I have been warning people for several months not to confuse “bullion-ETF's” with actually owning real gold and silver (see “Bullion-ETF's: a multi-purpose scam”). In the case of silver, I've pointed out that it simply isn't possible that both the silver bullion-ETF's and the massive “short” positions at the Comex could be fully-backed since the two total more than 100% of existing inventories – with nothing left over for the other 95% of the world (see “History of Silver, Part III: inventories gone!”). What is important to note is that the bullion banks with those massive, short positions are also the custodians for most of the silver (supposedly) “owned” by the bullion-ETF's.
Now, this week we find out that one of the members of the U.S. financial crime syndicate has agreed to pay a multi-million dollar fine for pretending to buy and hold bullion on behalf of clients. This is not the first time that Wall Street banks have been caught engaging in bullion-fraud, and it won't be the last.
Despite the rising reek of corruption, we have a scenario where the bullion-ETF's claim to be fully-backed because they can produce serial numbers for the gold and silver bars they claim to own. However, since the massive short positions of the bullion-banks are NEVER audited, there is a potential shortage here of billions of dollars in bullion – and in the case of the silver bullion-ETF's, there is nothing hypothetical about it. There simply can't be enough silver to back everyone.
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Oooh Busting the Comex!
ReplyDeleteYeahs. Like how GreenLight hedge lost 23% last year, so this year they go ahead and take all 5 billion federal coupons they have and buy 5 billion worth of gold bullion and TAKE DELIVERY! 147 TONS of gold! Woohoo!
I bet that made the Chinese very unhappy because they wanted that gold to help make a gold backing for their Yuan which they envision as becoming a world currency.
Oooh they are SO ANGRY.
Especially when you consider the USA only has like 1200 tons according to the unauditable federal folks that say 'we have 1200 tons and you'd best beleive that!' in fort knox which was recently used as an anechoic echo chamber for a re recording of Bob Dylan's 'Like a Rolling Stone'
hang em high
ReplyDeleteDon't worry about the neighborhood thief, worry about the thief at your bank.
ReplyDeleteI can't wait until the crookes get screwed! It's going to be wonderful to see as we sit back and watch gold & silver soar to true market value! Like about 2 to 3 times higher than it is now!
ReplyDeleteTrue market value of silver is 10x what it is now, or more. Silver is being heavily manipulate down.
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