Chavez to nationalize gold industry, JPM caught with pants down
derryb
Posts: 36,585 ✭✭✭✭✭
Chavez Announces He Will Nationalize Venezuela's Entire Gold Industry
"millions in ounces of potential gold supply are about to be taken out of future circulation, courtesy of the uber-modern Venezuelan extraction and mining infrastructure. Which is why if gold does dip on expectations of Venezuelan dumping, don't expect said dip to last more than a few milliseconds."
In further development:
Venezuela may transfer billions of dollars in cash and gold reserves held in U.S. and European banks to financial institutions in “allied” countries
Sounds like Chavez is fearing the assets being confiscated. Interesting to see how this plays out.
Edited to add: JP Morgan caught with pants down. Chavez wants his gold that they hold. See subsequent post in this thread for details.
"millions in ounces of potential gold supply are about to be taken out of future circulation, courtesy of the uber-modern Venezuelan extraction and mining infrastructure. Which is why if gold does dip on expectations of Venezuelan dumping, don't expect said dip to last more than a few milliseconds."
In further development:
Venezuela may transfer billions of dollars in cash and gold reserves held in U.S. and European banks to financial institutions in “allied” countries
Sounds like Chavez is fearing the assets being confiscated. Interesting to see how this plays out.
Edited to add: JP Morgan caught with pants down. Chavez wants his gold that they hold. See subsequent post in this thread for details.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
0
Comments
Nationalize...... means lower production long term.
In God We Trust.... all others pay in Gold and Silver!
<< <i>Chavez must be running out of the people's money. Always happens. >>
Margret Thatcher quote: "that's the problem with socialism - you eventually run out of other people's money."
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
<< <i>
<< <i>Chavez must be running out of the people's money. Always happens. >>
Margret Thatcher quote: "that's the problem with socialism - you eventually run out of other people's money." >>
Tru dat! I was paraphrasing ole Iron Margaret. It, socialism, sounds fair but breeds malaise.
No to be crass, but how is "running out of other people's money" different than ours and Europe's situation?
Is this really an idealogical difference or something a bit more global and standardized?
Miles
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>This should be fun to watch
Yup. The commies will screw up any industry they take over and run. Gotta be bullish for gold.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
exchange listings as its share price was driven to around 10 cents. Gold Reserve Corp (GRZ) out of Spokane, Washington is still hanging in there. But I wouldn't want to touch it.
Buenaventura is Peru's leading gold mining company (BVN). President Humala back tracked on his pre-election words that he would ensure the miner's profits get spread to the
people. Now he says he really didn't mean that. At a min expect increase increased taxes on all production. Colonel Humala came to power years ago from the rebel army and
as a friend of Chavez. It will be interesting to see how much of that influence is exerted over the next few years. Besides BVN, a couple of the world's big miners have operations
in Peru. Could be exciting. There's not going to be many politically safe jurisdictions down the road after taxation and/or nationalization. Bolivia is loaded up with some big silver
miners such as PAAS and CDE. They are also on the hot seat.
As I see it, this is just less gold now available to the world markets, assuming any of it was being exported in the first place. Gold price positive imo...and somewhat negative for
miners in similar situations/jurisdictions. Other potentially interesting jurisdictions are Argentina, Bolivia, Ivory Coast, Ghana, Congo, South Africa, Turkey, and Russia just to name
a few. Mexico with its graft and drug cartels might have some issues down the road with its huge silver mines. Not sure what to say about China. Eldorado Gold has a number of gold
projects and mines going on there. I guess as long as they keep the Chinese govt happy all is well.
roadrunner
I'd fear him trying to control the gold flow in country in an effort to maximize profits on any gold sales.
I would think he'd slowly sell or maybe even reduce the amount of gold exported to world markets.
I think this is a self-serving, control freak move.
<< <i>More Mas Gartmen Gold Support form the man that told many to SELL a few weeks ago...
No to be crass, but how is "running out of other people's money" different than ours and Europe's situation?
Is this really an idealogical difference or something a bit more global and standardized?
Miles >>
the money is acquired in a different manner under different circumstances.
one taxes the suckers to death, the other borrows the suckers to death.
one is meant to serve everyone and make sure everyone is served, the other is trying to spend (do) the right thing so those successful people can ensure they provide jobs for everyone else through business growth. (but unfortunately through not enough tax revenue growth to pay for the spending growth).
<< <i>Chavez is a menace to the world.
>>
Please, a menace to the world?
chavez is only dangerous to himself.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
the unfortunate thing about his administration is that despite all the oil wealth, tere are still impoverished people in the country. So much for Chavezism.
<< <i>isint chavez in with bank of america or something? just wondering >>
I figure he's still alive for a reason. As much as I disagree with him on just about everything, I have always respected the way he gives Washington the middle finger and refuses to be their puppet. Most like him get invaded and whacked. I think Russia's got his back on that one.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
<< <i>Chavez must be running out of the people's money. Always happens. >>
And exactly how is this any different than what any of our elected presidents have done over the past 40 years?
<< <i>
<< <i>Chavez must be running out of the people's money. Always happens. >>
And exactly how is this any different than what any of our elected presidents have done over the past 40 years? >>
///
No difference at all. Except that Chavez is out in the open being a socialist/dictator.
In the US we haven't had free markets and proper representation for quite some time. A Brazilian businessman told me a few months ago in the US you have "freer" markets.
edt4sp
<< <i>
<< <i>Chavez is a menace to the world.
>>
Please, a menace to the world?
chavez is only dangerous to himself. >>
Do you read the news? A couple of links....
Chavez, Iran and Missiles: A Dangerous Step
Hugo Chávez embraces Iran and Syria, wins Russian support for nuclear program
In God We Trust.... all others pay in Gold and Silver!
<< <i>
<< <i>
<< <i>Chavez is a menace to the world.
>>
Please, a menace to the world?
chavez is only dangerous to himself. >>
Do you read the news? A couple of links....
Chavez, Iran and Missiles: A Dangerous Step
Hugo Chávez embraces Iran and Syria, wins Russian support for nuclear program >>
LOFL, are you serious? It's getting to the point where some of you are terrified of someone who may be thinking of throwing a rock at a picture of the flag.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
"The problem for Jamie Dimon and JPMorgan is that they hold only 10.6 tonnes of gold, and all of it belongs to Venezuela, though they have pledged approximately 100 times that amount in various paper markets.
While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD)."
10.6 tonnes X 100 leverage = 37,390,399 oz. of gold. Somebody's in big trouble! This is going to be a big story with a big impact on the price of both physical and paper gold. Look for one to go down and one to go up. "Houston, we have separation."
Thursday's gold related ETF action should be interesting.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Wow, this could get interesting ( and fun to watch! ). What do they mean JP Morgan has it "pledged" 100 times? >>
They have "loaned/promised" 100 times more than they actually have to ETFs such as GLD and others. Many sellers of paper gold (and silver) don't have the metal, they lease a loan/promise for it, because they don't expecet their investors to actually take possession of the physical stuff. As long as the majority doesn't want possesson they are free to sell more thant they actually have. The loaner, JPM in this case, will loan out much more than they actually have (100 times) because they don't expect to have to come up with all of it at once. This is known as fractional banking when it is done with cash deposits and is practiced by all lenders. The higher the "fraction," the higher the instituion is at risk. 100 to 1 is pretty far out there. The risk of fractional banking is what really drives the need for FDIC insurance on cash deposits. It is rumored that if there were a run on banks, they would only have less than 5% of the cash that account holders have deposited with them.
The 1% (10.6 tonnes)of gold that JPM does physically hold is now being reclaimed by Chavez. They will soon have none of this gold but have "promised" others 1060 tonnes based on their possession of the 10.6 tonnes. They just might have to buy a bunch on the open market. More likely they will get a gold loan (on paper) from someone else who is loaning more than they themselves have on hand. It's a game of musical chairs but the music could very well end with this episode. The publicity of this exposes JPM to those they promised gold and shines a spotlight on others on both sides of simliar fractional lending/borrowing practices. More importantly it has a very negative impact on those investing in a fund that is now known not to have any holdings other than promises from a bank that can not back them.
This could very easily become the "black swan" event of the year for gold (and silver). The difference between paper gold and physical gold is about to become very clear. I personally expect a panic in the gold ETFs shortly, not so much over the quantity involved in this case, but moreso by the realization of paper investors that maybe the rest of the gold is not there. This is bad publicity for the sellers of paper gold, so I expect news of it to be limited and contained by mainstream media. Events like this demonstrate why it's important for players in the paper metals market (myself included) keep abreast of news and events that affect their investments and be quick to react accordingly. I will be closely watching GLD and SLV in the morning premarket. My only exposure is a small amount of AGQ. How this affects physical spot price remains to be seen. If taken seriously, the reaction could be one of confusion until what this all means becomes clearer. What it means is clear to me. Physical is secure, paper is risk. That said, risk has its rewards when closely monitored and properly managed.
Of course none of this need happen if Chavez is "dealt" with. He's now picked a fight with the bankers; bad move. Then again, Chavez may be bluffing.
What you do in the Dark, You See in the Light
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
I just plunked down some coin on gld TODAY!!!!!
Wish me luck.
<< <i>
<< <i>Wow, this could get interesting ( and fun to watch! ). What do they mean JP Morgan has it "pledged" 100 times? >>
They have "loaned/promised" 100 times more than they actually have to ETFs such as GLD and others.
>>
To derryb or others who have the knowledge:
I heard that the banks have leveraged their gold holding by many many times from many different forums/internet articles. But do you know of any solid fact to support such claim? Sometimes, it is very difficult to find out the truth, and I hope someone can shed some light on this.
Thx!
<< <i>I heard that the banks have leveraged their gold holding by many many times from many different forums/internet articles. But do you know of any solid fact to support such claim? Sometimes, it is very difficult to find out the truth, and I hope someone can shed some light on this. >>
Without producing the sources or the numbers it is common knowledge that if one were to look at the number of ounces sold against the known supply it is obvious that somebody is selling much more than they could possibly have. And we're not talking just a small discrepancy either. Most investors in paper metals never take delivery. Paper sellers work on the assumption that not everyone will want delivery at the same time therefore they sell more than they have. Of course there was once an assumption that real estate never goes down. Demand for delivery could/will break the paper metals market the same a demand for bank deposits (run on a bank) could/will break a bank.
Banks use the same "fractional" system where they loan out many time the amount of cash on hand because they know that there is little to no chance that all depositors will want their money back at the same time. Banks have been known to loan out 30 times of the deposits on hand. That's why a run on the bank is their greatest fear. One contributing factor to the 2008 financial crisis was that banks leveraged too much (loaned out way more than they actually had) of the their depositors' money in the form of mortgage loans that didn't get paid back.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
<< <i>
<< <i>I heard that the banks have leveraged their gold holding by many many times from many different forums/internet articles. But do you know of any solid fact to support such claim? Sometimes, it is very difficult to find out the truth, and I hope someone can shed some light on this. >>
Without producing the sources or the numbers it is common knowledge that if one were to look at the number of ounces sold against the known supply it is obvious that somebody is selling much more than they could possibly have. And we're not talking just a small discrepancy either. They work on the assumption that not everyone will want delivery at the same time therefore they sell more than they have. Most investors in paper metals never take delivery.
Banks do this when they loan out your cash because they know that there is little to no chance that all depositors will want their money back at the same time. That's why a run on the bank is their greatest fear. One contributing factor to the 2008 financial crisis was that banks leveraged too much (loaned out way more than they actually had) of the their depositors' money in the form of mortgage loans that didn't get paid back. >>
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I read an article about gold from the Economist a few months ago, and they provided a yearly figure of supply and demand for gold. It seems that the number matches quite well. The yearly supply and demand is about 3,700 tonne.
I think this website have similar figure: Gold supply and demand
From the data, it seems there is enough supply for the investment demand of around ~1,000 tonne per year.
What do you think?
<< <i>I read an article about gold from the Economist a few months ago, and they provided a yearly figure of supply and demand for gold. It seems that the number matches quite well. The yearly supply and demand is about 3,700 tonne. From the data, it seems there is enough supply for the investment demand of around ~1,000 tonne per year. What do you think? >>
When you have investors that don't want possession it is easy and legal to sell them all they want regardless of supply. A purchase of paper metal with no intent on taking possession is really just a bet on the price of the metal. It is nothing more than a "derivative." Since no metal changes hands to cover each bet, the number of bets can theoretically be limitless. Demand figures really are an accounting of the metal a buyer demands delivery of. The side bet on price of the metal is not figured into demand of the physical metal. One has to realize that unlike a stock in a mining company with a set number of shares or unlike a purchase of ounces of gold, many ETFs are nothing more than side bets on the price movement with the investor never wanting the actual metal. Many of these ETFs claim to have physical backing, but it may just be a percentage or it may all be leased or loaned by someone else such as JPM. The ironic thing in this case is that JPM was loaning/leasing gold that was not theirs (no different than a bank and your cash deposits that get loaned out).
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
“We think that China, Russia and Brazil have asked Venezuela to transfer the reserves to guarantee the loans that the government has received in recent years,” Montoya said.
Note that their "reserves" are being used as loan guarantees, i.e. - collateral, real money.
A large-scale repatriation of gold reserves and transfers of assets to non-U.S. and European banks may cause borrowing costs to rise over investor concerns regarding the guarantee of outstanding bonds, Asdrubal Oliveros, director of Caracas-based consulting and research firm Ecoanalitica, said.
“The country risk would rise because the reserves are seen as a guarantee of payment for foreign investors,” he said. “A repatriation of gold reserves could cloud the transparency over actual holdings.”
Guys, this is important news. When gold holdings affect the bond market which is hundreds (thousands?) of times larger than the gold market, it seems to me that gold is being recognized as the asset of last resort by governments.
I knew it would happen.
Gold and silver forward rates exploded today, no doubt are related the Chavez news. Biggest one day jump I can remember for a while.
3700 tons of gold demand is a problem when world production is only 2600-2800 tons. That means recycled scrap gold and other's people gold in hand has to be
coerced from them (Cash4Gold) with higher prices to supply that extra 1000 tons of investment demand. The number is probably larger than that because you know China is not
giving up any of the >300 tons they mine annually to anyone else. And I'm sure some other nations have the same mindset. Gold mined in those nations is staying home.
And then the issue of mine nationalization comes up for the "good of the nation" because after all, gold and silver are strategic metals of great importance.....yeah and
barbarous relics as well....lol.
Studies on gold production predict at most a 15% increase over the next 5 yrs....or around 3100-3200 tons. Still not enough. And you know that a lot of that gold will be
locked down only tighter as the years go on. The people of each nation will want their national reserves to stay at home. What about secretive central bank buying? You
know China and others are secretly buying gold from outside their nation. That too adds to the amount of gold needing to be recycled from weak hands to strong hands.
roadrunner
<< <i>
<< <i>I heard that the banks have leveraged their gold holding by many many times from many different forums/internet articles. But do you know of any solid fact to support such claim? Sometimes, it is very difficult to find out the truth, and I hope someone can shed some light on this. >>
Without producing the sources or the numbers it is common knowledge that if one were to look at the number of ounces sold against the known supply it is obvious that somebody is selling much more than they could possibly have. . >>
They may be short sellers who are hedged against their position with long call options or future contracts (I hope!!).
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Of Venezuela’s $18 billion in gold reserves, $11 billion is held abroad and could be transported back to Venezuela, Montoya said, citing a document he said he obtained from the ministry.
“We think that China, Russia and Brazil have asked Venezuela to transfer the reserves to guarantee the loans that the government has received in recent years,” Montoya said.
Note that their "reserves" are being used as loan guarantees, i.e. - collateral, real money.
A large-scale repatriation of gold reserves and transfers of assets to non-U.S. and European banks may cause borrowing costs to rise over investor concerns regarding the guarantee of outstanding bonds, Asdrubal Oliveros, director of Caracas-based consulting and research firm Ecoanalitica, said.
“The country risk would rise because the reserves are seen as a guarantee of payment for foreign investors,” he said. “A repatriation of gold reserves could cloud the transparency over actual holdings.”
Guys, this is important news. When gold holdings affect the bond market which is hundreds (thousands?) of times larger than the gold market, it seems to me that gold is being recognized as the asset of last resort by governments. >>
I hear that central banks are BUYING gold whereas they have been net sellers, they're buying. China with importing more than 200 tons and they're speculating as much as 400 tons while they used to consume there own, they are now importing mucho kilo's
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>So if he's not kidding and these scumbag banks do not pay him the gold back he can then go on national television and say "see these "capitalists are all thieves, they have stolen the money/gold of the poor people of venezeula, had they had a national communist system this could have never happened" and I can see Americans right here on this forum applauding what he says.
JPM will give Chavez his gold, even if they have to get a gold bailout from the Fed.
A little history:
The London Gold Pool came unstuck when France under Charles de Gaulle pulled out and began to send the dollars earned by exporting to the US back to the US and demanding gold rather than Treasury debt paper in return. Under the terms of the Bretton Woods Agreement signed in 1944, France was legally entitled to do just that. As the drain on US Gold became acute, the London Gold Pool folded in April 1968 because it did not command enough gold to support the price at $35 per ounce. The demand by foreigners for gold held by the US surged.
John Connally, Treasury Secretary under President Richard Nixon, had told foreign finance ministers that “the dollar was America’s currency, but your problem.” To solve the problem, France redeemed its dollar holdings in gold in early August, 1971 by sending a French battleship to New York to take delivery of French gold from the vault of the New York Federal Reserve Bank and to bring it to the vault of the Banque de France in Paris. The French raised gold reserves and dumped dollars. Banque de France eventually increased its gold holding to 92% of its reserves.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Derry you should write something out and submit it to Lew Rockwell and get it published.
I'm a retired technical writer. The only work i do now is stack PMs.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan
In God We Trust.... all others pay in Gold and Silver!
had more than enough to pay off DeGaulle.
The London Gold Pool was lucky that a recession was hitting the world just as they disbanded because they were out of gold bullets. But in 1970 their efforts in gold supression were
starting to show big cracks.
roadrunner
John Connally, Treasury Secretary under President Richard Nixon, had told foreign finance ministers that “the dollar was America’s currency, but your problem.” To solve the problem, France redeemed its dollar holdings in gold in early August, 1971 by sending a French battleship to New York to take delivery of French gold from the vault of the New York Federal Reserve Bank and to bring it to the vault of the Banque de France in Paris. The French raised gold reserves and dumped dollars. Banque de France eventually increased its gold holding to 92% of its reserves."
After all we did for them during WWII. Maybe we should have let the Germans keep France.
<< <i>A couple of the US exchange listed Venezuelan gold miners were hammered over the past year because this was expected to happen. Crystallex (KRY) disappeared already off the major
exchange listings as its share price was driven to around 10 cents. Gold Reserve Corp (GRZ) out of Spokane, Washington is still hanging in there. But I wouldn't want to touch it.
Buenaventura is Peru's leading gold mining company (BVN). President Humala back tracked on his pre-election words that he would ensure the miner's profits get spread to the
people. Now he says he really didn't mean that. At a min expect increase increased taxes on all production. Colonel Humala came to power years ago from the rebel army and
as a friend of Chavez. It will be interesting to see how much of that influence is exerted over the next few years. Besides BVN, a couple of the world's big miners have operations
in Peru. Could be exciting. There's not going to be many politically safe jurisdictions down the road after taxation and/or nationalization. Bolivia is loaded up with some big silver
miners such as PAAS and CDE. They are also on the hot seat.
As I see it, this is just less gold now available to the world markets, assuming any of it was being exported in the first place. Gold price positive imo...and somewhat negative for
miners in similar situations/jurisdictions. Other potentially interesting jurisdictions are Argentina, Bolivia, Ivory Coast, Ghana, Congo, South Africa, Turkey, and Russia just to name
a few. Mexico with its graft and drug cartels might have some issues down the road with its huge silver mines. Not sure what to say about China. Eldorado Gold has a number of gold
projects and mines going on there. I guess as long as they keep the Chinese govt happy all is well.
roadrunner >>
Looks like Peru's new President is moving towards the model used in Chile rather than nationalization as used in the other pro-Chavez aligned governments.
Peru miners agree to higher taxes as part of system overhaul - sources
<< <i>Posted: Wednesday , 17 Aug 2011
LIMA (Reuters) - LIMA (Reuters) -
Peru's mining firms have agreed to pay higher royalties in an overhaul of the current system, sources on both sides of negotiations between companies and leftist President Ollanta Humala's government said on Tuesday.
Under the new system, companies would pay royalties based on their operating profits instead of their sales. The new system would be similar to one used in Chile.
The new royalties rates still need to be defined, but they would likely be higher than the current rates of 1-3 percent charged on sales, a mining source said.
A government source said the agreement had been reached.
"There is agreement that they (royalties) be charged on operating profits instead of sales, with the aim of not hurting the competitiveness of the sector," the government source said.
During his campaign, Humala promised to introduce a tax on the windfall profits of miners to raise funds for social programs in a country where a third of the people live in poverty.
The new royalties' structure would likely apply a sliding scale to miner's operating profits, the source representing miners said.
In Chile, the world's No. 1 copper producer, miners agreed to a new royalty contribution of between 4 and 9 percent of operating profits to fund reconstruction after a deadly earthquake in 2010.
"The important thing is that there was consensus that the royalty should not be applied to sales, because that creates a distortion and makes it hard to turn a profit on new projects or expansions," a source representing miners said.
The sources said meetings would continue this week with the goal of agreeing on precise tax rates as soon as possible, to avoid uncertainty for investors.
Even companies that signed tax stability agreements with the government in the 1990s have agreed to pay more in royalties, the mining source said. Many of those agreements are scheduled to expire in the next few years.
Mining accounts for 60 percent of Peru's exports. The country is the world's No. 2 producer of copper and silver and the sixth most important gold producer.
Large international mining firms including Xstrata , BHP Billiton , Anglo American , Barrick Gold , and Grupo Mexico 's Southern Copper operate in Peru.
"This system is expected to generate a kind of partnership between the state and investors in the sense that when prices are soaring both sides will have more resources, but when prices fall neither side gains," the mining source said. >>
<< <i>
<< <i>
<< <i>I heard that the banks have leveraged their gold holding by many many times from many different forums/internet articles. But do you know of any solid fact to support such claim? Sometimes, it is very difficult to find out the truth, and I hope someone can shed some light on this. >>
Without producing the sources or the numbers it is common knowledge that if one were to look at the number of ounces sold against the known supply it is obvious that somebody is selling much more than they could possibly have. . >>
They may be short sellers who are hedged against their position with long call options or future contracts (I hope!!). >>
That's the 'official' line. Of course like everything else, it's never the whole truth.
COUNTER-ARGUMENTS TO GOLD CONSPIRACY THEORIES
COUNTER-ARGUMENTS TO SILVER CONSPIRACY THEORIES
nice work derryb
Stack on, DB...nice post.
Paper and physical are about to part company
"The problem for Jamie Dimon and JPMorgan is that they hold only 10.6 tonnes of gold, and all of it belongs to Venezuela, though they have pledged approximately 100 times that amount in various paper markets.
While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD)."
10.6 tonnes X 100 leverage = 37,390,399 oz. of gold. Somebody's in big trouble! This is going to be a big story with a big impact on the price of both physical and paper gold. Look for one to go down and one to go up. "Houston, we have separation."
Thursday's gold related ETF action should be interesting.
Great call!!!!. Though probably not as you exoected. Lol.
I TTT'd this thread as it appears Venezuela has exhausted most of its currency reserves and is now dumping gold. You can find stories throughout the internet. Pick your own choice of reliable sources.
Knowledge is the enemy of fear
I saw that story earlier today but it seems to have been taken down. Article said that they were out of money and had to sell their physical gold reserves. As noted above, those reserves are probably being physically "held" by a third party that likely has taken 100:1 paper for it so lesse what happens. Talk about a margin call...
100-1 short is the way...
Paper and physical are about to part company
"The problem for Jamie Dimon and JPMorgan is that they hold only 10.6 tonnes of gold, and all of it belongs to Venezuela, though they have pledged approximately 100 times that amount in various paper markets.
While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD)."
10.6 tonnes X 100 leverage = 37,390,399 oz. of gold. Somebody's in big trouble! This is going to be a big story with a big impact on the price of both physical and paper gold. Look for one to go down and one to go up. "Houston, we have separation."
Thursday's gold related ETF action should be interesting.
Great call!!!!. Though probably not as you exoected. Lol.
I TTT'd this thread as it appears Venezuela has exhausted most of its currency reserves and is now dumping gold. You can find stories throughout the internet. Pick your own choice of reliable sources.
Important to note which they dumped last.
"How many times can a man turn his head and pretend he just doesn’t see?” - Bob Dylan