An
interview of David Jensen by Jay Taylor on December 17, 2014
Physical Market Stress: Major Gold Market Players Departing
1) Reuters and CME providing silver fix each day.
http://www.kitco.com/news/2014-07-11/LBMA-Cho...Silver-Fix.html
Reuters
has a history of acting as a propaganda arm of the UK Government during WWI
and WWII, took secret subsidies from the UK Government in the 1980s and
1990s, and has recently been accused of fraudulently reporting stories from
Iraq, Syria, Lebanon etc.
Samples
of Reuters' allegedly fraudulent reporting:
http://www.bagnewsnotes.com/2014/03/were-r...-photos-staged/
https://www.youtube.com/watch?v=oSgSrgDJRoA
http://therearenosunglasses.wordpress.c...baiji-refinery/
Historically,
silver has been the day-to-day monetary medium of exchange while gold was reserved
for higher-value transactions.
LBMA
has had a problem with apparently collusive and fraudulent setting of gold
and silver prices and the LBMA's response to the alleged fraud and collusion
is to set a new daily silver price with including a party that has been
repeatedly acted as a UK Gov propaganda agent and that has also repeatedly
been alleged to engage in fraudulent reporting.
2) Further evidence of gold market problems - major metals
market participants are leaving in rapid succession:
Allegations
of crimes committed at the LBMA (85% of daily global gold trading volume).
Central
issue appears to be multiple claims to bars through rehypothecation /
repeated lending of the same assets, unallocated metal instruments creating
multiple claims per bar, etc.
Engaging
in fraudulent trade or in assets with multiple claims or fraudulent title
potentially implicates parties involved in the transactions.
Class
action suits of defrauded gold and silver LBMA investors is possible and
these companies may be exiting the physical space as a defensive move.
One
piece of a mosaic and worthy of tracking for other precious metals players
departing this space as the metals markets are scrutinized.
3) James Turk - central banks almost exclusively occupy the
gold lease market at the LBMA
With 5
billion oz. of gold globally above ground, if leasing of gold only
provided by central banks then that is further evidence of market failure
(private gold not available for lease for paper profit).
Artificiality
of the physical gold market would be indicated by central banks as sole
presence in market sectors where substantial paper profit could be generated.
http://kingworldnews.com/he...er-comex-close/
Overall,
serious problems appear to exist and questions are being raised re. the LBMA
gold and silver markets.
Gordon
Brown showed in 1999 by selling 400 tonnes of the British People's gold at
$250/oz. to solve a gold 'crisis' for London traders that the UK gov was
acting in the interests of the City of London traders and not UK citizens.
There
are 170,000 tonnes of gold available above ground. Why sell 400 tonnes of the
UK citizens' gold at market bottom?
Holding
gold positions at the LBMA appears to expose investors to risk of numerous
claims per ounce of gold putatively available.
Russia
and China have announced they are no longer accumulating USD denominated
assets. They are actively buying gold and other real assets with their trade
generated USD currency and moving to a new, stable currency system as the
USD/Euro western paper money system collapses on itself.
http://www.gold-eagle.co...ins-golden-trap
LBMA hides
statistics from public scrutiny regarding open interest, leverage, etc.
A new
open trading platform for gold, silver, and PGM's is needed.
4) Scale: Oil trade dollar volume vs gold trade dollar
volume
On
daily production basis, 15x more dollar volume of oil is produced each day vs
dollar volume of gold produced each day
Daily
oil futures tra target="_blank"ding volume on NYMEX: http://www.cmegroup.c...volume_voi.html
1.2 M
futures contracts per day or 1.2 Billion bbls per day
At $60
bbl oil, $72 billion per day of oil futures
traded on the NYMEX
Compare
target="_blank" London LBMA gold trade: http://www.lbma.or...ring-Statistics
October
2014 saw 17.4 million oz. gold per day (net settled) or 174 million oz. of
gold per day gross daily trading volume using the LMBA's 10x gross volume vs
net settled trading volume.
http://www.lbma...ty_Surveyrv.pdf
At
$1,200 per oz., that is $209 billion of
gold traded each day in London (85% of global daily gold trading
volume).
Daily
gold trading dollar volume in London is 3x daily oil trading in NY on the
NYMEX exchange.
5) Saville article - a typical view of the gold market
ignoring the distortion of gold and silver leverage in the physical market
< target="_blank"span style='font-size:12.0pt;'>http://tsi-b...aw-of-economics
- Look at 2,900 tonne annual mine supply of gold
because it is a liquid supply of gold. Gold is tightly held and
fluctuations as to how much available to the market
- Saville confuses supply and demand of real
metal vs LBMA supply of 'physical' metal
- By leveraging forwards, multiple times and
selling 'unallocated' virtual gold, artificial physical supply is
artificially created allowing the steering of the gold price while
market participants sit in virtual 'physical' gold positions on the
LBMA.
- Key is that, as with all Ponzi schemes, investors
must be kept sanguine - gold withdrawn from the exchange will quickly
collapse the leveraged physical metal system and the market itself.
In summary, it is important to keep open
minds about the nature of these metal trading systems, pulling together
disparately sourced information to form a mosaic to see with time the big
picture. Not all information is material. However, with time, we will be able
to see the greater market picture and be able understand and to act to
stabilize our markets and monetary system.