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Best news in years for PM physical pricing mechanism

derrybderryb Posts: 36,013 ✭✭✭✭✭
edited May 22, 2021 3:43AM in Precious Metals

End is near for London Bullion Market Association.

Is the COMEX next?

New Basel 3 regulations will make it uneconomic for banks to continue to run bullion trading desks.

"Basel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will be producer hedging."

"Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

Comments

  • dcarrdcarr Posts: 7,882 ✭✭✭✭✭

    This could potentially be a very big deal. But it is not yet certain if it will be fully enacted, apparently.
    We should know by the end of the year, I suppose.

  • OPAOPA Posts: 17,103 ✭✭✭✭✭

    Two edged sword, if implemented, which btw, I doubt.

    "As it is unwound, the withdrawal of synthetic supply has enormous implications for future precious metals prices by transferring pricing power to physical markets, now dominated by China."

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • MsMorrisineMsMorrisine Posts: 32,012 ✭✭✭✭✭

    someone could come in to fill that void. china certainly has already started their own spot price fixings. they are on the kitco home page.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭
    edited May 16, 2021 5:30PM

    @MsMorrisine said:
    someone could come in to fill that void. china certainly has already started their own spot price fixings. they are on the kitco home page.

    I'm showing paper spot at $27.57, physical spot is anywhere between $25.89 and 39.67 depending on what you're moving and where you're trying to move it. Of course moving without the middleman and moving that of the most liquid always yields the greatest return. THANKS!

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 17, 2021 11:28AM

    Reddit Silver Gang interviews Andrew McGuire

    https://youtu.be/19uWKq_Gw54

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • ReadyFireAimReadyFireAim Posts: 1,800 ✭✭✭✭✭
    edited May 17, 2021 1:40PM

    Basel 3 pushed back until 2023

    https://www.fsb.org/work-of-the-fsb/implementation-monitoring/monitoring-of-priority-areas/basel-iii/

    Good news is we can stack for about another year...Maybe

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 22, 2021 3:54AM

    Update on the link in the OP:

    The end of paper gold and silver markets

    "The conclusion is that unless the BIS has an ulterior motive to trigger a chaotic financial reset of some sort, it is a case of regulators not understanding the market consequences of their actions."

    LBMA and World Gold Council Warn Bank of England that Basel 3 rules will wreck gold price suppression.

    The LBMA and the World Gold Council complain that the “Net Stable Funding Ratio” provision of the Basel III regulations would require the London bullion banks (the manipulators on the London futures exchange) to hold funds offsetting 85 percent of the value of the unallocated gold they hold for customers, and the banks could not afford this.

    Oops there goes another Ponzi Scheme. Removing obscene leveraging from any form of finance is a very good thing.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • derrybderryb Posts: 36,013 ✭✭✭✭✭

    Basel III's impact on PM's:

    It requires banks, including bullion banks (who control the precious metal futures market where spot price is determined), to deleverage their lendings by holding a very much higher amount in actual assets of what they are lending out. On June 28th, a new regulation will be set in place that disvalues unallocated gold paper contracts held against lendings. At the same time, physical Gold changes its spot from a Tier 3 asset to a Tier 1 asset. It will count as a 100% reserve asset. This move is highly positive for physical gold and silver.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • OPAOPA Posts: 17,103 ✭✭✭✭✭

    derryb....apparently, judging by the current price of gold or silver, the PM market does not agree with your scenario. My personal gut feelings are, sos or business as usual. With luck, we may even breach last years highs.

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    I just find it strange that those who believe in this grand conspiracy that the banks, comex, lbma etc. are all working so hard to suppress the price of PMs are the ones always complaining about it. If you truly believe the conspiracy you should be grateful that they are continuing to allow you the opportunity to buy metals at these suppressed prices.

    If you dig deep enough you will find that those who continuously push the lie are the same ones who are trying to sell you more metal and news letters.

    The whole worlds off its rocker, buy Gold™.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:
    Basel III's impact on PM's:

    It requires banks, including bullion banks (who control the precious metal futures market where spot price is determined),

    This statement should be read as opinion, and not fact.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 22, 2021 8:42AM

    @blitzdude said:
    I just find it strange that those who believe in this grand conspiracy that the banks, comex, lbma etc. are all working so hard to suppress the price of PMs are the ones always complaining about it. If you truly believe the conspiracy you should be grateful that they are continuing to allow you the opportunity to buy metals at these suppressed prices.

    If you dig deep enough you will find that those who continuously push the lie are the same ones who are trying to sell you more metal and news letters.

    surely you are not referring to this lie,

    or this one,

    or this one.

    Appears the Department of Justice is nothing but liars. LOL

    Almost forgot, here's another of their lies.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 22, 2021 9:04AM

    @cohodk said:

    @derryb said:
    Basel III's impact on PM's:

    It requires banks, including bullion banks (who control the precious metal futures market where spot price is determined),

    This statement should be read as opinion, and not fact.

    Fact is bullion banks conduct the majority of precious metals trading on both the LBMA and COMEX exchanges. Their trading in precious metals futures is what ultimately determines spot. This is the basis of all successful Department of Justice action (documented in my previous post) against them for manipulating the price of precious metals.

    Labeling facts that you don't like as being opinion does not turn facts into opinion. Again you attempt to misdirect, your typical modus operandi.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭
    edited May 22, 2021 9:50AM

    @derryb said:

    @cohodk said:

    @derryb said:
    Basel III's impact on PM's:

    It requires banks, including bullion banks (who control the precious metal futures market where spot price is determined),

    This statement should be read as opinion, and not fact.

    Fact is bullion banks conduct the majority of precious metals trading on both the LBMA and COMEX exchanges. Their trading in precious metals futures is what ultimately determines spot. This is the basis of all successful Department of Justice action (documented in my previous post) against them for manipulating the price of precious metals.

    You mean the banks that trade on behalf of thier clients? Or the miners that hedge positions?

    Yout arguement is akin to saying Ribinhood manipulated GME.

    Labeling facts that you don't like as being opinion does not turn facts into opinion. Again you attempt to misdirect, your typical modus operandi.

    My modis is rooted in fact. Yous is in supposition.

    Dont whine because a false narrative gets misdirected.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 22, 2021 11:42AM

    Bullion banks have their own trading desk where their traders conduct actual trades on the futures exchange and they have been prosecuted for controlling price while making those trades (spoofing). While they conduct trades for large clients they also trade their respective bank's accounts, a huge profit making operation for the banks with a big incentive to manipulate prices. This incentive is no longer a tin foiler's imagination, it is documented in the four links above.

    Robinhood does not have its own traders, it simply provides a trading platform where outside traders make their trades. Apples and oranges. Again another attempt to distract from the facts.

    I finally figured it out. You are what poses today as a journalist.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    Perhaps they were "spoofing" the price higher? The tinfoil club always claims they are suppressing the price. I mean JPM is the largest holder of physical silver on planet earth. Yeah I'm sure they want their assets to depreciate. lol

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 22, 2021 3:11PM

    You don't think that JPM has and continues to stockpile that big stack of physical silver at artificially low prices? Best believe when the time is right they will explode the price. Best to hang on to that gutter metal.

    Their bullion desk sends them massive paper profits on both the ups and downs in price. They play the currently profitable side of metal trades that they have been proven to manipulate.

    You need to sign up for coho's newsletter.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    @derryb said:

    You need to sign up for coho's newsletter.

    Is it free? Link? Thanks!!!

    The whole worlds off its rocker, buy Gold™.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭
    edited May 23, 2021 8:02AM

    More misdirection and personal attack from derryb.

    Hold me derryb

    BTW---we still be waiting for evidence of the huge JPM stack. And "control of the precious metals futures market".

    Look, we all want $200 silver, even JPM by your account, but why the need to create such narratives? Silver will go when investors and speculators deem its time, just as they did with the cryptos. There was no need for conspiracy or manipulation or "them" narratives.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,013 ✭✭✭✭✭

    your troll is showing. lol

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • derrybderryb Posts: 36,013 ✭✭✭✭✭

    Basel III and the New Role For Gold

    "physical gold will go from being the price taker to the price maker."

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited May 24, 2021 12:40PM

    @blitzdude said:

    @derryb said:

    You need to sign up for coho's newsletter.

    Is it free? Link? Thanks!!!

    Free? No. Cheap? Yes.

    Get it here.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    @derryb said:

    @blitzdude said:

    @derryb said:

    You need to sign up for coho's newsletter.

    Is it free? Link? Thanks!!!

    Free? No. Cheap? Yes.

    Get it here.

    Well even though you meant it as a joke your link is actually probably more reliable than that zero hedge crap you seem to gravitate towards. Guess since I'm such a cheapo I'll just stick with the free forum newsletter version. THKS!

    The whole worlds off its rocker, buy Gold™.

  • dcarrdcarr Posts: 7,882 ✭✭✭✭✭

    @derryb said:
    Basel III and the New Role For Gold

    "physical gold will go from being the price taker to the price maker."

    Here is, I think, the most important quote from that article:

    "Think of it this way, in a world where debt assets are failing and new private forms of custodial assets are rising in mindshare [Bitcoin, for example], what’s the only real weapon the central banks have to maintain credibility ?
    Their gold reserves."

  • drei3reedrei3ree Posts: 3,430 ✭✭✭✭

    @dcarr said:

    "...central banks credibility"

    Now that's funny!!!

  • derrybderryb Posts: 36,013 ✭✭✭✭✭

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • MsMorrisineMsMorrisine Posts: 32,012 ✭✭✭✭✭

    Central banks have nowhere near enough gold to cover the currency.

    How does one draw credibility from that?

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,013 ✭✭✭✭✭

    Now that it is a tier one asset, banks can use their physical holdings to increase their lending capacity.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    From the article/advertisement...

    "Trading will tighten and clearing costs will rise to match the wider bid-ask spreads as gold and silver becomes less liquid, which could make institutional investors less interested in precious metals for no other reason than liquidity will be harder and spreads wider"

    So better price discovery will result from reduced liquidity, increased costs and wider spreads? WT?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Now that it is a tier one asset, banks can use their physical holdings to increase their lending capacity.

    That's not the entire picture. Only physical gold (allocated gold) is considered Tier One. Unallocated gold is no longer allowed as a lending asset, as it was previously. This means that only physical gold is eligible in meeting their reserve requirements for lending, instead of allowing the banks to use leveraged paper as lending reserves.

    So better price discovery will result from reduced liquidity, increased costs and wider spreads? WT?

    He said "greater price volatility", and ultimately (but not instantly) it will result in a more honest price discovery when there's no incentive for banks to rehypothecate other people's unallocated gold as their own assets for lending purposes.

    The article discusses the possibility of price declines due to lower liquidity, but at the same time, gold's value has already been determined to be higher on a relative basis. The only things we don't know are: how much higher relative to other assets, and when. Oh, and whether or not private individuals will be "allowed" to own gold still.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:

    So better price discovery will result from reduced liquidity, increased costs and wider spreads? WT?

    He said "greater price volatility", and ultimately (but not instantly) it will result in a more honest price discovery when there's no incentive for banks to rehypothecate other people's unallocated gold as their own assets for lending purposes.

    The article discusses the possibility of price declines due to lower liquidity, but at the same time, gold's value has already been determined to be higher on a relative basis. The only things we don't know are: how much higher relative to other assets

    Relative to what basis has gold been determined to be higher?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Relative to what basis has gold been determined to be higher?

    Relative to its pre-Basel 3 basis.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:
    Relative to what basis has gold been determined to be higher?

    Relative to its pre-Basel 3 basis.

    Ok...and so are potato chips.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Ok...and so are potato chips.

    The master of red herring diversion strikes again. I wasn't aware that Basel 3 addressed potato chips.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    Basel 3 gutter down. Should of invested in the Pogey bait. Glad I got gold. THKS!

    The whole worlds off its rocker, buy Gold™.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Basel 3 gutter down. Should of invested in the Pogey bait.

    Got an English translation?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • TwoSides2aCoinTwoSides2aCoin Posts: 43,750 ✭✭✭✭✭

    The problem with the whole premise of Basel 3 is "if", it's implemented. Not when or how.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:
    Ok...and so are potato chips.

    The master of red herring diversion strikes again. I wasn't aware that Basel 3 addressed potato chips.

    And you didnt address what gold performed relative to. It was a simple question, but one you couldn't answer, or refused to answer because you knew the answer wasnt very conpelling.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,750 ✭✭✭✭✭

    So, for the present time.... blitzdude is correct, in my opinion. It is stacking time. I've seen guys stack more aluminum beer cans, than silver. Then they make a semi annual drive to the recycler , cash in and pay for another case of beer. Each to their own.

  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    @jmski52 said:
    Basel 3 gutter down. Should of invested in the Pogey bait.

    Got an English translation?

    Sure. Potato chips are outperforming silver. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    you didnt address what gold performed relative to. It was a simple question, but one you couldn't answer, or refused to answer because you knew the answer wasnt very conpelling.

    My reply was stated in Plain English. Should I be responding in potato chip language? It appears that way.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:
    you didnt address what gold performed relative to. It was a simple question, but one you couldn't answer, or refused to answer because you knew the answer wasnt very conpelling.

    My reply was stated in Plain English. Should I be responding in potato chip language? It appears that way.

    Plain indeed. You have no idea what you wrote. Nor what i wrote.

    You said gold did well relative to itself.

    Thats the same as saying you are pretty smart compared to yourself.

    Some eat fish and some eat cow chips.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,013 ✭✭✭✭✭
    edited July 12, 2021 6:35AM

    London protecting its own. Too bad the rest of europe is not so lucky, but they will likely figure out a way to follow suit.

    The primary purpose of Basel III is to make banks more stable and prevent a repeat of the financial crisis of 2008-09. Basel III is but just another warning of what's coming. Looks like British banks prefer the continued risk over stability. Greed at work; crisis not averted.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • blitzdudeblitzdude Posts: 5,278 ✭✭✭✭✭

    Oh well so much with basel 3 at least the conspiracies will live on. lol

    The whole worlds off its rocker, buy Gold™.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭
    edited July 14, 2021 8:26PM

    Relative to what basis has gold been determined to be higher?

    Relative to its pre-Basel 3 basis.

    You said gold did well relative to itself.

    That's the same as saying you are pretty smart compared to yourself.

    No, that's not the same and I suspect that you know it very well.
    Basel 3 changed the basis for gold valuation as a Tier 1 Asset, compared to it's pre-Basel 3 valuation as a Tier 3 Asset.
    You mischaracterized what I said, but what I said is quite accurate, so I'm not clear about what you think you are saying.

    Investigate the meaning and usage of the word "relative" in most any comparative context.
    In this case, gold has been revalued higher in relation to its pre-Basil 3 basis.

    You can also look up "basis" in a financial context and it might help your understanding.

    None of this matters too much if the bullion banks got a carve-out and don't have to comply to the same rules as other banks.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
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