11 May 2015

Gold Daily and Silver Weekly Charts - Deliverable Gold in the Comex Falls To Record Low

This is an inactive month for gold on the Comex, and the delivery reports, such as deliveries are at The Bucket Shop which is merely an exchange of claim checks, reflect this.

So I was a little surprised to see that in the latest warehouses report the 'registered' or deliverable gold, at these price levels, has fallen to record low levels of 372,235 ounces, or about 11.6 tonnes.

To put that into a more global perspective, the Shanghai exchange alone is actually physically delivering, or withdrawing in excess of 30 tonnes per week.

This is not so much an issue now since this is an 'inactive month' at The Bucket Shop, meaning that the exchange of claim checks takes a back seat to the purer exercise of wagering to an internal set of rules, scheming and bluffing amongst the big swinging dicks of Manhattan, in the manner Liar's Poker, and the long tradition of scheissers and assorted flim-flam men.
Can you not see this in our culture?  We admire and hold up the most skillful liars as role models.  See how he can deftly answer any question in whichever way he wills,  without batting an eye or touching a fact?   What a great leader for our time.
But as our self-absorbed nincompoops in business and government so often forget, the rest of the world is active, and very open for business.   And they are not necessarily signing on to the one world government of the multinational corporations just yet.
To be clear, I am not saying that the Comex is on the verge of default, or anything as dramatic as that, although there are plenty who will make that claim, and on just about every occasion on which they have a podium to be heard.
Rather, I am making the point that our models of price discovery and capital allocation are broken, and badly, in quite a few markets beyond the precious metals.   It is like we are running our economy on demo mode, some video game in which wiseguys play to cheat the unsuspecting and the productive. 
And this is having and will continue to have increasingly disruptive consequences in the real domestic and the world economy.  And at some point the world may say 'enough.'  And then change may come.
Have a pleasant evening.