Tag Archives: HSBC

More Surprises In The Physical Gold Market Reaffirm Gresham’s Law

While I don’t follow the data reporting on the Comex on a day-to-day basis – primarily because 1) I don’t have the time, 2) enough people do follow it and report on anything unusual and 3) I don’t fully trust what is reported.

However, Avery Goodman posted an article on Seeking Alpha, The Big Long,  that caught my eye.  He noted that Goldman Sachs and HSBC reported delivery of 7.1 tons of gold into their “house” accounts on August 6.   Goldman stopped 3.2 tons and HSBC stopped 3.9 tons.

This equates to 250,438 ozs of gold, or roughly 2,500 contracts.    It also coincidentally, or not coincidentally, represents just a little less than the amount of gold that JP Morgan moved from its “eligible” account to its “registered” account in order to meet the  JP Morgan issued delivery notice on 2,750 contracts on August 4.   So it would appear as if Goldman and HSBC “stopped,” or took delivery in their house account of most of the gold what was delivered from JP Morgan’s customer house account.

My initial response to this development is that it should not surprise us that Goldman may be accumulating a long position in physical gold despite having noted analysts at the firm issuing bearish gold research reports.  Goldman is infamous for taking the other side of trades that it convinces clients to implement.

What I will say, however, is that we can’t necessarily assume that the Goldman and HSBC gold was ultimately destined for their respective banks’ proprietary positions.  For instance, it could well be the case that Goldman is on the hook for delivery of physical gold to a counterparty of one of its OTC precious metals derivatives contracts.  If that’s the case, perhaps the easiest source of gold to fulfill that obligation was to take the other side of some of JP Morgan’s reported Comex vault inventory.

Similarly, while its conceivable, perhaps even probable, that HSBC might be building its own “nest egg” of golden eggs, it’s also quite possible that HSBC needed to source gold for the GLD vault, of which it is the custodian.  Yes, GLD uses 400 oz bars and the Comex “traffics” in 100 oz bars, but it would be easy enough to do a gold bar swap in order to convert 100 oz bars into LBMA 400 oz. bars.

My point here is that the available information on Comex gold transactions is opaque by design.  But having said that, the relevant piece of information here is that a significant amount of physical gold has been removed from the visible of publicly reported vault holdings.

It seems that the above-ground, available supply of physical gold and silver continues to disappear down rabbit holes all over the world, further reaffirming Gresham’s Law.

 

A Texas “Yellow” Gold Rush

“We are not talking Fort Knox,” Capriglione said. “But when I first announced this, I got so many emails and phone calls from people literally all over the world who said they want to store their gold … in a Texas depository.   “People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold.”   – Texas State Representative, Giovanni Capriglione (Ft. Worth Star Telegram)

Texas State Rep Giovanni Capriglione created legislation that would create a Texas Bullion Depository where Texas could store its gold.  Both the House and Senate in Texas have signed off on the Bill and it is headed to the Governor for consideration.

Comment from Texas reader, Dan:    All in Texas that think like this Representative…the gold may be gone by the time the vault is built…’rounded’ up by Jade Helm 15 and placed in a ‘secure vault’ for safe keeping…minus the Texas Teachers’ gold of course.

The plan calls for the creation of secure facility that would enable the State to move over $1 billion in gold bullion bars owned by the University of Texas Investment Management Company, which is the second largest U.S. academic endowment.   The fund currently “safekeeps” its gold at an HSBC vault in NYC.

This will be an interesting process to watch unfold.  My first instinct is to put on my “think like a criminal” hat and wonder if HSBC even has possession of the investment fund’s bullion – i.e. that the bullion might already be hypothecated.  To further this thought, I can envision a scenario in which HSBC – along with highly influential politicians in DC – exert undo influence on Governor Abbot to compel him to veto the legislation. This would alleviate the high degree of pressure that would be placed on HSBC to cough up the bars.

Notwithstanding this “think like a criminal” angle, the State of Texas now joins Venezuela, Germany, the Netherlands and Austria in the gold repatriation movement by governmental entities.  Germany, of course, already found out what happens when you “safekeep” your gold with bullion banks that are practiced in the art of leasing and hypothecation.

It would seem that the State of Texas is going to attempt to avoid the fate faced by Germany…

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values.  – Franciso D’Anconia’s “money speech,” Atlas Shrugged

 

 

The Daily Coin Interviews Alasdair Macleod

I don’t know when, I don’t know how but somehow there has got to be a link I think to give the renminbi a level of credibity in cross-border trade which places it above the dollar. I think gold is the obvious link for this. – Alasdair Macleod

Rory Hall  of The Daily Coin just posted a must-hear interview with Alasdair Macleod.  Topics include the recent news that HSBC is closing all seven of its “retail” gold vaults in London (it is keeping the GLD vault open), the new London gold fix, the curious “RMB, New World Currency” billboard that went up to next to China’s busiest airport and the Shanghai Cooperation Organization:

I have been reading Alasdair’s work for several years and consider him to be one of the most insightful financial market analysts – particularly with regard to his analysis of the precious metals market.

Note:   In two weeks The Shadow of Truth will be hosting a roundtable discussion with Alasdair Macleod, Turd Ferguson, Rory Hall and myself. We plan on discussing the Shanghai Cooperation Organization (SCO) in depth. Understandably, the mass financial and political media has completely avoided reporting on the SCO. Remarkably, the alternative media blogosphere has largely ignored the topic. But the SCO is going to be a global game-changer. We will be discussing how and why.

Comex Gold Open Interest Numbers Show Massive Manipulated Gold Hit In Progress

The Comex is a complete fraud.  It’s one of the biggest Ponzi schemes in history.

With China and Viet Nam (the latter being a major gold importing country) now closed until next Wednesday in observance of their Lunar New Year, the bullion banks have engaged in a major attempt to drive the price of gold lower.    Yesterday (Tuesday) 99,000 gold contracts  – 9.9 million ounces or 287 tonnes – were sold into the market between 9 a.m and 11 a.m. EST, which had the effect of driving the price of gold down over $26.  To put this into context, a total of 179,833 contracts traded between 6 p.m. Monday and 5 p.m. Tues. The entire daily trading period is 23 hours. But 55% of yesterday’s total trading volume – the volume used to slam gold – was traded in a two-hour window of NY trading.

Think about it this way:  in that two-hour window, 35 days worth of daily global gold mine production traded in the form of paper gold.  The open interest expanded by 5,290 contracts, which translates into just over 15 tonnes of gold.  The total amount of gold available for delivery – the “registered” account gold – is 804.9k ounces, or 23 tonnes.  In just one day, the bullion banks (JP Morgan, HSBC and Scotia) sold forward 65% of the entire stock of deliverable gold on the Comex.  And that’s if you really believe the unaudited bank reports which produce the gold warehouse stock reports.  I do not.

Gold was raided again today (Wednesday, Feb 18) – again at 11:00 a.m. EST. This time gold was slammed another $9 in the space of 30 minutes, most of it in the first seven minutes. Today 18,000 April gold contracts traded in the 30 minute space, representing 24% of the total volume in the April gold contract up to that point since 6:00 p.m EST the previous evening. This is 52 tonnes of paper gold – more than twice the amount of gold in Comex vaults available for delivery.

This is very painful for most of us to watch unfold because we understand how corrupt our entire system is and we also somewhat understand just how devasting the consequences will be for the entire population of the United States (and, really, the entire world) when this giant Ponzi scheme blows up.

Folks, these are not free markets by any remote stretch of the imagination. These are markets controlled by dangerous criminals who are in the process of stealing everyone’s wealth and, in the process, destroying our system. Unless something is done, your children’s lives will become a very unpleasant experience. I don’t have children so I don’t have equity in the future of this system other than I was raised with a very strong sense of “right” and “wrong.” I’m just the messenger.

Sometimes I wonder if I might have been better off being one of the 95%’ers who are oblivious to the size and the velocity of the giant two-by-four being swung at the back of their head by those in control of our system…

[post_ender] (please share this with anyone who might care, if even just a little, we need to pry open any doors that are cracked open in the minds of those who care about our country)