‘Crime, once exposed, has no refuge but in audacity.’
Gold and silver were hit early on today, and knocked lower on high volume in relatively quiet trade, while the stock market was being pumped higher.
The Fed would like to set the stage for their FOMC meeting next week, and rather badly so. They are afraid to do it with these unstable equity and bond markets, because if they raise and then the market breaks, then they will be blamed for it. You can see that the IMF and the World Bank have already covered their posteriors by warning.
It is not a 25 basis point increase that will break these markets. They are already broken, an accident waiting to happen.
The Comex continues to bleed out, with additional gold and silver leaving their warehouses yesterday.
Registered (deliverable) gold has fallen to 185,314 troy ounces, a low we have not seen I believe in since before the year 2000. On a quick calculation pending the final numbers early tomorrow, I would think that the ratio of paper claim to actual deliverable gold at price is now at an unprecedented about 225:1. This is not ‘normal.’
Unless something changes, you can stick a fork in the NY version of ‘price discovery’, it is done.
Who is going to keep honoring a price set by a bunch of jokers playing liar’s poker with a stack of paper claims?
The largest gold bullion exchange in the world outside of Asia, the LBMA in London, is scraping the bottom of the barrel trying to find enough bullion to keep satisfying delivery requests for Asia at these prices. That is worth watching closely, although it has always been light on disclosure.
The real game now is in London, and the indications are that the costs to borrow physical for immediate delivery, which means refining into kilobars and shipment to Asia never to return, are soaring.
This post was published at Jesses Crossroads Cafe on 09 SEPTEMBER 2015.