Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1231.10 down $9.20 (comex closing time)
Silver: $16.86 down 21 cents (comex closing time)
In the access market 5:15 pm
Gold $1233.50
silver $16.90
Gold/silver trading: see kitco charts on right side of the commentary.
Tomorrow we will finally see whether Europe shuns the Greeks. Early in the morning, the Europeans tried a trial balloon which stated that they may be offering Greece a 6 month extension but that was later refuted by Schauble in the afternoon. We have two huge papers on what might happen tomorrow with respect to the Greek crisis and these are extremely important reads: Bill Holter and David Stockman.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 0 notices served for 0 oz. Silver comex registered 0 notices for nil oz .
Three months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 251.00 tonnes for a loss of 52 tonnes over that period.
In silver, the open interest rose by 621 contracts as Monday’s silver price was up by 37 cents. The total silver OI continues to remain relatively high with today’s reading at 167,346 contracts. The bankers are not happy campers tonight with respect to the high OI in silver.
We had 0 notices filed for nil oz
In gold we had a surprisingly huge fall in OI as gold was up by $6.90 yesterday. The total comex gold OI rests tonight at 394,447 for a loss of 6663 contracts. Today we had a 0 notices served upon for nil oz.
Today, we had no changes in gold inventory at the GLD/Inventory at 773.31 tonnes
In silver, /SLV no change in of silver inventory to the SLV/Inventory 320.327
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today
.
First: GOFO rates: the crooks are no longer reporting.
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell by a gigantic 6663 contracts today from 401,110 down to 394,447 despite the fact that gold was up by $6.90 yesterday (at the comex close). We are now in the big delivery month of the active February contract and here the OI fell by 111 contracts from 786 down to 675. We had 4 contracts served yesterday. Thus we lost 107 contracts or 10,700 oz will not stand for delivery for the February contract. The next contract month of March saw it’s OI fall by 32 contracts down to 1312. The next big active delivery month is April and here the OI fell by 6,499 contracts down to 269,660. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 54,863. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was awful at 101,753 contracts even with much help from the HFT boys. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI rose by 621 contracts from 166,725 up to 167,346 as silver was up by 37 cents yesterday. The bankers were not able to shake any silver leaves from the silver tree. I guess the CME needs to resort to another silver margin hike. We are now in the non active contract month of February and here the OI fell by 5 contracts down to 20. We had 5 notices filed yesterday so we neither gained nor lost any silver contracts standing for delivery in this February contract month. The next big active contract month is March and here the OI fell by only 5,438 contracts down to 84,804. The estimated volume today was awful at 18,974 contracts (just comex sales during regular business hours). The confirmed volume yesterday was excellent (regular plus access market) at 51,628 contracts. We had 0 notices filed for nil oz today.
February initial standings
Feb 10.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil oz
Withdrawals from Customer Inventory in oz
1,963.05 oz (Scotia,Brinks,Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
675 contracts (67,500 oz)
Total monthly oz gold served (contracts) so far this month
549 contracts(54,900 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
107,298.5 oz
Today, we had 0 dealer transactions
we had 0 dealer withdrawals:
total dealer withdrawal: nil oz
we had 0 dealer deposit:
total dealer deposit: nil oz
we had 3 customer withdrawals
i) Out of Scotia: 1,607.500 oz (50 kilobars)
ii) Out of Manfra; 64.30 oz (2 kilobars_
iii) Out of Brinks: 291.25 oz
total customer withdrawal: 1963.06 oz
we had 0 customer deposits:
total customer deposits; nil oz
We had 1 adjustment
i) Out of HSBC: 385.80 oz was adjusted out of the dealer and this landed into the customer account at HSBC
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the December contract month, we take the total number of notices filed for the month (549) x 100 oz or 54,900 oz , to which we add the difference between the OI for the front month of February (675 contracts) minus the number of notices served today x 100 oz (0 contracts) x 100 oz = 122,400 oz, the amount of gold oz standing for the February contract month.( 3.807 tonnes)
Thus the initial standings:
549 (notices filed for the month x( 100 oz) or 54,900 oz + { 675 (OI for the front month of Feb)- 0 (number of notices served upon today) x 100 oz per contract} = 122,400 oz total number of ounces standing for the February contract month. (3.807 tonnes)
we lost 107 contracts or 10700 oz will not stand in this February contract month.
Total dealer inventory: 804,854.509 oz or 25.03 tonnes
Total gold inventory (dealer and customer) = 8.070 million oz. (251.01) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 52 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
February silver: initial standings
feb 10 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
32,039.1 oz (Delaware, HSBC )
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
0 contracts (nil oz)
No of oz to be served (notices)
20 contracts (100,000 oz)
Total monthly oz silver served (contracts)
381 contracts (1,905,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
2,253,413.5 oz
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer deposits:
total customer deposit nil oz
We had 2 customer withdrawals:
i) Out of Delaware: 1,984.400 oz
iv) Out of HSBC: 30,054.700 oz
total customer withdrawal: 32,039.100 oz
we had 0 adjustments
Total dealer inventory: 67.890 million oz
Total of all silver inventory (dealer and customer) 176.569 million oz
.
The total number of notices filed today is represented by 0 contracts for 25,000 oz. To calculate the number of silver ounces that will stand for delivery in February, we take the total number of notices filed for the month (381) x 5,000 oz = 1,905,000 oz to which we add the difference between the OI for the front month of February (20)- the number of notices served upon today (0) x 5,000 oz per contract = 2,005,000 oz, the number of silver oz standing for the February contract month
Initial standings for silver for the February contract month:
381 contracts x 5000 oz= 1,905,000 oz + (20) OI for the front month – (0) number of notices served upon x 5000 oz per contract = 2,005,000 oz, the number of silver ounces standing.
we neither gained nor lost any silver ounces standing in this February contract month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com or http://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Feb 10 no change in gold inventory at the GLD/inventory 773.31 tonnes
Feb 9 no change in gold inventory at the GLD/Inventory 773.31 tonnes
feb 6/ no change in gold inventory tonight/inventory 773.31 tonnes
feb 5. we had another addition of 5.38 tonnes of gold to the GLD/Inventory tonight at 773.31 tonnes
Feb 4/2015; we had another addition of 2.99 tonnes added to the GLD inventory/Inventory tonight 767.93
Feb 3.2015: today a withdrawal of 1.79 tonnes of gold inventory removed from the GLD/Inventory at 764.94
feb 2/ a huge addition of 8.36 tonnes of “paper” gold inventory/Inventory tonight at 766.73 tonnes
jan 30. we had no change in gold inventory/Inventory at 758/37 tonnes
Jan 29/we had an addition of 5.67 tonnes of gold inventory at the GLD/Inventory at 758.37 tonnes
Jan 28/no changes in gold inventory at the GLD/Inventory at 952.44 tonnes
Jan 27.we had a monstrous “paper” addition of 9.26 tonnes of gold into the GLD tonight/Inventory at 952.44 tonnes
Jan 26.2015: another volatile day as they added 1.79 tonnes/743.44 tonnes of gold.
Jan 23/the action at the GLD is very volatile: today they added 1.20 tonnes of gold to their inventory/Inventory 741.65
Jan 22 no change in gold inventory at the GLD/Inventory 740.45 tonnes
Jan 21.2015: Tonight, we lost 1.79 tonnes of gold from the GLD/Inventory 740.45 tonnes
Feb 10/2015 /no change in gold inventory at the GLD/
inventory: 773.31 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 771.31 tonnes.
end
And now for silver (SLV):
Feb 10 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 9 no change in silver inventory/SLV inventory at 320.327 million oz
Feb 6 no change in silver inventory/SLV’s silver inventory at 320.327 million oz.
Feb 5.we had no change in silver inventory/320.327 million oz/
Feb 4/we had a small withdrawal of 136,000 oz of silver from the SLV vaults/Inventory/320.327 million oz
feb 3.2015: we had a good addition of 1.149 million oz of silver inventory/inventory 320.463 million oz
Feb 2 no change in silver inventory at the SLV/inventory at 319.314
million oz.
jan 30 no change in silver inventory at the SLV/inventory at 319.314
million oz
Jan 29/no change in silver inventory/SLV inventory at 319.314 million oz
Jan 28/no changes in silver inventory/SLV inventory at 319.314 million oz
Jan 27/no change in silver inventory/SLV inventory at 319.314 million oz
Jan 26.2015: no change in silver inventory/SLV inventory at 319.314 million oz
jan 23/2015/ a huge addition of 1.053 million oz. This entity is also being quite volatile/Inventory at SLV 319.314 million oz.
Jan 22 a huge reduction of 6.75 million oz/Inventory at 318.261 million oz
Jan 21 no change in silver inventory/Inventory at 325.011 million oz
feb 10/2015 we had no change in silver inventory/
SLV inventory registers: 320.327 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 5.0% percent to NAV in usa funds and Negative 4.6 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.5%
Percentage of fund in silver:38.0%
cash .5%
( feb10/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to + 2.83%!!!!! NAV (Feb 10/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to +.11% to NAV(feb 10 /2015)
Note: Sprott silver trust back into positive territory at +2.83%.
Sprott physical gold trust is back into positive territory at +.11%
Central fund of Canada’s is still in jail.
end
And now for your most important physical stories on gold and silver today:
Early gold trading from Europe early Tuesday morning:
(courtesy Mark O’Byrne)
Syriza Stands Defiant, US tries to calm EU stance while Greenspan predicts Grexit
By GoldCore Research February 10, 2015 0 Comments
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- Tsipras to push ahead with counter-reforms “in their entirety”
- Dijsselbloem tells Syriza it must comply with Troika this week or have funding cut from February 28th
- Varoufakis calls the Eurogroups bluff – does not believe EU would risk expelling Greece from Euro
- US apply pressure on EU to keep Greece in the fold, fears “Grexit” would push Greece into Russia’s arms
- Greeks buying gold as insurance against uncertainty
Despite attempts last week by EU technocrats to browbeat the new and inexperienced Greek government into submission, Syriza appear to have grown even more resolute to fulfil their mandate.
Alan Greenspan has thrown down the gauntlet and predicted a Greek exit from the Euro. Noting the contradiction at the heart of Europe Greenspan pointed out that without political unity you can not have a fiscal unity.
“The problem is that there is no way that I can conceive of the euro of continuing, unless and until all of the members of the eurozone become politically integrated – actually even just fiscally integrated won’t do it.”
Greenspan’s words may prove to be prophetic as European rhetoric has become increasingly polarized and the only leader with any real power, Merkel, seems to be captured by special interests within the financial services apparatus. The contagious effects of a Greek exit could be catastrophic for the EU as other debt laden countries eject centrist technocratic parties in favour of new nationalist parties, typically filled with nuevo politicians with very little experience. Watch for swift elections in Italy, Portugal, Spain and Ireland. Should Europe sneeze then the United States could catch the cold. An exit and its repercussions could make Lehman look like a picnic.
In a speech to the Greek parliament on Sunday night, Prime Minister Tsipras made what London’s Telegraph described as a “declaration of war” on the Eurogroup of finance ministers and the EU hierarchy.
Mr. Tsipras stated that Syriza would proceed to raise the minimum wage, raise pension payments for the poorest and reverse the privatisation of state assets among other things.
He also said he would pursue Germany for €11 billion in reparation payments for the plundering of Greece during the Nazi occupation from 1941 to 1944.
Tsipras’s first official act in office – visiting the Kaisariani rife range where the Nazi’s executed 200 Greeks – reflects how any left-leaning greeks view the European project in it’s present guise.
While finance minister Varoufakis has tried to downplay the significance of the visit, saying it was a message to new Golden Dawn and other fascist groups in Greece, the fact remains that many Greeks view the EU as a tool of a new wave of German imperialism.
During the Nazi occupation somewhere between 250,000 and 300,000 Greeks starved to death as the country was plundered to feed the war machine. The cost of living rose, on average, 722% each month following the invasion. For over three years Greeks suffered immense deprivation.
As such, the bitterness and resentment that had lain dormant resurfaced when austerity was foisted upon ordinary greeks, apparently at the behest of German banks. The emotional charge behind the Syriza movement should not be underestimated.
For Syriza, succumbing to the troika is not an option. National pride in the face of the old enemy is at stake.
Meanwhile, the Eurogroup chair Jeroan Dijsselbloem has warned Greek finance minister Varoufakis that Greece must reengage with the troika at tomorrow’s meeting of EU finance ministers or Greece will be shut off from funding from February 28th.
This would effectively force Greece out of the Euro and back onto the Drachma. Varoufakis response was “we will not roll over”.
London’s Telegraph reports,
“Exit from the euro does not even enter into our plans, quite simply because the euro is fragile. It is like a house of cards. If you pull away the Greek card, they all come down,” he said.
“Do we really want Europe to break apart? Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous. Who would be hit after us? Portugal? What would happen to Italy when it discovers that it is impossible to stay within the austerity straight-jacket?”
The Greek government seem intent on calling the EU’s bluff. They have received some encouragement from the Obama administration who are applying political pressure on the EU to find an acceptable resolution lest Greece, locked out of the Euro, are forced to seek assistance elsewhere.
Again from the Telegraph,
In Washington, President Barack Obama has already warned EMU elites to be careful. “You cannot keep on squeezing countries that are in the midst of depression. At some point there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits,” he said.
Russia have already indicated that they would assist Greece if asked. The BRICS have formed their own IMF/World Bank style development bank with $100 billion in reserves.
Were Greece forced to access such funds it would greatly enhance Russia’s influence in Europe. Peripheral might reject the Troika in favour of better terms from the BRICS bank.
It will be very interesting to watch how this all plays out. Can the EU afford to expel Greece? Can they afford to keep Greece and renegotiate knowing that Spain and Italy will be watching very carefully and expecting similar concessions.
Such concessions could bring down the banking system and the Euro. Failure to grant concessions could lead to the dismantling of the EU as aggrieved nations look East.
In the longer term it is difficult to see how the Euro can survive. Without fiscal and political integration the currency will lurch from crisis to crisis. The possibility of further integration grows more remote as discontent festers.
Whatever the outcome of the current phase of the accelerating global economic crisis it is clear that great uncertainty lies ahead. Greeks have been preparing for the worst in recent months.
British Gold Sovereigns were a common store of wealth during the war and are familiar to Greek people. In recent months the Royal Mint has seen an upsurge in demand for sovereigns from Greece.
“There has been a noticeable increase in demand in this last quarter,” Lisa Elward, head of bullion sales at the Royal Mint, said in an e-mail to Bloomberg News. “We tend to see an upsurge in sales at times of political and financial uncertainty.”
At the same time, the Bank of Greece saw a dramatic increase in demand for sovereigns.
Bloomberg reports,
The Bank of Greece sold 5,849 Sovereign coins in January, according to an e-mail from the central bank, which said the numbers do not show any “abnormal activity.” While it didn’t provide monthly figures for comparison, government data show sales of 7,857 coins in the last quarter of 2014.
A serious crisis in the Euro currency is looming. Bank-runs, currency collapse and break up of the currency union are possibilities. The response from the EU include bail-ins of bank deposits. We, as always, advise clients to prepare for the worst by holding an allocation of physical gold outside of the banking system while hoping for the best.
MARKET UPDATE
Today’s AM fix was USD 1,237.50, EUR 1,096.78 and GBP 812.97 per ounce.
Yesterday’s AM fix was USD 1,242.25, EUR 1,096.18 and GBP 816.20 per ounce.
Gold rose 0.41 percent or $5.00 and closed at $1,240.70 yesterday, while silver climbed 1.67 percent or $0.28 closing at $17.03.
The likelihood of Grexit from the eurozone has increased since Prime Minister Alexis Tsipras has taken a tough stance over government debt. Tsipras has insisted that Greece would not extend its reform-linked bailout.
European Commission President Jean-Claude Juncker warned Greece not to expect the Eurozone to bow to Tsipras’ demands in a growing battle that spooked financial markets and prompted pleas for compromise from the U.S. and Canada.
This uncertainty is still leading to safe haven demand for gold bullion. Gold was last trading at 1,097 in euros up 0.35%. Gold in dollars is off marginally near $1,237.70. Silver and platinum are also trading down from the open at $16.86 and $1,215.52.
The Chinese Lunar New Year (Year of the Goat) begins on February 19th. Traditionally there is an increased demand over this time. Shanghai Gold Exchange withdrawals surged to 255 tonnes in January ahead of the holiday period.
SGE total withdrawals for the week ending January 30th reached 53.67 tonnes, following two consecutive weeks of 70 tonnes or more being delivered from the vaults, records show.
Crude oil or ‘black gold’ had its biggest two-week rally in 17 years on speculation that a drop in rig count will curb U.S. production growth. Price volatility rose to the highest in nearly six years. Brent crude jumped 18 percent in the last 10 trading days, the most since March 1998.
Breaking News and Updates Here
end
Ronan Manly’s 3rd installment:
(courtesy Manly/GATA
Ronan Manly: Coin bars, ‘melts,’ and the Bundesbank
Submitted by cpowell on Tue, 2015-02-10 18:17. Section: Daily Dispatches
1:15p ET Tuesday, February 10, 2015
Dear Friend of GATA and Gold:
In the third installment in his series “The Keys to the Gold Vaults at the New York Fed,” gold researcher and GATA consultant Ronan Manly describes the history of high-purity and low-purity gold bars and suggests that the latter are used in transactions between central banks when gold supplies are under strain, as they seem to have been lately when the German Bundesbank purported to be repatriating some of its gold from the Federal Reserve Bank of New York. Manly’s analysis is headlined “Coin Bars, ‘Melts,’ and the Bundesbank” and it’s posted at the Bullion Star blog here:
https://www.bullionstar.com/blog/ronan-manly/keys-gold-vaults-new-york-f…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Grant Williams’ new project, ‘Real Vision,’ has gold focus and more
Submitted by cpowell on Tue, 2015-02-10 20:27. Section: Daily Dispatches
3:28p ET Tuesday, February 10, 2015
Dear Friend of GATA and Gold:
Our friend Grant Williams, publisher of the popular, painstakingly researched, and entertaining “Things That Make You Go Hmmm. …” financial letter, has undertaken a new project of market insight — exclusive and detailed Internet video interviews with the best financial minds, produced weekly and accessible only by subscription.
The project is called “Real Vision” and it already has produced more than a hundred such interviews, with interviews being added at a rate of three of four per week. A new series of interviews, titled “The Chain,” has investment greats interviewing each other, and it starts this week with a 50-minute interview with gold-friendly fund manager Kyle Bass, founder and president of Hayden Capital Management in Dallas, whose anticipation of the subprime mortgage collapse may turn out to be the most profitable market insight of this century.
In the interview with “Real Vision,” Bass observes (pretty congenially for GATA supporters) that “traditional macro-analysis just doesn’t work when the central banks have the training wheels on the market.” Bass adds that he thinks 2015 will be the year of “policy divergence” when “macro analysis” starts to work again and gold moves higher.
The “Real Vision” library already contains a series of interviews examining gold particularly, including talks with Tocqueville Bullion Reserve’s Simon Mikhaelovich, Gold Switzerland’s Egon von Greyertz, William Kaye of Pacific Group Ltd. in Hong Kong, and even your secretary/treasurer, who isn’t quite sure how he stumbled into such respectable company, but don’t worry — it’s not likely to happen again.
Also pretty congenially for GATA supporters, Real Vision says it means “to combat the dumbed-down approach to finance in traditional media,” a dumbed-down approach that in GATA’s view ferociously prohibits examination of the most critical issues, particularly surreptitious intervention in markets by central banks, the most sinister form of what even some central bankers themselves have called “financial repression.”
A subscription to “Real Vision” costs $400 per year, but GATA supporters can get a $100 discount by using promotion code GATA-RV when they subscribe.
Check it out with the interview with Bass, which can be viewed in the clear at the “Real Vision” Internet site here:
https://realvisiontv.com/teaser/118272195
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Part ii
(courtesy/Bill Holter/Miles Franklin)
A spade can never be called a spade!
Yesterday we looked at the situations in both Ukraine and Greece, and how they are both out of money which makes them potential “flash points” for reality to set in. What I’d like to talk about today are the various “slights of hand” and why a spade can never be called a spade.
Currently in the U.S., some (but certainly not all) of the recent economic numbers are showing an absolutely booming economy. All you need to do is look at Friday’s unemployment numbers, they were clearly bogus. The biggest driver of employment over the last five years has been the boom in the oil patch …which is now busted with 1,000’s of pink slips being handed out. BLS revised the November and December numbers to show the fastest growth of employment for any three month period …so far this century! Really? Do you believe this in any fashion at all?
The economic and financial lies are getting bigger and bigger while the economy is shrinking and the financial position is more perilous. The gap between the reality and the true conditions have never before in history been this wide. Stocks are not allowed to drop, institutions are not allowed to fail, heck, financial institutions have been “told” not to mark to market as this would expose failures. Inflation is understated, employment is overstated, gold is not allowed to rise and the game continues. Everything you now see and hear has one goal behind it, hide the reality at any and all costs.
The situation with Greece is very sticky for the West for several reasons. Each and every one of them is because a Greek failure will expose the very ugly reality that the West is one big and interconnected series of Ponzi schemes constructed in pyramid fashion. Greece cannot be allowed to fail because of what, how much, and who they owe. In order for the reality to stay hidden, Greece absolutely must be forced to borrow more money so they have the ability to pay past debts. Already this morning, a six month “trial balloon” extension has been floated. If Greece is allowed to fail, other central banks (including and particularly the ECB) and many commercial banks will take some very real losses. This CANNOT be allowed to happen because of the leverage factor and the fact that no more collateral exists within the system that’s not already encumbered.
You see, many assets have been hypothecated (lent/borrowed against) many times over, including Greek debt. In case you don’t see the problem here, I will spell it out. When something is “lent” out or “borrowed” more than one time, it is theft pure and simple. This truth cannot in any fashion come to the surface because it will create a “call”. The original owners will flood in and ask for their security, their asset, (think gold) back. What do you think the world will look like when 100 or so “owners” of the same asset decide they will not be one of the suckers who are left with nothing? This will be a bank run on a system-wide basis and include nearly any asset type you can think of.
The following analogy sums it up pretty well I believe. This game works well …for a “while”. It works “while” everyone is confident and no one asks any questions. It works while no one at the poker table decides to cash in and leave with their chips. It works well for as long as no one believes anyone else is cheating. Actually, it even works when everyone knows that everyone else is cheating …as long as everyone is winning. The problems begin when people start asking questions. Questions begin when people start to lose money. The answers are brutally ugly when discovered so it is imperative that no questions are allowed to be asked… and this is where we are today. This is exactly what “official policy” is today.
The Chinese, the Russians, The BRICS nations and 135 other nations tagging along ALL know what the “answers” are. They fully understand the casino is 100% rigged. They understand that everything of value has already been borrowed against and in many instances, several times over. This is why there have been so many trade and currency deals signed over the last year and a half …without U.S. involvement, approval or even “dollars”.
My personal opinion is this, a spade will very soon be exposed as the spade it is and all the theft, corruption and intentional fraud will be uncovered. The relevant event could be anything. It could be Greece failing to pay, leaving the EU or even being kicked out. It could be a local currency blowing up which bankrupts someone in derivatives. It could be the failure of a debt auction somewhere in the world. It could be something already well known or not. It could be a war. It could come from the West or the East, and it could be an accident or even an intentional event. It doesn’t matter “why”, the event is coming. The event is coming because everyone knows that everyone knows the system is fraudulent.
Please don’t reply to me saying “no, not everyone knows, the sheeple are as asleep as always”. I am talking about “countries”. I am talking about the players that count. The East et al absolutely knows they are dealing and trading in a lopsided and unfair system. They know the West is massively leveraged and has been dealing unfairly for many years. Even Western countries know this to be true, for example, why are countries repatriating their gold? Because they hope there is enough still in the vault to cover what they originally deposited. Like I said, everyone knows that everyone knows.
As mentioned yesterday, it is my opinion the East would prefer to allow the West’s failure to occur “naturally” and not force the issue. Time alone will do this. The U.S. has been pushing for war at every turn. A war will be pointed at as “the reason” everything failed. A war will also be used to cover the tracks of the fraud. This is not new thought and only the way it has always been. Distract, pretend, and extend!
If you believe the meme of “recovery” or “growth”, all you need to do is look at this. The Baltic dry index has just dropped to ALL-TIME lows! This index is very basic and when broken down reflects the state of global trade. Global trade has collapsed since the 2008 crisis began, unlike ever before.
courtesy Zerohedge
This, after huge global deficit spending and monetization. “Magic Policy” which we were assured would cure all ills has failed miserably and no amount of bogus economic reports can mask this fact.
Expect out of control markets, unimaginable financial failures and ultimately a breakdown of distribution and society itself. The truth is, we have lived in financial fantasyland since 2007. 2008 came along, markets collapsed and the reset which should have occurred was aborted …only to become a much bigger and far more painful “inevitable” event now. More debt, more money supply and of course less gold in Western vaults. We in the West have spent, frittered, and given away 100’s of years worth of labor and savings of our forefathers. This in an effort to resist living within our means and calling a spade a spade. Spades are almost all that is left, all the other suits have been spent, lent and borrowed 100+ times over! Regards, Bill Holter
end
Koos does a thorough research on audits of gold by the Fed and finds that they were not serious at all
you will enjoy this…
(courtesy Koos Jansen)
Posted on 9 Feb 2015 by Koos Jansen
Second Thoughts On US Official Gold Reserves Audits
This post is a sequel to “A First Glance At US Official Gold Reserves Audits”.
What is not often covered in the media or blogosphere are the audits of the US official gold reserves stored at the US Mint, which is the custodian for 95 % (7716 tonnes) of the stash – also referred to as deep storage, and at the Federal Reserve Bank Of New York that safeguards the remaining 5 % (418 tonnes). The lawful owner of the US official gold reserves is the US Treasury. Part one covered the most recent records I could find published by the US government, in this post we’ll examine more historical records and approach this matter from a more critical angle. Because of the amount of information I found this post is split in multiple parts.
What Is A Gold Audit?
From Wikipedia:
Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment, which is communicated through his audit report.
Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits.
To be sure, I’ve asked several bullion dealers about how their audits are being conducted. They all agreed an audit involves three parties: the owner of the gold, the custodian and an external (independent) auditor. The external auditor examines the gold, compares its findings with the statements of the custodian and then reports on the accuracy of the statements of the custodian to the owner of the gold. An example of an audit report by such an external auditor can be found here.
The fact that the auditor is an external party is essential; if the custodian itself would perform the audit it could easily falsify the reports and lend gold that isn’t often transferred in and out of the vaults.
What Is A Gold Assay?
Assaying gold is done to test the purity of the metal; to make sure a bar contains at least the amount of fine gold disclosed on its inscription. For assay tests often samples are taken from random bars (not from all bars of a specific inventory). From Wikipedia:
A metallurgical assay is a compositional analysis of an ore, metal, or alloy. Raw precious metals (bullion) are assayed by an assay office. Silver is assayed by titration, gold by cupellation and platinum by inductively coupled plasma optical emission spectrometry.
Ron Paul
Allegedly the deep storage gold at the US Mint is stored in 42 vault compartments at three different locations in the US. 4,583 tonnes is stored at Fort Knox, Kentucky, 1,364 tonnes in Denver, Colorado, and 1,682 tonnes at West Point, New York.
The last time the US official gold reserve audits were publicly discussed was in 2011 when Ron Paul, who was a well informed member of the US House of Representatives, proposed new legislation at the time to have a full audit of the US holdings: The Gold Reserve Transparency Act (H.R. 1495, not enacted). Strangely Dr Paul wasn’t up to date of the audit and assay procedures performed since 1974, while he was in politics because of gold since 1971. FromWikipedia:
When President Richard Nixon “closed the gold window” … on August 15, 1971, Paul decided to enter politics and became a Republican candidate for the United States Congress.
Only during the preparation of the congressional hearing Dr Paul became aware of the audit and assay procedures. From Paul’s opening statement at the hearing June 23, 2011:
For far too long, the United States Government has been less than transparent in releasing information relating to its gold holdings. Not surprisingly, this secrecy has given rise to a number of theories about the gold at Fort Knox and other depositories.
Some people speculate that the gold has been involved in gold swaps with foreign governments or bullion banks. Others believe that the gold has been secretly shipped out of Fort Knox and sold. And, still others believe that the bars at Fort Knox are actually gold-plated tungsten. Historically, the Treasury and the Mint have dismissed these theories rather than addressing these concerns with substantive rebuttals.
The difference between custody and ownership, questions about the responsibility for U.S. gold held at the New York Fed, and that issue of which division at Treasury is ultimately responsible for the gold reserves are just some of the questions that have come up during the research for this hearing. In a way, it seems as though someone decided to lock up the gold, put the key in a desk somewhere, and walk off without telling anyone anything. Only during the preparation for this hearing was my office informed that the Mint has in fact conducted assays of statistically representative samples of gold bars, and we were provided with a sample assay report.
While the various agencies concerned have been very accommodating to my staff in attempting to shed some light on this issue, it should not require the introduction of legislation or a congressional hearing to gain access to this information.
Why did Dr Paul not know about this? Why did it take a congressional hearing to get the details of the audit and assay tests? Why wasn’t this information easily accessible to him and the American people?
Gold Audits At Fort Knox
The construction of the notorious gold depository was finished in 1936 at the Fort Knox army base in Kentucky; large quantities of gold were first deposited in 1937. After President Roosevelt had ordered the people of the United States to sell all their gold coins and bullion for $20.67 per fine ounce to the Federal Reserve in 1933 through Executive Order 6102 (the great gold confiscation), a fortress was needed to store the bars that were coming out of the smelters of theseized gold. The bars that were melted from gold coins are approximately 90 % pure, the majority of the bars in Fort Knox are coin bars.
The Gold Reserve Act of 1934 required the Federal Reserve to transfer ownership of the official gold reserves to the Department of the Treasury, in return it received gold certificates (that are mere redeemable for dollars). The US Mint was assigned to safeguard the Treasury Department’s gold, silver and other assets at several depositories across the US, among others at Fort Knox and Denver.
1953
To research the integrity of the audits performed at Fort Knox (and the other depositories) in all of history, we’ll start from the beginning and work our way to the present. The first audit I could find dates from 1953, when total US reserves accounted for roughly 20,000 tonnes. Many researchers that have worked on this subject in the past refer to the first and last full audit of 1953. However, the audit in 1953 was anything but full.
During my research I came across many articles of researchers that have investigated Fort Knox audits – Ed Durell, James Turk and Tom Szabo, to name a few. Often these articles contained dead web links to documents on US government websites. Everything that was still accessible during my research I copied to my own servers to secure access to them at all times.
The next quotes are from the official report of the gold audit in 1953 (download here).
Fiscal Year Ended June 30, 1953
REPORT ON FISCAL OPERATIONS
VERIFICATION OF GOLD AND SILVER BULLION AND OTHER TREASURY ASSETS
…The audit was performed in accordance with procedures which were recommended by an advisory committee of consultants appointed jointly by the present Secretary and his predecessor in office. Members of the advisory committee were W. L. Hemingway, Chairman of the Executive Committee of the Mercantile Trust Company, St. Louis, chairman; Wm. Fulton Kurtz, Chairman of the Board, The Pennsylvania Company, Philadelphia; Sidney B. Congdon, President, National City Bank of Cleveland, Cleveland; and James L. Robertson, Member, Board of Governors, Federal Reserve System, Washington. As had been suggested by the advisory committee, the audit was conducted under the general supervision of a continuing committee representing both incoming and outgoing Treasury officials. Representatives of the Comptroller General of the United States observed the audits at each of the various audit sites.
In accordance with a recommendation of the advisory committee the special settlement committee at the Fort Knox depositary opened three gold compartments, or 13.6 per cent of the total of twenty-two sealed compartments at that institution containing 356,669,010.306 fine ounces [11,094 metric tonnes] of gold valued at $12,483,415,360.28. All of the gold contained in the three sealed compartments opened, amounting to 34,399,629.685 fine ounces [1,070 tonnes] valued at $1,203,987,038.94 or approximately 88,000 bars, was counted by members of the settlement committee and found in exact agreement with the recorded contents of the compartments. Slightly in excess of 10 per cent of the total gold values so counted, or some 9,000 bars weighing approximately 130 tons, was further verified through weighing upon special balance scales indicating exact weights to the 1/100 part of a troy ounce. All gold weighed was found in exact agreement with the recorded weight thereof. Further, test assays were made of 26 gold bars selected at random from the total gold counted. The reported results of the test assays indicated, that all gold tested was found to be of a fineness equal to or in excess of that appearing in the mint records and stamped on the particular gold bars involved. Gold samples used for test assay purposes were obtained through drilling from both the top and bottom of each representative gold bar. In final confirmation of the verification of the gold bullion asset values held in the Fort Knox depositary the special settlement committee reported in part as follows:
“0n the basis of assays, your committee can positively report that the gold represented, according to assay, is at the depositary. We have no reason, whatsoever, to believe other than, should all melts be assayed, the results would be the same.”
“We, the undersigned, found the assets verified, to be in full agreement with the assets as indicated by the joint seals affixed to the respective compartments on January 26, 1953.”
“It is the opinion of this committee that the same agreement would be found should all of the compartments be verified.”
In short; an advisory committee of “consultants” assembled special settlement committees that, under the supervision of Treasury officials and Representatives of the Comptroller General, audited 3 of in total 22 compartments filled with gold (it’s likely Fort Knox has many more compartments in total). 13.6 % – 1,070 tonnes – of all the gold bars held at Fort Knox was counted, of which 9,000 bars were weighed upon special balance scales and 26 bars were assayed. The document notes procedures at other depositories closely paralleled those employed at Fort Knox, though no numbers are disclosed.
In 1953 the US Treasury held approximately 1,300,000 gold bars at multiple depositories of which 88,000 were counted, 9,000 were carefully weighed and 26 bars (0.00002 %) were assayed; no external auditing firm was present. This was not a full audit.
1974
The other full audit that keeps buzzin around in the media was the one in 1974, because the media was actually allowed to enter the fortress back then. On September 23, 1974, roughly 100 journalists were allowed entrance, accompanied by 9 members of Congress.
When the total US official gold reserves had declined by 11,500 tonnes from 1953 to 1974, many Americans began to doubt if the US actually had any gold left at all, especially after Nixon had temporarily suspended the convertibility of dollars for gold at the US Treasury in 1971. The amount of gold at Fort Knox had dropped from 11,094 tonnes (stored in 22 compartments) to 4,585 tonnes (stored in 13 compartments). In an attempt to reassure the American people not all gold was gone a new audit was scheduled.
From several sources we know for the visual inspection by the press and congressmen only one compartment was opened, in which 368.2 tonnes was stored. I edited a small video cli