Noted Quotes 8/16/20

https://www.zerohedge.com/markets/luongo-end-comex-paper-gold#comment_stream

gold_081620

 

 
 
2 hours ago

What’s important here isn’t that gold may be moving into a longer-term correction, which is highly likely and a bit overdue, it is that dramatic washouts in price are having little effect on bullish sentiment.

 

Spot on.  What we saw in March was that the central banks tipped their hand and showed us all that they are permanently trapped (litterally a checkmate).  So all they can do now is to try and manipulate and confuse the market as best they can except too many now realize the endgame.  This is not to say we won't have a correction in prices of PMs temporarily but it means that the CBs are cooked in terms of monetary policy.  Hammering the PM's with paper only serves to point out how desperate they really are because confidence in the system is dropping faster than a lead balloon.  Their only out would be to raise rates dramatically (like we saw after they closed the gold window in the 1970's) which we all know in the current massive deficit situation around the world would be absolutely devastating.  This means they will have to simply print until they can't do it anymore while the smart CBs and sovereign wealth funds are buying the PMs with both fists.  You can see this with Buffett's latest wager on Barrick Gold, they are well beyond concerned at this point.......this game of musical chairs is for all the marbles. 

 

 
 
1 hour ago

It's pretty simple we see the fed debasing the currency and before you know it your currency is worthless. Better to be holding gold or silver at time of collapse than the dollar. Bernanke said the fed would never demonetize the debt and the fed did just that. He also said the fed bought gold because of "tradition" and gold wasn't money, he's wrong about gold and a lot of other things as well.  

I've used this quote before and it's use is appropriate here. 

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Ludwig Von Mises

 

 
 
1 hour ago

It’s not a producer/consumer hedging platform. It’s a currency hedging/speculator platform.

Which is, of course, what a Futures market is supposed to be. If it isn't that, what is it? Answer: The PM Futures markets were introduced in 1973 specifically to allow Governments and Central banks to control the price of PMs. 

What’s even more impressive is that the COMEX, after Monday’s follow-through beat down, did what it always does to protect itself, it raised margin requirements on both gold and silver to force even more liquidations from now exposed and under-water longs.

Actually, no it is to help the Bullion Banks knock down prices. Comex ONLY ever increases margins when prices are being attacked to further help squeeze longs. Never on the way up to squeeze shorts. This is obvious corruption and fraud involving collusion between CME and the Bullion Banks. 

Someone is standing for hundreds of tonnes of delivery in gold while pushing the price higher against the wishes of the exchange.

Again, an Exchange is supposed to be a independent intermediary and not to favor either side and, as (in theory) a producer/consumer hedging platform should be ready and able to facilitate deliveries. 

The article also fails to point out that throughout the most recent paper price attack, premiums for physical metal NEVER declined and at no time during the attack was it ever possible to buy physical metal at anywhere near the paper Futures prices.

So in response to what I suggest are inaccurate conclusions of the article, I would suggest a different question: Who benefits from maintaining the existing Comex system as a "Tail wagging the dog" mechanism for fixing the price of physical Gold? The answer is, of course, ALL Central Banks who issue fiat currencies and who would be able to continue to use Comex Futures as a vehicle to manipulate PM prices, as they was the original intention. So the Russia/China aspect is highly speculative at best and doesn't actually pass the Occam's Razor test.

Also not referenced are important market changes in progress. Bullion Banks got badly hurt in March, many losing Billions as a result of the Futures spreads and the short EFP trade against long LBMA positions. This uncertainty and huge financial loss has impacted the credibility of Comex?LBMA and other exchanges are stepping in. LME is reported to be about to introduce a physical exchange (Like Shanghai) to address the newly defined needs of Banks who never want to be caught out again.

So where does that leave Comex? I would suggest the possibility that it will be isolated as an irrelevant paper play pen for central Banks, disassociated from the price and price setting mechanism for physical Gold.

COVID 911
The Evolution of Fiat Money, Endless War, and the ...
 

Comments

Already Registered? Login Here
No comments made yet. Be the first to submit a comment

By accepting you will be accessing a service provided by a third-party external to http://notzerohedge.com/