This story has been making the rounds since Monday. One of the “5 depositories licensed to deliver” for CME (subsidiary of COMEX) has issued “force majeure” because of hurricane Sandy. They say that their vault is flooded (an act of nature) and cannot make any deliveries of their gold or palladium holdings.
First off, they claim to have some 29,000 ounces of Gold and 33,000 ounces of palladium vaulted. I guess my first question would be… is this vault the size of a closet inside of a single wide trailer home? This is roughly 1 ton of each metal and would stack neatly inside of a closet. Secondly, the vault is flooded? …Still? Were they not able to have a sump pump shipped in from another state? Oh, no sump pumps? Why not call in a couple of scuba divers to go in and start “reclamation?” How hard would this be? These 2 tons represent less than the crust on a ham sandwich. Larry, Moe and Curly could move and ship all of this metal in less than an 8 hour day even after crashing the forklift 5 times and doing it all by hand! I don’t get it, why even raise any eyebrows of non delivery and why not just have “other Gold” shipped from another institution since it is “so plentiful?” This really smells putrid to me and really have to wonder “What are they thinking?”
On the subject of “Oh puulease!,” nearly 7,800 COMEX Gold contracts were sold in less than 5 minutes this morning. This is 780,000 ounces which represents about 1% of the entire annual global production of the mining industry. “Who” in their right mind would EVER sell in this manner? Could they not wait and feed the trade out over the course of the day? A trade done at 8:00 AM still settles the same day as one done at 11:00 AM of even Noon so what’s the rush? We all know the answer, they know that we know and we know that they know that we know… it is one gigantic party joke.
In reality we should have known for a fact that another raid was coming as the CME (here they are again) lowered margin rates for Gold and Silver to suck in the speculators… it worked and now the speculators are getting spanked for the 1,000th time! My opinion is that anyone who “trades” on the COMEX needs to have their head examined. You cannot “out trade” the house with their inside knowledge and the ability to change the rules whenever they’d like. Oh, you want to “lock in a price?” …and you think that you will be able to obtain the metal at a future date? Wanna buy a lottery ticket? JUST BUY THE PHYSICAL METAL AND GO TO SLEEP; PERIOD! Buy the metal from a reputable dealer so that you know your metal is real and not the type that will “rust” because it was in some vault that got flooded. Buy the physical and TAKE IT off of the market. This way it cannot be lent against and rehypothecated 100 times over. It is yours and cannot be “played” with.
…And all the while, the CFTC is now in year 5 of its Silver investigation. How’s it going guys? We get it, you cannot possibly make a ruling… any ruling! You cannot rule that there is NO manipulation because that is just not plausible in any fashion… and you cannot rule that there IS manipulation because of the ramifications. Ramifications? Can you imagine what the world would look like the day after the CFTC ruled that Silver IS rigged and has been for years? This would cause the biggest “run” in the history of history. EVERYONE would call for their Silver and by extension, their Gold. The fraud would be exposed for what it is, a rehypothecated screwing 100+++ times over. Silver and Gold would immediately go no offer world wide and the Dollar would be sold and sold and sold until it went “no bid.” Store shelves would be empty within 3 days and Mad Max world would be ushered in by the end of the week so… yes, we get it, where Silver is concerned… “no comment” is the better part of valor for that wonderful watchdog the CFTC!