Fed Bailed Out The Comex With Hypothecated Gold
Did JPMorgan Chase just engage in a bailout similar to John Pierpont Morgan’s 1907 bailout of the New York City banks ?
Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
I’m not the only one who’s noticed a significant increase in the amount of anti-gold propaganda flooding the financial media. Here’s a perfect example published by Bloomberg News just today: Gold’s Technical/Fundamental Trend Is Down
Of course, nothing could be further from the truth. You tell me, does this chart look “bearish:” ?
This graph does not reflect today’s spike higher in gold. The U.S. financial media has become disinformational in proportions that would make George Orwell or Joseph Goebbels blush with embarrassment.
Another critical fundamental variable ignored by the financial media – and even Koos Jansen for that matter – is deliveries onto the Shanghai Gold Exchange. Yes, withdrawals are the ultimate barometer of Chinese demand for gold – minus the PBoC’s demand, of course – and Koos has done brilliant work on that. But gold can not be withdrawn it is not first delivered!
As it turns out, just this week alone delivery volume onto the SGE has totaled 115.4 tonnes. John Brimelow of JB Gold Jottings describes this volume as “impressive.” Especially considering that the financial media and dolt’s like Scott Bauer would have us believe that seasonal demand in China is low. Clearly utter disinformation.
Avery Goodman has written a piece for Seeking Alpha that describes why it appears as it the Fed – via JP Morgan – bailed out the Comex from defaulting on gold deliveries under the June contract. I believe Avery’s article is 100% accurate based on my 15 years of researching, trading and analyzing precious metals trading on the Comex:
In an article dated June 1, 2015, I pointed out that COMEX clearing members had gotten themselves to the edge of a widespread default on physical gold delivery obligations. They faced net claims of 550,000 troy ounces against only 370,000 registered ounces left at the COMEX warehouses. That left a deficiency of 170,000 ounces, or 5.29 tons of gold.
That same day, JPMorgan Chase (NYSE:JPM) transferred 177,402 troy ounces of gold into COMEX registered gold stockpiles – just enough to cover the shortfall at maturity, plus some extra to cover the additional buying that always happens during an average delivery month. All this raises a question: Did JPMorgan Chase just engage in a bailout similar to John Pierpont Morgan’s 1907 bailout of the New York City banks?
You can read his entire article here – every assertion he makes is 100% accurate and verifiable: The Fed Bailed Out The Comex
Summary of Avery's article.....
- On June 1, 2015, JPMorgan added almost exactly enough ounces of physical gold to patch the deficiency between supply and delivery demand at COMEX, avoiding widespread dealer default.
- Declassified documents, along with strong circumstantial evidence indicate that it was not JPMorgan, but its most important customer, the US Federal Reserve, that just bailed out COMEX.
- The deficit in world physical gold supply will be at least 606.1 tons in 2015, but may be much larger, and similar incidents are likely in the future.
- The deficit in world gold supply versus demand will grow much larger in 2016 and beyond.
- Even if the entire remaining US gold reserves were mobilized, prices could not be permanently held down to current levels, making gold and gold mining stocks a good deal now.
I wrote during the period just before first notice of deliveries that the open interest standing for delivery was unusually high. I also suggested that the bullion banks would attack gold and coerce as many of those longs to sell as possible. I also suggested that the Comex would find a way to avoid delivery default. Both of my predictions were fulfilled. Avery’s article explains how delivery default was avoided.
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