Did Gresham’s Law Invade JP Morgans Comex Gold Vault?

Gresham’s Law states that bad money drives good money out of the system.  People will use inferior money in their daily “bartering” for goods, services, investments etc and hoard good money.

We are seeing Gresham’s Law work in the gold market, where eastern hemisphere Central Banks, investors and populations are in the process of hoarding all the gold the west will send their way in exchange for the constituent country fiat currencies.  “Here, take our currency and convert it to dollars and sell us your gold.”

And the gold seems to disappear from sight.   Can anyone hazard a guess how much gold the People’s Bank of China controls or where it’s safekept?

Recently my friend and colleague Craig “Turd Ferguson” Hemke – TFMetals Report – noticed an usual amount of gold was being removed from the “registered”/investor account in JP Morgan’s Comex vault.    Last Friday, for instance, 24% of the eligible gold disappeared from JPM’s registered vault account and disappeared to destinations unknown:  LINK

Again yesterday another chunky 160,750 ozs of gold fled the questionable custody of JP Morgan’s eligible account (click on image to enlarge):


The amount of gold removed yesterday represented 32% of the amount of gold remaining the eligible account after last Friday. In total, this entity or entities has/have removed 49% of the gold that was sitting in “investor safekeeping” section of JP Morgan’s Comex custodial vault.

We can only speculate what might of “spooked” the entitled owners of that gold to take it away from the Comex.

However, I will say this confidence:   whomever removed that gold decided that they no longer trusted JP Morgan to safekeep it.  It’s interesting because the Comex offers storage rates that are a significant discount to market rates to investors who take delivery off the Comex and use the Comex vaults for safekeeping.

Whatever the case may be, nearly 50% of ALL of the gold in Comex vaults has been removed since 2011 (source:  24hgold.com, edits are mine – click to enlarge):


8 thoughts on “Did Gresham’s Law Invade JP Morgans Comex Gold Vault?

  1. Eligible gold is unrelated to COMEX. It’s just gold in a vault that satisfies the contract description (i.e. 100oz bars and 1 kilo bars are eligible), where the vault has been approved for delivery of Comex gold contracts. The vault is obliged to report all the gold that is 100oz or 1 kilo in weight).

    JP Morgan could (and does) hold lots of 400oz bars in the same vault and does not have to report these since they are not eligible for the Comex 100oz contract.

    1. Actually, what you just asserted is misleading and incorrect. From where do you get your information? Eligible is indeed specifically related to the Comex. While JP Morgan may keep proprietary gold in the same vault as it uses keep Comex-related gold, it would not report movement of its own gold in and out of the Comex eligible allocated vault account. “Eligible” gold is not necessarily “approved” to be moved in to the “registered” account. There is a whole set of hurdles the gold must jump over to be moved from eligible to registered.

      I might suggest printing this out and using it for bathroom reading material – you might learn something: http://www.cmegroup.com/rulebook/NYMEX/1/7.pdf

  2. With the SGE consuming over 2,000 tons per year …. combined with the consumption from India, Russia, Turkey, Thailand, Veitnam, US, and everyone else …. the free floating Gold supply is quickly being soaked up… the 300-to-1 owners-to-ounce may be telling us just how small the free floating Gold supply actually shrunken.

  3. The mind boggles at the thought that someone just now decided that JP Morgan is so corrupt that he can’t trust them with his gold. One imagines a 1932 resident of Chicago who sympathizes with Al Capone but can no longer support him after seeing him jaywalk.

    I’m just guessing but I think it more likely that gold was urgently needed at points east and someone’s gold was sent there with or without their knowledge.

  4. Nice, now would like to see the same thing happening to eligible gold of HSBC & Scotia Mocatta, and then it all falls apart.

    Ghenghis Khan and his Golden Horde have been resurrected and they’re invading the COMEX vaults. They weren’t called the “Golden” Horde for nothing. 😉

  5. Become your own central bank. Stash gold and silver where you have complete control over it and laugh at the folks who don’t study history.

  6. The last chart could be the price of gold. Isn’t it strange that there seems a close correlation between the gold holdings at the Comex and the price of gold?

    Can’t wait to see this house of crap falling apart.

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.