Tag Archives: Comex

Was Gold Actually “Dumped” Friday?

Sifting through Twitter, I came across a curious assertion posited as a reply to a post on “unemployment” on Steph Pomboy’s twitter feed (@spomboy).  The tweeter asked, “have you noticed that gold is being dumped?”  But was gold “dumped?”  Perhaps the tweeter should have qualified the question with the adjective, “paper,” in front of the word “gold.”

I replied rhetorically with, “is actual physical gold being dumped or is it Comex is it paper gold?” Let’s have a look. (click image to enlarge)

The Comex is a futures contract trading venue. While the Comex vault operators issue daily vault reports which allege the presence of 100 oz gold bars in custody, we have no idea if all of the bars are sitting physically in the vaults or whether or not there are any sort of encumbrances attached to any of them. Very few holders of gold contracts ever take delivery and very little actual physical gold moves in or out of the Comex vaults on a weekly/monthly/quarterly basis.  In short, the Comex is a paper gold trading exchange.

On Friday, after the primary physical bar trading markets – India and China – were closed for the weekend, large quantities of paper gold futures were suddenly being dumped into the CME’s Globex computer trading system, about 5 minutes before the Comex gold pit opened for the day (8:20 a.m. EST).  You can see the action narrated in the chart above.  It’s not uncommon for the price of gold to be smashed using paper gold on the Friday after an FOMC meeting, especially in the summer months when trading operations are likely only at half-staff and the rest of the world is gone for the weekend.

Over a 60 minute period from 8 a.m. – 9 a.m. EST, approximately 90,300 contracts were sold, largely indiscriminately hitting every bid in sight.   This is the equivalent of 9.03 million ozs of gold.  There’s only one problem with this:   as of Friday’s warehouse report, Comex vaults were reporting total gold stock of 9.01 million ozs – only 507,453 of which were listed as “available to be delivered.”  In other words, in just one hour, the total amount of gold allegedly held in Comex vaults was “dumped” in the form a paper derivatives.  Worse, the amount “dumped” was 17.7x the number of gold ozs currently available to deliver.

For the entire day, Globex + floor volume, 495,364 contracts were “dumped.”  This is 49,536,640 ozs of Comex paper gold.  Again, I ask the tweeter who posited that comment on twitter, was gold really “dumped” on Friday?

For those who monitor the daily gold flow into India and China, I will bet any amount of money that both of those markets will be aggressively buying more than their usual daily amount of physical gold in order to take advantage of the lower price.   Funny that Trump would enable the Chinese to buy cheap physical gold when he’s engaged in a rapidly escalating trade war with China…

Gold And Silver Are Extremely Undervalued

Patrick Vierra of Singapore Bullion invited me to discuss precious metals, the stock market and the fiat currency-fueled asset bubbles that will blow-up sooner or later.  I explain why investing in gold requires a long term perspective on investing and wealth preservation, why gold and mining stocks are extremely undervalued right now and why the world wants out of the U.S. dollar.

Singapore Bullion is Singapore-based bullion dealer and bullion storage facility with a wide-array of products and services – the podcast is ad-free:

01:37 Gold – A Long Term Perspective
08:14 Was 2015 the bottom for gold price?
13:14 Gold – One of the Best Performing Assets
14:45 Bullion vs Mining Stocks
17:10 Gold is very undervalued right now
19:20 The COMEX cycle that impacts the gold price
21:47 Silver will outperform gold
25:00 How overvalued are the stock markets
30:11 How every U.S pension funds will ‘blow up’
32:40 The ratio of paper to physical gold
35:01 Housing bubble rearing its head again
39:51 “Trump loves debt!”
41:09 Fed rate hike to prick the housing bubble?
45:25 The world wants out of the dollar

You can learn more about my research and stock idea newsletters here:

MINING STOCK JOURNAL                                     SHORT SELLER’S JOURNAL

The Mining Stock Journal is twice per month, every other Thursday evening. The Short Seller’s Journal is weekly, every Sunday evening. The last mining stock purchase recommendation (May 17th issue) is up 10.5% in the last five trading days. It’s going higher – a lot higher.  My Short Seller’s Journal subscribers have been raking in the profits in my homebuilder short ideas.

A Quiet Bull Market Move In The Mining Stocks

This analysis is an excerpt from the opening market commentary in my April 19th issue of the Mining Stock Journal.

I was looking at some charts with a colleague two weeks ago and was startled to discover that a very quiet bull move has begun in the miners. Like the move that began in late 2015, it seems that some of the junior miners per GDXJ have gotten the party going. As you can see in the chart above, GDXJ is up 12.8% since December 7, 2017. GDX is up 9.5% since March 1st. Some individual stocks are up quite a bit more than the indices: AEM up 18% since March 1st, EXK up 49.7% since Feb 9th, Bonterra up 25% since March 1st, etc.

The chart below is two weeks old but the bull pattern in GDX (and GDXJ, HUI, etc) has continued after a brief pullback (which in and of itself is bullish):

In my opinion, the charts in the sector are beginning to look quite bullish. I would like to see the Comex gold futures open interest drop 70-80k contracts – it was 499k as of Friday’s close. However, if a bigger move than has occurred already starts now, the big Comex banks will be forced to cover their large short position in gold futures. This will “turbo-charge” the move [in fact, per the latest COT report, the Comex banks continue to cover shorts and reduce their net short position and the hedge funds continue to dump longs and add to shorts – historically this shift in trader positioning has preceded big bull moves in gold/silver].

Silver is also starting to form a very bullish base:

Wholesale silver eagle premiums are creeping higher, as are retail premiums. Perhaps the big inventory overhang that had formed over the last year is starting to clear out. Also, silver mining stocks, especially the ones that actually produce and sell silver, have been quietly outperforming just about every stock sector (I have had a buy recommendation on a smaller silver producer since early October 2017 – the stock is up 20% since that buy recommendation (I own it) and it’s up 47% since it bottomed in December.

From a fundamental standpoint, given the deteriorating financial condition of the U.S. Government and the escalating rate of inflation and geopolitical risks, the planets are aligned for a big move in the precious metals sector.   If the banks continue to reduce their net short position in Comex paper gold – and concomitantly the hedge funds continue to reduce their net long position – then both the planets and the stars will be aligned for a move in the sector that I believe will take a lot of market observers and participants by surprise.

The Mining Stock Journal is a bi-weekly (twice per month) newsletter that offers in-depth precious metals market commentary and, primarily, junior mining stock ideas.  My goal is to find the hidden “gems’ ahead of herd.  You can find out more here:  Mining Stock Journal information.

Wow great report…by the way I have cancelled most of my precious metal subscriptions except your’s…. You do a treat job for us! – from “Robert,” received last week

Are The Precious Metals Percolating For A Big Move?

Since the beginning of 2018, gold has been stuck in a trading range between $1310 and $1360.  Silver has ranged between $16.20 and $17.50, though primarily between $16.80 and $16.25 since February.   So what’s next?   While most analysts base their views largely on chart technicals, I have found – at least for me – the Commitment of Trader “tea leaves” is a more reliable forecasting tool.  Friday’s COT report showed a continuation of the trader positioning pattern that I believe will support the next big move higher.

Elijah Johnson and James Anderson invited me on to their weekly Metals and Markets podcast to discuss why I believe the metals may be bottoming.  In addition, we discuss the why Amazon.com and Tesla are horrifically overvalued:

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Stocks Dump Today – WTF Just Happened?

The stock market (per the Dow), after an initial spike up at the open, has sold off continuously today. The sell-off began to accelerate just before 2 p.m. EST on no specific news or event catalysts.  So what the heck happened?  To begin with, the stock market jumps at the open almost everyday no matter what type of news hits the tape overnight.  It’s clear that the Fed’s “unspoken” policy is to support asset prices.  But it’s the events developing behind the thick veil of propaganda that is starting to become obvious.

The real economy sucks.  The average household is sinking slowly under  the weight of debt that grows continuously and will soon become unbearable.  The fraud and corruption at all levels of Government and Corporate America has become glaringly blatant.   The Federal Government is going to issue well over $1 trillion in new Treasury debt this year – debt that not only will never be repaid but will continue to grow exponentially until the system collapses.

Gold has spiked up in response to the stock market turmoil.  Physically deliverable gold is running low in NY and London.  The clearest sign of this is persistent backwardation on the LBMA.  Eric Dubin and I discuss the ticking time bomb of rising interest rates and what it will take for gold and silver to finally break out and up in our “WTF Just Happened” podcast hosted by Jason Burack’s  Wall St For Main St:

A Dollar Collapse – And Gold Revaluation – Is Inevitable

“Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today…

…The pricing of financial assets, and today’s extraordinarily low interest rates indicate that a flight from the dollar is the last thing expected in financial markets. If they were still alive, de Gaulle and his economic advisor, Jacques Rueff, would be instructing the ECB, as successor to the Bank of France, to dump all dollars for gold immediately. And probably to dump all other foreign fiat currencies for gold as well. However, today, it is likely that other actors will blow the whistle on the dollar, such as the Chinese, and the Russians.”

The quotes above are from Alasdair Macleod’s piercing essay on the gold standard and the mechanics underlying an inevitable collapse of the U.S. dollar: Why A Dollar Collapse Is Inevitable. No one can claim to understand the modern monetary system without reading this piece from Macleod. It also explains by Modern Monetary Theorists are full of shit.

As the antithesis to the dollar, gold will soar. I was looking at some charts with a colleague earlier this week and was startled to discover that a very quiet bull move has begun in the miners.

Like the move that began in late 2015, it seems that some of the junior miners per GDXJ have gotten the party going. As you can see in the chart below, GDXJ is up 12.8% since December 7, 2017. GDX is up 9.5% since March 1st. Some individual stocks are quite a bit more than the indices: AEM up 18% since March 1st, EXK up 49.7% since Feb 9th, Bonterra up 25% since March 1st, etc.

I’ve had several stocks in my Mining Stock Journal that have outperformed the sector my several multiples. Some of them are risky junior exploration stocks and some are lower-risk producers. A good example is EXK, which I presented in the August 24, 2017 issue at $2.16. It closed Friday at $3.06, up 41% from my buy recommendation. This is just one out of many examples. You can learn more about the Mining Stock Journal here: Mining Stock Journal Information.

Why Mark Cuban’s Comments On Gold Make Me Want To Buy More

Below is a must-read essay from a friend and colleague of mine, Chris Marcus, who is a former options trader (Wharton MBA) that now lives in Denver.  Many of you may not be aware, but Mark Cuban made his fortune the old fashioned way – he was lucky to be in the right place at the right time. Cuban owned Broadcast.com (a relic of the 1990’s tech bubble).  Yahoo.com used tech bubble stock “wampum” to acquire Broadcast.com.  Broadcast.com was no longer around a few years later.

If anyone knows how to get lucky off a worthless asset, it’s Mark Cuban.  Currently he spends his time running the Dallas Mavericks into the ground.   Chris Marcus eloquently presents the counter-argument to Mark Cuban’s absurd comments about gold in a Kitco.com interview.

During my time training to be an equity options trader, the shop I worked for required that I log 100 hours of poker training. Under the belief that there are great similarities between the decision-making required for poker, and that required for successfully trading the financial markets.

Along those lines, there was a particular lesson that always stood out to me. That while the numbers and percentages are important in both sciences, understanding the people you are playing against is equally, if not a more important element of the game.

Because you might think you’re right, and the person you’re trading against might think they’re right. But if you can identify why they’re wrong and spot the flaw in their thinking, that can really arm you with some confidence in your bet.

If you’ve seen the movie The Big Short, you may remember the scene where right before one of the funds was getting ready to increase the size of their bet against the mortgage industry, they were a little bit concerned.

But to ease those fears, the Deutsche Bank character played by Ryan Gosling took the fund managers to meet the people they were actually trading against. Because once they heard how the people they were trading against were completely caught up in the mania and missing the bigger picture, it gave them the confidence to pile on their trade in even bigger size.

Along those lines, for those investing in gold and silver, there were some interesting recent comments from Dallas Mavericks owner Mark Cuban. That are somewhat reflective of the mainstream view of gold, and similar to the rhetoric you hear out of the central banks.

Which in my own personal opinion comes as extremely fantastic news for those who own precious metals and wonder whether there is still upside to the pricing.

Cuban was interviewed by Daniela Cambone of kitco.com. And with all due respect to Mr. Cuban, some of his answers were so far detached from the reality I’m living in that the more I heard him talk, the more I was tempted to dial Andy Schectman and buy more gold.

Consider the following:

Cambone: Where do you think are some of the safest bets for your money right now?

Cuban: If you need safe, just put the money in the bank.  (Editor side note – seems safe to say at this point that Cuban likely hasn’t been reading Von Mises during halftime at the Mavs games).

Cambone: Gold, up 2.5% for the first quarter. I know in the past you’ve seen it as a speculative bet. How do you see it today?

Cuban: I hate gold. Gold is a religion. There’s some fundamental value to gold, but everything else…it’s a collectible.

Cambone: Well hate is a strong word. The miners too?

Cuban: Individually as people, I heard they’re great people (he says giggling). But as an investment, hate is not strong enough. Hate with an extreme prejudice.

Cambone: So you don’t see gold as money.

Cuban: I do not see it as an alternative to currency. No not at all.

Cambone: Do you feel the same about silver, palladium, or platinum?

Cuban: I don’t know those others as well. But those are pretty much based off their intrinsic value as much as I can tell.

Cambone: So you’re in the camp of gold is just a pet rock.

Cuban: Pretty much. But I’d buy a pet rock first.

Mark Cuban Says Gold And Bitcoin Are Equally Useless – Part 1  – Ironically in 2016 in response to market turmoil, Cuban bought call options on gold. At the time he explained how “when traders don’t know what to do, they go where everybody is, and I thought there was a good chance that would be gold.”

Which makes his current comments all the more baffling. Although perhaps Cuban doesn’t see any cause for concern with rising interest rates and foreign creditors walking away from the dollar system.

Ultimately what Cuban thinks about gold may be irrelevant. Yet to the degree that there are many in the markets who share a similar line of thinking, it’s worth registering that if you own gold, this profile and argument is essentially what you’re betting against.

Personally I receive it as great news. Because in my career, the best trades are not when a person thinks they’re right and puts the trade on. But when a person thinks they’re right, knows why the other person is betting against them, and can spot the flaw in that person’s logic.

I’ll leave it up to you to decide whether Cuban’s argument makes much sense. But his views are generally reflective of what the anti-gold crowd is thinking, and it makes me feel better than ever about owning physical gold and silver. (Article LINK)

The Paper Gold Price Attack Cycle Is Almost Over

As students of the gold market know, the paper gold markets in New York and London function as price manipulation mechanisms used by the western Central Banks in their effort to control the price of gold. As the physical demand from the eastern hemisphere pushes the price higher, the operators of the LBMA and Comex print large quantities of paper gold (gold futures, forwards) in order to satisfy the demand of hedge funds, which use futures to chase price momentum (up and down) in gold and silver.

Gold had been trading in a sideways pattern since mid-September between $1320 and $1260:

The graph above is derived from the Comex “continuous contract” end of day price. The continuous contract is not an actual contract. It is rather a price measure that “splices together” the front-month contracts over time for charting purposes.

As you can see, gold has formed a nice uptrend from late December 2016 that seems to have “stalled” since mid-September.  I watch the Comex gold futures open interest level and the COT “structure,” where COT structure is the big bank net short position vs the hedge fund net long position, in order to form an opinion on where I think the price of gold is headed. When the open interest in gold futures is at an extreme high level, combined with a bank net short position that is also extremely high, it almost always implies a price-takedown is coming.

Since mid-September, however, the gold futures open interest has stubbornly persisted above 500,000 contracts until the last week. Similarly, the big bank net short and the hedge fund net long positions have persisted at extremes over this time period. This is because, contrary to the “fake news” anti-gold propaganda spewing from U.S. financial media (Bloomberg and reuters specifically), physical “consumption” in the eastern hemisphere (India, China, Russia, Turkey, etc) has been unexpectedly strong.   Evidence of this is in direct data that comes from these countries and from the unusually high level of Privately Negotiated and Exchange For Physical transactions occurring on the Comex and the LBMA. These are “off exchange” contract settlement transactions that are intentionally opaque in nature.

Historically, extremes in these metrics tend to correct in much less time than the current period.   We have maintained a hedge on our mining stock portfolio for about 80% of the time between mid-September and now. We pulled it off about two weeks ago on a Friday thinking that maybe the ability of the banks to slam the market had diminished this time because of the strong physical demand from the east. Literally about 30 minutes after we took off the hedge the price of gold was slammed (I’m not kidding).

My thinking has been that, if we abide strictly by the COT and open interest, the Comex o/i needs to decline to the low 400k area before the next move higher takes place. When I “eyeballed” the gold chart in early September in the context of historical price-takedown operations, I figured it would take a move down to the $1230-1240 area to wash out enough open interest to rebalance the net short/net long set-up. But the open interest has persisted above 500k and the attacks on the gold price during the paper trading Comex hours have been short-lived in duration and shallow relative to historical intra-day attacks. The banks couldn’t  seem to get gold below $1260-$1270 until this week.

My best guess is that the unusually high demand for physical gold from the eastern hemisphere has prevented the banks from taking the price down enough to trigger one last hedge fund open interest wash-out. The 34,896 contract plunge in gold futures open interest last Tuesday (November 28) was the third largest one-day decline in o/i since the beginning of 2011 and it is a move in the right direction in order to break the “log-jam” in open interest on the Comex.

That said, the eastern hemisphere will go into temporary hibernation in mid to late December thru early January. I suspect that one last “shock and awe” price attack orchestrated in the paper market will be attempted in order to get the open interest down into the low 400k area. I thus expect the bull trend in gold/silver will resume in mid-January. We put the hedge back on this week, though we’ve been trying to trade in and out of it on price swings. In all likelihood, unless I see something that suggests otherwise, we’ll likely go through the Christmas/New Year’s period with a hedge.

One last thought, it’s going to be interesting to watch the Bitcoin bulls squirm and panic when the CME banks wrap their tentacles around Bitcoin futures.  Contrary to the untested notion that the supply of Bitcoin is capped, the supply of paper Bitcoin (futures contracts) is theoretically infinite…

The commentary above is from IRD’s Mining Stock Journal, which focuses on undiscovered gold and silver junior exploration stock ideas as well as presents relative value trading ideas in mid-cap mining stocks.  You learn more about this newsletter hereMining Stock Journal Information.

I wanted to thank you again for explaining to me how you put a hedge on it has saved me a great deal of money  – subscriber feedback received this morning

Will The New Bitcoin CME Futures Contract Benefit Gold?

The Chicago Mercantile Exchange (CME) announced a plan to launch Bitcoin futures by the end of the year. The price of Bitcoin surged to a new record in response to the announcement.  It was reminiscent of the dot.com era, when a dot.com stock would jump 10% if Maria Bartiromo merely whispered the name of the company on CNBC.

Ironically, the cheers for this new contract from the Bitcoin faithful could turn out to be analogous to chickens in the barnyard cheering at the appearance of Colonel Sanders.

GATA released an article about the new Bitcoin futures contract titled “So Long Cryptos.” I’m sure that editorial stance puzzled most Bitcoin price-momentum chasers.  Crypto aficionados, for now, overlook the fact that CME futures are used aggressively to push around the dollar-based Comex gold and silver futures contracts.

As GATA points out, the ability to manipulate precious metals futures contracts by the official entities motivated to suppress the price of gold is reinforced by the volume trading discounts given from the CME to Governments and Central Banks who trade on the CME.

If there any reason to assume that the same volume discounts will not be extended to the Bitcoin contract?  Another curious feature of the Bitcoin contract is that it will be settled in cash.  I would point out the original intent behind futures contracts was to enable producers and users to agree ahead of time on a price that would be paid for the delivery of the underlying commodity associated with the futures contract.  Futures were a financing tool intended to facilitate the production and distribution of the underlying commodity product.

The Bitcoin futures contract is settled only in cash – U.S. dollars.  To wit, does this not theoretically sabotage the intended purpose of Bitcoin, which is to provide an alternative to fiat currencies?  Why would you want to receive fiat dollars rather than delivery of the underlying?

Technically this is not a bona fide futures contract. It’s a derivative of the “index” price of Bitcoin but it does not facilitate the production and distribution of Bitcoin.  As such, it’s an instrument of pure speculation. By definition, this opens the door to manipulation by the entities who might be motivated to control the price of Bitcoin. Oh, by the way, those entities can buy and sell the contracts at a price advantage to the speculators by virtue of the volume discounts.

At least with gold and silver contracts, the contract enables the contract owner to take delivery of the actual physical commodity connected to the contract. To a limited extent, this mechanism serves to prevent the complete unfettered manipulation of gold and silver via the Comex futures contract.

With the Bitcoin futures contract, the contract owner is paid cash.  The absence of a requirement to deliver actual Bitcoins enables the issuance of an unlimited number of fiat dollar-based paper Bitcoin contracts which can be used to drive the price lower by increasing the supply of the contract relative to the demand.  So much for the idea that Bitcoin supply issuance is firmly capped. This could  actually be quite entertaining to observe

It’s also quite possible that Bitcoin futures could divert hedge fund trading volume away from gold and silver futures. This would be a blessing in disguise if this occurs.  The price-momentum chasing hedge fund algo trading enables the Comex bank manipulation of Comex futures contracts.  Remove this source of volume and it will remove to some degree the ability of the banks to push the price around by exploiting the hedge fund algos.

If the percentage of open interest in gold and silver Comex futures contracts becomes skewed toward the users of these contracts who actually take bona fide delivery of the underlying physical gold/silver bars because the non-delivery-taking users move over to Bitcoin futures, it could  mitigate the ability of the banks to price-cap the price of gold/silver.  

In this regard, investors who prefer to keep their wealth stored in physical gold and silver rather than fiat dollars or fiat Bitcoins will indeed welcome the new Bitcoin futures product.

Where Is The United States’ Gold?

A concocted public relations scheme – an event which resembled the annual Punxsutawney ground-hog viewing tradition –  in which the Treasury Secretary emerges from Ft Knox and proclaims, “the gold is safe” does not provide any evidence whatsoever.

On cue, Jim Rickards followed up with a half-baked apology for the unwillingness of the U.S. Government to force a bona fide audit of the public’s gold being “safekept” in the Fed’s custody.

Bill “Midas” Murphy asked my opinion on Rickard’s white washing of the topic:

This is why I don’t read Rickards. I don’t know what his deal is anymore. He was a front for the Pentagon’s goal to circulate the idea of the SDR replacing the dollar as the reserve currency. This is because they know the dollar is toast but the dollar is still the largest percentage share of the SDR so the U.S. would remain in control over the world’s reserve currency if it were to be the SDR.

Now Rickards has pimped himself out to Agora, which really devalued Agora in my opinion. And he’s ripping off the public with his gold letter subscription. Total scam.  I’ve had subscribers to my Mining Stock Journal tell me his subscription service is a farce.

He really butchered the truth there with that article. While it’s true that a gold leasing transaction does not have to entail the actual transfer of physical gold from the lessor to the lessee, often it does.  Goldman recently did a lease-style transaction with Venezuela that transferred possession of VZ’s gold to Goldman.

The U.S. would have to audit to the gold if the public forced the issue. Ron Paul tried several times to force the issue on behalf of the public and the Fed spent millions in lobbying money to get Barney Frank to quash Paul’s efforts. The Fed hired Linda Robertson, formerly a lobbyist for Enron, to assist with the effort to snuff out any attempt to legislate an audit. That’s why the Government has never ordered an audit of the PUBLIC’s gold. You don’t spend millions to derail legislation just because you’re worried it will elevate the importance of gold to the public. That’s complete foolish babble but coming from Rickards  makes it sound legitimate.

That’s Rickards’ modus operandi. Offer up some half-baked justification to support his argument because he knows a majority of his audience will nod their head robotically in agreement rather than question the assertion. Does he ever offer proof? Who are his military contacts? Why are we supposed to accept the legitimacy of his assertions with blind faith, especially considering that the “tracks in the snow” suggesting the contrary have been visible for many years. Certainly well before Rickards’ handlers thrust him under the spotlight of the gold investing, truth-seeking community.

As for the actual physical transfer of gold, if gold under the Fed’s control has not been used to satisfy eastern hemisphere delivery demands for several years, how come it took so long for Germany to get its gold bars back, allegedly? Especially given that it took Hugo Chavez just 4 months to repatriate 160 tonnes of gold that was held at several Central Bank vaults around western Europe?  From all accounts, the gold bars Germany originally sent to the U.S. for “safekeeping” after WWII are not the same bars that were returned, assuming they were actually returned.  Again, why does anyone accept with blind faith anything coming from any Government, especially the U.S. Government?

A small portion of the public, led by a high-ranking, long-time Congressman have demanded several times in the last decade to see bona fide evidence that the gold owned by the Treasury, which means the citizens of the U.S., is physically sitting in the various Fed vaults and is unencumbered by any form of counter-party claim. The fact that the Government refuses to do this can only lead to one conclusion – and it’s not Rickard’s half-baked apology.

This is a topic that was put to rest in my mind more than a decade ago.  Some of the gold may be physically sitting in the various Fed vaults “safeguarded” by the military, but most of it is now sitting in the form of refined kilo bars in Chinese vaults or as highly-prized gold jewelry draped around Indian wives.

To counter Rickards’ “military sources” reference, I received this email last night from a reader:

Back in February 2011, I ran into a Kentucky good ole boy who worked at Fort Knox in rural Kentucky. Fort Knox was also an Army Military depot as well as gold storage which it is/was famous for.

Several months before February 2011, the Army made a decision to transfer the Army Military Depot at Fort Knox to other military depots and my Ky guy no longer had a job and had to transfer and relocate to keep a Federal Gov’t job. So that’s what he did, he relocated and how I ran into him.

So I asked him…”Does Ft Knox have any gold there because I have heard there may no longer be any gold there.”

His response: “That’s been the rumor on the Base for some time…but the only people that would know for sure are the people who have clearance to get into the vault.” He didn’t have anything else to add or say because he worked on the military depot part of the base. But this is 6 plus years ago and I believe him because it just came spontaneously out of his mouth. It sent shivers down my spine when he told me this.

This is how I feel about what he said: People can’t keep a secret…just human nature….a worker can tell his spouse, a spouse can talk to a friend…and before you know it, it’s all around the base. Spreads like a wild fire. This is in rural KY so rumors and news like this will never get any national publicity legs so it just stays local.