CDG and CDS

As we begin 2017, it’s more important than ever to be clear about what we discuss here. To that end, today we add two new acronyms to the TFMR glossary…CDG and CDS. No longer will be discuss the paper derivative price of “gold” or “silver”. Instead, we will refer to these issues as CDG (Comex Digital Gold) and CDS (Comex Digital Silver).
Let’s just cut to the chase. When you regularly observe charts such as this one…

…isn’t it appropriate to ask yourself just what you are following? How in the world can anyone continue to call what you see trading on the Comex “gold”? It’s not gold. Instead, it is simply an electronic derivative contract that HFTs and hedge funds utilize to give themselves “gold exposure” or a “hedge”. No physical metal ever changes hands. Even the bi-monthly “delivery” process is nothing but a Bullion Bank circle jerk where warehouse receipts and warrants are shuffled to and fro.
So, why should we continue to refer to what is traded there as “gold”? Well I, for one, will no longer do so. Oh sure, I may slip up from time to time and, by force of habit, still call what is discovered on Comex the “gold price”. However, going forward I will make every effort to instead refer to it as CDG for Comex Digital Gold. As the same situation exists in silver, henceforth the Comex silver price will be referred to as CDS for Comex Digital Silver.

This post was published at TF Metals Report on January 6, 2017.