Deflation Xforming to Inflation Soon

Richard MayburyRichard Maybury, one of my heroes, warns deflation is likely to turn into inflation sooner than most expect, perhaps before Obama is inaugurated Jan 20. Richard has been tracking something most poeple don’t: the *velocity* of money.

“The crisis began in August 2007 with a velocity-driven inflation, and about a year later turned into a velocity-driven deflation.

“As far as I can tell, the deflation shows no signs of abating yet. But, I think that when the turn back to a velocity-driven inflation does happen, it will be quick. We will see a V-shaped bottom, not a U-shaped bottom.

“I also don’t think the turn is very far away — weeks or days, not months. Obama is one of the most masterful showmen since PT Barnum. It may be that he will do a spectacular job of convincing the public that his economic team has developed a miracle cure, and the resulting wave of optimism will cause the turn in velocity. We’ll see.

“In any case, when I think the bottom has happened, I will let my subscribers know on the Subscriber Access part of our web site. No guarantees, but I’ll do my best to get it right.” [more]

Click here to see more posts by/about Richard Maybury.

Vaporize COMEX 2008-12-10

Last update: Wed 12/10/2008, 4:49 pm CST.
Gold: 43.0% depleted. Delivered today: 13,900 oz.
Silver: 37.1% depleted. Delivered today: 140,000 oz.

Link to all Vaporize COMEX posts:
Vaporize COMEX Graphs

Latest:  
COMEX: Taking Delizery Is EZ
Silver Dealers: My Experiences

Now that I’m showing the “eligible” warehouse inventory numbers in the data grid below each COMEX chart, I’ve simplified the COMEX charts to show only “delivered” and “registered” inventory numbers.

comex-countdown-gold-2008-12-10

 gold-data-2008-12-10

 comex-countdown-silver-2008-12-10

silver-data-2008-12-10

COMEX trades hundreds of times more gold & silver than they actually possess. If enough investors demand delivery of PHYSICAL gold & silver COMEX stockpiles will be depleted. If COMEX runs out, the ensuing rush to grab physical metal to settle contract obligations *could* be the spark that ignites the long-awaited precious metals wildfire.

Explanation:
COMEX warehouses contain both “registered” and “eligible” metals. The “registered” metals are available for physical delivery. The “eligible” metals are not ready for delivery until they become “registered.” Although this pool of “eligible” metals is stored at COMEX warehouses there is no obligation to “register” these metals for subsequent physical deliveries.

The graph shows:
1) the cumulative ounces of metal delivered this month,
2) the ounces of “registered” metal available for delivery,
The percentage shown is based on the cumulative physical metal deliveries for the month against the “registered” amount of metal in COMEX.
“Eligible” metal inventories are not shown as they do not have a direct bearing on the inventory depletion ratio.

Sources:
[1] COMEX precious metals warehouse stocks: http://www.nymex.com/warehouse.aspx
[2] COMEX precious metals daily deliveries: http://www.nymex.com/media/delivery.pdf
[3] “Zed”, “nofear”, “DaveInDenver” and “Kaboom” from blog comments. Thanks, guys! 

More info:
Gold: Is This It, NOW?
Attack of COMEX Gold & Silver
How 2 Track COMEX Deliveries
Sinclair Sez “Help Me Bust Comex”
This Guy Plans 2 Kill “Paper” Silver
COMEX: Taking Delizery Is EZ

COMEX: Taking Delizery Is EZ

This excellent write-up is from the revered JSMineSet website, one of the foremost sources of accurate info on gold (as you probably already knew).

CIGA JB Slear of Fort Wealth Trading Comments on the Comex Delivery Process:

I wanted to give you a quick update on the delivery process. I have to say, this is not difficult at all, it just requires some time.

  1. You must have an account with a commodities firm to take delivery of COMEX Gold/Silver. Some clearing houses will not allow you to take delivery, so don’t hesitate to ask your broker.
  2. We started taking delivery in November Gold and these people got their gold bars by the first week of December.
  3. The process starts with the purchase of the contract in the delivering month, now December gold. With the account fully funded, we simply buy the futures and inform the clearing firm of our intent to take delivery.
  4. The costs out of the commodity account is (at the time of this writing) $756.1 per ounce, x 100 (for a 100 ounce bar), plus commissions and receipt fees totaling no more than $200 total per bar (Fort Wealth Trading Co.). So $75,810 in the account and about a week’s time to process the warrant/receipt, and your gold will be ready to be delivered.
  5. I will phone and receipt numbers once the stopper contacts us. “Stopper” is a term referring to the warehouse that holds the product. If your stopper is HSBC, they will require a faxed ID with the name and address of where the bar is to be shipped, along with a check for the freight and insurance/handling. HSBC has an account with the US postal service, and can tell you how much the shipping costs will be for sending an insured package. (I’d suggest Next Day Air, after all, it’s gold). If your stopper is Brinks, there is a slight difference in delivery. They will allow a credit card to be used for these additional fees and shipping, but require the bars be delivered to an institution (rightfully so too, you don’t want a Brinks truck stopping at your home). They will deliver to a Post Office, Bank, or business address.
  6. I haven’t had any stoppers from the other 2 warehouses yet, but the delivery procedures should be the same – minimal. Please be patient with these people, these procedures are in place to make sure the product goes to the right person, and from my understanding, these warehouses are busier now than ever before. I wonder why?
  7. This is it! Don’t let your broker tell you any different. It’s even easier to will call the product too. These warehouse people are absolutely wonderful and will do what they can to make it easier.

Non-US entities:

For our foreign investors, the process is the same. Jim tells me that the shipping process is different. Shipping cost quoted below include full value insurance.

I’m here of course to answer any questions or concerns you might have so feel free to call me and we’ll push the snowball downhill together. You save $200 an ounce over local coin and bullion dealers.

Sincerely yours,
CIGA JB Slear

Fort Wealth Trading Co. LLC
www.FortWealth.com
866-443-0868 ext 104