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

CBC Documentary: The Secret World of Gold

Here is the CBC Documentary from this week, presented in three parts.

In Part Three they present Andrew Maguire and his activities in calling attention to manipulation in the silver market.

I could be surprised, but I expect nothing to be done for all the same reasons that Jeff Sachs cites in his talk to the Philadelphia Fed banking conference about the pathological environment on Wall Street, and how a docile President, Congress and regulators will say or do nothing about it.

I think they will, but only after something blows up so badly that they cannot keep hiding it and kicking it down the road. I cannot hardly blame them. And this does not speak to the situation in London and especially Berlin.

I am however seeing more indications that we are getting closer to a tipping point. And when and if it does break it could break rather quickly, with the exchanges closed or on holiday. There is a desperation in the air amongst the financerati and their loyal manservants.

So have a care when swimming in opaque waters that are subject to rip tides.








h/t To the TFerguson crowd for putting this up on Youtube and to SilverSaito for making me aware of it.

Chinese Gold and Silver Exchange Has 'Almost Run Out of Available Gold Bullion' Awaits Imports

Hong Kong's century old Chinese Gold and Silver Exchange has reportedly almost run out of gold bullion at these price levels and is waiting for imports to come on Wednesday of next week from Switzerland and London. This information is from an April 19th interview.

Apparently they are not able to source from within their region which is a bit of a surprise since China is a major gold and silver producer.  Gold seems to be moving from West to East.

Why aren't they also going to New York for available bullion supply at the Comex?  

The Hong Kong Gold and Silver market seems to be more of what is called a 'bullion market' rather than a paper speculative market dealing in highly leveraged position trading with only small amounts of actual metal changing hands.

"The Chinese Gold and Silver Exchange Society operates in Hong Kong as a registered society. At present, we have 171 member firms which are sole proprietorships, partnerships or limited companies. Among these 171 firms, 30 are bullion group members. Bullion group members who want to manufacture good delivery bars may apply for the qualification of accredited refineries. Upon accreditation, these member firms may produce 99% fineness 5-tael gold bullions and 999.9% 1-kg gold bullions for delivery on the Exchange. The bullions they produce also circulate widely in the open market."

Please see the attached interview from Bloomberg Asia with the President of the exchange.

I do not want to make too much of this as it may be temporary. And since this is a metals exchange rather than a derivatives market a shortage of metal is not a default. A default is a paper promise to deliver that fails.

But it seems to call into question, if not shoot all to hell, the theory that the precipitous decline in the price of gold marked by the dumping of huge numbers of contracts into quiet markets was based on market fundamentals rather than brazen naked short selling and highly leveraged speculation in the London and especially New York markets, which both deliver only a fraction of the metals volumes which are traded on their exchanges.

And still hardly anyone is talking about the dog that didn't bark, and that is silver.



h/t to Delray and Liberty Mike

Sorry but I do not have any way to turn off the autoplay feature with the Bloomberg player. You will have to pause it yourself.

David Cay Johnston: On Crony Capitalism, Control Frauds, and the Gods of Greed and Power

David Cay Johnston is an investigative journalist and author, a specialist in economics and tax issues, and winner of a 2001 Pulitzer Prize.

Since 2009 he has been a Distinguished Visiting Lecturer who teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management.

Why have you never heard of David Cay Johnston or his ideas before? Why is he almost never interviewed on the mainstream media.

Because in times of general deception, telling the truth is a revolutionary act. And we are in those times, and are caught in a credibility trap.

It is not the same as a coup d'état, but has many of the same appearances and characteristics.

It is the convergence of like minded kleptocrats and the amoral careerists who support whatever status quo that happens to exist. It is the banality of the willing functionary and the bureaucrat, and the inability of a moral center to withstand it.  

Neither austerity or stimulus will work until there is meaningful reform.