It is a slow day today with the usual end of week profit taking. Even the monetary whack-a-mole, Zimbabwe Ben, popped his head out today to give a verbal goose to the markets.
I came across an article that addresses an interesting phenomenon that rarely gets an airing, except perhaps by those stalwarts in GATA.
"The World Gold Council recently released its second quarter statistics on gold “demand and supply trends”. For those not familiar with the WGC, it is an “industry trade group” composed of large-cap gold miners who love bankers.
How much do these mining companies love bankers? So much that they allow the bankers to keep all the records for their sector, and pretty much do all of their of their promotion to the world. It is the WGC which elevated two private “consultancies” (of bankers) – GFMS and the CPM Group – to the status of quasi-official record-keepers for the entire global gold (and silver) industry.
It would be problematic at best for the gold industry to allow itself to be almost entirely represented by a “profession” now known only for its rampant fraud. However, given the known hatred of the banking community toward gold and silver, and their relentless attacks on both the bullion market and the miners themselves; it’s almost beyond comprehension that the world’s largest gold miners choose bankers as their spokesmen.
I’ve already exposed the devious/perverse manner in which these consultancies produce phony inventory numbers in the silver market. In the upside-down world of these “record-keepers”, when someone purchases an ounce of silver from a silver-ETF (and thus takes that ounce of silver off of the market), the CPM Group adds another ounce to total inventories.
In other words, if silver investors were to buy-up every ounce of silver currently available in the world (via silver-ETF’s), global silver inventories would supposedly double, while if silver-ETF holders were to sell all their holdings it would (apparently) collapse inventories..."
Jeff Nelson, Why a Gold Crisis Looms
Speaking of the available supply of silver, Ed Steer reports this morning that:
"Sprott's Physical Silver Trust reported receiving 320,000 ounces of silver yesterday...and still has over a bit over a million ounces left to be delivered from their latest offering. Since they got the first tranche on July 11th, they have received just under seven million ounces...and since they purchased a bit more than eight million ounces, they're just awaiting the balance...44 days [6+ weeks] since receiving the first shipment. It will be interesting to see how long it takes to get the rest. From this information it should be obvious that good delivery bars are not exactly laying around."
I doubt the concerns about manipulation in the markets will amount to anything until an actual crisis hits, and someone big defaults on either gold or silver and threatens to take down an exchange. And then the masters of the universe will run around waving their hands saying 'we have a problem, we have a problem,' and do something obtusely irrational and carelessly self-serving to try and fix it. You know, like TARP, or most corporate reorganizations for that matter.
(Inside the idiom reference. At a certain technical school in Cambridge Mass they used to refer to the case study crackheads up Mass Ave as the 'hand wavers' who, when things did not go as planned, only knew enough to recognize that they were in trouble, and run around waving their hands saying 'we have a problem, we have a problem.' And then, after a few stupid attempts at a quick fix and a cover up made things much worse, look for someone to fix it for them. In my own defense I was not formally enrolled at that particular tech school, I was merely a 'fellow traveler.' In other words, I had a girlfriend.)
Gold continues to command a higher premium than silver in the funds.
In a recent interview (JPM Is In Trouble) Bill Murphy made some allusions to a scandal brewing in the silver market that may burst upon the public before year end. One can only imagine. Bill is an optimist, which is one of his great strengths and supports. I am stoically skeptical, but long term hopeful, about anything approaching transparency, disclosure and reform. And the current trend in reform is not promising.
I provided an update to the NAV chart at 3:00 PM.
See you at the close.