Harvey Organ Comments on the Gold Inventory at the COMEX

Time to send a distress flare to their friends and cohorts at the central banks?

Hey Rocky. Watch me pull a rabbit out of a hat.

From Harvey Organ this evening:

"Ladies and Gentlemen, we have a three-fold problem:

i) the total dealer inventory of gold is at a very dangerously low level of only 44.32 tonnes, and none of the 9.5 tonnes delivery notices from May and the 30 tonnes from June have been removed from inventory as of yet.

ii.a)   JPMorgan's customer inventory remains at an extremely low 136,380 oz.
If you are a customer of JPMorgan and have your gold in its vault, I think it is best to remove it before we have another fiasco like MFGlobal.

ii.b) JPMorgan's dealer account rests tonight at 413,000 oz. However all of this gold has been spoken for plus an additional 81,000 oz

iii) the 3 major bullion banks have collectively only 30.08 tonnes of gold left!"

I do not watch the Commitments of Traders and the broad sweep of inventory levels like Harvey and others do.

As you know I do not think that this is where the scheme breaks, except as a secondary effect perhaps. The COMEX is a paper shell game. The real fireworks will begin more likely in a run on the bullion banks, and the depletion of physical supply sparked by some major scandal or failure to deliver.

Keep an eye on silver. The central banks don't have any.

And do not think for a moment that this will go down easily. There are desperate but powerful forces at work.

But I do enjoy watching this sort of thing unfold.

"You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!"

President Andrew Jackson, February 1834, from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

Pictures In an Exhibition: Who Profits?

Why keep the median wage low, despite rising profits and productivity?

Whom does an increasingly debt-based economy serve?

Who profits from the status quo?

Pictures in an exhibition of elephantine greed.

US Civilian Employment To Population Ratio Since 1970

What recovery was that again?

The lower employment to population ratios of the early post war decade were more manageable because it was prior to the long wage stagnation despite rising productivity. 

It was also an era when single worker households were able to maintain a livable income.

Gold Daily and Silver Weekly Charts - Guess Who's Coming To Dinner?

Paper versus physical.

Intraday commentary on the widening gold premiums in Vietnam here. It will be more impressive when we see the same type of explosive demand in a few other countries. Until then it is what it is.

But on the whole, it's not nice to fool Mother Nature.

Here is an analysis of tomorrow's two day FOMC Meeting from Tim Duy that is fairly comprehensive. 

As for what is going on in the markets, there will be an inevitable reckoning. Guess who's coming to dinner?

SP 500 and NDX Futures Daily Charts - Long Con

Two day FOMC meeting this week.

Let's see if we get a 'rally Tuesday' tomorrow.

The general trend is to be long on baloney if you are in the political/financial professions.

Gold Premiums in Vietnam Hit $217 Over Spot In Heavy Demand

I think you have had to experience a collapsing currency first hand in order to truly appreciate the fundamentals of monetary value, and how these things can take on what seems like a force of nature.

I was doing business in Moscow during the 1990's, and saw the slow motion collapse of the rouble. Or at least it seemed like a slow motion collapse at first, until it gained quite a bit of momentum despite the measures the State took to maintain their 'official rates.'

Russia had a sovereign currency, right?  And so does Vietnam, and many of the other countries that experienced extraordinary currency depreciation, otherwise known as monetary inflation, since WW II.  Perhaps they just needed some better monetary theorists, or official enforcers with hairier knuckles. Their financial elite seems to have had plenty of false bravado.

But then again, they were not us. We are different. We are unique. We are the masters of all that we survey and purvey, the beauty of the world, the paragon of animals.  London and New York are where the elite meet to eat.

Here is what is happening with gold prices in southeast Asia now.  Ding dong.

This from Goldcore:

The Vietnamese Central Bank sold another 25,700 taels (1 tael = 37.5 grams or 1.2 troy ounces) at a gold bar auction on Friday in order to try and satiate the massive public demand for gold in Vietnam.

The Central Bank hopes that the sale of gold into the market will reduce the very high premiums paid by gold buyers in Vietnam, the largest buyer of gold in Southeast Asia after Thailand and one of the largest physical buyers of gold per capita in the world.

Vietnamese people hold gold as a store of wealth for protection against war, inflation and currency depreciation. In recent months, the bursting of bubbles in the stock market (see chart) and property market and the continuing devaluation of the dong has led to record demand in Vietnam and a surging premium over the spot price of gold.

Today, the premium was close to 5.5 million dong which is the equivalent of a very high premium of $217 per ounce over spot.

Bill Moyers and Lawrence Lessig On Privacy