14 November 2013

Comex Registered Gold Falls To 587,235 Ounces - Claims at 63 to 1 - The Karma of Buddha's Palm

There was a rather large adjustment into eligible gold storage at the HSBC warehouse as 51,617 ounces left the deliverable 'registered' category.

This is not such a big short term issue since November is a' non-active delivery month' for the Comex precious metals futures markets.

But in fact there is so little actual physical delivery activity taking place there anymore, even in an 'active month,' that one might argue that the New York metals market is approaching practical insignificance, long before it can reach the storied permanent backwardation.

However, one must keep up appearances, since the Comex still effectively sets the metals price for much of the free world, if only aspirationally these days for Asia.

More charts will be added as they are updated later this evening.

Earlier today in a piece about price premiums in India I included a link to the online section of Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds.

You might want to have a quick glance over the chapter regarding John Law's highly innovative dalliance into the théorie monétaire moderne that was adopted by the nation of France, almost to the point of its demise.  It is a useful reminder that truly, there is nothing new under the sun.

As theoretical as all these pricing antics and market manipulations might seem, exercises in price setting for personal greed or policy considerations have real world consequences, especially when they are applied over long periods of time, and with some resort to coercion.

The longer that valuations are maintained against the market, the stronger the coercion to sutain them must become, to the demise of freedom, and the point of exhaustion and collapse.   The Soviet ruble is a possible case study for what happens when the unsustainable meets the inevitable, even with a hairy knuckled police state backing it up. 

We might start thinking about 2014 as the year of financial consequences.

Weighed, and found wanting.

Stand and deliver.