Zero Hedge
Submitted by Tyler Durden on 11/09/2014 17:08 -0500
http://www.zerohedge.com/news/2014-11-09/another-conspiracy-theory-bites-dust-ubs-settles-over-gold-rigging-many-more-banks-f
Submitted by Tyler Durden on 11/09/2014 11:56 -0500
Submitted by Sprout Money on 11/09/2014 08:00 -0500
Tweets......
China Aims For Official Gold Reserves At 8500 Tonnes
Submitted by Tyler Durden on 11/09/2014 - 20:17
"China should accumulate 8,500 tonnes in official gold reserves - more than the US... Gold is money par excellence in all circumstances and will help support the renminbi to become an international currency as gold forms the very material basis for modern fiat currencies"
What The Swiss Gold Referendum Means For Gold Demand
The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war - between the Swiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People's Party (SVP) on the other - has begun and we expect it to escalate as the day draws ever nearer. Having already questioned the 'location, location, location' of Switzerland's current gold stash, and examined the initiative in great depth here, JPMorgan notes that not only might the forthcoming Swiss gold referendum stabilize gold prices at a time when Gold ETF demand continues to decline, but warns, it also appears that markets under-appreciate this event.
As JPMorgan explains,
Gold ETF flows continued to bleed losing $4bn or 6% of AUM cumulatively since the end of August.
Gold Miners ETFs, which have held up relative well up until recently also suffered over the past two weeks (Figure 7).
The downtrend in Gold ETF flows represents a headwind for gold in the face of subdued physical demand recently.
The latest data from China Gold Association, reported physical gold demand by Chinese investors of only 185 tonnes in Q3, down from 246 in Q2 and 322 in Q1.
While Chinese physical demand remains subdued...
[ZH - a point we note is very much in the eye of the newspaper holder]Who do you choose to believe?h/t @sobata416
* * *
The forthcoming Swiss gold referendum could stabilize gold pricesat a time when Gold ETF demand continues to decline.
It also appears that markets under appreciate this event.If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year.This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year.
* * *
As Grant Williams noted previously, with the establishment being unable to actively campaign AGAINST the Initiative, all has been quiet for many months; but with the dawning awareness that this little campaign might actually grow some legs, a few members of that establishment have been getting a little antsy...
(Centralbanking.com): ...Now, with less than two months until the vote, the central bank is intensifying its communication. It opened a “dossier” on its website yesterday where it will post materials outlining why it “reject[s] the initiative”.“Monetary policy transactions directly change our balance sheet. Restrictions on the composition of the balance sheet therefore restrict our monetary policy options,” [SNB Vice-chairman Jean-Pierre] Danthine explained.“A telling example is our decision to implement the exchange rate floor vis-à-vis the euro... with the initiative’s legal limitation in place, we would have been forced during our defence of the minimum exchange rate not only to buy euros but also to buy gold in large quantities.“Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means.”
Sometimes I think these people are completely delusional.
So, let me get this straight: gold is a relic which restricts your ability to do such vital things as... oh, I dunno, promise to print unlimited amounts of your currency in order to peg it to another, failing currency and thereby debase it by 9% in 15 minutes? Or it might mean the market doesn’t have complete faith that you might be completely relied upon to do really smart things like that?
Disaster!
Somebody. Please? Make it stop.
The Swiss establishment has been reliant upon the public’s ignorance in these matters, but now they are up against a formidable opponent in Egon von Greyerz. Not only that, but they can clearly see that, as elsewhere around the world, the public is fast becoming disenchanted with the status quo; and that is potentially very dangerous for these people.
What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY — not in two years, as many blogs and websites are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you.
The closer we get to the vote on November 30, the bigger this story is going to become, and the bigger it becomes, the higher the chance that the yes vote wins.
Should that happen, it will undoubtedly set off alarm bells throughout the gold market, as yet more physical gold will need to be repatriated and another sizeable, price-insensitive buyer will enter the marketplace.
http://www.zerohedge.com/news/2014-11-09/another-conspiracy-theory-bites-dust-ubs-settles-over-gold-rigging-many-more-banks-f
Another "Conspiracy Theory" Bites The Dust: UBS Settles Over Gold Rigging, Many More Banks To Follow
- Barclays
- Central Banks
- Deutsche Bank
- LIBOR
- Market Manipulation
- New Normal
- None
- Precious Metals
- Reality
- Zurich
Remember when everyone decried wholesale Libor manipulation as a crazy conspiracy theory (Zero Hedge: January 2009: "This Makes No Sense: LIBOR By Bank") because after all, it was impossible for so many people to keep their mouth shut or whatever the generic justification is for disproving such "conspiracy theories"? Why, none other than ICAP chief Michael Spencer says they all though Libor was "unmanipulable." As it turns out, not only is Libor manipulable(sic), and a vast rate-rigging "conspiracy theory" is quite possible when everyone's interests are aligned, but it also was massively profitable.
Then it was the turn of the even more massive, multi-trillion FX market, when first UBS squealed like a pig and soon ratted out every other bank in the criminal "Cartel" (or was it "Bandits"?) syndicate (see: "Meet The (First) Seven Banks Who Rigged The FX Market"). End result: banks such as JPM, Citi and BofA forced to review their criminal ways and adjusting their third quarter results a month into Q4. Many more legal fees, charges and settlement coming however for those who lost money on the other side of such long-running manipulation, please accept our condolences: you won't see a penny.
And finally, there was the precious metals market: a market which all the Keynesian fanatic paper bugs said was immune from manipulation, be it of the central or commercial bank kind, even with every other market clearly exposed for perpetual rigging either by hedge funds, by prop desks, by HFTs, or central banks themselves.
Sadly this too conspiracy theory just was crushed into the reality of conspiracy fact, when moments ago the FT reported that alongside admissions of rigging every other market, UBS - always the proverbial first rat in the coal mine, to mix and match metaphors- is about to "settle" allegations of gold and silver rigging. In other words: it admits it had rigged the gold and silver markets, without of course "admitting or denying" it did so.
UBS is to settle allegations of misconduct at its precious metals trading business alongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging.* * *UBS is expected to strike a settlement over alleged trader misbehaviour at its precious metals desks with at least one authority as part of a group deal over forex with multiple regulators this week, two people close to the situation said. They cautioned that the timing of a precious metals deal could still slip to a date after the forex agreement.Regulators around the world have alleged that traders at a number of banks have colluded and shared information about client orders to manipulate prices in the $5.3tn-a-day forex market. UBS has previously disclosed that it launched an internal probe of its precious metals business in addition to its forex investigation. It declined to comment for this article.Unlike at other banks, UBS’s precious metals and forex businesses are closely integrated. The business units have joint management and the bank’s precious metals staff – who mainly trade gold and silver – sit on the same floor as the forex traders.One person familiar with UBS’s internal probe said the bank found a small number of potentially problematic incidents at its precious metals desk.
"Potentially problematic incidents"? One must give props to the FT for always finding just the right amount of politically correct lipstick to cover up what was market manipulation, pure and simple, which continued for years and years, even as the same FT routinely mocked everyone who alleged otherwise.
****
The US Government Doesn’t Want You To Know There’s A Run On Silver Bullion
It looks like the entire world is spitting out gold and silver as an investment or hedge, as the prices of both precious metals were tumbling in the past few weeks. Well, at least the demand for gold and silver ‘paper’ isn’t anymore what it used to be, but the demand for physical silver is really booming.
Reports have reached us from Germany that the demand for silver is really surging, and this is an interesting sentiment meter because Germany usually acts as one of the main distribution centers for the European Union. Several large bullion dealers have seen the demand for silver increase, and in just the next few days after last week’s crash, almost all dealers sold as many silver coins in just three days as they usually do in an entire month.
Now you can try to dismiss this easily by saying that the Germans and the rest of the European Union are simply preparing for an upcoming implosion of the Eurozone, but that couldn’t be further from the truth. The US Mint recently had to announce that there were no more silver Eagles in inventory, and that it would have to suspend deliveries for new orders. This announcement hasn’t been made public (why not, US Mint? Are you trying to keep the people dumb?) but was only sent to larger bullion dealers in the USA.
Source: US Mint
So did the US Mint miscalculate its production rate or was there effectively a surge in demand? Well, the previous image proves it’s the latter. The sales number of Silver Eagles in October almost TRIPLED from the August level and in just the first few days of November (there were only 3 trading days before the US Mint ran out of coins), another 1.26 million ounces were sold, and this brings the total year to date at 39.3M (and it’s quite certain last year’s sale number of 42.675M will be surpassed). We see the same demand increase in gold (see the next image), as the Mint sold more gold in October alone than in July and August combined. And here again, in just the first few days in November, the Mint already sold more gold than in several previous months and it looks like November will end on the second place in terms of demand per month.
Source: US Mint
A cheap argument would be that it’s the Europeans who are accelerating their purchases of Silver Eagles. That’s incorrect, as people usually buy silver Maple Leafs and Australian coins and not as much Silver Eagles which have a higher premium over the pure silver value. So this demand for the Silver Eagles (and renewed demand for the Gold Eagle coins) is coming from the USA itself and NOT from foreign demand.
All signs are indicating that both in Europe as in the USA (not so much in Australia, which – despite the big mining sector- isn’t in a bad shape from an economic point of view) the demand for precious metals coins is surging. It’s not surprising the US Mint has ran out of inventory, but instead of announcing it in a press release, it sent a secret note to the bullion dealers. As the US Mint is a government institution, it should really be no surprise the government doesn’t want you to know there a rush to get your hands on gold and silver.
Tweets......
@EdSteerGSD:JPMorgan et al painted key reversals to the upside in all of them http://www.caseyresearch.com/gsd/edition/greenspan-gold-is-currency.-no-fiat-currency-including-the-dollar-can-match-it/ …
Jesse's Café Américain: Gold Daily and Silver Weekly Charts - Short Squeez... http://jessescrossroadscafe.blogspot.com/2014/11/gold-daily-and-silver-weekly-charts_7.html?spref=tw …
Jesse's Café Américain: A Tale of Two Markets: Gold Market Manipulation in... http://jessescrossroadscafe.blogspot.com/2014/11/a-tale-of-two-markets-gold-market.html?spref=tw …
Hal
.@JessesCafe Américain: Gold Daily & Silver Weekly Chart - Big money and government are in a corrupt partnership http://sco.lt/8VjFnl
No comments:
Post a Comment