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In the land of the goldbugs who choose to be blind, the one-eyed blogger is king

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Published : January 08th, 2014
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( 13 votes, 2.4/5 ) , 3 commentaries
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Category : Gold and Silver
I have a post up on the corporate blog about Comex stocks coverage (owners per ounce) talking about yet another example of the one-eyedness (a mind not open to all the data and varying interpretations) I discussed in yesterday's post. The post is a rework/expansion on this personal blog post on Comex stocks.

The interesting thing to me about those bloggers who have been using Nick Laird's owners per ounce charts for registered gold and its current 80:1 ratio is that to get to that chart you have to scroll past the chart for total gold stock and its 5:1 ratio. In other words you have to wilfully ignore the 5:1 ratio and the big difference between this and the 80:1 ratio.

Now I can admit that maybe such bloggers disagree with my views that you have to look at both eligible and registered stocks (although I fail to see how when there is over 5 million ounces of conversion volume between the two categories during 2013) in assessing the likelihood of a Comex default or shortage of gold, but surely anyone who isn't one-eyed would want to at least discuss/explain the 80:1 and 5:1 discrepancy to their readers?

For those who like to use both of their eyes, consider these points from the corporate post:

1. people only keep metal in a Comex deliverable form and in Comex warehouses because they are expecting to sell it back in the futures (if they took it off eligible there would be costs to get it accepted back as eligible) and they will sell it if the price is right

2. sellers may try and "hide" their intention to sell by holding eligible (making it look like gold is not available for delivery and thus get the price bid up) then at the last minute instantly change their gold to registered status

3. Silver Doctor's theory that “the owners [or eligible] would likely be strong-armed or forced into converting their eligible supplies into registered should things become desperate for the cartel

4. 2.6 million ounces (80 tonnes) was converted from eligible to registered, indicative of point 2

5. 3.2 million ounces (100 tonnes) was converted from registered to eligible, indicative of strong hand longs standing for delivery?

With some points from this post:

5. you can deliver 3 kilo bars against a Comex futures contract (note there is a cash adjustment for any over/under ounces as the result of delivery of odd weight 100oz bars or kilo bars against a futures contract)

6. BBs have been proven to deliver tonnes of kilo bars into Comex warehouses, this could indicate weak markets where they park metal until demand returns (see here: " the owner may simply want to vault their metal securely, before using it to meet demand elsewhere – for manufacturing, or from investors in another marketplace, such as Asia")

7. consequently, movements of round ounce tonne lots, indicative of kilo bars, out of the warehouses may be an advance bullish signal of Asian demand returning

And this interesting story from Martin Armstrong:

8. "To create the fundamental, they moved inventory from New York to London. They were manipulating silver as always. Playing games with the inventories. They were moving silver from New York to London where the Buffett orders were being executed. This made the US warehouse inventories drop sharply." to give the impression of a shortage of silver

And finish with this interesting point made to me in an email by a Mr D:

9. A BB is only legally obliged to deliver from registered stock. Failure to deliver eligible gold wouldn’t be a default. So this eligible gold could be safely used as the basis for a lot of transactions outside Comex that are completely opaque while it the gold remains on show to the Comex punters

I think all the above makes a strong case for looking at the total Comex stocks (both eligible and registered). I personally think the Martin Armstrong story is the most telling. By focusing on the 80:1 ratio bloggers may well be (hopefully innocently) helping those playing games with reported warehouse stocks.
I'd like to think that after this gold bear market the eligible stocks are now mostly held by strong hands rather than just being BB inventories, and thus a squeeze is in play, but I'm keeping my mind (and both eyes) open to the fact that the figures may be gamed. I hope you also choose to not be blind.
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Well, small invester, what Suchecki is talking about here is the
paper-gold market. Phoney gold. Skanky gold.

1) a skanky outfit either buys, or pretends to have, some gold
2) the skanky outfit tells folks they can buy gold and hold it in their special vault creating pretend gold
3) the skanky outfit could care less about anyone who has bought their gold and sells even more pretend gold
4) the skanky owners per ounce is how many stupid people think they have bought gold from the skanky outfit vs how much real gold the skanky outfit has in their skanky vault
5) the skanky outfit has 5 ounces of gold, and has sold 25 certificates to skanky idiots whom each think they own an ounce of gold: 5:1 "owners per ounce"
6) the skanky outfit has 5 ounces of gold and has sold 400 skanky certificates to skanky idiots each whom think they own an ounce of gold: 80:1 "owners per ounce"
7) You can tell the skanks who have the vault you may want to sell your illusionary gold - they like that, the pretend gold stays pretend
8) You may want to actually have the skanks send you your gold - that hurts - it isn't actually there
9) Forget about eligible and registered: they are still just pretend paper gold stocks, you will lose all of your money, guaranteed.

10) Look, small investor, forget leveraging gold, or buying ETFs.
Buy real gold, have it sent to you.
If you can't touch it, you do not own it.
Use dollar cost averaging to take advantage of a simple risk spread idea.
Don't buy fancy old coins, you know nothing about numismatics.
Buy gold bullion gold or bullion coins, and get the darn things in your hand.
Hold at least one real gold coin in your hand long enough until it warms up dear friend!!!!!

Buy real physical metal, use a monthly buying program, and

DCA All The Way!!!
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a Gold Bear market ??? sure Gold is down but only 1 year (2013) in 13 years ,hardly a Bear market
most analysts eg Alasdair MacLeod are Bullish on Gold and Silver ,Physical demand is Enormous another sign of a BULL market
most of Brons comments are Bearish so are we in a Bull market ? do your own research
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What a nice work of propaganda , Mr. Sucheki . As usual from you .
Rate :   3  5Rating :   -2
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a Gold Bear market ??? sure Gold is down but only 1 year (2013) in 13 years ,hardly a Bear market most analysts eg Alasdair MacLeod are Bullish on Gold and Silver ,Physical demand is Enormous another sign of a BULL market most of Brons comments ar  Read more
OzSILV - 1/8/2014 at 8:16 PM GMT
Rating :  3  2
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