http://www.caseyresearch.com/gsd/edition/secret-imf-report-hide-gold-loans-and-swaps-market-manipulation
http://www.goldmoney.com/gold-research/alasdair-macleod/gold-futures-market-heading-for-crisis.html?gmrefcode=gata
I thought I had a good idea what disasters we might face in 2013, and then I saw the most recent US Commodity Futures Trading Commission’s Bank Participation Report for gold and silver. On the basis of recent BPRs these markets are heading for a crisis, which is generally unexpected. I shall break the reader in gently by looking at gold first.
Secret IMF Report: Hide Gold Loans and Swaps For Market Manipulation
Dec
11
"Today is the 1-day FOMC meeting...and I have no idea what that portends for the precious metals...if anything."
¤ YESTERDAY IN GOLD AND SILVER
It was a very quiet day in the gold world yesterday. The price didn't do much until early in the afternoon Hong Kong time...and the small rally that began at that point ran into a seller about ten minutes after the Comex open.
The sell-off, such as it was, was over by the London p.m. gold fix...and then gold traded sideways into the close of electronic trading.
Gold closed at $1,712.60 spot...up $8.10 on the day. Volume was extremely light...around 84,000 contracts.
It was pretty much the same story in silver, with silver's high tick coming at the same 8:30 a.m. Eastern time as gold's...and from there got sold down into the London p.m. gold fix...and traded sideways from there as well.
Silver closed at $33.27 spot...up 16 cents on the day. Volume was around 24,500 contracts.
The sell-off, such as it was, was over by the London p.m. gold fix...and then gold traded sideways into the close of electronic trading.
Gold closed at $1,712.60 spot...up $8.10 on the day. Volume was extremely light...around 84,000 contracts.
Silver closed at $33.27 spot...up 16 cents on the day. Volume was around 24,500 contracts.
The dollar index didn't do much either. It rallied a hair...and it's high tick of the day [80.55] came about a half hour before the London open...and then declined about twenty-five basis points by the 8:20 a.m. Comex open. The index didn't do a lot from that point...and closed at 80.33...down less than 10 basis points from Friday's close.
* * *
The CME's Daily Delivery Report showed that 45 gold and 128 silver contracts were posted for delivery on Wednesday. In silver, the big short/issuer was Jefferies with 123 of those contracts...and the two largest long/stoppers were JPMorgan and the Bank of Nova Scotia with 104 contracts between them. No surprises there. The link to yesterday'sIssuers and Stoppers Report is here.
There were no reported changes in either SLV or GLD.
But the U.S. Mint had another sales report. They sold 2,500 ounces of gold eagles...and 300,000 silver eagles.
It was a quiet day over at the Comex-approved depositories on Friday. They received 97,664 troy ounces of silver...and shipped out a smallish 2,000 ounces of the stuff. The link to that activity is here.
Well, I received a reply from the ombudsman at the Bank of Nova Scotia yesterday...and I must admit that I was somewhat taken aback by his answer. Not only did he answer a question I didn't ask...he didn't answer the question I did ask...and I also got blown off as well...along with the comment that I shouldn't share the contents of this e-mail with anyone other than "a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments"...because their reply to me was "confidential".
I must admit that I expected to be treated better than this. I guess my illusion that Canadian banks would be nicer than their American counterparts just got shredded. Anyway, as promised, here is the e-mail I received in its entirety...
Dear Mr. Steer,
I am responding to the attached e-mail that you sent to my office on December 2nd. Allow me to begin by apologizing for the delay in providing this response to you. I would normally respond to you by letter but, as I did not have a reliable mailing address for you, I am responding by e-mail.
I would also like to inform you that all correspondence you receive from the Ombudsman’s Office must be treated as confidential. This e-mail may not be shared with anyone other than a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments.Turning to your request for information concerning information published by the Commodity Futures Trading Commission (CFTC), I have reviewed the response you received from Dave Shearim at Scotiabank. Mr. Shearim indicated that Scotiabank has no connection with data provided by the CFTC and referred you directly to them for any further information concerning the data in their publications. I must say that I find his response to be a reasonable one under the circumstances. Therefore, I am not prepared to recommend to Scotiabank that it take any further action in this matter.
This is almost certainly not the response you were hoping to receive and you may, within six months of the date of this letter, have your concern, including this e-mail, reviewed by the office of the Ombudsman for Banking Services and Investments (OBSI), who will determine if your concern falls within his mandate. The OBSI may be reached at:
Ombudsman for Banking Services and Investments
401 Bay Street
Suite 1505
P.O. Box 5
Toronto, ON
M5H 2Y4
Telephone: 1-888-451-4519
Facsimile: 1-888-422-2865
E-mail: ombudsman@obsi.ca
In closing, I would like to thank you for writing to me and giving me the opportunity to investigate and respond to your concern.
Nowhere in that reply did I see them say....no, it wasn't them. I got the impression that I was asked to take a long walk off a short pier. I will try one more time...and let you know I make out.
Of course the real question that I asked the CEO of the Bank of Nova Scotia [and the ombudsman] was this...
There were no reported changes in either SLV or GLD.
But the U.S. Mint had another sales report. They sold 2,500 ounces of gold eagles...and 300,000 silver eagles.
It was a quiet day over at the Comex-approved depositories on Friday. They received 97,664 troy ounces of silver...and shipped out a smallish 2,000 ounces of the stuff. The link to that activity is here.
Well, I received a reply from the ombudsman at the Bank of Nova Scotia yesterday...and I must admit that I was somewhat taken aback by his answer. Not only did he answer a question I didn't ask...he didn't answer the question I did ask...and I also got blown off as well...along with the comment that I shouldn't share the contents of this e-mail with anyone other than "a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments"...because their reply to me was "confidential".
I must admit that I expected to be treated better than this. I guess my illusion that Canadian banks would be nicer than their American counterparts just got shredded. Anyway, as promised, here is the e-mail I received in its entirety...
Dear Mr. Steer,
I am responding to the attached e-mail that you sent to my office on December 2nd. Allow me to begin by apologizing for the delay in providing this response to you. I would normally respond to you by letter but, as I did not have a reliable mailing address for you, I am responding by e-mail.
I would also like to inform you that all correspondence you receive from the Ombudsman’s Office must be treated as confidential. This e-mail may not be shared with anyone other than a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments.Turning to your request for information concerning information published by the Commodity Futures Trading Commission (CFTC), I have reviewed the response you received from Dave Shearim at Scotiabank. Mr. Shearim indicated that Scotiabank has no connection with data provided by the CFTC and referred you directly to them for any further information concerning the data in their publications. I must say that I find his response to be a reasonable one under the circumstances. Therefore, I am not prepared to recommend to Scotiabank that it take any further action in this matter.
This is almost certainly not the response you were hoping to receive and you may, within six months of the date of this letter, have your concern, including this e-mail, reviewed by the office of the Ombudsman for Banking Services and Investments (OBSI), who will determine if your concern falls within his mandate. The OBSI may be reached at:
Ombudsman for Banking Services and Investments
401 Bay Street
Suite 1505
P.O. Box 5
Toronto, ON
M5H 2Y4
Telephone: 1-888-451-4519
Facsimile: 1-888-422-2865
E-mail: ombudsman@obsi.ca
In closing, I would like to thank you for writing to me and giving me the opportunity to investigate and respond to your concern.
Nowhere in that reply did I see them say....no, it wasn't them. I got the impression that I was asked to take a long walk off a short pier. I will try one more time...and let you know I make out.
Of course the real question that I asked the CEO of the Bank of Nova Scotia [and the ombudsman] was this...
"All I need to know is if the "non-U.S. bank" that the CFTC is referring to in its comments below...and on its Bank Participation Report home page...is The Bank of Nova Scotia - Scotia Mocatta.
"A simple 'yes' or 'no' answer will suffice.
The comment states... "The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity's self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity's most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes" [Emphasis is mine. - Ed]
Here's a chart that Nick Laird sent me on the weekend it showed the average intraday price moves for silver during November. Once you average out all 19 trading days, the price pattern is obvious.
"A simple 'yes' or 'no' answer will suffice.
The comment states... "The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity's self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity's most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes" [Emphasis is mine. - Ed]
Here's a chart that Nick Laird sent me on the weekend it showed the average intraday price moves for silver during November. Once you average out all 19 trading days, the price pattern is obvious.
* * *
selected news items.....
Mortgage Crisis Presents a New Reckoning to Banks
The nation’s largest banks are facing a fresh torrent of lawsuits asserting that they sold shoddy mortgage securities that imploded during the financial crisis, potentially adding significantly to the tens of billions of dollars the banks have already paid to settle other cases.
Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.
Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.
Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life.
This story showed up on The New York Times website on Sunday sometime...and I thank Phil Barlett for bringing it to our attention. The link ishere.School District Owes $1 Billion On $100 Million Loan
More than 200 school districts across California are taking a second look at the high price of the debt they've taken on using risky financial arrangements. Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.
In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.
Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.
In the West Contra Costa Schools' case, that $2.5 million bond will cost the district a whopping $34 million to repay.
I'd bet big money that Wall Street and/or the 'Big 5' U.S. banks are behind all those 'loans'. This showed up on the National Public Radio website yesterday...and the story is courtesy of reader Scott Pluschau. The link is here.
In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.
Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.
In the West Contra Costa Schools' case, that $2.5 million bond will cost the district a whopping $34 million to repay.
I'd bet big money that Wall Street and/or the 'Big 5' U.S. banks are behind all those 'loans'. This showed up on the National Public Radio website yesterday...and the story is courtesy of reader Scott Pluschau. The link is here.
Chilton blasts 'puny' fine in case where Goldman Sachs used fake trades
An outspoken regulator lashed out at a $1.5 million settlement between Goldman Sachs and the Commodity Futures Trading Commission, calling the deal a steal for the Wall Street bank.
Bart Chilton, a CFTC commissioner, described the cash amount as "puny" and "a slap on the wrist" when compared to the whopping $8.3 billion trade at the center of the case.
In 2007, a Goldman trader hid the outsize trade as the market unraveled.
"This is another example of where puny penalties send the wrong message for these guys who are breaking the law," Chilton told The Post.
Well, Bart...let's see what you have to say when your buddies at JPMorgan Chase and the CME Group get out of the silver and gold price management scheme without going to jail, or paying a fine. Where's your righteous indignation when it comes to JPMorgan Chase/Scotiabank price management scheme in silver? This story showed on the New York Post website on Saturday...and I found it in a GATA release. The link is here.
Bart Chilton, a CFTC commissioner, described the cash amount as "puny" and "a slap on the wrist" when compared to the whopping $8.3 billion trade at the center of the case.
In 2007, a Goldman trader hid the outsize trade as the market unraveled.
"This is another example of where puny penalties send the wrong message for these guys who are breaking the law," Chilton told The Post.
Well, Bart...let's see what you have to say when your buddies at JPMorgan Chase and the CME Group get out of the silver and gold price management scheme without going to jail, or paying a fine. Where's your righteous indignation when it comes to JPMorgan Chase/Scotiabank price management scheme in silver? This story showed on the New York Post website on Saturday...and I found it in a GATA release. The link is here.
Central Banks Ponder Going Beyond Inflation Mandates
Inside the world’s oldest central bank, a new debate is raging over a dilemma facing monetary authorities around the globe.
Policy makers at Sweden’s 344-year-old Riksbank and elsewhere are arguing about how far they can look beyond their price mandates and focus instead on economic growth, employment or financial stability when inflation threats are either not pressing or deemed to be passing. This marks a shift from three decades in which central bankers battled inflation, an enemy they understood so well that most made it their singular emphasis in the 1990s.
“There are lots of things central banks are worried about at the moment, and inflation is not the highest priority,” said Stephen King, chief economist at HSBC Holdings Plc in London and a former U.K. Treasury official. “As long as people believe central banks are committed over the longer term to price stability, there is leeway to play around with other objectives.”
Such as??? I can't believe he said that! Be very afraid. This Bloomberg story was posted on their website in the wee hours of yesterday morning Mountain Standard Time...and I thank Casey Research's own David Galland for sending it along. The link is here.
Policy makers at Sweden’s 344-year-old Riksbank and elsewhere are arguing about how far they can look beyond their price mandates and focus instead on economic growth, employment or financial stability when inflation threats are either not pressing or deemed to be passing. This marks a shift from three decades in which central bankers battled inflation, an enemy they understood so well that most made it their singular emphasis in the 1990s.
“There are lots of things central banks are worried about at the moment, and inflation is not the highest priority,” said Stephen King, chief economist at HSBC Holdings Plc in London and a former U.K. Treasury official. “As long as people believe central banks are committed over the longer term to price stability, there is leeway to play around with other objectives.”
Such as??? I can't believe he said that! Be very afraid. This Bloomberg story was posted on their website in the wee hours of yesterday morning Mountain Standard Time...and I thank Casey Research's own David Galland for sending it along. The link is here.
Ambrose Evans-Pritchard: Mario Monti's exit is only way to save Italy
Italy has only one serious economic problem. It is in the wrong currency.
The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.
It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.
“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.
You would be able to knock me over with a feather if the decision was made to leave the euro...especially by Italy. But in reality...no European country should be forced to use the euro as a currency. This A.E.-S. offering was posted on the telegraph.co.uk Internet site at 9:09 GMT yesterday evening...and I thank Manitoba reader Ulrike Marx for digging it up on our behalf. The link is here.
The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.
It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.
“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.
You would be able to knock me over with a feather if the decision was made to leave the euro...especially by Italy. But in reality...no European country should be forced to use the euro as a currency. This A.E.-S. offering was posted on the telegraph.co.uk Internet site at 9:09 GMT yesterday evening...and I thank Manitoba reader Ulrike Marx for digging it up on our behalf. The link is here.
Paris hit by wave of street muggings and grave robberies
Last week, police in the French capital arrested three people as part of a widening grave robbery investigation.
There was further public outrage after two masked intruders shot dead a 52-year old precious metal worker when he tried to stop them stealing gold from his foundry in the chic central Parisian district of Le Marais.
Police said sky-high market prices for precious metals are acting as a magnet for thieves with scant regard for the living or the dead.
In Pantin cemetery, in the north of Paris, dozens of bodies have recently been dug up, with gold teeth and jewellery stolen from them.
Police sources said the three men seized last week were gravediggers employed by the city's cemeteries.
Phil Barlett sent me this story that was posted in on The Telegraph's website on Sunday evening...and the link is here.
There was further public outrage after two masked intruders shot dead a 52-year old precious metal worker when he tried to stop them stealing gold from his foundry in the chic central Parisian district of Le Marais.
Police said sky-high market prices for precious metals are acting as a magnet for thieves with scant regard for the living or the dead.
In Pantin cemetery, in the north of Paris, dozens of bodies have recently been dug up, with gold teeth and jewellery stolen from them.
Police sources said the three men seized last week were gravediggers employed by the city's cemeteries.
Phil Barlett sent me this story that was posted in on The Telegraph's website on Sunday evening...and the link is here.
De Facto Loss of Sovereignty: Cyprus Makes Big Concessions for Bailout
Dimitris Christofias had a serious look on his face as he turned to the cameras and spoke of what a "gut-wrenching" decision it was, but added that it was also a "necessary evil." The Cypriot president was not giving his people good news.
His staff realized how bad it would be when Christofias, in his televised address last Tuesday, reminded viewers of his country's darkest hour, the Turkish invasion of northern Cyprus in 1974.
Although Cyprus is not about to suffer the same fate, it is already clear that in return for billions of euros for the debt-ridden country from the European bailout fund, the "troika," made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), will essentially take control of the Mediterranean island.
This must read story showed up on the spiegel.de Internet site yesterday...and it's Roy Stephen's second offering in today's column. The link ishere.
His staff realized how bad it would be when Christofias, in his televised address last Tuesday, reminded viewers of his country's darkest hour, the Turkish invasion of northern Cyprus in 1974.
Although Cyprus is not about to suffer the same fate, it is already clear that in return for billions of euros for the debt-ridden country from the European bailout fund, the "troika," made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), will essentially take control of the Mediterranean island.
This must read story showed up on the spiegel.de Internet site yesterday...and it's Roy Stephen's second offering in today's column. The link ishere.
World risks fresh credit bubble, Switzerland's BIS warns
“Some asset prices appeared highly valued in a historical context relative to indicators of their riskiness,” said the bank in its quarterly report.
Yields on mortgage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies.
The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy.
The International Monetary Fund and the OECD have downgraded their outlooks for 2012 and 2013, with sharp cuts for much of Europe as well as for Brazil, China, and India.
This is another article courtesy of Roy Stephens. It was posted on thetelegraph.co.uk Internet site on Sunday evening...and the link is here.
Yields on mortgage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies.
The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy.
The International Monetary Fund and the OECD have downgraded their outlooks for 2012 and 2013, with sharp cuts for much of Europe as well as for Brazil, China, and India.
This is another article courtesy of Roy Stephens. It was posted on thetelegraph.co.uk Internet site on Sunday evening...and the link is here.
Citigroup’s Amazing Abu Dhabi Adventure
Off in a small corner of the judicial system is a big-time Wall Street lawsuit that neither side in the dispute wants anyone to know much about.
Thanks, however, to George B. Daniels -- the federal judge in the case -- we can catch a rare glimpse of what happens when a multibillion-dollar investment in a supposed pillar of Wall Street goes terribly wrong.
At issue is the $7.5 billion investment that Abu Dhabi Investment Authority, a large sovereign wealth fund, made in Citigroup Inc. in November 2007, just after the bank fired chairman and chief executive officer Chuck Prince. Michael Klein, one of Citigroup’s most senior investment bankers, negotiated the deal; Robert Rubin, the former Treasury secretary, in nearly his first official act after taking over for Prince as Citigroup’s chairman, flew off to Abu Dhabi to bless it.
A year later, of course, Citigroup collapsed, and American taxpayers bailed it out to the tune of $45 billion, plus another $306 billion to ring-fence a pile of toxic assets. ADIA, as the Abu Dhabi fund is known, lost nearly its entire investment after Citigroup’s shares were diluted down to pennies on the dollar by the rescue financing.
You couldn't make this up if you tried. This very interesting op-ed piece showed up on the Bloomberg website on Sunday afternoon Mountain Time...and it's certainly worth your time if you have it. I thank Washington state reader S.A. for digging it up on our behalf...and the link is here.
Thanks, however, to George B. Daniels -- the federal judge in the case -- we can catch a rare glimpse of what happens when a multibillion-dollar investment in a supposed pillar of Wall Street goes terribly wrong.
At issue is the $7.5 billion investment that Abu Dhabi Investment Authority, a large sovereign wealth fund, made in Citigroup Inc. in November 2007, just after the bank fired chairman and chief executive officer Chuck Prince. Michael Klein, one of Citigroup’s most senior investment bankers, negotiated the deal; Robert Rubin, the former Treasury secretary, in nearly his first official act after taking over for Prince as Citigroup’s chairman, flew off to Abu Dhabi to bless it.
A year later, of course, Citigroup collapsed, and American taxpayers bailed it out to the tune of $45 billion, plus another $306 billion to ring-fence a pile of toxic assets. ADIA, as the Abu Dhabi fund is known, lost nearly its entire investment after Citigroup’s shares were diluted down to pennies on the dollar by the rescue financing.
You couldn't make this up if you tried. This very interesting op-ed piece showed up on the Bloomberg website on Sunday afternoon Mountain Time...and it's certainly worth your time if you have it. I thank Washington state reader S.A. for digging it up on our behalf...and the link is here.
Five King World News Blogs
The first blog is with John Embry...and it's headlined "This is Why Silver Will Smash Through $100". The second blog is with James Turk. It's entitled "The Key Chart Every Silver Investor Needs to Watch". Next is Richard Russell..."Stage Now Set For Public to Enter the Gold Market". Last by not least is this interview with John Hathaway. It's titled "This is What is Going on Behind the Scenes in the Gold War". The audio interview is with Egon von Greyerz.
Adrian Ash: When governments steal gold
In a new essay, Bullion Vault's research director, Adrian Ash, tells three fascinating and little-known stories of how governments confiscated gold: fascist Italy in 1935; Nazi Germany in 1939 with the assistance of the Bank of England and the Bank for International Settlements, two organizations of barely greater integrity that are still around; and -- how can we not call it "fascist"? -- Britain in 1966.
There's more preamble to this story contained in this GATA release from yesterday. It's a must read, of course...and the link is here.
There's more preamble to this story contained in this GATA release from yesterday. It's a must read, of course...and the link is here.
Fort Knox on Thames. Barclays’ big new London gold vault
Barclays has built, and has already opened, three months ago, what is believed to be Europe’s largest privately-owned vault for the storage of gold and silver (and platinum, palladium and rhodium) as vaulting space at other locations is being filled up by unprecedented demand for storage for physical metal. For security reasons the location of the vault is secret – Barclays will only say that it is within the M25 – London’s orbital motorway which circles the capital between 25 and 40 miles from the city centre.
Britain’s Sunday Times newspaper was accorded a behind the scenes tour of the ultra-secure facility which has security features out of a James Bond movie protecting it, but only, the newspaper says, on condition that it would not reveal too many of the vault’s wonders. Suffice it to say it has the capacity to hold many tens of billions of dollars worth of precious metals.
This is the second article in a row from Lawrie Williams over at themineweb.com...and it's Ulrike Marx's third and final offering in today's column. The link is here.
Britain’s Sunday Times newspaper was accorded a behind the scenes tour of the ultra-secure facility which has security features out of a James Bond movie protecting it, but only, the newspaper says, on condition that it would not reveal too many of the vault’s wonders. Suffice it to say it has the capacity to hold many tens of billions of dollars worth of precious metals.
This is the second article in a row from Lawrie Williams over at themineweb.com...and it's Ulrike Marx's third and final offering in today's column. The link is here.
Secret IMF report: Hide gold loans and swaps for market manipulation
Western central banks conceal their gold loans and swaps because information about them is "highly market-sensitive" and accountability about them would hinder secret currency market interventions by central banks, according to a confidential report by the International Monetary Fund obtained this week by GATA.
The report, provided to GATA by its researcher R.M., was written in March 1999 as the IMF staff proposed to strengthen financial reporting standards for central banks. The report shows that the objections by gold-lending central banks were decisive in weakening the standards. While the first draft of the new reporting rules would have required disclosing central bank gold loans and swaps, the revised rules, later adopted, allowed central banks to hide their gold loans and swaps within their gold reserves and even not to disclose the amount of their monetary gold at all, just the value assigned to it.
That is, the explicit but secret policy of Western central banking toward gold is to deceive and manipulate markets, as GATA long has complained.
The confidential IMF report says that to strengthen its financial reporting standards for central banks -- its Special Data Dissemination Standard reserves template -- IMF staff members consulted top officials of the organization as well as the Bank for International Settlements, the European Central Bank, the Bank of England, the German Bundesbank, the Bank of France, and other European central banks.
This is today's BIG STORY...and Chris sent it to me very late yesterday evening. If I had to pick just one item for you to read from today's column...this would be it. It's posted on the gata.org Internet site...and the link is here.
The report, provided to GATA by its researcher R.M., was written in March 1999 as the IMF staff proposed to strengthen financial reporting standards for central banks. The report shows that the objections by gold-lending central banks were decisive in weakening the standards. While the first draft of the new reporting rules would have required disclosing central bank gold loans and swaps, the revised rules, later adopted, allowed central banks to hide their gold loans and swaps within their gold reserves and even not to disclose the amount of their monetary gold at all, just the value assigned to it.
That is, the explicit but secret policy of Western central banking toward gold is to deceive and manipulate markets, as GATA long has complained.
The confidential IMF report says that to strengthen its financial reporting standards for central banks -- its Special Data Dissemination Standard reserves template -- IMF staff members consulted top officials of the organization as well as the Bank for International Settlements, the European Central Bank, the Bank of England, the German Bundesbank, the Bank of France, and other European central banks.
This is today's BIG STORY...and Chris sent it to me very late yesterday evening. If I had to pick just one item for you to read from today's column...this would be it. It's posted on the gata.org Internet site...and the link is here.
* * *
¤ THE WRAP
What else has to be done to us before we understand? Isn't this enough? But he knew that it wasn't. He knew that millions upon millions of people knew nothing and wanted to know nothing, and even if they found out would ooh and aah for five minutes and then go back to their own routines. - Arkadi and Boris Strugatskii...Roadside Picnic [1972]
With such a low volume day in the precious metals, I'm not going to read much into yesterday's price action...except for the fact that the rallies that had developed in both gold and silver ran into sellers within ten minutes of the Comex open. However, the dollar index 'rallied' a hair at that point, so that was all the excuse that was needed.
I was not surprised by what Jim Rickards said in his interview further up in the 'Critical Reads' section. He says that the Fed wants inflation...and I agree. One way to get everyone's attention would be to let the price of gold and silver run a bit. That may be in the cards at some point, but it certainly isn't obvious at the moment. Time will tell.
Not much happened in Far East trading during their Tuesday, but both metals got sold down a hair, even though the dollar index declined a bit as well. London has been open for a bit more than two hours as I write this paragraph...and the volume levels are exceedingly light...and the dollar index is down a bit. Based on this activity level, I wouldn't read a thing into the price action at the moment.
Today is the 1-day FOMC meeting...and I have no idea what that portends for the precious metals...if anything. But whatever associated action there may be, won't show up until New York starts to trade.
I was going to post a couple of Chinese gold import charts that Nick Laird sent me on the weekend, but this column has gone on long enough...for you and for me...so they can wait.
See you tomorrow.
With such a low volume day in the precious metals, I'm not going to read much into yesterday's price action...except for the fact that the rallies that had developed in both gold and silver ran into sellers within ten minutes of the Comex open. However, the dollar index 'rallied' a hair at that point, so that was all the excuse that was needed.
I was not surprised by what Jim Rickards said in his interview further up in the 'Critical Reads' section. He says that the Fed wants inflation...and I agree. One way to get everyone's attention would be to let the price of gold and silver run a bit. That may be in the cards at some point, but it certainly isn't obvious at the moment. Time will tell.
Not much happened in Far East trading during their Tuesday, but both metals got sold down a hair, even though the dollar index declined a bit as well. London has been open for a bit more than two hours as I write this paragraph...and the volume levels are exceedingly light...and the dollar index is down a bit. Based on this activity level, I wouldn't read a thing into the price action at the moment.
Today is the 1-day FOMC meeting...and I have no idea what that portends for the precious metals...if anything. But whatever associated action there may be, won't show up until New York starts to trade.
I was going to post a couple of Chinese gold import charts that Nick Laird sent me on the weekend, but this column has gone on long enough...for you and for me...so they can wait.
See you tomorrow.
http://www.goldmoney.com/gold-research/alasdair-macleod/gold-futures-market-heading-for-crisis.html?gmrefcode=gata
Gold futures market heading for crisis
2012-DEC-10
I thought I had a good idea what disasters we might face in 2013, and then I saw the most recent US Commodity Futures Trading Commission’s Bank Participation Report for gold and silver. On the basis of recent BPRs these markets are heading for a crisis, which is generally unexpected. I shall break the reader in gently by looking at gold first.
The first chart below shows US banks’ net short exposure to gold up to December 4. Between February and August the US banks managed to reduce their net shorts from 104,717 to 57,689 contracts against a background of a declining gold price. This is logical, to be expected and sensible position management. However, when the gold price turned up after the August BPR, net shorts rapidly rose to new highs, and over the last month unexpectedly increased again while the gold price actually declined. This is a sign that the US banks, of which only five made returns for December, are having difficulty keeping a lid on the market that emotionally at best is neutral, but most probably somewhat oversold. This differs from an over-bought market with potential profit-takers to shake out, as was the case when gold traded at $1,900 per ounce and the same banks were able to bring the gold price back under control.
The next chart is of Non-US banks’ net shorts, which tells a very different story. From October 2011 these banks increased their short positions, with a sudden jump between August and October, before sharply reducing their net positions to 44,707 contracts this month. It appears that some of the shorts have ended up on the US banks’ books, pushing their shorts to uncomfortable levels as shown in the first chart.
The jump in these net shorts between August and October was comprised of sharp rises in both longs and shorts involving swap dealers and the other commercials. Longs more than tripled from 9,199 to 34,881 and shorts rose even more from 49,772 to 113,445 on a rising gold price. The likely explanation is that buyers materialised through some of these non-US banks, who hedged by buying futures contracts. A dealer or dealers at one or more other non-US banks saw the price go against their shorts and tried to kill it by massive intervention. Subsequently, when the US banks sold the market down from the October rally these non-US banks took the opportunity to reduce their shorts to more normal levels.
This information is particularly revealing, given that the Commitment of Traders Report shows a substantial reduction in the Commercials’ net position by 34,551 contracts for the week to the same date as the BPR, giving an impression of a market being brought back under control. The BPR suggests otherwise.
Silver
While there is a large stock of gold that can theoretically become available at higher prices, the same cannot be said for silver. We shall look at the position of the US banks first. The first silver chart shows that even though silver is trading well below its 2011 highs, US banks’ net shorts are substantially higher than might be expected. The long figure is down to only 625 contracts, while the shorts are 40,198, so these less-than-four-banks that reported last week have a net short exposure of nearly 200,000,000 ounces, or twice the estimated annual supply of silver available to investors after industrial demand is allowed for.
The final chart shows the non-US banks’ net shorts. Unlike their exposure to gold, these banks are in the same deep trouble as the US banks, having made the mistake of turning a broadly level book as recently as the August BPR into a record net short position on the August-October price rise. This is a vicious bear squeeze on them, which added to the US banks’ position amounts to a total short of 290,000,000 ounces. This figure compares with net shorts of only 120,000,000 ounces when the price was successfully taken down from its all-time highs early last year.
Conclusion
The silver does not exist to cover these short positions, and it will take very little further buying to set off a crisis in this important market. In the case of gold, there have always been central banks with physical bullion available to ease market shortages, but so far as we are aware the strategic silver stockpiles of previous decades are exhausted. There is therefore no price at which these shorts can be closed.
Bank positions in both silver and gold seem to have been adversely affected by “events unknown” from the August BPR onwards. All attempts by the banking community to regain control of these important markets appear to have failed.
Since the date of the latest BPR (December 4), there have been three serious attempts to reduce these short positions and each time the same $32.60 level has held firm. This suggests that a buyer or buyers larger than the banks are prepared to take them on by buying the dips. This price action supports anecdotal evidence that physical bullion in important markets such as London is in short supply.
On this evidence, and assuming the trend continues, there will shortly come a time where NYMEX will be forced to declare force majeure in this market, which they can do under their rule book. The consequences of this extreme action could well be destabilising not only for the price and demand for silver but also disruptive for gold.
Therefore, we must add the breakdown of precious metals markets to the list of systemic dangers we face in the New Year.
and answering questions for those wondering where the gold may have gone in Germany and Austria ( and Switzerland , US , UK , Australia etc ........ Gata notes
IMF study in 1999 found 80 central banks lending 15% of official gold reserves
Submitted by cpowell on Sun, 2012-12-09 17:24. Section: Documentation
12:31p Sunday, December 9, 2012
Dear Friend of GATA and Gold:
A study by the International Monetary Fund in 1999, obtained last week by GATA's researcher R.M., reported that more than 80 central banks had lent 15 percent of official gold reserves into the market and that central banks then lending gold included the German Bundesbank, the Swiss National Bank, the Bank of England, the Reserve Bank of Australia, and the central banks of Austria, Portugal, and Venezuela.
The IMF study, commissioned as the agency pondered selling some of its own gold, emphasized the lack of transparency in the gold market and the secrecy demanded by central banks.
"Information on the gold market is patchy," the study said. "Transactions are characterized by a high degree of secrecy. Apart from the relatively small amount of open trading on exchanges, gold trades are private, over-the-counter transactions, and little is reported on these transactions. ... Official information on gold lending is virtually nonexistent."
... Dispatch continues below ...
As a result, the IMF study said, its information was "largely drawn from private sources."
Predictably enough, the study said "the increased mobilization of central bank reserves through gold lending operations has had a depressing influence on the spot price for gold since on-lent gold is usually associated with sales of gold in the spot market."
Indeed, just a year earlier, urging Congress not to regulate financial derivatives, Federal Reserve Chairman Alan Greenspan had disclosed that controlling the gold price was the primary objective of gold lending: "Central banks stand ready to lease gold in increasing quantities should the price rise."
Further, the IMF study said, gold lending had caused central banks to become active in the gold derivatives market with bullion banks and gold producers, "selling through forwards and options."
In turn, "bullion banks have made efforts to secure and consolidate long-term relationships with central banks."
"The number of countries with official-sector involvement in the gold lending market is now estimated to have reached over 80. The outstanding amount of gold lending provided by the official sector by end-1998 amounted to nearly 15 percent of official gold holdings of all central banks. The share of industrial countries in the stock of total official gold lending rose from 33 percent at end-1995 to 46 percent by end-1998 as some industrial-country central banks increased their lending, while new lenders, such as the Bundesbank and the Swiss National Bank, entered the market."
Thirteen years later it seems likely that the proportion of central bank gold reserves that has been lent into the market is substantially higher, as Western central banks continue to demand secrecy for their gold lending even amid growing concerns about the security of their gold reserves vaulted abroad.
With so many central banks lending so much gold in secret to financial institutions whose primary talent lately has been shown to be rigging markets, who but the usual agents of disinformation still can deny that the gold market is manipulated precisely to prevent the world from enjoying free markets generally?
The IMF's 1999 study of gold lending has been posted at GATA's Internet site here:
Your secretary/treasurer surely cannot have perceived everything of significance in the study and so would be grateful to receive comments on it by e-mail at CPowell@GATA.org.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
and from silver doctors - gold , silver and major news of the day .......
By SD Contributor 
In his latest update to CIGA’s, the legendary 
Excellent Post, I agree that in 2013, Gold & Silver price will increase. It can even drop also but it depends on economic problems of some countries. I also get trading tips on this topic from the experts & they also think likewise.
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