What has happened to the precious metals market in the past thirty days? Plenty. Here’s a sampling.
James Turk interviewd on King World News regarding the change in the London Bullion Market Association reporting on silver:
Ned Naylor Leyland of Cheviot Asset Management on the change in the LBMA reporting on silver:
The press release from the LBMA regarding the cessation of SIFO
Why did the LBMA make the change?
The reason for the withdrawal of the dataset was that unlike GOFO these rates were indicative rates only and therefore not dealable rates between forward Market Makers. In addition, since January 2011, the LBMA forward Market Makers have jointly contributed essentially the same data (but covering an extended range of maturities – from spot to 3 years) to the LBMA’s daily forward curve for silver.
The Force Majeure by the Comex for the MTB metals depository in New York: http://www.cmegroup.com/rulebook/files/20121126s-6476.pdf
Goldcore.com on a massive unloading of paper gold on the market yesterday:
“One thing that we can say for certain was that there was massive, concentrated selling as the New York stock markets opened with some 35,000 lots sold which is equivalent to 3.5 million ounces and saw the price fall from $1,735/oz to $1,711/oz between 0825 and 0830 EST.”
Junior Gold Mining stocks are at virtually the same price they were three years ago when gold was $1,150 whereas today gold is better than 30% higher than that.
What do I think is going on? If you ask me, they’re starving out selected junior miners because they want the in-the-ground gold. I have written about this numerous times before under the name vector gold. I believe there will be a new accounting standard that allows for in the ground gold to be recognized as “real” gold in the same way that paper gold such as ETF’s are recognized as “real” gold.
India’s plan to dematerializes gold: http://articles.economictimes.indiatimes.com/2012-11-25/news/35346727_1_gold-imports-gold-loan-companies-high-gold
What does “dematerialize” mean? Here’s a definition from the article:
“It (high gold imports) is creating some macroeconomic stresses and so the challenge is to find ways to replicate the financial characteristics of gold without necessarily causing physically importing.”
Jamie Dimon’s Basel III nemesis, Mark Carney was appointed to the governership of the Bank of England in addition to his chairmanship of the Financial Stability Board where he is responsible for bringing the largest U.S. banks into Basel III compliance against their will or risk breaking the banking cartel. http://www.euromoney.com/Article/3098264/Mark-Carney-Finances-new-statesman.html
As reported by Eric Sprott in his letter today the much promoted shiny new Tier 1 status of gold is a misnomer as the World Gold Council has rumored that gold will get a 15% liquidity haircut: http://www.zerohedge.com/news/2012-11-29/gold-solution-banking-crisis
In a related move Warren Buffet gives a non-London-based whale of an endorsement to Jamie Dimon as Timothy Geithner’s replacement as the cabinet level Secretary of the Treasury. If this is a signal, then Dave’s original projection that Erskine Bowles (the privatizers of Social Security’s Simpson-Bowles democrative half) and husband of JP Morgan board member Crandall Bowles looks like he may have made the best career decision of his life.
Blythe Masters gets the appointment at JP Morgan to handle regulatory affairs. Presumably this puts her in charge of managing the CFTC’s four year old investigaton of price manipulation in the silver market. Or is it a three year old investigation. I forget. Either my dog is three years old and the investigation is four years old or my dog is four years old and the investigation is three years old. I get that confused. http://blythemasters.blogspot.com/2012/11/blythe-masters-leading-regulatory.html
On the other end of the metals spectrum, pennies and nickels to be eliminated from the money supply: http://goldsilver.com/news/bid-farewell-to-pennies-and-nickels/ . Hayman Capital’s Kyle Bass has been all over the new this month, but it wasn’t for his 20 million nickels coin stockpile. Add to that Dave’s only 100% surefire, no counterparty, risk-free arbitrage that he is aware of on the planet and you can see why the U. S. Mint must be stopped. Where else can you invest $25,000 and get a $3,000 instantaneous return on your investment. Looks like days of Dave’s penny carry trade are numbered: http://tradewithdave.com/?p=5222
The beans really hit the fan this week as market manipulation whistleblower and purported hit-and-run victim Andrew Maguire made a non-speaking cameo appearance on the TF Metals report while rebels removed bags of beans from the vault at the Central Bank of the Congo in what can only be described as a globally coordinated disinformation campaign described by observeres as ”The central bank pot calling the bean filled kettle brown”: http://tradewithdave.com/?p=13757
Worried about getting your gold quickly in a panic. No worries… in Turkey you simply walk up to the ATM at Kuveyt Turk Katilim Bank and out pops the gold. It’s like Staples Easy Button but for quantitative easing instead of offfice supplies. Here’s there website with a picture of the gold dispensing machine gone mad: http://www.kuveytturk.com.tr/pages/gold_atm.aspx
China gets its foot in the back door through a newly announced Hong Kong silver exchange that Dave believes could be the twin sister of the failed Pan Asian Gold Exchange and a threat to the 50:1 gold to silver ratio: http://tradewithdave.com/?p=13741
All that metals news and I didn’t even mention the flood at 55 Water Street and subsequent fire. You can read all about the trillions in paper certificates that “replicate financial characteristics” here. How much of that paper was related to the precious metals market and is this paper destruction ushering in the Chicago Plan? http://tradewithdave.com/?p=13436
That’s a lot of action in the metals market in one month. You can call it the post-election end of the year shuffle. If you ask Dave, the best I can tell they still have the upper hand over gold. As long as you have four fingers (Ben and three Goldman alums) on the print button and an unlimited supply of HP Laser Confidence-Filled Cartridges it doesn’t matter if you’re Mitt Romney of President Obama, a 3-D laser printer is all you need to print a golden picture of a tungsten-based bridge over the fiat fiscal canyon of your mind or your own unlicensed homemade handgun.
The question remains however, if you have the upper hand over gold, if the 50:1 ratio holds, then you have an upper hand over silver. However, if the ratio breaks that’s when the real trouble starts. It looks to me like the plan is to break the will of the junior miners while breaking their balance sheets via low gold prices and high operating expenses. What does this do? Not much unless they are able to come up with an entirely new way to account for in-the-ground gold and that’s what Dave has been harping on for quite some time. I call it Vector Gold ™ and it’s coming to a central bank/TBTF/sovereign roll-up near you. At this point, Dave only has one question. Who is holding the debt of the junior miners and how are in-ground deposits viewed by the bankruptcy court? Are they unallocated and subject to In-Situ Vaporization in a Corzine sense of the word?
Here’s the full report on the In-Situ gold: http://www.nrh.co.il/i/pdf/NRH_Research_2012%20World_Gold_Deposits.pdf
Here’s the amazing infographic from VisualCapitalist.com: http://www.visualcapitalist.com/portfolio/global-gold-mines-and-deposits-ranking-2012
Here’s a link to Dave’s previous take on Vector Gold. Remember, Dave’s not a financial advisor and it’s actually been a couple of years since I stayed at Holiday Inn Express, so you may want to talk to your financial advisor about those return-free-risk-near-zero-interest-rate-or-below-sovereign-bond-offerings while they last, because they can’t last forever. http://tradewithdave.com/?s=vector+gold