Is A Scandal In Paper Gold/Silver Brewing?

We should realize the suppression of the silver price is overwhelmingly a monetary problem rather than an industrial users collusion. Money creators don’t want silver as a competitor to their wealth transferring synthetic currency. So if the SUA (sounds like a hog call) went away completely and the monetary drive to hinder silver remained, we’ve made perhaps ten percent of the necessary progress. But it seems as if the SUA, better connected in its market intelligence than any silver longs, is in position to know what the megabank and central bank price suppressors know well in advance of any silver long price analysts.  – Charles Savoie, link below

Yesterday it was not widely reported that Mitsui Group’s Precious Metals Division was pulling out of the London and New York paper gold markets.  Curiously, the Company will continue its precious metals operations in Tokyo and Hong Kong.

I had suggested that this was another “signpost” of the world’s growing distrust of the massive paper leverage embedded in the Comex and the LBMA.

A good friend and business colleague emailed me a response to my post yesterday.  He is a scrap gold/silver recycler and gemologist.   He and  I worked on Wall Street together:

This is even bigger than you’re making it out to be. And I do NOT mean that snidely: combined with the Barclays and Deutsche moves, it signals that the financial center of the world is also shifting east. Not just precious metals. Pretty big statement by each of these banks, and big banks [especially Japanese big banks] don’t make moves like this without careful consideration.

I agree with Brian that this is a big statement move, especially by one of the biggest corporations in the world from a country that typically a U.S. vassal.

However, even more interestingly was the comment posted by Charles Savoie on my blog. For those of you who are relatively new (i.e. since 2008) to the precious metals world, Mr. Savoie has been around a long time and has worked with him continuously since September 2001.  In other words, he has impeccable silver market “pedigree.”    Mr. Savoie engages in “slavish” silver market research and left this comment:

The two largest members, Du Pont and Dow Chemical, members since before 1950—pulled out as of early last summer. Tiffany & Company and Ferro Corporation also withdrew. The Mitsui interests have usually also been listed. Someone is attempting to sidestep a scandal. Forgive and forget that they were members? Not in my perspective they remain culpable of collusive price suppression for several generations.

Mr. Savoie presented his cash in an article published and uploaded on the SGTReport in July:  The Silver Association Is Shrinking

Something has definitely been occurring out of sight of auditors and all other forms of accountability.  I fear that many of the widely read commentators who present analysis that is 100% reliant on the validity of what is being reported by LBMA and Comex banks are missing a much bigger event unfolding.  In fact, I believe that the true availability of deliverable physical gold/silver is considerably less than what is being reported by the western bullion banks (and the Fed, ECB, BoE).  If I’m right about this, then most of the recent commentary/analysis that has been published is highly misleading.

The elitists always drop small hints to warn us about impending disasters.  Warren Buffet warned about 9 years ago that the U.S. was in danger of becoming a nation of serfs.   Right now over 50% of the country is dependent on some form of Government transfer payment and nearly 1 in 6 people receive food stamps…I would suggest hat the recent withdrawal of highly prominent banks from the London and NY paper bullion markets is another “hint” of a brewing catastrophe.

On the Comex the paper to deliverable gold ratio has spiked up to the horrifying ratio of 200:1.  We can only guess at the true paper to physical ratio of gold in London.  Of course, that 200:1 ratio is a guess as well unless you are naive enough to believe the bank-issued Comex inventory reports.

Yes, indeed, a scandal is brewing.  And it looks like several rats are folding their hands and running for the exits…

29 thoughts on “Is A Scandal In Paper Gold/Silver Brewing?

  1. If something is going to blow up in the silver market then it makes since that these big players would know about it in advance. Good luck using technical analysis to predict a 20 sigma step function change.

  2. “On the Comex the paper to deliverable gold ratio has spiked up to the horrifying ratio of 6:1.”

    I thought it was north of 200:1 just a week or so ago. Did you miss a couple of zeros or am I getting confused here?

  3. What concerns me is the increasing number of articles I’m reading about gold and silver confiscation by govt when the system melts down and they get rid of cash, and replace it with only digital cash.

    Now some of these writings are probably what some would call conspiracy theory stuff, but if they want to create a reset with no cash then Gold and silver will not be wanted by central bankers. Not much point being a bullion bank in the West when the govt will take away all your product.

    1. Interesting riddle that; isn’t it ? On the other side of the coin: those rich enough to be in the know will need a way to hold onto their wealth. My current occupation is far from macro-economics and finance yet i believe i’m correct in stating that only part of their wealth is in actual real-estate and tangibles. If we presume that paper assests such as stock and bonds are about to melt down than they won’t store the majority of wealth in there neither. So gold is definitely a candidate for the big players, even if but for a part of their net worth. If so than confiscation would be against their interests. Additionally the actual people holding gold outside these elites are very few and far in between, hence why risk getting the elites own gold confiscated in an effort to locate the last scraps that might be left on the table ? The only scenario in which this would possibly occur requires either a loss of control from the elites to a popular uprising AND the popular uprising being aware of the role gold plays. Since politicians are bought and gold is ‘pet-rock’ du jour this seems an unlikely scenario. Moreover the wealth they will get by going to negative interest rates and full-digital will surpass any efforts at confiscation i think. Would love to hear other thoughts on this, particularly of more knowledgeable people than me in these matters.

      1. I suspect the current corrupt banksters and their government spawn will be high tailing it outta the U.S. before the axe falls on their guilty heads. The crash will probably leave scars on the U.S. for several generations and may lead to a WW. Who would be the new authorities? I don’t know, but if they are coming for the people’s gold and silver they might find lead instead. It will be a new and hard America left behind…assuming America can stay together.

        1. Pete, Those of us living in the “red States” are petty sick and tired of living under the thumb of these tiny but numerous pinko New England States “that have two Senators each”. We are tired of of this union with corrupt socialist in all of those blue states. We are so divided from them we can no longer co exist as countrymen. Our ideas & our desires for the future couldn’t be further apart. It’s time the U.S. to dissolve this union. The socialist have no respect for us or our rights, none. So I doubt the blue states, the socialists, or the federalists will allow us to part peacefully.

      2. I think the concept of removing cash works very well at a number of levels for the central banks. The one that affects me concerns gold and silver.

        Consider this: the idea is that you hold gold and silver to maintain your wealth. BUT if/when you need to ‘cash’ it in so you can take advantage of that wealth where do you go to do that? In a cashless system there will be no cash available from dealers etc so it has to be a bank that can ‘credit’ your account and so you are at the mercy and control of the banks.

        If say, a regulation controlling the swapping of precious metals (PM) for currency carries a time delay or penalty due to all such transactions being suspicious (money laundering) transactions then the chances are the banksters will confiscate your PMs!

        If you hold the physical PM you can at least try to wait out such a situation but , and I have mentioned this before on other blogs without getting a response, if you hold your physical PM remotely via a service such as Gold Money, Bullion Vault, Hard Asset Alliance, then you must use the banking system to benefit from the liquidation of your PM and as there are only a few businesses like this it would be dead easy for the central banks to control sales along the lines I mentioned above.

        Lastly, if you hold your gold in one of these businesses and we have a credit default collapse and the banks stop trading then irrespective of any legislation controlling gold sales, you will not be able to liquidate your PM holding. For the record I am and have been for many years a client of one of these businesses but now my holding is empty and I hold what little I have physically.

        1. IMHO, there is so little PM out there with the little guy, that the dragnet necessary to go after it, isn’t worth it.

          However, I do think that for a time PM could be made difficult to convert to fiat on the open market. Or be made illegal, or heavily taxed, or otherwise suppressed. After TSHTF, we will go through a number of evolutions before your PM can legally see the light of day. Eventually it will be made part of a new currency regime, fiat or not, so best sit on your hands until that day. In the meantime, use that silver for meat from hunters and fisherman, for vegetables from farmers, petrol, medicine, etc. Shit is going to get wild…

    2. Regarding the elites shooting themselves in their own feet with gold confiscation, they are probably holding theirs in Asia where it won’t be so strictly regulated, so that is how they avoid that problem.

      Regarding whether gold confiscation will happen, I doubt they will attempt this since the West will be in shambles and they will have no way to organize such a program. It would be ineffective anyways since only hardcore libertarians have gold these days and they usually have a lot of bullets to back it up. They might try to blame gold bugs for the crash and get neighbours to lynch their neighbours, but no official gold confiscation program will work, and therefore it won’t be worth their effort IMO.

      Regarding going cashless and digital only, I would think going there even today would be extraordinarily difficult, I can’t see how that would work after SHTF and things fall apart and internet is unreliable. Trying to ban cash would be the best way to create a black market in PM’s and if that is the case then you could probably find some way of getting your gold wealth back into the system a little bit at a time. I was actually thinking about gold confiscation the other day. Imagine if they tried to go cashless in Mexico. Not a chance in hell would that work. If anyone’s spent time in the country outside of resorts you will know how spotty internet service is and how many people’s jobs are just little stands with no technology and just some guy with a purse of cash. Not gonna happen there in a million years. So then, Mexico and the rest of Latin America, and Africa, and SE Asia are all for sure going to keep cash, but then right next door, USSA will ban cash? That’s a pretty big border, I can’t see that working. And what do you do if you want to travel to Latin America or anywhere else in the world that hasn’t banned cash (basically, anywhere other than Europe, N America, Australia and Japan), then how do you convert your digital dollars to paper pesos? What kind of a system are you going to have to go through to do that and who is going to administer it? How will that work when the country is in chaos?

      So IMO cashless will never work although in their arrogance and stupidity they may try, and official gold confiscation is unlikely although they may try to pin the blame on PM investors so the general populace may turn on us, so be careful. I’d suggest having some stashed away in another country. I was thinking of riding my bike 50 km into the Chilean desert and bury some there where no one could ever find it, but haven’t gotten around to that.

  4. I love it that you keep hammering these assholes’ on this Mr IRD. Speaking of imaginary numbers the Dow is really, no I mean really getting a cliff face vibe to it. Seriously maybe a couple of thousand share’s sold today? That imaginary chair is getting more imaginary by the minute….

  5. Great article Dave. Many of the Big boys are “jumpin ship” means “The Global Currency Reset” draweth nigh. The only currency with true intrinsic value in the room by which all others are measured is? You got it, Gold & Silver. Bring ‘er on. THEY could announce it by halloween. How spooky would That be?

  6. Coming Soon To A Checkout Lane Near You: Stock Giftcards

    The world got wise to the central banker bid a long time ago and now, with Cheryl Davis Hillary Clinton’s push to bring an end to the “tyranny of the next earnings report” and thus to the practice of leveraging the balance sheet and employing financial engineering to inflate the bottom line, the buyback bid may soon be in jeopardy as well.

    So unless the US wants to go the China route and simply make selling illegal, then it may be necessary to get creative when it comes to luring mom and pop back into the game. With that in mind, we bring you the following from WSJ who reports that now, you’ll be able to buy stock in the checkout line at the grocery store. Here’s more:

    Now selling at the checkout counter: breath mints, hand sanitizer and…$25 of Berkshire Hathaway stock?

    In a new twist on the bustling gift-card business, retailers such as Kmart and Office Depot this week are starting to roll out cards that give the recipients small amounts of stock in some of the country’s best-known companies. The cards will be available ahead of the holiday shopping season at other retailers, including Safeway Inc., Toys “R” Us andLowe’s Cos.

    The idea that shoppers might want to pick up some Apple Inc. along with their apples is the brainchild of Stockpile Inc., a Palo Alto, Calif.-based startup. Avi Lele, a former patent attorney and founder of the company, said he came up with the idea when he wanted to give a Christmas gift of stock to his nieces and nephews, and found the need to first gather personal information such as their Social Security numbers too burdensome.

    “It is taking something complicated and expensive and making it accessible to everyone,” said Mr. Lele, who also is Stockpile’s chief executive officer.


    1. If you really want to protect and enable generational wealth…give Gold and Silver as gifts. If it works for the Rothchilds, why not for Joesix pack.

  7. “Used to work with David Morgan” is actually “has worked with him continuously since September 2001” Nevertheless thanks for the recognition. The SUA mentioned me in their January 2006 Washington Report
    And while indeed I have “been around a long time” nutrients have “capped” my physiological age, and cost MD’s lots of money—which I was able to place into silver instead!

    1. Correction noted and made. Back in the early days of the bull 2001-2004 I seem to recall reading your maybe on Gold-Eagle and some other gold article aggregators?

      1. Morgan, Ted Butler and I were cited by the Institute of Chartered Financial Analysts of India some years ago, we’ve all been jumbled around in the web’s information hopper. Frankly, many sites haven’t posted my research because I’m hitting some deep bundle of nerves somewhere or fear of retaliation is present. See for example the ongoing Silver Squelchers series, of which #32 will be released soon. These aren’t teacup articles but research documentaries. Teacup articles are OK but to convey a picture of silver/gold antagonists, a succinct summary would only produce calls for documentation—hence—the Olympic swimming pool article series. The insiders I’m naming as culprits finally mentioned me by name in a “private” speech and resorted to ridicule. These are very highly educated men and know what a fallacy of logic is, but what else can they fall back on?

        1. You know what Gandhi said, Charles. First they ignore you. Then they laugh at you. Then they fight you. Then you win.

          You’re half way there!

  8. China’s making CIPS fully operational during IMF and right before China’s 5 year plan draft is made public this month was planned long ago no doubt. Could the 5 year plan be a show stopper? Maybe even be a venue to higher publicized PBOC gold reserves? Plus the timing of the Russian and Iranian action in Syria synchronized as well with CIPS is no coincidence.

    Thinking back it never occurred to me that CIPS would really have to be operational and with the West’s participation i.e. Citi, Deutsche Bank, etc. for the Chinese SGE to become the new price discovery mechanism for gold in RMB. Because now a SWIFT code client at Citi or DB can sell US dollars or Euros for RMB transfer RMB to aCIPS account and buy gold in SGE -leaving the U.S. Dollar out of the picture and the Chinese in control of gold and RMB price discovery?

  9. ” I fear that many of the widely read commentators who present analysis that is 100% reliant on the validity of what is being reported by the LBMA and Comex banks are missing a bigger event unfolding” Those analysts who rely on the official news from LBMA and Crimex will end up in the same boat as those who only looked at the official data presented by Enron- they will end up with egg on their faces and suffer damaged credibility.

    Thank you Dave for looking for the real facts, not the fairytale facts cooked up by LBMA, Crimex et al.

  10. Everything has been backwards for paper gold/silver for last 2 or 3 trading days. It stays down during Asia trading hours, and suddenly jumps like crazy when US trading opens. It’s the exact opposite of how things used to be during last depressing years.

    What’s going on, is this simply a case of short squeeze unwinding, or something bigger is brewing up behind the scenes?

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