Originally posted by: PutTogether I don't understand what it is about gold that brings out the intense levels of paranoia. Futures contracts are a standard instrument of commerce, and have been for almost 4,000 years. You can buy or sell futures contracts on any number of different commodities, but I've never read any threads about the manipulation of soybean prices, or how 'big timber' is manipulating the price of board feet of lumber.
There is nothing inherently crooked with selling a contract to deliver a certain item, at a certain price, at a certain date in the future. This concept introduces some form of stability and liquidity to nearly every market from gold and silver to orange juice and pigs.
There are two things that are brought up almost every time that I would like to try and address. First is the question of volume of contracts traded vs gold mined, and second is the idea that the contracts are just worthless paper.
Comparing contracts written to gold mined, or even gold that exists is not appropriate. Volume is tracked per transaction. If I sell a contract, then buy it back - that counts as 2. The contract traded twice, but it sure doesn't mean that I owe anyone 2 gold bars. I created a debt and eliminated a debt. If I did that back and forth 5 times, some people would try to tell you that I'm promising TEN gold bars. Nope. Zero.
If person A and person B decided to bet on a coin flip at $20 per turn, and each person won 5 times, you wouldn't claim anyone 'created' $200 out of thin air. If I spent a $20 bill at my local grocer, who then spent it with the pharmacist, who then bought a sandwich from the butcher, who took it home and gave it to his daughter, who then spent it on shoes - no one would mutter about price manipulation, but futures contracts trade almost the same way.
The second concern that is often brought up is that the futures contract itself is just an empty promise. It isn't. To write, or to sell short, a futures contract, requires the assumption of debt. If I write a futures contract I'm promising to deliver 100 ozs of gold at an agreed upon price at an agreed upon date. I have until that date to either buy a contract back to cancel it out, or to deliver my gold to the counter party to my contract. I don't have to have the gold in my pocket, I just have to have the means to get it to you. For the system to work, you have to trust that I am good for it. You also have to be able to later sell the contract you bought from me if you so choose. You need the future buyer to trust YOU, but all YOU have is MY promise, etc etc. That sounds scary to people, but that's what exchanges/clearing houses are for - to guarantee the trade. To make the contracts fungible. You don't HAVE to know me. You just need to know that the exchange guarantees that there is a broker out there that guarantees, that I have the money to make good on my contract. If I don't, they'll step in and cover it. Simple.
Anyone that doesn't believe it - buy a futures contract and let it expire. You will absolutely find out that there is a bar of gold waiting for you that you can go pick up. (If you don't have a ton of cash, you might want to try with a 5,000 oz contract of silver instead) The process of picking up the gold is a severe PITA - but it can done. (and will be done if you want it to be)
One final point. An interesting thing about futures contracts is that you can take either side of the bet for very small fees. If you think buying gold futures is a total scam and rigged, well then, you can SELL gold futures instead. At any given moment, a gold futures contract has a spread that is at most, $20 wide. We're talking about a whopping $20 difference in the buy/sell prices for a contract with a $120,000 nominal value - and you can be on any side of the bet you'd like. How can that be 'rigged?'
What I will concede is that owning a futures contract is no replacement for owning physical gold stored somewhere safely. One can be useful in an emergency, and represents a real, anonymous store of value. The other is an incredibly liquid, fungible instrument that can be rapidly traded in whichever direction you choose for immediate profits, or losses. Neither is a "scam."
"But puttogether," I can hear you saying "how do we know those nasty COMEX people will live up to their promises?" I've got two answers for you. 1) Try it yourself. 2) Find one instance of a trader who took a gold, silver, or platinum contract to expiration and the COMEX refused to deliver the metal. ONE INSTANCE where it didn't happen. You'll hear tons and tons of "bbbbut bbut the bogeyman wrote contracts on gold he didn't have" but you'll be very hard pressed indeed to find a recorded account of an exchange taking someone's money, and not giving them their gold.
"But what happens if every person on earth shows up and wants their gold all at the same time?" Possibly the same thing that happens if everyone in your town wants a case of bottled water all at the same time. There might be trouble and some delays, but I suspect it would eventually be worked out. This is one reason why owning a futures contract is NOT the same as owning physical gold. Not being the same as physical gold is not the same as being a scam either. They just serve different purposes.
There is way more to this, and I'm happy to go back and forth and share my experiences or answer questions about how it has all worked for me if anyone is interested. Just remember. If the prices are so obviously rigged, you can go take advantage of them too. No rule says you can only BUY the contract. If you can PROVE the market for paper gold is headed downward......by all means, go sell some gold and get RICH.
First of all the difference with gold as a commodity is the fact that it competes with dollars in winning the favor of buyers. Other commodities do not share as unique an inverse relationship with the dollar that gold exhibits. In fact many of the other commodities are traded primarily by producers who "hedge" to stabilize prices in an otherwise volatile market that can make or break that producer. Is this not in reality price control/manipulation?
Secondly the number of contracts in existence (not those traded) is relevant when hundreds of promises are made at the same time for the same gold bar. Your analogy of flipping a coin or spending a dollar is in no way similar to selling the same "promise" to multiple buyers at the same time. Flipping a coin results in a completed transaction each time it is flipped. Spending a dollar can only result after it was previously spent and a service or good was delivered. Am I allowed to sell a promise/title to my single piece of real estate to multiple buyers at the same time? You and I know I'd go to jail.
Thirdly, the major players in the game of "deflate the price" have no desire to take possession of their gold promise. In fact, they know that doing so would end their game. There are numerous reports of those who did want their gold being convinced to take payment in cash.
Your bottled water analogy is equally irrelevant. Everyone showing up for a bottled water at the same time did not all pay in advance for the same bottle of water.
Finally yes, understanding the manipulation can work to your favor.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention. It's even funnier that those of you who don't believe in manipulation have been manipulated.
Do not commodity futures traders use the futures market to ensure stable prices of what they produce?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
First of all the difference with gold as a commodity is the fact that it competes with dollars in winning the favor of buyers.
So do other currencies, real estate, equities, oil, natural gas, coffee, and many other commodities. Maybe there is a message board full of antique coffee pot enthusiasts that are convinced speculative forces are forcing the price of coffee futures down to the detriment of them all.
Originally posted by: derryb
In fact many of the other commodities are traded primarily by producers who "hedge" to stabilize prices in an otherwise volatile market that can make or break that producer. Is this not in reality price control/manipulation?
You are correct that commodities futures exist to protect production. Farmers, miners, orange juice makers, etc can guarantee certain prices that allow them to operate as an ongoing concern instead of a constant gamble on the verge of collapse. But the words "price control/manipulation" carry the connotation of nefarious or malevolent action, or at least intent. Stabliziing prices so that production of a necessary commodity can continue is not what most would consider manipulation. It is buying and selling of the product you make at a future date at an agreed upon price.
Originally posted by: derryb
Secondly the number of contracts in existence (not those traded) is relevant when hundreds of promises are made at the same time for the same gold bar.
This claim is made all the time, yet no one can ever show me an instance where someone demanded to take delivery of their gold and was refused. It's always "i heard about a guy where they talked him in to taking cash." That probably happens because taking delivery is a PITA, but NO ONE CAN FORCE YOU not to take delivery. Further more, I'll use your real estate example to prove how 'more promises than gold" wouldn't really matter anyway.
Originally posted by: derryb
Am I allowed to sell a promise/title to my single piece of real estate to multiple buyers at the same time?
Gold bars aren't real estate. A piece of real estate is like a coin - it has unique features that differentiate it's value from others just like it. 100 oz of gold is 100 oz of gold. It doesn't matter what country mined it, who owned it before, or whether or not it's pretty. Gold bars are fungible. (they can be exchanged for each other blindly and at will). Real estate is not.
If I write a contract on 4 different piles of gold, it simply doesn't matter if I have the gold in my garage or not. They only thing you need to know is that I have the means to get you your gold if/when you come calling for it. If I wrote you a contract promising to delivery you 12 brand new apple wireless keyboards at a certain price at some date in the future - you wouldn't scream conspiracy if you knew I could come up with the product. What I can't do is promise you a "really pretty beach house" because our definitions might differ. Gold is gold, keyboards are keyboards. You only need to know my word is good. The exchanges and brokers that act as counter parties guarantee my word. If I FAIL to make good, they will make good on my behalf.
You can express doubt that if everyone on earth demanded delivery right away - the exchanges couldn't make good - but that doubt is just an opinion. My personal belief is that if everyone started taking delivery there would be chaos, for a limited amount of time before it all got settled. (but again, just my opinion)
The fact of the matter is that billions of dollars of futures contracts take place every day. You CAN take physical delivery of gold, silver, or platinum. You CANT find anyone who's delivery was denied and funds taken. There ARE futures contracts (oil, coffee, hogs) which are PROHIBITED from taking physical delivery, but no one claims those are a scam.
Originally posted by: derryb
Thirdly, the major players in the game of "deflate the price" have no desire to take possession of their gold promise. In fact, they know that doing so would end their game.
If major players don't want their gold......a "run" on gold becomes even less likely. That's good right?
Originally posted by: derryb
Your bottled water analogy is equally irrelevant. Everyone showing up for a bottled water at the same time did not all pay in advance for the same bottle of water.
I'm glad you brought this up, because it is a key point that I think a lot of people don't understand. When you buy a futures contract, you don't pay in advance for the item either. A gold contract is for 100 ounces of gold. Apprx $120,000. If you buy a gold contract you ABSOLUTELY DO NOT PAY $120,000. You post apprx $4,000 in collateral to prove you CAN tender payment on delivery if required to do so. You don't pay the balance until you take your gold.
Originally posted by: derryb
Finally yes, understanding the manipulation can work to your favor.
My question is always this. If the market is so obviously rigged and predictable.......why haven't all the doomsayers become BILLIONAIRES taking the right side of the trade?
Final Note: I banged this message out quickly, so please forgive spelling or grammatical mistakes within reason.
So do other currencies, real estate, equities, oil, natural gas, coffee, and many other commodities. Maybe there is a message board full of antique coffee pot enthusiasts that are convinced speculative forces are forcing the price of coffee futures down to the detriment of them all.
Are not coffee producers depriving speculators/investors, who place their bets based on market conditions/fundamentals, of their due profit by "stabalizing" the price via the futures market. You agree below that these producers do in fact "stablize."
You are correct that commodities futures exist to protect production. Farmers, miners, orange juice makers, etc can guarantee certain prices that allow them to operate as an ongoing concern instead of a constant gamble on the verge of collapse. But the words "price control/manipulation" carry the connotation of nefarious or malevolent action, or at least intent. Stabliziing prices so that production of a necessary commodity can continue is not what most would consider manipulation. It is buying and selling of the product you make at a future date at an agreed upon price.
Call it what you want, but it remains controlling the price, the very definition of price manipulation.
This claim is made all the time, yet no one can ever show me an instance where someone demanded to take delivery of their gold and was refused. It's always "i heard about a guy where they talked him in to taking cash." That probably happens because taking delivery is a PITA, but NO ONE CAN FORCE YOU not to take delivery. Further more, I'll use your real estate example to prove how 'more promises than gold" wouldn't really matter anyway.
I'm sure that the few who demand gold get their gold. The remainder settle for a nice cash profit allowing COMEX to avoid default.
Gold bars aren't real estate. A piece of real estate is like a coin - it has unique features that differentiate it's value from others just like it. 100 oz of gold is 100 oz of gold. It doesn't matter what country mined it, who owned it before, or whether or not it's pretty. Gold bars are fungible. (they can be exchanged for each other blindly and at will). Real estate is not.
If I write a contract on 4 different piles of gold, it simply doesn't matter if I have the gold in my garage or not. They only thing you need to know is that I have the means to get you your gold if/when you come calling for it. If I wrote you a contract promising to delivery you 12 brand new apple wireless keyboards at a certain price at some date in the future - you wouldn't scream conspiracy if you knew I could come up with the product. What I can't do is promise you a "really pretty beach house" because our definitions might differ. Gold is gold, keyboards are keyboards. You only need to know my word is good. The exchanges and brokers that act as counter parties guarantee my word. If I FAIL to make good, they will make good on my behalf.
You can express doubt that if everyone on earth demanded delivery right away - the exchanges couldn't make good - but that doubt is just an opinion. My personal belief is that if everyone started taking delivery there would be chaos, for a limited amount of time before it all got settled. (but again, just my opinion)
The fact of the matter is that billions of dollars of futures contracts take place every day. You CAN take physical delivery of gold, silver, or platinum. You CANT find anyone who's delivery was denied and funds taken. There ARE futures contracts (oil, coffee, hogs) which are PROHIBITED from taking physical delivery, but no one claims those are a scam.
Your comments clearly validate the term "paper promises." I hope you do realize that they are only good until suddenly they are not. Many ebay presellers and their buyers can attest to that.
If major players don't want their gold......a "run" on gold becomes even less likely. That's good right?
That is very good to those out on a limb. When the pruning starts, those hugging the trunk will be glad they did.
I'm glad you brought this up, because it is a key point that I think a lot of people don't understand. When you buy a futures contract, you don't pay in advance for the item either. A gold contract is for 100 ounces of gold. Apprx $120,000. If you buy a gold contract you ABSOLUTELY DO NOT PAY $120,000. You post apprx $4,000 in collateral to prove you CAN tender payment on delivery if required to do so. You don't pay the balance until you take your gold.
And this justifies taking money from multiple buyers for a single item?
My question is always this. If the market is so obviously rigged and predictable.......why haven't all the doomsayers become BILLIONAIRES taking the right side of the trade?
Because those controlling the price via futures continue to play the game by their unwritten rule - Do Not Take Delivery. When the music stops they will all be looking to share the same chair just as they were all sharing the same gold. It is panic in the futures market that will release the gold price - when it becomes time for every man for himself. Your doomsayers know only one approach, buy and hold and one day in the far future they will be proven correct. But for the here and now, to hold long term only with your eyes closed will prove to be as unrewarding as did retirement account equities in the 08 crash.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Quoting is going to get messy from here, so I'll try to be brief and stay in order.
1) Your premise seems to be that futures contracts are inherently manipulative. The purpose of a futures contract is to secure future delivery of a product. That's it. Many choose to middlemen, market makers, speculators, or whatever other term you want to use, but the ultimate purpose of a futures contract is to purchase an underlying item. If you buy a futures contract and take it to delivery, you have purchased the item. Buyers of contracts are ultimately (and in a very real way) buyers of the product the contract represents, so no, I don't consider them as tools of 'price control' or manipulation. People buying and selling your product make a two-sided market, but that is not 'by very definition' price manipulation.
2) You are sure the few who demand gold get gold and the people that want cash take cash? What is the problem then?
3) As to 'paper promises': What other types of promises are there? Nearly any promise relating to commerce is a paper promise, enforceable by contract. That is the entire point. That is what laws, governments, etc are for. To use your real estate example - if you sell me your house, all I have is your 'paper promise' that the house was yours to sell in the first place. Even setting aside the matters of due diligence and the house being as you promise it, I still need to trust you that A) The house exists you have clear title and authorization to sell it. I can't KNOW these things, so I end up paying for lawyers, title insurance, etc to guarantee the transaction. Our contract (paper promise?) is enforceable by law. Third parties accept liability (for a fee) to see that the transaction was executed properly. Exchanges fill the same purpose as parties guaranteeing title do.
I will concede the point that if some event brings the world to it's knees and completely eliminates the financial system, that yes, your futures contract is probably not going to be fulfilled. A futures contract is not the same as physical gold, and I'm not refuting that. I'm simply making the point that not being different as physical gold does not equal a 'rigged casino.'
An ebay pre seller is not the same as a commodities exchange. It just isn't.
4) And this justifies multiple buyers of the same item? -- There is a lot going on in this statement. There are no 'multiple buyers' of the same item. People making this claim are confusing (intentionally or not) the difference between buying a physical item, vs a promise of the item in the future. I'll try to make an example. Lets say I build and sell tables. I take custom orders. You come to me and offer to pay me a small deposit to build you 100 tables. I agree. Lets say another buyer comes to my shop right after you and ALSO wants me to build them 100 tables. I take a deposit from them as well? Did I sell the SAME hundred tables twice? Keeping in mind that you don't actually PAY for the tables until I deliver them to you at an agreed upon date, do I need to have the tables in my possession before taking your order? Of course not. All I need to do is deliver the tables on the day we agreed at the price we agreed. All you need to do is pay for them at that time.
There is this fallacy that 'bars of gold are sold multiple times.' Bars of gold aren't sold at all. Future delivery of that gold is sold. i don't need to own the gold now to deliver it to you in the future. You simply need to be assured that I can if called upon to do so. This is not fraudulent, wrong, or even strange, but people use the idea that not having the gold right this second means that they are going to be ripped off somehow. You aren't. Two big reasons. 1) The exchange guarantees the transaction. 2) You haven't paid for the gold anyway. I
It can SOUND scary, and people love to peddle fear, but again.....show me an example of someone who tried to take delivery of gold and was refused.
There is always this vague talk of manipulators and shadowy figures controlling the price and the ultimate collapse of the entire system. I always end up with the same two questions:
A) In which direction are prices currently being manipulated, and can anyone tell this ahead of time?
If there is such an obvious inconsistency in the market, how is it not exploited out of existence?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention.
If everyone is blind, does that make the Mona Lisa more or less valuable?
Being blind is not the same as closing your eyes. You should open yours.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Having been a former assistant secretary of anything does not make a person infallible, or even automatically credible. Didn't he only have the job for a year anyway?
Roberts has a long history of making bizarre outlandish claims on all sorts of things. He picks 'hot button topics' says things far far far outside the mainstream, gets little bits of attention, and uses that attention to sell "books". He presents himself as an authority on economics, crime, terrorism, and whatever else happens to be on TV at the moment.
He's just a guy selling predictions, opinions, and fear - just like everyone else. Doesn't make him right.
He seems to like to take bizarre viewpoints on hot button issues. He's claimed that Sandy Hook didn't happen, and that the US Government perpetrated the Charlie Hebdo attacks in Paris. I will grant that this type of tinfoil-hattery (tm) doesn't necessarily make him WRONG about finance, but it certainly casts a shadow on his overall credibility. Again, he sells fear and knows his audience well.
Yes, he has academic credentials. Lots of people have credentials. What Roberts doesn't have (as far as I can tell) is the billions and billions of dollars he SHOULD have if he could actually decipher markets and accurately predict market directions, instead of making spurious claims in hindsight.
I am always suspicious (and apply a personal bias) to anyone who devotes themselves to the academic discussion of, and writing about money, but doesn't possess TONS and TONS of money themselves.
In fairness though I should also admit that I have a hard time taking reconciling his insinuations that 9/11 wasn't a terrorist attack, the us government killed a bunch of people in Paris, and the Sandy Hook probably didn't happen.
Links to some Paul Craig Roberts "tinfoil-hattery"
Governments don't kill people and markets aren't manipulated. And those that think so are whacko. Got it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Originally posted by: derryb Governments don't kill people and markets aren't manipulated. And those that think so are whacko. Got it.
This certainly went off in a direction I never would have anticipated.
No, I do not think the US Government shot up the Charlie Hebdo offices, knocked down the world trade center, or faked a mass shooting. Do you?
I DO think that Paul Craig Roberts is a whacko, yes. (or at least that he pretends to be one to sell "books.") I also readily admit that his dozens of bizarre conspiracy theories do not necessarily make him wrong about the gold market, but they do ensure that his credibility approaches zero.
I also don't think the gold market is a 'rigged casino.' I was happy to try and have a conversation/debate about how the futures market works, and did my best to do so. You linked to a 9/11 truther's website and acted like it was the equivalent of a mic drop.
Conversations like this too often veer to vague accusations, ramblings without evidence, and "but this one guy says......" type rhetoric.
I won't change your mind, and I can promise that you won't change mine. (Not quoting Roberts anyway). We'll both have just to go on with our lives happy in our own fantasies.
Agree, got off topic - apologies for my part. Appreciate your civilized discussion, it is refreshing and much needed on this forum. Bottom line is either you believe markets are tainted or you do not. We each know where the other stands, so let's respectfully leave it at that.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Originally posted by: Baley It was a fun chat for a minute anyway.
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
Originally posted by: derryb We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
Yet you continue to attack those that share information that disagrees with where you stand. Follow PutTogther's lead, attack the information, not the forum members that disagree with you. Attempting to discredit those who provide information when one cannot discredit the information only serves to distract from the discussion.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Originally posted by: 3stars Not seeing an issue on the volume part - if the same gold bar is traded 25 times, is that 25 gold bars? No, its only one that changed hands multiple times.
Problem is they're selling the same gold bar to 542 different buyers at the same time (see the posted chart) with these paper futures contracts. The contracts are created out of thin air in hopes of (more likely knowing) that everyone doesn't want their gold bar at once. Sorta like the bank not actually having all the money deposited with them because they loaned most of it out via fractional lending. When there are 542 times as many contracts as there are actual gold, the price of gold naturally falls because CRIMEX, I mean COMEX, has created an imaginary supply. By artificially controlling the "supply" (via futures contracts with no physical backing) of a vary scarce commodity (physical gold) they control the price. Most of the price of physical gold is set by the paper gold spot price. Note that premiums for physical PMs have been creeping up. This is a sign the physical market is moving, although very slowly, towards reality - a price that reflects physical supply. It will take a default by COMEX (inability to honor the unbacked contracts) to break up the fraud. Unfortunately, most all of their contract buyers are in on the scam and settle for cash instead of the gold or they roll the contracts into new contracts.
And, on the topic of fractional bank lending what happens when bank depositors all show up wanting their cash at once? Estimates are that the banks can't even cover 12% of the amount. What affect do you think a negative interest policy (NIRP) on bank deposits is going to do to the number of people who will suddenly show up wanting their deposits back? For this reason there will be a war on holding cash and an effort to switch all the cash in your hands to digital cash that only a bank can control for you. Result: possible banking default due to NIRP problem solved.
Why is it that no PM investors make the argument that futures create artificial demand? Why is is always artificial supply keeping prices lower?
I'm waiting for much lower gold prices. Especially now that all the hedge funds are buying. Under $1000 for sure. I might start buying sub $900. If that doesn't happen, I'm happy keeping my cash elsewhere.
References: Too many to list. PM for details. 100% satisfaction both as buyer and seller. As a seller, I ship promptly and keep buyers updated.
Originally posted by: derryb Governments don't kill people and markets aren't manipulated. And those that think so are whacko. Got it.
This certainly went off in a direction I never would have anticipated.
No, I do not think the US Government shot up the Charlie Hebdo offices, knocked down the world trade center, or faked a mass shooting. Do you?
I DO think that Paul Craig Roberts is a whacko, yes. (or at least that he pretends to be one to sell "books.") I also readily admit that his dozens of bizarre conspiracy theories do not necessarily make him wrong about the gold market, but they do ensure that his credibility approaches zero.
I also don't think the gold market is a 'rigged casino.' I was happy to try and have a conversation/debate about how the futures market works, and did my best to do so. You linked to a 9/11 truther's website and acted like it was the equivalent of a mic drop.
Conversations like this too often veer to vague accusations, ramblings without evidence, and "but this one guy says......" type rhetoric.
I won't change your mind, and I can promise that you won't change mine. (Not quoting Roberts anyway). We'll both have just to go on with our lives happy in our own fantasies.
It was a fun chat for a minute anyway.
Well said, hard to change anyone mind on the interwebs, maybe impossible, no matter how much of an outlier those beliefs are.
Please join us for the next round table discussion on the PM forum, Did man really land on the moon, or was it all filmed on the James Bond set near Las Vegas? ;~
Originally posted by: Baley It was a fun chat for a minute anyway.
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
Originally posted by: derryb We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
Yet you continue to attack those that share information that disagrees with where you stand. Follow PutTogther's lead, attack the information, not the forum members that disagree with you. Attempting to discredit those who provide information when one cannot discredit the information only serves to distract from the discussion.
Mostly because you don't share information. Propaganda is not information. Conspiracy BS is not information. Opinion from a huckster is not information.
Yeah, go ahead and prove my conspiracy theory is wrong. You can't can you? Haha. You see, I'm smarter than you. .......This is what you sound like.
And I love how everyone feels they are "attacked"...you all sound like a bunch of f----- p------.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I think I need a more respected source on this Derry. This is too off the wall for me.
Yepper, Listening to Reuters is like watching TMZ.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Originally posted by: cohodk So if all of these bad, bad, evil manipulators have been shut down, why hasnt gold found its "rightful, LOL" valuation?
Who said they have been shut down. The fines they pay (without criminal charges) are peanuts to what they reap.
"The game is what it is." - Proposition Joe, The Wire.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
0.04% are executed with physical
how many are executed into?
how many are executed out of?
as for the number of paper contracts, let's say I am an active trader. I trade 100 contracts a month taking a little off the rips and dips. let's say that's 5 round trips per trading day. Does that mean there needs to be 5 contracts worth of physical in the vault per day or one? If I'm closing them at the end of my day does there need to be any at all?
Perhaps exercised vs open interest is better, however there are issues there. open interest is a moving target. Perhaps all the entity wants is the cash off the trade. So, looking at open interest even the day before the last day to trade would be misleading as they could be sold on the last day without exercising.
The numbers proposed are compelling but need examination to realize their usefulness.
In following this thread I've often wondered why the vaults aren't opened to "show us the books' so to speak, on the actual supply of gold. Seems it would dispel many myths and answer the many questions surrounding this controversy.Would we even believe it or if it is not really all there, would we rather not know the truth.Which if this was the case would this induce panic?One would think when you invest in something you would want to see the investment, be it land, a business, a company that you invested in,their product.
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
Ever think it's the gold bugs that don't want the "vaults open'? One of the great "fundamentals" of gold is its mystery. The manipulation and conspiracy theories fuel demand.
Actual supply of gold in any vault is irrelevant to the price of gold as long as price is determined by fiat (paper promises) supply that is limited only by the available supply of paper, ink and fools.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Even if the gold vaults were independently audited there would be conspiracy theory types that would claim that the gold bars aren't there and the bars that are there are actually gold plated lead bars or some other nonsense.
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
@PerryHall said:
Even if the gold vaults were independently audited there would be conspiracy theory types that would claim that the gold bars aren't there and the bars that are there are actually gold plated lead bars or some other nonsense.
@PerryHall said:
Even if the gold vaults were independently audited there would be conspiracy theory types that would claim that the gold bars aren't there and the bars that are there are actually gold plated lead bars or some other nonsense.
I agree. This speaks to a lack of credibility on the "managers" part.
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
Comments
I don't understand what it is about gold that brings out the intense levels of paranoia. Futures contracts are a standard instrument of commerce, and have been for almost 4,000 years. You can buy or sell futures contracts on any number of different commodities, but I've never read any threads about the manipulation of soybean prices, or how 'big timber' is manipulating the price of board feet of lumber.
There is nothing inherently crooked with selling a contract to deliver a certain item, at a certain price, at a certain date in the future. This concept introduces some form of stability and liquidity to nearly every market from gold and silver to orange juice and pigs.
There are two things that are brought up almost every time that I would like to try and address. First is the question of volume of contracts traded vs gold mined, and second is the idea that the contracts are just worthless paper.
Comparing contracts written to gold mined, or even gold that exists is not appropriate. Volume is tracked per transaction. If I sell a contract, then buy it back - that counts as 2. The contract traded twice, but it sure doesn't mean that I owe anyone 2 gold bars. I created a debt and eliminated a debt. If I did that back and forth 5 times, some people would try to tell you that I'm promising TEN gold bars. Nope. Zero.
If person A and person B decided to bet on a coin flip at $20 per turn, and each person won 5 times, you wouldn't claim anyone 'created' $200 out of thin air. If I spent a $20 bill at my local grocer, who then spent it with the pharmacist, who then bought a sandwich from the butcher, who took it home and gave it to his daughter, who then spent it on shoes - no one would mutter about price manipulation, but futures contracts trade almost the same way.
The second concern that is often brought up is that the futures contract itself is just an empty promise. It isn't. To write, or to sell short, a futures contract, requires the assumption of debt. If I write a futures contract I'm promising to deliver 100 ozs of gold at an agreed upon price at an agreed upon date. I have until that date to either buy a contract back to cancel it out, or to deliver my gold to the counter party to my contract. I don't have to have the gold in my pocket, I just have to have the means to get it to you. For the system to work, you have to trust that I am good for it. You also have to be able to later sell the contract you bought from me if you so choose. You need the future buyer to trust YOU, but all YOU have is MY promise, etc etc. That sounds scary to people, but that's what exchanges/clearing houses are for - to guarantee the trade. To make the contracts fungible. You don't HAVE to know me. You just need to know that the exchange guarantees that there is a broker out there that guarantees, that I have the money to make good on my contract. If I don't, they'll step in and cover it. Simple.
Anyone that doesn't believe it - buy a futures contract and let it expire. You will absolutely find out that there is a bar of gold waiting for you that you can go pick up. (If you don't have a ton of cash, you might want to try with a 5,000 oz contract of silver instead) The process of picking up the gold is a severe PITA - but it can done. (and will be done if you want it to be)
One final point. An interesting thing about futures contracts is that you can take either side of the bet for very small fees. If you think buying gold futures is a total scam and rigged, well then, you can SELL gold futures instead. At any given moment, a gold futures contract has a spread that is at most, $20 wide. We're talking about a whopping $20 difference in the buy/sell prices for a contract with a $120,000 nominal value - and you can be on any side of the bet you'd like. How can that be 'rigged?'
What I will concede is that owning a futures contract is no replacement for owning physical gold stored somewhere safely. One can be useful in an emergency, and represents a real, anonymous store of value. The other is an incredibly liquid, fungible instrument that can be rapidly traded in whichever direction you choose for immediate profits, or losses. Neither is a "scam."
"But puttogether," I can hear you saying "how do we know those nasty COMEX people will live up to their promises?" I've got two answers for you. 1) Try it yourself. 2) Find one instance of a trader who took a gold, silver, or platinum contract to expiration and the COMEX refused to deliver the metal. ONE INSTANCE where it didn't happen. You'll hear tons and tons of "bbbbut bbut the bogeyman wrote contracts on gold he didn't have" but you'll be very hard pressed indeed to find a recorded account of an exchange taking someone's money, and not giving them their gold.
"But what happens if every person on earth shows up and wants their gold all at the same time?" Possibly the same thing that happens if everyone in your town wants a case of bottled water all at the same time. There might be trouble and some delays, but I suspect it would eventually be worked out. This is one reason why owning a futures contract is NOT the same as owning physical gold. Not being the same as physical gold is not the same as being a scam either. They just serve different purposes.
There is way more to this, and I'm happy to go back and forth and share my experiences or answer questions about how it has all worked for me if anyone is interested. Just remember. If the prices are so obviously rigged, you can go take advantage of them too. No rule says you can only BUY the contract. If you can PROVE the market for paper gold is headed downward......by all means, go sell some gold and get RICH.
First of all the difference with gold as a commodity is the fact that it competes with dollars in winning the favor of buyers. Other commodities do not share as unique an inverse relationship with the dollar that gold exhibits. In fact many of the other commodities are traded primarily by producers who "hedge" to stabilize prices in an otherwise volatile market that can make or break that producer. Is this not in reality price control/manipulation?
Secondly the number of contracts in existence (not those traded) is relevant when hundreds of promises are made at the same time for the same gold bar. Your analogy of flipping a coin or spending a dollar is in no way similar to selling the same "promise" to multiple buyers at the same time. Flipping a coin results in a completed transaction each time it is flipped. Spending a dollar can only result after it was previously spent and a service or good was delivered. Am I allowed to sell a promise/title to my single piece of real estate to multiple buyers at the same time? You and I know I'd go to jail.
Thirdly, the major players in the game of "deflate the price" have no desire to take possession of their gold promise. In fact, they know that doing so would end their game. There are numerous reports of those who did want their gold being convinced to take payment in cash.
Your bottled water analogy is equally irrelevant. Everyone showing up for a bottled water at the same time did not all pay in advance for the same bottle of water.
Finally yes, understanding the manipulation can work to your favor.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Funny how those that believe in manipulation have been manipulated.
Knowledge is the enemy of fear
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention. It's even funnier that those of you who don't believe in manipulation have been manipulated.
Do not commodity futures traders use the futures market to ensure stable prices of what they produce?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
First of all the difference with gold as a commodity is the fact that it competes with dollars in winning the favor of buyers.
So do other currencies, real estate, equities, oil, natural gas, coffee, and many other commodities. Maybe there is a message board full of antique coffee pot enthusiasts that are convinced speculative forces are forcing the price of coffee futures down to the detriment of them all.
In fact many of the other commodities are traded primarily by producers who "hedge" to stabilize prices in an otherwise volatile market that can make or break that producer. Is this not in reality price control/manipulation?
You are correct that commodities futures exist to protect production. Farmers, miners, orange juice makers, etc can guarantee certain prices that allow them to operate as an ongoing concern instead of a constant gamble on the verge of collapse. But the words "price control/manipulation" carry the connotation of nefarious or malevolent action, or at least intent. Stabliziing prices so that production of a necessary commodity can continue is not what most would consider manipulation. It is buying and selling of the product you make at a future date at an agreed upon price.
Secondly the number of contracts in existence (not those traded) is relevant when hundreds of promises are made at the same time for the same gold bar.
This claim is made all the time, yet no one can ever show me an instance where someone demanded to take delivery of their gold and was refused. It's always "i heard about a guy where they talked him in to taking cash." That probably happens because taking delivery is a PITA, but NO ONE CAN FORCE YOU not to take delivery. Further more, I'll use your real estate example to prove how 'more promises than gold" wouldn't really matter anyway.
Am I allowed to sell a promise/title to my single piece of real estate to multiple buyers at the same time?
Gold bars aren't real estate. A piece of real estate is like a coin - it has unique features that differentiate it's value from others just like it. 100 oz of gold is 100 oz of gold. It doesn't matter what country mined it, who owned it before, or whether or not it's pretty. Gold bars are fungible. (they can be exchanged for each other blindly and at will). Real estate is not.
If I write a contract on 4 different piles of gold, it simply doesn't matter if I have the gold in my garage or not. They only thing you need to know is that I have the means to get you your gold if/when you come calling for it. If I wrote you a contract promising to delivery you 12 brand new apple wireless keyboards at a certain price at some date in the future - you wouldn't scream conspiracy if you knew I could come up with the product. What I can't do is promise you a "really pretty beach house" because our definitions might differ. Gold is gold, keyboards are keyboards. You only need to know my word is good. The exchanges and brokers that act as counter parties guarantee my word. If I FAIL to make good, they will make good on my behalf.
You can express doubt that if everyone on earth demanded delivery right away - the exchanges couldn't make good - but that doubt is just an opinion. My personal belief is that if everyone started taking delivery there would be chaos, for a limited amount of time before it all got settled. (but again, just my opinion)
The fact of the matter is that billions of dollars of futures contracts take place every day. You CAN take physical delivery of gold, silver, or platinum. You CANT find anyone who's delivery was denied and funds taken. There ARE futures contracts (oil, coffee, hogs) which are PROHIBITED from taking physical delivery, but no one claims those are a scam.
Thirdly, the major players in the game of "deflate the price" have no desire to take possession of their gold promise. In fact, they know that doing so would end their game.
If major players don't want their gold......a "run" on gold becomes even less likely. That's good right?
Your bottled water analogy is equally irrelevant. Everyone showing up for a bottled water at the same time did not all pay in advance for the same bottle of water.
I'm glad you brought this up, because it is a key point that I think a lot of people don't understand. When you buy a futures contract, you don't pay in advance for the item either. A gold contract is for 100 ounces of gold. Apprx $120,000. If you buy a gold contract you ABSOLUTELY DO NOT PAY $120,000. You post apprx $4,000 in collateral to prove you CAN tender payment on delivery if required to do so. You don't pay the balance until you take your gold.
Finally yes, understanding the manipulation can work to your favor.
My question is always this. If the market is so obviously rigged and predictable.......why haven't all the doomsayers become BILLIONAIRES taking the right side of the trade?
Final Note: I banged this message out quickly, so please forgive spelling or grammatical mistakes within reason.
So do other currencies, real estate, equities, oil, natural gas, coffee, and many other commodities. Maybe there is a message board full of antique coffee pot enthusiasts that are convinced speculative forces are forcing the price of coffee futures down to the detriment of them all.
Are not coffee producers depriving speculators/investors, who place their bets based on market conditions/fundamentals, of their due profit by "stabalizing" the price via the futures market. You agree below that these producers do in fact "stablize."
Call it what you want, but it remains controlling the price, the very definition of price manipulation.
I'm sure that the few who demand gold get their gold. The remainder settle for a nice cash profit allowing COMEX to avoid default.
If I write a contract on 4 different piles of gold, it simply doesn't matter if I have the gold in my garage or not. They only thing you need to know is that I have the means to get you your gold if/when you come calling for it. If I wrote you a contract promising to delivery you 12 brand new apple wireless keyboards at a certain price at some date in the future - you wouldn't scream conspiracy if you knew I could come up with the product. What I can't do is promise you a "really pretty beach house" because our definitions might differ. Gold is gold, keyboards are keyboards. You only need to know my word is good. The exchanges and brokers that act as counter parties guarantee my word. If I FAIL to make good, they will make good on my behalf.
You can express doubt that if everyone on earth demanded delivery right away - the exchanges couldn't make good - but that doubt is just an opinion. My personal belief is that if everyone started taking delivery there would be chaos, for a limited amount of time before it all got settled. (but again, just my opinion)
The fact of the matter is that billions of dollars of futures contracts take place every day. You CAN take physical delivery of gold, silver, or platinum. You CANT find anyone who's delivery was denied and funds taken. There ARE futures contracts (oil, coffee, hogs) which are PROHIBITED from taking physical delivery, but no one claims those are a scam.
Your comments clearly validate the term "paper promises." I hope you do realize that they are only good until suddenly they are not. Many ebay presellers and their buyers can attest to that.
That is very good to those out on a limb. When the pruning starts, those hugging the trunk will be glad they did.
And this justifies taking money from multiple buyers for a single item?
Because those controlling the price via futures continue to play the game by their unwritten rule - Do Not Take Delivery. When the music stops they will all be looking to share the same chair just as they were all sharing the same gold. It is panic in the futures market that will release the gold price - when it becomes time for every man for himself. Your doomsayers know only one approach, buy and hold and one day in the far future they will be proven correct. But for the here and now, to hold long term only with your eyes closed will prove to be as unrewarding as did retirement account equities in the 08 crash.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
1) Your premise seems to be that futures contracts are inherently manipulative. The purpose of a futures contract is to secure future delivery of a product. That's it. Many choose to middlemen, market makers, speculators, or whatever other term you want to use, but the ultimate purpose of a futures contract is to purchase an underlying item. If you buy a futures contract and take it to delivery, you have purchased the item. Buyers of contracts are ultimately (and in a very real way) buyers of the product the contract represents, so no, I don't consider them as tools of 'price control' or manipulation. People buying and selling your product make a two-sided market, but that is not 'by very definition' price manipulation.
2) You are sure the few who demand gold get gold and the people that want cash take cash? What is the problem then?
3) As to 'paper promises': What other types of promises are there? Nearly any promise relating to commerce is a paper promise, enforceable by contract. That is the entire point. That is what laws, governments, etc are for. To use your real estate example - if you sell me your house, all I have is your 'paper promise' that the house was yours to sell in the first place. Even setting aside the matters of due diligence and the house being as you promise it, I still need to trust you that A) The house exists
I will concede the point that if some event brings the world to it's knees and completely eliminates the financial system, that yes, your futures contract is probably not going to be fulfilled. A futures contract is not the same as physical gold, and I'm not refuting that. I'm simply making the point that not being different as physical gold does not equal a 'rigged casino.'
An ebay pre seller is not the same as a commodities exchange. It just isn't.
4) And this justifies multiple buyers of the same item? -- There is a lot going on in this statement. There are no 'multiple buyers' of the same item. People making this claim are confusing (intentionally or not) the difference between buying a physical item, vs a promise of the item in the future. I'll try to make an example. Lets say I build and sell tables. I take custom orders. You come to me and offer to pay me a small deposit to build you 100 tables. I agree. Lets say another buyer comes to my shop right after you and ALSO wants me to build them 100 tables. I take a deposit from them as well? Did I sell the SAME hundred tables twice? Keeping in mind that you don't actually PAY for the tables until I deliver them to you at an agreed upon date, do I need to have the tables in my possession before taking your order? Of course not. All I need to do is deliver the tables on the day we agreed at the price we agreed. All you need to do is pay for them at that time.
There is this fallacy that 'bars of gold are sold multiple times.' Bars of gold aren't sold at all. Future delivery of that gold is sold. i don't need to own the gold now to deliver it to you in the future. You simply need to be assured that I can if called upon to do so. This is not fraudulent, wrong, or even strange, but people use the idea that not having the gold right this second means that they are going to be ripped off somehow. You aren't. Two big reasons. 1) The exchange guarantees the transaction. 2) You haven't paid for the gold anyway. I
It can SOUND scary, and people love to peddle fear, but again.....show me an example of someone who tried to take delivery of gold and was refused.
There is always this vague talk of manipulators and shadowy figures controlling the price and the ultimate collapse of the entire system. I always end up with the same two questions:
A) In which direction are prices currently being manipulated, and can anyone tell this ahead of time?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention.
If everyone is blind, does that make the Mona Lisa more or less valuable?
Knowledge is the enemy of fear
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention.
If everyone is blind, does that make the Mona Lisa more or less valuable?
Being blind is not the same as closing your eyes. You should open yours.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The whole market is rigged. Then again, I get my medicine to help me with my paranoia.
You don't need meds to help with that one. Trust me.
Hopefully, a former Assistant Secretary of the Treasury can better help you see the reality.
Having been a former assistant secretary of anything does not make a person infallible, or even automatically credible. Didn't he only have the job for a year anyway?
Roberts has a long history of making bizarre outlandish claims on all sorts of things. He picks 'hot button topics' says things far far far outside the mainstream, gets little bits of attention, and uses that attention to sell "books". He presents himself as an authority on economics, crime, terrorism, and whatever else happens to be on TV at the moment.
He's just a guy selling predictions, opinions, and fear - just like everyone else. Doesn't make him right.
He seems to like to take bizarre viewpoints on hot button issues. He's claimed that Sandy Hook didn't happen, and that the US Government perpetrated the Charlie Hebdo attacks in Paris. I will grant that this type of tinfoil-hattery (tm) doesn't necessarily make him WRONG about finance, but it certainly casts a shadow on his overall credibility. Again, he sells fear and knows his audience well.
Yes, he has academic credentials. Lots of people have credentials. What Roberts doesn't have (as far as I can tell) is the billions and billions of dollars he SHOULD have if he could actually decipher markets and accurately predict market directions, instead of making spurious claims in hindsight.
I am always suspicious (and apply a personal bias) to anyone who devotes themselves to the academic discussion of, and writing about money, but doesn't possess TONS and TONS of money themselves.
In fairness though I should also admit that I have a hard time taking reconciling his insinuations that 9/11 wasn't a terrorist attack, the us government killed a bunch of people in Paris, and the Sandy Hook probably didn't happen.
Links to some Paul Craig Roberts "tinfoil-hattery"
Charlie Hebdo was actually the US
Osama didn't do 9/11
The literal end of the world is coming in November
Edited to fix some auto correct mistakes.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Governments don't kill people and markets aren't manipulated. And those that think so are whacko. Got it.
This certainly went off in a direction I never would have anticipated.
No, I do not think the US Government shot up the Charlie Hebdo offices, knocked down the world trade center, or faked a mass shooting. Do you?
I DO think that Paul Craig Roberts is a whacko, yes. (or at least that he pretends to be one to sell "books.") I also readily admit that his dozens of bizarre conspiracy theories do not necessarily make him wrong about the gold market, but they do ensure that his credibility approaches zero.
I also don't think the gold market is a 'rigged casino.' I was happy to try and have a conversation/debate about how the futures market works, and did my best to do so. You linked to a 9/11 truther's website and acted like it was the equivalent of a mic drop.
Conversations like this too often veer to vague accusations, ramblings without evidence, and "but this one guy says......" type rhetoric.
I won't change your mind, and I can promise that you won't change mine. (Not quoting Roberts anyway). We'll both have just to go on with our lives happy in our own fantasies.
It was a fun chat for a minute anyway.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
Liberty: Parent of Science & Industry
It was a fun chat for a minute anyway.
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
Yet you continue to attack those that share information that disagrees with where you stand. Follow PutTogther's lead, attack the information, not the forum members that disagree with you. Attempting to discredit those who provide information when one cannot discredit the information only serves to distract from the discussion.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It was a fun chat for a minute anyway.
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
+another here
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
Thank you, I tried. I have to admit I was surprised again. The conversation went from the bizarre right back to downright polite. Not too shabby.
Not seeing an issue on the volume part - if the same gold bar is traded 25 times, is that 25 gold bars? No, its only one that changed hands multiple times.
Problem is they're selling the same gold bar to 542 different buyers at the same time (see the posted chart) with these paper futures contracts. The contracts are created out of thin air in hopes of (more likely knowing) that everyone doesn't want their gold bar at once. Sorta like the bank not actually having all the money deposited with them because they loaned most of it out via fractional lending. When there are 542 times as many contracts as there are actual gold, the price of gold naturally falls because CRIMEX, I mean COMEX, has created an imaginary supply. By artificially controlling the "supply" (via futures contracts with no physical backing) of a vary scarce commodity (physical gold) they control the price. Most of the price of physical gold is set by the paper gold spot price. Note that premiums for physical PMs have been creeping up. This is a sign the physical market is moving, although very slowly, towards reality - a price that reflects physical supply. It will take a default by COMEX (inability to honor the unbacked contracts) to break up the fraud. Unfortunately, most all of their contract buyers are in on the scam and settle for cash instead of the gold or they roll the contracts into new contracts.
And, on the topic of fractional bank lending what happens when bank depositors all show up wanting their cash at once? Estimates are that the banks can't even cover 12% of the amount. What affect do you think a negative interest policy (NIRP) on bank deposits is going to do to the number of people who will suddenly show up wanting their deposits back? For this reason there will be a war on holding cash and an effort to switch all the cash in your hands to digital cash that only a bank can control for you. Result: possible banking default due to NIRP problem solved.
Why is it that no PM investors make the argument that futures create artificial demand? Why is is always artificial supply keeping prices lower?
I'm waiting for much lower gold prices. Especially now that all the hedge funds are buying. Under $1000 for sure. I might start buying sub $900. If that doesn't happen, I'm happy keeping my cash elsewhere.
Governments don't kill people and markets aren't manipulated. And those that think so are whacko. Got it.
This certainly went off in a direction I never would have anticipated.
No, I do not think the US Government shot up the Charlie Hebdo offices, knocked down the world trade center, or faked a mass shooting. Do you?
I DO think that Paul Craig Roberts is a whacko, yes. (or at least that he pretends to be one to sell "books.") I also readily admit that his dozens of bizarre conspiracy theories do not necessarily make him wrong about the gold market, but they do ensure that his credibility approaches zero.
I also don't think the gold market is a 'rigged casino.' I was happy to try and have a conversation/debate about how the futures market works, and did my best to do so. You linked to a 9/11 truther's website and acted like it was the equivalent of a mic drop.
Conversations like this too often veer to vague accusations, ramblings without evidence, and "but this one guy says......" type rhetoric.
I won't change your mind, and I can promise that you won't change mine. (Not quoting Roberts anyway). We'll both have just to go on with our lives happy in our own fantasies.
It was a fun chat for a minute anyway.
Well said, hard to change anyone mind on the interwebs, maybe impossible, no matter how much of an outlier those beliefs are.
Please join us for the next round table discussion on the PM forum, Did man really land on the moon, or was it all filmed on the James Bond set near Las Vegas? ;~
Funny how those that believe in manipulation have been manipulated.
Only those not paying attention.
If everyone is blind, does that make the Mona Lisa more or less valuable?
Being blind is not the same as closing your eyes. You should open yours.
Yup, thats what i should do. Lmao!!!
Knowledge is the enemy of fear
It was a fun chat for a minute anyway.
Good job, PutTogether. A lot of us have typed similar words over the years, you have done very well in articulating logical reasoning.
We each know where the other stands, so let's respectfully leave it at that.
... and that's where a lot of us have left it
Yet you continue to attack those that share information that disagrees with where you stand. Follow PutTogther's lead, attack the information, not the forum members that disagree with you. Attempting to discredit those who provide information when one cannot discredit the information only serves to distract from the discussion.
Mostly because you don't share information. Propaganda is not information. Conspiracy BS is not information. Opinion from a huckster is not information.
Yeah, go ahead and prove my conspiracy theory is wrong. You can't can you? Haha. You see, I'm smarter than you. .......This is what you sound like.
And I love how everyone feels they are "attacked"...you all sound like a bunch of f----- p------.
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The ugly truth
I think I need a more respected source on this Derry. This is too off the wall for me.
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
The ugly truth
I think I need a more respected source on this Derry. This is too off the wall for me.
Yepper, Listening to Reuters is like watching TMZ.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
So if all of these bad, bad, evil manipulators have been shut down, why hasnt gold found its "rightful, LOL" valuation?
Who said they have been shut down. The fines they pay (without criminal charges) are peanuts to what they reap.
"The game is what it is." - Proposition Joe, The Wire.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Because the regulators don't shut them down, it's a pay to play game.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Nothing but sore loser talk.
Knowledge is the enemy of fear
0.04% are executed with physical
how many are executed into?
how many are executed out of?
as for the number of paper contracts, let's say I am an active trader. I trade 100 contracts a month taking a little off the rips and dips. let's say that's 5 round trips per trading day. Does that mean there needs to be 5 contracts worth of physical in the vault per day or one? If I'm closing them at the end of my day does there need to be any at all?
Perhaps exercised vs open interest is better, however there are issues there. open interest is a moving target. Perhaps all the entity wants is the cash off the trade. So, looking at open interest even the day before the last day to trade would be misleading as they could be sold on the last day without exercising.
The numbers proposed are compelling but need examination to realize their usefulness.
In following this thread I've often wondered why the vaults aren't opened to "show us the books' so to speak, on the actual supply of gold. Seems it would dispel many myths and answer the many questions surrounding this controversy.Would we even believe it or if it is not really all there, would we rather not know the truth.Which if this was the case would this induce panic?One would think when you invest in something you would want to see the investment, be it land, a business, a company that you invested in,their product.
Knowledge is the enemy of fear
Actual supply of gold in any vault is irrelevant to the price of gold as long as price is determined by fiat (paper promises) supply that is limited only by the available supply of paper, ink and fools.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Even if the gold vaults were independently audited there would be conspiracy theory types that would claim that the gold bars aren't there and the bars that are there are actually gold plated lead bars or some other nonsense.
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
tungsten!
Looks to me like "Buy low, store lower" is the mantra.
I agree. This speaks to a lack of credibility on the "managers" part.