19 April 2013

Bullion Shortage Reported in Dubai - When Pigmen Go Wild

This is related to the story about the shortage of bullion at the Hong Kong Exchange as reported on Bloomberg earlier today.

This was clearly not metals longs disgorging their bullion positions, but rather 'an orchestrated panic.' Even the speculative longs were forced in, as an examination of the action on the open interest shows.

And it is so brazen and clumsy that I doubt it was even the usual suspects gaming the markets for a quick buck. Although they just might be that arrogant, thinking they can do almost anything these days with impunity.

In order to make a big 'market operation' work you have to let the major players know, otherwise they complain about it as we saw in the London Whale and the Citi bond manipulation scandals. But the downside is that if you let too many greedy people know, the operation becomes harder to control, and it can get 'over its skis.'

Let's call this Imperial Overreach: When Pigmen Go Wild.

Still, it seems more likely that this was a quasi-political move as well as a commercial opportunity for plunder given the chiming in from the pampered pets, manservants, assorted spokesmodels, and Lord Haw-Haw's of the Anglo-American banking cartel on cue. 

And I don't exactly expect that this means that it is over.  You know what they say, 'in for a penny, in for a pound.'   One would expect the Wall Street wiseguys and the City lords and barrow boys to run their last bluff until they hit the wall.  That is how we will know it is the last.

Pigmen go whole hog on naked shorts and get slaughtered.  And wouldn't that be a headline to remember.

Economic Times of India
Shortage of gold bars and coins in Dubai, says World Gold Council
By Sutanuka Ghosal, ET Bureau
19 Apr, 2013, 12.46PM IST

KOLKATA: World Gold Council, which has been tracking the global gold market pattern, has found that there is a shortage for bars and coins in Dubai which is creating a supply shortage.

Aram Shishmanian, CEO, World Gold Council: "It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday's further decline.

The surge in gold purchases is spanning markets from India and China to the US, Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years."

The World Gold Council is uniquely positioned in the gold market to get immediate feedback on market patterns. "We are already seeing shortages for bars and coins in Dubai, while premiums in Mumbai are at $26/oz and $6 in Shanghai, indicating that buyers are willing to pay more than current spot prices for the metal..

Source: Economic Times of India