The Comex Is A Grotesque Comic Book

If you don’t want everyone to run out of the coal mine, hide the canary from everyone’s sight before it dies.  – Quote from a good friend and colleague

The story is getting old, but it needs to be shoved in front of us to keep the truth alive.  By now most of you have seen the incredible 325:1 paper gold to deliverable gold ratio on the Comex.   Let’s say the CME were to hypothecate ALL of the gold reported to be held in Comex vaults and used it to “back” the paper gold open interest.  It would require importing 6 times more gold, or 956 tons – more than 1/3 the total amount of gold mined globally in a year.  Just not possible.

It’s very important to keep in mind that the numbers that are reported representing the amount of gold held in Comex vaults are numbers that originate from the bullion banks, who generate the reports and send them to the publishing apparatus at the CME.  They are not audited.   Using those numbers as “the numbers” requires a leap of faith that could easily be betrayed.   This is a point fact – not opinion – based on the history of bank numbers reporting that gets lost on most people and market analysts.   Let’s put it this way:  If the Comex numbers are being reported accurately and honestly, it would be the only area of bank financial reporting that is not laced with fraud.  Are you willing to make that wager?

For the record, here’s what happened today:

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After trading sideways around the $1065 level in the overnight Asian trading session – the actual physical gold trading market – paper gold engaged in the now familiar “cliff dive” formation just after 8:00 a.m. EST. There were no news or events reported that would have triggered any type of market response from the price of gold.  And the trading “needle” didn’t move in any other related commodities market or in the stock market futures.

Just pure, unadulterated blatant manipulation of the price of gold using fraudulent electronically generated paper contracts.

John Embry emailed me this a.m. and asked me – rhetorically, of course – how come the U.S. Government is so insistent on the idea of raising rates and coming up with truly insulting economic numbers to allegedly justify it?  What is really going on behind the curtain?

The answer, of course, is that the Fed will not be raising rates. Especially now that the U.S. Treasury debt outstanding is a short chip shot away from $19 trillion and every privately compiled economic activity measurement index is now showing that the U.S. economy is in collapse.

But it’s the same game they are playing with the price of gold. If you are worried about everyone leaving the coal mine because people see a dead canary, take away the canary the before it dies and replace it with a happy fairytale.

23 thoughts on “The Comex Is A Grotesque Comic Book

    1. The FED wants to push all the money they created the last years into the real economy to spur inflation. And if they hike rates – oh boy – they will. Inflation target 2%? Forget it. Inflation will go double digits. Real rates will go way into negative territory. Very bullish for PMs! The gold bugs will ridicule everybody who called gold a pet rock! Can’t wait for it to happen. Next year we will talk on Dave’s blog here when gold will hit new all time highs.

      This is why I’m saying to Janet: Bring it ooooooooooooooonnnnnnn, biyatch!!! 🙂

  1. Dear FED, please hike interest rates!!! Please, please, bring it on!!! Don’t listen to Dave Krenzler!!! 😉

  2. I’ve read comments to the effect that the FED has to RAISE rates because the insurance cos and pension funds are dying for lack of yield.
    Interesting times for sure.

    1. But those same insurance and pension funds have been buying bonds for the past 7 years. They will lose principal marked-to-market and more debtors will default in a rising rate environment. The entire system is not built for rising rates.

    1. Not since 1913! I’ve been posting this article everywhere. Making the US dollar look good! Authored by a Certified Financial Analyst (above and beyond the credentials for a CPA), and the former Assistant Treasury Secretary of the United States of America.

  3. Dave,

    It strains credulity to believe hedge funds and other taking the opposite side of the trade from the bullion banks, J. P. Morgan, etc. that they have been losing money for the past decade or so. More plausible is that they are discretely compensated for incurring intentional losses designed to manage the gold price.

    Moe B.

  4. When it comes to Comex something is bugging me.
    You have a lot of billionaires likes Sprott and Rule that couls ask for delivery anytime and break the back of Comex and the fraud would be in the open for everyone to see.
    Why doesn´t these guys buy up a lot of physical and ask for delivery?
    Are they afraid of “falling out of rooftops and windows or an upclose experience with a nailgun??
    You have people with the means of doing something about it just talking but doing nothing.
    As long as this goes on you can just forget about the discussion regarding the Comex papergame.

    1. I think that Sprott once made a statement along the lines that no one wants to be known as the guy who broke the Comex. Still with the insane leverage of claims to registered ounces it would not take a big player to break the Comex. Several small position long traders could independently decide to take delivery of a few contracts each and that could cause a default. What would the Comex’s reaction be to this? They would not be able to claim that these small position longs were trying to corner the market.

    2. Why? Because Sprott et al are windbags. I remember when Sprott was asking in public who in the hell is selling at these prices when he did! Mr. Sprott, just look in the mirror. These guys are not really honest. Dave Krenzler is actually one of the few who hasn’t (so far at least 😉 ) lost his credibility. We have to be grateful that Dave Krenzler makes his thoughts public for all of us. I hope some of us are buying his research reports. I myself haven’t bought one so far because most of the reports if not all advice to go short which I personally don’t like. I’m just way too conservative for that kind of trading. But I’m sure judging by his public work that his research reports must be outstanding because he spends much more time on them than on his blog entries.

      1. Try one of my two latest mining stock reports. There’s a two-report special for those. One of the stocks is up 36% since July. It was up a lot more until this latest round of bashing of gold. This is a great spot to buy the stock. It was up nearly 3% today. The other stock is so rich with value it’s mind-blowing. I just met with the CEO a few weeks ago and this stock should be trading over $3 in today’s market, not under $1.

        That 2-report special is the best research value on the internet. Once I update the second company with the latest based on meeting with the CEO I’m taking down the special offer and raising the price on both reports.

    3. Sprott, Rick Rule and others don’t take delivery as the longs are limited to 1500 contracts at a time. Rule said to me at the Silver Summit a few days ago, they did try to stagger deliveries, but when position limits exist on the long side, there isn’t much they can legally do. Position limits are absent from the short side in silver. One cannot do much with a rigged system no matter how much money you have to purchase silver. Largely, this is why I think Butler was calling for position limits of 1500 contracts, as the commercials and speculators would not be able to exceed 1500 contracts each on the short side.

  5. Unless the Friday employment report is fugly (possible) they will raise rates at the next meeting. It will be a mistake but they will do it anyway. Let’s them take a victory lap and have something to lower when we sink into the abyss . Think like a goon

  6. There was another fairly big dump of stocks at the close today. Tells me they’re paying people out. There has got to start to be huge amounts of cash floating around markets’ it will be trying to find value. This constant smashing of metals, dumping in equities’, I mean volume on physical has been flying up? this not all little retail buyers,, some big players starting to try to sneak all their cheated profits in to real money now. JMO

  7. If Yellen raises’ rates’. There will be only one reason. To squeeze physical holders of metal. The criminals want’ real money now. So maybe Denningers right.

  8. To quote a corrupt crook; “What difference does it make”.

    The Fed and the ‘Yellen Yak’ are about raising rates 1/4 of 1% = 0.25%

    Really? Give me a break! As if twenty five basis points means ANYTHING!

    Meanwhile, at the CRIMEX its ‘business’ as usual.

  9. Two things to mention-

    1. The Fed et al took the canary out of its cage in the coal mine, killed it, took its body to a taxidermist, had it stuffed and reattached it to its perch in the cage with some super glue a la Monty Python’s dead parrot skit “This is an ex canary!”

    2. Why doesn’t someone break the CRIMEX COMEX? Maybe because no one wants to end up like Abraham Lincoln – sorry to be so ghoulish but who would doubt that the powers that be wouldn’t stoop to a little assassination to cling to power?

    1. I have heard from VERY reliable sources that big “rogue” type funds with the capability to take large deliveries off the Comex AND from GLD have been told – under no uncertain terms – to stay from doing that.

      1. Thanks Dave, I don’t doubt that at all. That leaves the work up to the small longs. I doubt that TPTB would be happy with someone asking for delivery of 1500 contracts. We will let you have it but you had better get a quote on replacement knee caps first.

  10. So sound like its getting nastier…. why doesn’t that surprise me. Really makes perfect sense why else would this be happening this way

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