We can't ask for any of the gold supposed to be at Fort Knox, but 252 peoples (and firms) can ask for delivery of the Gold at Comex when their "long side" contracts mature. It is going to be interesting soon. Please Register or Log in to view the hidden image!
With 252 owners of delivery contracts for each ounce of delivery gold, there is strong probability that more than 0.4% will ask for their gold instead of accept a cash settlement. That would exhaust Comex's vaults of deliverable gold. Comex will not, however, default on those asking for their promised gold. Instead Comex will offer the owners of eligible gold at Comex higher than current market POG to get the amount of gold needed to met the delivery requests. IE the value of the "delivered gold"* will very significantly exceed the standard cash settlement price. - A strong incentive for many more than just 0.4% of the owners of maturing delivery contract to ask for their promised gold. I would guess at least 15% ask for their gold**, as immediate and certain capital gain it highly probable. No one knows how big an increase in POG would be required to get owners of eligible gold to agree their gold can transfer to the registered class. As can be seen in graph below there is plenty of eligible gold to met all the delivery requirements - It is just a question of what POG needed to get current owners of eligible gold to give up their gold for cash. Please Register or Log in to view the hidden image! I'll try to compute what percent of owners of registered gold contracts asking for gold instead of cash would Break Comex - IE not even all the eligible gold at Comex transfer (at very high POG) would met the delivery demand. * I put "delivered gold" in quotes as only a very small part if any would actually be delivered - need an armed escort truck to take it away. Almost 100% of it would just move from the registered to eligible stack. I.e. names of the owners of some eligible gold would change. The gold would not need to move an inch. I think this has already been happening, since end of 2005. IE the graph's "blue line" is declining as the gold line goes up. The text quoted below was with the graph I copied from post 11 at https://gold-forum.kitco.com/showth...s-Drop-To-Lowest-Levels-In-Over-7-Years/page2: "Once again the culprit for the decline was JPM which saw not only a 122,124 ounces of Eligible gold be withdrawn, reducing the total by 13% to 750K ounces, but 8.9K ounces of registered gold was pushed into the Eligible category, in the process reducing total JPM registered gold by 45%..." That essentially confirms my speculation deliverable is going down because eligible is going up, except in early 2013 both registered and eligible sharply fell together. JPM actually took its big block of gold from Comex. Perhaps JPM ceased to trust Comex? Operated on the POV: "If you don't hold, it you don't own it." Or just had delivery obligations of their own and needed the physical? ** As you can see in my next post, 15% asking for delivery of their promised gold is a volume of gold more than double ALL the gold at Comex! (total of eligible + registered)
To make good on my post 63 promise to try to compute what fraction of holders of delivery contract asking for gold (instead of accepting cash settlement) would "break Comex," Assume (from graph) there are currently 7,000,000 oz of eligible gold and only 400,000 oz of registered gold with each oz promised to 242 holders of delivery contracts. (at last read the number was 252.) IE at least 242x400,000 = 96,800,000 oz have been promised, and 7,000,000 / 96,800,000 is 7.23%. As we said in the space department of APL/JHU when a satellite was in trouble and not responsive to commands trying to "fit it." Comex may be in "deep yogurt." If only 8% of those entitled to delivery ask for delivery. I said "may be" as some central banks, with lots of gold in its vault could "bail Comex out of its deep yogurt" if only small double digit percent of owners of delivery contracts ask for delivery. Do you think US will drain Fort Knox (assuming there is gold not pledged to others there) or Chinese central bank will aid Comex? - As whatsupdoc suggested they might in his post 14 of thread at https://gold-forum.kitco.com/showth...-Drop-To-Lowest-Levels-In-Over-7-Years/page 2. I think climate change rains making Sahara Desert into Lake Sahara is more likely. (BTW a large section of the Sahara is below sea level - so Lake Sahara is physically possible.) SUMMARY: As I said at start of post 62: "Its going to get interesting, soon." even without a POG manipulation conspiracy exposed.
It's a great place to store all those alien bodies. Please Register or Log in to view the hidden image!
The "big boys" IE the conspirators who held POG down, seem to be "rats jumping ship" now. That is they are taken their gold from Comex, even their "Eligible" that Comex could not legally touch. This was done on Monday, 14 Sept 2015. Who knows how much more was done in last four days of that week? Note the red boxes all are withdrawals. JPM was the biggest "rat" but Scotia Mocatta seems to still trust Comex. - They only moved 10,335,089 oz from exposed deliverable (registered) to eligible, but we can not be sure of that. Perhaps that gold only sat a day or two as eligible in a Comex vault until their armored truck could be packed with it? Please Register or Log in to view the hidden image! In one day (Monday) the "big boys" took home 124,955,843 ounces of gold. I think they know we are soon at SHTF day, due to the hard facts I spoke of in posts 62, 63 & 65. If US does not really own all the gold at Fort Knox, we may soon see the true owners asking for their gold - physical delivery - too, as Germany has for much of its gold in the NYC vault.
Dam! the table that is here: http://seekingalpha.com/author/hebba-investments/articles did copy and post in post 70 for a few hours. Perhaps one needs to go here to read: http://seekingalpha.com/article/354...registered-gold-inventories-drop-to-a-new-low and then click on the "read full article" in the red bar. (that seems to work.) Here is the text I added, that got wiped out too: " Now 259 claims on each ounce of deliverable gold (registered) at Comex. The highest ratio ever. The table showed that as of last Friday, there were only 161,643 oz of deliverable gold at Comex. I then noted: 161,643 x 259 = 41,865,537 oz but ALL the gold at Comex is only 6,850,581 oz and most of it is "eligible" - has an owner already who does not need to sell it. Four weeks more (from 2/10/15) is Halloween - I bet this one, (2015) is going to be real SCARY.
