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Copper Catcher
Administrator
USA
2092 Posts |
 Posted - 04/01/2010 : 19:53:51
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The following is a great article I wanted to share:
I know the CFTC Gold and Silver Hearing Is Old News — Seeking Alpha
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However a couple hedge funds have converted their paper ETF gold holdings into physical gold. Greenlight Capital did last year for about $400million worth in their own warehouse, citing storage costs of physical is cheaper than gold fund mgt fees. hmmmm
Anway, from recent CFTC hearings it is revealed that the “physical” gold market can include GLD ETF, London LBMA OTC gold, Comex gold. All paper.
It was also admitted that there is approximately 100X gold paper leverage to every ounce of gold.
In one of the videos the guy testifying said gold banks shorted the market at the time when they were getting many physical gold redemptions. An obvious attempt to keep prices down to prevent any more physical redemptions(manipulation). He later came up with some gobbledy gook saying he misspoke.
Also, something is afoot when exchanges change rules saying they do not have to settle in physical gold but rather cash. Obviously it is similar to fractional reserve banking where they don’t have the entire amount outstanding.
So it sounds like you can have unlimited naked shorting in order to keep prices in check.
Can you say manipulation of physical gold?
This is something to keep an eye on as it strikes to the very integrity of markets, especially in this environment of distrust.
In addition, Sprott Asset Mgt set up a gold bullion fund that must hold nearly all (97%)physical gold. They raised as much as $390million recently and listed as holding only $15million in gold assets.
Those large amounts are the type that central banks buy from the IMF. Recent reports have the IMF announcing that they are selling large quantities of gold either to India or China. Critics say it was only a deception intended on keeping the price of gold in check not to cause a run on real physical gold and blowing up the gold paper market (remember 100X or so).
China said it was willing to buy the entire IMF lot of 13 million ounces the IMF had indicated for sale and would buy the entire 100million ounces in cash. The IMF later sold a chunk to central banks of India, Sri Lanka, and Mauritius in “off market” transactions, probably bookkeeping entries and not physical transfer. More “things that make you go hmmm”
IMF later announced they’d sell another chunk into the market. Sprott announced they had inquired about purchasing a chunk from the IMF but was turned down by the IMF (probably since Sprott wanted physical delivery and not a piece of paper that transferred ownership but bullion still held by IMF)
This is either a grand conspiracy to get every last dollar from regular folks before gold bubble pops (all the gold commercials are getting tiring), OR, we’ll see a bust of the (100X+)paper gold bubble and price of physical gold skyrocket on any nervousness.
I’m gonna have to revisit my brainstorm on raising some money to buying pawn shops up for the gold purchasing engine
There is some interesting reading in the above article and video clips of the CFTC testimony.
Article Source: You must be logged in to see this link.
It is hard to believe that it was fully admitted that the leverage of paper gold to physical gold is over 100 to 1 in the London Market.
In case you missed it listen as they explain:
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IdahoCopper
Penny Pincher Member
125 Posts |
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highroller4321
1000+ Penny Miser Member
USA
2648 Posts |
Posted - 04/02/2010 : 10:13:53
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| Its going to be very interesting to see what happends. I don't know how things can't change when they openly adminted a 100 to 1 ratio of paper to physical! Heck Im not sure if its even that much.... |
Copper Penny Investing
www.portlandmint.com |
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Market Harmony
1000+ Penny Miser Member
USA
1274 Posts |
Posted - 04/02/2010 : 10:41:35
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It seems like this whole corruption and manipulation thing just keeps going and going... more information is built upon previous information. More facts creep to the surface, and more eyes are focused on the practices and policies of the CFTC and COMEX. This has been going on for years. There is not a bubble in commodities, but in the gathered information regarding the corruption within its trading exchange. Once this information-bubble pops, there is going to be some serious revaluation of the "alleged" manipulated commodities.
The CFTC is going to need a few fall guys to blame when the walls come tumbling down. These hearings and investigations just give the upper crust all the information they need to begin their case to point fingers to easiest and weakest pawn. If the investigation was more clandestine, and then suddenly sprung on the whole game, then everyone would be held accountable. In the end, however, we're just going to have a few poor shmucks to point fingers at. The real players and manipulators won't be affected by it because they have been building their defense to the allegations the whole time. They're at the hearings, too, you know. And they aren't the dumbest guys in the room. |
goto the new and improved realcent: http://realcent.org |
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Commodity Futures Trading Commission Hearing Etc.
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