COMEX Warehouses in Trouble?

Since I started tracking COMEX gold and silver warehouse levels last November I’ve grown to be very suspicious of the numbers COMEX reports each day. In spite of increased physical deliveries in both metals, “registered” inventory levels remain more or less stable. This is why I gave up daily updates in favor of weekly ones; I just don’t have all that much faith in COMEX reporting.

Jim SinclairHero and venerable gold guru Jim Sinclair has experience in all things gold going back to the 1970s. Things happening NOW at COMEX gold warehouses are reminding him of severe delivery problems that bankrupted brokers BACK THEN.

Will Increased Delivery Demand Break The Gold Warehouses?

Dear Friends,

I have been speaking with many people this evening who have taken gold delivery.

What I am hearing is not impressive.

For decades warehouses have held, but rarely delivered as compared to store.

When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001.

There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.

I have been told that bars delivered do not correspond with the receipts from exchanges.

I have been told that bars of slightly different weight (higher) have been received.

COMEX floor tradingThis may well be a system that has never been asked to handle volumes as are now taking place. This may well be like the old hand clearing equity systems that broke down as volume of trading increased in the early 70s.

F.I. Dupont went out of business because their back office could not meet the growing clearing and trading at that firm.

Pershing, and Vilas & Hickey were the two largest equity clearing firms.

Vilas & Hickey, a NYSE firm of which I was a general partner (at 27 years old) recognized the growing problem and transferred our clearing business to Pershing and merged our activities into another firm, Muller & Company, in order to avoid the impending problem.

I was the sole general partner of the merged NYSE firm so I know what I talk about. We preserved our capital and side stepped a problem that busted many firms.

I smell exactly the same thing in the precious metals warehouse business. How pervasive it is we all will soon find out.

Regards,
Jim

And Jim’s friend J.B. Slear, who helps people out with getting physical delivery from COMEX, is reporting:

1) “We’re finding out that some brokerages will not help with the delivery process or refuse to help even after the commissions are paid.”

2) “Calls today are reflecting concerns about accounting practices in Canada and other G7 countries.”

3) “…We have witnessed cost increases in just about everything “Comex”, from Prudential’s verification process (which is matching buyers monies and sellers bars) all the way down the line to the delivery itself.”

Read more at Assistance Getting Delivery from COMEX Warehouses.

Will the COMEX Manipulation Ever End?

Jim SinclairThe headline above echoes a popular question asked by all who suddenly realize gold and silver prices have been manipulated on the COMEX. No less an authority than Jim Sinclair (of JSMineset.com) answered this query Monday, June 8, 2009:

You always offer me, among the many other lamentations in your communication, the fear that gold and the dollar will always be manipulated to withhold true pricing.

My answer is manipulation only works in the direction anything wants to go in the first place, which gold and the dollar have so far proven correct. Step back and from the day to day ticks and look at the big picture.

The problems out there are so big that no central bank, treasury or group of Banksters anywhere on the planet can afford to handle them. Right now if it were not for the charisma of the new Administration things would have unwound completely.

In time, the problems of today’s financial world to which there is no practical solution will overwhelm the manipulation by simple size of money motivated into the gold market and the number of newly created dollars for sale.

The size of the dollar pool is infinite, and the amount of gold is finite. That is the equation which will make Alf right in his take on the price. It only takes a failure of confidence to motivate the equation. This is why I have been trying to give you clear direction free of the fog of emotion and spin in order to protect you.

At every turn the media, government and Banksters have been trying to get you to dump your protection.

Stay the course. Gold is going to save more than your financial position.

Jim Sinclair

Editor’s note: Alf’s numbers are predicting $3,000 to $4,000 per ounce for gold during this next leg up.

Jim has said this move will begin in just a few days, around June 15, 2009.

I say, “Where gold goes, silver will follow at a ratio between 1:16 to 1:75. Silver is the poor man’s gold.”

$3,500 gold implies silver at $47 (1:75) to $219 (1:16).

Ten Reasons to Buy Stocks Now [humor]

growthstockwireI’ve respected Jeff Clark’s advice on the markets for years now. In the last two weeks he’s made a compelling case for a major. imminent decline in the stock market. I’m getting ready to jump into some DXD (the double DOW down fund).

Then this morning I was mystified to read this headline from him:

Ten Reasons to Buy Stocks Now

For the past few weeks, I’ve been spouting off about all the reasons to stay out of the stock market.

Numerous technical indicators are flashing “sell” signals. There’s massive negative divergence on the charts of all the major broad market indexes. Insider selling is at its highest level since late 2007. The public has forgotten all about the tortuous decline suffered just a few months ago and is casually tossing what’s left of its savings back into the most speculative stocks like a toddler throwing coins into a wishing fountain.

Of course, nobody really wants to hear stuff like that. As one reader put it, “Enough already with the negativity. Can’t you find any good reasons to buy stocks?”

The reader is right. Frankly, I’m tired of being bearish on the stock market. It’s time to blow away the storm clouds of negativity and enjoy the lemon drop sunshine and gummy bear rainbows. Let’s stop focusing on the bad stuff. Instead, join hands with your neighbor and share good thoughts.

And if you’ll hum a little Kumbaya, I’ll share my top 10 reasons to buy stocks right now…

10) The Feds are already doing everything they can to destroy your wealth. Putting all you have into stocks will get the job done faster and free up their time for other things.

9) Bernie Madoff thinks it’s a good idea.

8) You won’t need a calculator to figure out your net worth.
 
7) Your broker won’t have to take a second career delivering pizzas. That’ll open up a job for someone else. The employment report will improve, and you’ll be credited with kicking off the economic boom of 2009.

6) Standing in soup lines is a great way to meet new people.

5) You won’t feel guilty benefiting from the “Take a penny, Leave a penny” tray at the local Starbucks.

4) It’s “Opposite Day.”

3) A diet of Top Ramen and generic beer will bring back all those wonderful memories from college.

2) Homelessness will take your mind off of global warming.

And, the No. 1 reason to buy stocks right now…

1) You won’t have any of those pesky capital gains taxes to worry about at the end of the year.

Best regards and good trading,
Jeff Clark

(Read more from Jeff on The Gowth Stock Wire.)

Governator Squeezes Trigger for Crime-n-Riots

Scott's Soapbox

I admit I’ve been quiet for quite a while here, waiting for that thunk of the other shoe. Plus, the road ahead isn’t just filled with potholes, to me it’s looking downright cratered.

Seriously.

governator_poster_70x82Seriously B-A-D. I am more worried now than I was last August, before everything tanked. And, it’s cost me a lot of my admittedly-diminished piece-of-mind. I’ve been nearly paralyzed with foreboding these last six weeks, andI haven’t been able to bring myself to spend much time on this site blogging the imminent (further) collapse.

And California, the world’s 7th largest economy, could be the first car in the jerking roller-coaster ride to the bottom. He warned they have until June 15 to make draconian cuts or face insolvency by the end of July. [link]

What Will Trigger The Coming Riots
20090527_CA_cuts_150x210What do you think will happen in Califonia when the Governator cuts off welfare as promised? [link] Do you think crime will go up or down as a result?

And what message is being sentto the judicial system for California’s 36,756,666 residents when Arnold is releasing prisoners EARLY cuz the state can’t afford the incarceration expense? [link]

Is it crazy to foresee an explosion in crime, some of it violent, that escalates once the disenfranchised realize they “ain’t gonna do time” over petty crime? And, is it really that much of a stretch to envision the crime turning ever more violent as the masses realize the cops can’t stop it?

We are months (not even a year) away from big-city riots in this country.

Gun Confiscation Won’t Make It Safer
The ripples of GM’s bankruptcy and California’s crash will be felt from shore to shore. It’s going to be hard to hide from it. If you currently live in (or within a day’s walk for a hungry male) a large population-concentration things will get “I-wish-I-bought-that-20-gauge-shotgun” ugly for you if you stay one day past the tipping point.

I’m not the only one thinking like this: legislators in the Great State of Tennessee just enacted a law PREVENTING gun confiscation in the event of martial law [link]. Yes, that’s supposed to be a constitutional right but Tennessee doesn’t trust the Feds after what they did during Katrina.

Care to jog your memory a bit?
-ABC News vid showing the gun confiscation by troops.
-Watch the CNN video of a 61-year-old lady tackled by cops in her home while taking her gun.

Is There A Chance I Could Be Right?
Hmmm… check my track record on big-picture stuff. Looks like I notch another win with the bankruptcy of GM and selling of bankrupt Chrysler to “Fix It Again, Tony.” (Worst car I ever had was a 1969 Fiat850 Spyder. 2ndworse car was a Plymouth Fury III land yacht. Shoulda been a crime to sell dogs like these to struggling teens.) [My Predictions from Feb 2008]

Protect Yourself.
Protect your family. If you live in a larger city move (I did in 2004, but I always seem to be too early  to the party). This is often impractical so at least phone up a friend/relative living in an area with a lower population density and “joke” about coming to visit if TSHTF. Seriously. Ask him what you can bring that would make him happy to see you. 

Get other ideas from Checking Off My “To Do” List. Also look at Warnings & Advice from a Saint, Part 3 for 6 things you can do starting today.

Scott

U hav no idea how bad its gonna git

Reader Asks, “What’s So Hard About Busting COMEX?”

Scott's Soapbox

Here’s a good question from a reader, “Mike“:

Scott,
I have been following your website for some time along with Sinclair and enumerable others. I think you do a great job and I find your musings incredibly infromative. I’ve never traded futures on the comex but this whole comex cracking/failure to deliver thing puzzles me a great deal.

As best I can tell, if someone wanted to bust the comex couldn’t they just go long an unlimited amount of futures and then just ask for delivery?

The total dollar amount of all registered comex inventory is only about $3B which for many wealthy oligarchs, sovereign wealth funds, or potentially hostile countries is but a drop in the bucket. Is there something I’m missing here?

People seem to get excited about the comex potentially failing and it very well could but it seems that it wouldn’t be very difficult if anyone really wanted to. Again, perhaps I’m oversimplifying but I think getting a clear understanding is very important so people aren’t mislead in their understanding of the process and in any investment decisions regarding the precious metals skyrocketing if and when the comex collapses.

By the way, I am incredibly bullish on both monetary metals and am a firm believer in abolishing the fed, a return to sound money, etc., etc. etc. I’d love to hear your thoughts on this issue when you have a moment as it would probably be educational for me and many other of your readers.

Thanks so much and keep up the great work,
Mike

watermelons smashed 120x84Mike, here’s my take on it FWIW:

I agree, theoretically it shouldn’t be all that hard to crack COMEX open like a ripe melon. Like you say, it’s a relatively small market.

How small? As of yesterday, June 3, 2009, COMEX reported a total silver inventory of 120,879,235 oz. So, 121 million ounces at $15.92/oz works out to $1.9 billion.

[/begin conspiracy rant]
Chump change when the “govmint” is throwing around trillions. Geez, remember how the “govmint” gave JPMorgan $30 billion for taking over failing Bear Stearns? Monday, March 17, 2008 was the FIRST business day JPMorgan assumed and expanded Bear Stearns’ COMEX silver manipulation. [link] JP Morgan is almost solely responsible for the COMEX silver manipulation, and they’re funding it with money given to them by your “govmint”.

Oh, BTW, do you remember when silver hit its recent 28+ year high?

Monday, March 17, 2008,  you say, the EXACT SAME DAY JPMorgan took over the COMEX silver manipulation from Bear Stearns? What a coincidence…the price has been beaten down visciously ever since.
[/end conspiracy rant]

So, yes, if you know someone who’s pro-freedom and anti-bankster with a spare $2 billion* they’d have a shot at getting it done.

But normally there’s a problem with doing something like this. You can’t just go out and BUY long futures contracts: there has to be someone else willing to take the other side and SELL short. The COT report (Commitment of Traders) tells us how much JP Morgan’s willing to bet on shorts: right now it sits at 235 million oz.

prince-charming-v2smYes, you read right. JPMorgan is short DOUBLE the entire COMEX silver stockpile. Guess it won’t be hard to find someone to take the other side of your long bet!

BUT WAIT! YES! Now you’re catching on! The very fact that there’s 235 million ounces SHORTED out there right now means SOMEONE(S) ALREADY MADE THE LONG BET as well.

Are you getting this? While you (and any normal, rational human who can fog a mirror) would think all you’d have to do to bust COMEX is make a long bet for the ENTIRE COMEX inventory, you’d be wrong. It’s been tried before AND IT’S BEING TRIED RIGHT NOW. But JPMorgan just keeps making a bigger SHORT bet.

How can they do that?

Ever play poker? Say you’ve got more chips than everyone else at the table. What the hey, let’s make that more than everyone else COMBINED at the table. Let’s also pretend you’re arrogant and cocky ‘cuz your rich uncle is standing behind you, ready to replenish your supply of chips. And, boy oh boy, is he loaded. (We’ll call him your good ol’ Uncle Sam.)

What happens when you’re dealt a crappy hand? Fold?

HAH!

Bluff your way to a winning hand, up the ante, RAISE, RAISE, RAISE. As long as you can outspend ’em all you got a shot at the pot.

bad poker handYou see, Mike, JPMorgan knows silver is going north like Santa on Dec 26th. Their silver hand absolutely sucks. But, our “govmint” gave ’em a $30 billion grubstake to keep a lid on silver. As long as silver is down, the dollar looks solid and the sheeple won’t panic. [See: JPMorgan Is Fed’s Fair-Haired Golden Boy]

And, so far, JPMorgan knows everyone holding a long position is NOT paid up; they’re LEVERAGED. If JPM can knock silver down a buck the longs’ll get whacked with a big margin call. If they can’t cover, they lose. When the whacked longs lose, their emergency exit pushes the silver price down some more. That causes more margin calls for the longs, pushing the price further down, et cetera, et cetera, et cetera, ad nauseum.

So far the longs (“us” not “U.S.”) have lost each time. But let me ask you this: can a guy win a poker championship with nothin’ but bad hands and solid bluffing?

Would you bet your retirement, your country, your currency, your very physical safety on the guy NEVER having his bluff called and winning EVERY time?

I, for one, want a place at the table when his luck runs out. That’s why I don’t trade my silver, why I have only bought silver since 2005, and why I never sell. I have all the silver I ever bought, except for that which I’ve given away to help people [If You Have No Silver I’ll Give You Some of Mine].

* So, can a guy step in and bust COMEX for $2 billion? Hmmm, sure, futures are leveraged so maybe you could do it for less. In an honest market (#snicker#) 1/10th of $2 billion oughta do it. BUT JPMorgan’s used those nasty margin calls to flush out the longs before. Guess you’d better have the full $2 billion to do it.

But wait! It ain’t enough to bet the entire COMEX stockpile long. Remember, JPMorgan’s betting DOUBLE the entire stockpile. If you wanna call ’em I guess you better pony up about $4 billion.

But wait, again! Who says JPMorgan won’t short even more? How MUCH could they short? $8 billion? $16 billion? Gee, wouldn’t the CFTC step in at some point and declare a manipulative short position and stop the madness?

NO.

[/begin conspiracy rant]
You see, the chairman of the CFTC sits on the president’s Plunge Protection Team [link]. He’s automatically in on the manipulation. If it makes him squeemish heading up a dishonest, deceptive “watchdog” organization he can just quit. Oh wait a minute. It does look like turnover’s been a problem at the CFTC Chairman position:
2005: Sharon Brown-Hruska
2006: Reuben Jeffery III
2007: Walt Lukken
2009: Michael V. Dunn
2009: Gary Gensler

Hmmm, maybe they do have a conscience. At least a small, easy-to-kick-around, Jiminy Cricket one.
[/end conspiracy rant]

So, NO, the crooked CFTC won’t stop JPMorgan’s silver manipulation, you see, because they’re backing it. So, if you’re going to bust COMEX you’d better have enough multi-billions on hand to call JPMorgan’s bluff. And, you’re not just going up against JPMorgan, but the guy who’s bankrolling them: dear ol’ Uncle Sam.

Maybe it’d be easier to replace CFTC leadership with an honest guy. Maybe you’d also have to replace at least 51 Senators. Maybe throw in 222 Congressman (you can keep Ron Paul, maybe Dennis Kucinich.)

Or, maybe you just wait for the US dollar to finally collapse. Once there’s no dollar to protect, there may be no reason to keep a lid on gold and silver. Actually, now that I think about it, since the Shadow Powers want a dollar collapse anyways (to cripple the U.S. and make way for greater global gov’t) maybe they already plan to trigger it by abruptly stopping the manipulation.

USDX 2009-06-04

Hmmm… maybe the dollar dive has already started…

Have you noticed how nervous the Chinese have gotten in the past few weeks? How Brazil no longer uses the dollar for trade. How Russia now prices oil in rubles not dollars? How the Chinese laughed at Treasury Secretary Geithner last week when he said “the dollar’s strong.” [ Read Why The Chinese Laughed At Geithner by former Assistant Secretary of the Treasury Paul Roberts.]

And, finally, the last time COMEX had manipulated the silver price below its cost of production a couple brothers from Texas tried their hand at busting COMEX by going long on silver and preparing to TAKE PHYSICAL DELIVERY of 192 million ounces. What happened? The CFTC crooks villified them.

The Hunts shook the lying bankers to their boots – to the point where intervention by the Fed, Treasury, and the Defense Department were warranted – merely by asking for delivery of the 192 million ounces of silver they’d been promised. This was not a “cornering” of a market; it was the attempt to enforce a contract, same as you’ve got with your landlord or bank.

Read “The Hunts Tried to Corner the Silver Market” Myth.

Please protect yourself and your family. Don’t cash in your (gold and silver) insurance!

Scott

More:
COMEX Crimes: Your Tax $ at Work
JPMorgan Is Fed’s Fair-Haired Golden Boy

Web Bot Forecast for Fall 2009

From George Ure and the Web Bot guys: some predictions followed by my thoughts on his accuracy.

His Prediction:

October 26+/- – Another Web Bot Hit Shapes Up

Oh-oh.  Here we go again.  Calendar watch time. I  can’t remember how long ago I told you to put a circle on October 26th (plus or minus a week or so) but that was when Iran would be attacked but oh, my frigging goodness, have you see the “Report: U.S., Allies Put October Deadline on Progress from Iran”

 

This is all starting to become almost ‘other-worldly’ too clear to me:  Markets will come down over the next couple of weeks to the high seven thousands on the Dow, we get one more pop up to the 9,600 level.  The ‘troubles’ socially come to visit France and then the U.K.  And then here in the U.S.

 

Then we get the bombing of Iran by Israel in late October, about which time, the U.S. government will be contemplating use of its ‘continuity of government’ plans due to social unrest brought about by (what else?) economic collapse.  And that in turn sets a 4-week temporal ‘timer’ that brings us to the part where South Korea receives a nuke or two from the North.  And then things get bad.

Now, whether this all works out precisely doesn’t really matter because the meme – thought virus if you will – is out and about.  And that in itself is curious to know about in advance.

 

Oh, and it means Elaine and I already have our NIOSH P100 full-face masks.  The dust going global by early November threatens to cross from the conceptual to the physical layer of life.  Like we need it. 

His Track Record:

Has George (and the Web Bot guys) been on target with his past predictions?

Last summer they were forecasting a major economic collapse centered around Oct 7, 2008, preceded by 11 days of tension starting Sept 27. Looking back now it looks like they were right on.
Oct 6, 2008: Fear Index Highest Ever
Oct 7, 2008: Iceland Warns of Bankruptcy
Oct 7, 2008: Russia & Brazil Suspend Trading Amid Crash
Oct 8, 2007: Bank of America on Fire
Oct 9, 2008: DJIA Down 40% From 1 Yr Ago
Oct 10, 2008: Fear Index on a Tear
Oct 12, 2008: Ron Paul on Pending Dollar Death

Sept 10, 2008: The Web Bots foresee consumer society collapsing by mid November 2008. Looks like it’s happening with the huge plunge in consumer spending and confidence: [link: Nov 26: Consumer Confidence Hits 28-year Low]

Most Recent

Jim SinclairWill Increased Delivery Demand Bust the Gold Warehouses?
Jim Sinclair: “I have been speaking with many people this evening who have taken gold delivery. What I am hearing is not impressive. When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001. There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.” COMEX Warehouses in Trouble?

Jim SinclairWill the Manipulation of Gold & Silver Prices Ever End?
Gold and silver price suppression has been going on for years now, as documented by GATA and Ted Butler. Who’s behind it? Evidence points to JPMorgan Chase using massive (and illegal) short-selling on COMEX, at the bidding of the president’s Plunge Protection Team. Now, Jim Sinclair answers the question on everyone’s mind: Will the COMEX Manipulation Ever End?

businessmanstairs_70x75What? You’re Still in the Stock Market?
Maybe you’re not bothered by the largest amount of insider selling since the DOW’s all-time high in 2007. Maybe the recent, massive, engineered bear-market rally has you seeing “green shoots” as well. Maybe you’re just lookin’ for Ten Reasons to Buy Stocks Now [humor].

governator_poster_70x82What Will Foment the Coming Riots?
California, the world’s 7th largest economy, could be the first car in the jerking roller-coaster ride to the bottom of our financial and societal meltdown. Their “Governator” warned, “Califonians have until June 15 to make draconian cuts or face insolvency by the end of July.” But could these budget cuts have unintended consequences? Governator Squeezes Trigger for Crime-n-Riots

watermelons smashed_70x69Crush COMEX Like a Ripe Melon?
A perceptive reader, Mike, is puzzled by all this talk about busting COMEX. Why hasn’t it happened yet? Does the fact that it hasn’t happened yet mean it’s likely it’ll never happen? Are we silver bugs simply doomed to suffer? Reader Asks, “What’s So Hard About Busting COMEX?”.

70x70 atomicOctober 2009 Shaping Up Worse Than October 2008?
The Web Bot guys have been re-tooling their predictive software. Now it’s forecasting  “the bombing of Iran by Israel in late October, about which time, the U.S. government will be contemplating use of its ‘continuity of government’ plans due to social unrest brought about by (what else?) economic collapse.  And that in turn sets a 4-week temporal ‘timer’ that brings us to the part where South Korea receives a nuke or two from the North.  And then things get bad.”
Tired of getting a good night’s sleep? Read Web Bot Forecast for Fall 2009.

1992_LA Riots_70x66What the Next 36 Months May Look Like
In the interest of providing you with an alternate vision—something outside the mainstream—a guy over at SeekingAlpha has penned a worse-case-scenario for the next three years. Some of this is hard to stomach but could he be right about America By 2012: 10 Dire Predictions?

wake-up-and-smell-the-fascism-70x85FEMA’s Martial Law Preparations
County officials south of Chicago reveal FEMA’s attempts to coordinate emergency vaccination of populations, structural hardening of police and fire stations, planning for mass grave locations, and anticipation of ammunition shortages. Indiana officials are worried FEMA’s
Planning for Martial Law.

relax_70x54“11:11” Time For Lunch Or Something Deeper?
Is there a special significance to the occurrences of 11:11 found in just getting through the day? What about “Lightworkers”? More than just installing fiberoptic cables for faster Internet? Here’s my take on the 11:11 Phenomenon & Lightworkers.

nibiru-orbit-nasa_70x72Planet X. 2012.
OK, you asked me what I know about 2012 and “Planet X.” I spill the beans AND hit you up with how a dead star 45,000 light years away may have killed 240,000 people here on little ol’ Earth a few years back. Planet X and 2012.

Edgar SteeleRace Riot Warning
OK, I admit his writings make me squirm. But what if Idaho attorney Edgar J. Steele is right about the disenfranchised minorities in the US rising up against the Average Joe? How ugly could things get? Have you heard about Mexican drug gangs terrorizing residents of Tuscon? Straight Talk About Coming Riots.

Read about the only indicator I’ve found that has correctly predicted the timing and magnitude of the 1929 crash in Market Predictions for 2009-2010.

Scott

Checking Off My “To Do” List
WSJ Talks Amero
Stats Say Yes, It’s a *Depression* 
Warnings & Advice from a Saint, Part 1 KEY INFO
– 2009: Worst Still Ahead 
Best Way 2 Control the Masses
– Uncle Sam’s Gold Grab   
Something of Historic Proportions Is Happening 
Shadow Powers Plan for 2011 
Sober Prediction for Nov. 2009 
– Market Prediction for 2009-2010 KEY INFO
 
>> How to Rate Your Bank’s Safety <<
History of the Meltdown… (on-going)