The Rick Akerman piece dispatched by GATA today is another brick in the wall.
http://news.goldseek.com/RickAckerman/1260255720.php
QUOTE
"Physical supply is VERY tight. We were offered 125% premium not to take delivery of our September contracts because unallocated LBMA gold runs on a fractional-reserve basis and they simply didn't have the metal to deliver. We are now demanding delivery of December early and are hearing the same song"
END
I recently wrote 2 articles analyzing the LBMA possible gold reserves from 2 different angles
http://www.gata.org/node/7908
http://www.gata.org/node/7911
I deduced that the LBMA is running a fractional reserve operation and that the amount of paper gold they have sold that is unbacked could be in the range of 30,000t to 50,000t. (almost equal to all the gold reserves left to be mined in the earth!!).
This anecdotal information from this London trader is a confirmation that my analysis is likely correct. If the LBMA had 100% backing of gold they sell they could not possibly be unable to deliver.
The LBMA may think it is smart to offer premiums to take cash but this is the equivalent of stepping on their own land mine. This declares to the world they don’t have the gold that they are meant to have. This is what starts bank runs. This is what will start the mother of all bank runs…the run on the bank of the gold cartel. And just to add further credence to my analysis the US Government doesn’t have enough gold to mint a few measly gold eagles.!
You can see the state of desperation and why the COMEX was raided by the shorts.
--------------
here were a very significant 277 delivery notices issued in the DEC gold contract. The DEC gold contract total for the month is 6,643 contracts or 664,300 ozs. Yesterday was not a one off event of the Cartel Honchos showing up in the delivery note business. JPM issued no notices but stopped 132 of them and Goldman Sachs issued none and stopped 88 notices and issued none. BNS issued 2 notices. Yesterday I said “whenever something changes in the gold market one has to pay attention”. And guess what! The gold market was bludgeoned and raped today. It was clearly done by the Cartel because the HUI was up BEFORE gold and silver recovered. That is a clear sign of insider trading (hello SEC, CFTC! Where are you?), I wouldn’t mind betting that the entities selling gold and silver contracts on the COMEX were the same ones buying mining stocks. What a coincidence that happened a day after JPM and GS show up as BIG stoppers of delivery notices!
There were 23 delivery notices issued in the DEC silver contract. The total delivery notices for the month in silver stand at 2,178 or 10.9 Mozs. JPM issued 15 notices and stopped 15. BNS issued none and stopped 4.
There is only 0.7 cent of contango in silver DEC/JAN contracts and only 1.5 cents DEC/FEB contracts. The contango in gold dropped again and DEC/JAN is only $0.1 and $0.5 for DEC/FEB. This is razor thin contango. Gold is almost in backwardation which implies a very tight physical market. That jives with what we are hearing about delivery difficulties on the LBMA and the government suspending gold coin minting. The market is getting ready to blow skywards.
There are still 4,225 contracts of OI in DEC gold and there are still 661 contracts of OI in DEC silver. Have you ever seen a dog chase a rabbit? When the dog catches it by the neck it shakes it around like crazy to break its neck. That’s what the gold cartel did to the weak longs today while they were no doubt buying the HUI! That was the clean out. The market is going higher and the cartel knows it. This was a little sideshow on the COMEX for the paper shufflers but the main event is the London LBMA where the smoke is billowing on physical delivery issues.
Cheers
Adrian
