Possible default in gold supply

[Bumble]

Those interested in gold will be interested to read this article from Seeking Alpha:

http://seekingalpha.com/article/3247676-did-comex-just-receive-a-physical-gold-bailout-from-the-feds

 

The background to it is that commentators on gold trading have been pointing out for years that gold is moving from west to east: China, India and Russia are buying aggressively, while western countries are destocking. A commonly heard complaint from fans of gold is that the price is being held down artificially by the trading of 'paper' contracts with no physical delivery, including naked shorting, but that this activity will inevitably hit the buffers when the west runs out of gold and there are no stocks left to fulfil orders. The article presents evidence that this is starting to happen: a large shortfall in physical supply emerged in the Chicago Comex and JP Morgan stepped in to cover it to prevent a default. Since JP Morgan is not known for its altruistic beneficence, they were most likely acting as a front-man for the Federal Reserve itself. If the author of the article is correct, then this may indicate that the price suppression is starting to end and prices will begin to reflect the strong demand from the east.

[HighlandTiger]

The problem with the story that JP Morgan is buying up all the gold and silver it can, is that when you try to find the original source of this story, all you can find is rehashed articles from PM blogs and websites, repeating what they heard elsewhere. A case a friend of a friend type story 

 

As far as I can see, there is no actual evidence that JP Morgan has actually purchased large amounts of physical gold for themselves with their OWN money. 

 

But its a great story for the anti-establisment, SHTF'ers, and those with an interest in boosting prices or selling PM's themselves. Lots of smoke and mirrors, and not just from the top.

[Bumble]

HT, I think you have confused this story with a different one. This is not about JPM buying gold but about them providing a large quantity of gold to a bunch of short sellers in order to head off a default in supply. The gold was almost certainly not thier own.

[HighlandTiger]

When an article includes the words

 

"Declassified documents" 

"strong circumstantial evidence" 

"Henry Kissinger" and  

"If conspiracy theorists, like those at GATA, are correct"

 

 

then I lose interest very quickly and let the tin foil hat brigade go into melt down about the big bad NWO

 

 

[HawkHybrid]

'As a practical matter, large physical gold buyers avoid COMEX partly out of a fear that they might end up with a cash settlement instead of gold'

 

they can't possibly default. more importantly

the comex cannot be trusted to supply gold

when needed. the comex either improves to

give it's customers the service that they want

or it's customers will look for a metals exchange

that will.

 

HH