Saturday, December 27, 2008

Dec 27.08 commentary.

Good afternoon Ladies and Gentlemen:


Gold rose by $23.70 to 870.40; silver rose by 18 cents to close at 10.50.  The open interest on gold comex continues to rise, climbing by  3000 contracts to 290,000.  Silver’s OI remains relatively comatose.


However, events over at the comex delivery pits are getting very exciting.  Here is a graph of the events up to Dec 24.08 :


Vaporize COMEX 2008-12-26

Posted on by Scott Gallup

Gold: 47.9% depleted. Delivery notices today: 11,000 oz.
Silver: 46.3% depleted. Delivery notices today: 415,000 oz.

Link to all Vaporize COMEX posts:
Vaporize COMEX Graphs





COMEX trades hundreds of times more gold & silver than they actually possess. If enough investors demand delivery of PHYSICAL gold & silver COMEX stockpiles will be depleted. If COMEX runs out, the ensuing rush to grab physical metal to settle contract obligations *could* be the spark that ignites the long-awaited precious metals wildfire.

COMEX warehouses contain both “registered” and “eligible” metals. The “registered” metals are available for physical delivery. The “eligible” metals are not ready for delivery until they become “registered.” Although this pool of “eligible” metals is stored at COMEX warehouses there is no obligation to “register” these metals for subsequent physical deliveries.

The graph shows:
1) the cumulative ounces of metal delivery notices this month,
2) the ounces of “registered” metal available for delivery,
The percentage shown is based on the cumulative physical metal delivery notices for the month against the “registered” amount of metal in COMEX.
“Eligible” metal inventories are not shown as they do not have a direct bearing on the inve

In gold, 11000 oz were hit bringing the total to date at 1.356 million oz.  There are a total of 2.8 million oz of registered or “for sale” gold.

The comex still has 212 contracts left to go, or 21,200 oz.


In silver, a huge 415000 oz of silver were bought and stood for delivery immediately.  There are also 120 contracts or about 600,000 left to be hit.  The total silver standing for delivery for the month of Dec-January are as follows:


  1. As of Dec 24.08  31,090,000 million oz have been hit so far.
  2. On Nov 30.08 a further 1.0 million oz of silver options were hit and these stood for silver delivery. They are not in the Dec totals.
  3. There are .6 million oz left to be hit
  4.  There are 550 contracts moved to January and they will stand for delivery.  The totals here are 2.75 million oz of silver.


This makes the totals for silver delivery on the comex to 35.45 million oz (31.1 + 1.0 +  .6+  2.75).


What is very strange is that there have been zero oz of silver added to the comex.  In previous months,  if 2 million oz of silver left you would see the identical amt. of silver enter.


In gold, we have witnessed only a tiny 10,000 oz of gold enter on Dec 12.08.


On the flip side of things, the cartel seem not at all worried about the default as suggested by the increase in open interest and the 20,000 increase in commercial short side interest. 

Or is JPMorgan the only banker supplying the paper and everybody else abandoning the arena.


Dec 31.08 will be the day which we will see the score.  Apply for ring seats.


There is another disturbing event in the physical vs paper arena.  We are now seeing the premiums for Central Fund of Canada skyrocket.

The gold GTU is now 24% and the gold/silver CEF.a rose to 18.%.  The gold premium for the first time ever rose above the silver entity.


The operators of the fund are now seeking metal as the new owners pay net asset value plus a small premium. They are probably having a hard time finding the metal.  The fund grows as long as they can obtain metal and the high premiums pay for the insurance costs and storage costs.


The custodians of the fund have been seeking metal for over 2 months but cannot find any of sufficient quantity.


Here is the link:


GTU premium now above 24% - this has to be a record. So get ready for a big offering next week, to suck up more gold (who knows, this may be them buying right now).

And CEF back up to 18%

We have pointed out in the past Russia’s desire to increase its official holdings of gold.  Russia produces around 160 tonnes per year but they wish to grow the reserves by 513 tonnes.  It will need to buy the gold off the market to get to that level. They will compete with physical buyers llike central fund of Canada and other hoarders for the metal. 


Here is the newspaper article on Russia:

Russia to grow gold reserves 513 tonnes, coal 58 mln tonnes in 2008

MOSCOW. Dec 25 (Interfax) - Russia will grow its geological gold, silver and coal reserves by respectively 513 tonnes, 2,080 tonnes and 58 million tonnes in 2008, Natural Resources Minister Yury Trutnev told reporters.

Trutnev said Russia held 251 auctions for rights to solid minerals in 2008 and planned approximately 350 auctions in 2009.

The Russian Gold Producers' Union forecasts Russia will Russia will produce at least 165.6 tonnes of gold in 2008, including 147.6 tonnes of gold mine output and 12.1 tonnes of incidental or byproduct mine production. It produced 162.779 tonnes in 2007, including gold mine production of 144.791 tonnes.


If I read this right, the Russians produce 165.6 tonnes of gold. If they are going to increase their reserves next year by 513 tonnes, the obvious question becomes where is that huge increase going to come from? Could this news alert be correct? If so, yikes! That means the Russians will be buying an enormous amount of gold in a market that is already in a severe annual supply/demand deficit.

If that is true, and then the Chinese decide to add to their gold reserves, we will be at $2,000 per ounce in a blink. The Gold Cartel, or what is left of it, will be in the deepest of trouble, which is just what I explained to Commissioner Bart Chilton of the CFTC and the other three CFTC personnel at out meeting.  end


The ECB in its weekly announcement of gold sales, reported a sale by one captive bank of 6.12 tonnes of gold.  The previous week was only 1 week.  Judging from past performance, my bet is that is a collar by a commercial entity who had calls on gold by the ECB.  They decided to exercise that right and take the gold.  This is why physical gold is depleting.  Here is the link:


ECB Condition Statement

Tuesday’s condition statement indicated a fall in "gold and gold receivables" of E125Mm, attributed to sales by on captive CB. This is 6.12 tonnes at the present book value – last week’s total was 1.04 tonnes. A larger sale than usual, but still well below the notional weekly average implied by WAG2.

Best wishes for Christmas to those who care to receive them. end

The much revered ECRI, a leading think tank that maps leading indicators have stated that they saw a small movement up but the economy still remains close to the bottom.  Here is their report.


US yearly growth rate ticks above record low -ECRI

NEW YORK, Dec 26 (Reuters) - A measure of future economic growth in the United States and its annualized growth rate inched up in the latest week, but still indicate the U.S. recession is here to stay, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose in the week ending Dec. 19 to 106.6 from 106.2 in the previous week.

The index's annualized growth rate edged up to negative 29.2 percent from minus 30.1 percent, initially reported at minus 30 percent.

"With WLI growth barely above its all-time low seen two weeks ago, the U.S. recession will persist in the months ahead," said Melinda Hubman, research associate at ECRI.

The weekly index rose due to lower interest rates and higher stock prices and the gain was partly offset by higher joblessness, according to ECRI data.


We are hearing trouble at ECB members.  The ECB remember have kept interest rates at around 3 PER CENT when everyone else is at zero.  The British will move to zero shortly.


Just look at Italy’s debt to GDP.  It is at 104%.  Here is the wall street report:


05:10 Euro zone may have its wish for a weaker currency granted soon - WSJ
A "Heard on the Street" column says rising political tensions will lead investor confidence to crash, causing the devaluation the euro needs. The range in government debt trading levels indicate investors think a euro-zone member could default or quit the currency. Germany's 65%-of-GDP debt and 0.5% projected 2009 budget deficit pale in comparison to Italy's 104% and more-than-3% figures. Recall EU rules call for debt to be no more than 60% of GDP and annual deficits to be below 3%. With no agency set up to enable massive borrowing by weaker states, irresponsible, inflation-inducing borrowing seems possible. Germany may end up settling the bill when a member state defaults, but the eventuality may trigger a much-needed devaluation.
Reference Link (subscription required)
* * * * *


The USA have a far worse debt problem than the ECB.  Their debt ceiling right now is 10.6 trillion.  However if you add in the Fannie and Freddie debt of 5.0 trillion, the national debt is 15.6 trillion dollars.  The Fed is contemplating spending a further 8.5 trillion to bail out the banks such as Citibank, AIG etc.  Obama is also asking congress for a further 1.0 trillion dollars in infrasture spending.  

The total debt will climb to 25.-26 trillion dollars.  The GDP is 13 trillion so the debt to GDP will be over far the most dangerous of any nation on earth.


The usa is desperate to get the home prices higher.  They are trying desparately to lower mortgages to get prices higher so as to move the collateral off of bank balance sheets.


The losses so far to the economy have been as follows:


  1. 7 trillion dollars  …loss on the stock market value for everyone
  2. 6 trillion dollars…loss on home values.


Total losses 13 trillion dollars.


The Fed will have pumped in 8.5 trillion dollars, but that is still not enough.

Early in 2009, the ALT a’s implode which will further exasperate the collateral mess at the banks.  Expect further losses in this field.


In summary, the credit default spiral will still be very pronounced even though the Fed is massively printing money.  Legislators will demand that the banks loan this new money out.  I cannot see how they will do this with such massive losses on their books.


Have a great weekend



Wednesday, December 24, 2008

Dec 24.08 commentary.


Good evening Ladies and Gentlemen:


A Merry Christmas to you all.


I will keep this short tonight.


Gold closed up by 10.00 to 846.70. Silver rose by 10 cents to 10.32.


The open interest on the gold comex  fell by 3700 contracts to 287000.  Silver’s OI remains comatose at 85000 rising by a scant 118 contracts.


At the silver comex, we have still 30.6 million oz being hit upon which you must add the 1.0 million from November.  There is 3.0 million oz moved to January and we have about   50 contracts or 250,000 oz left to go.  The number of oz remains at 34.7 million oz.  There have been zero oz of silver added to the comex.


In gold we have 1.34 million oz of gold standing.  There is another 400 contracts or 40,000 oz of gold.  Again there have been no additional oz of gold added to the comex.


In economic news, Libor rates remained at 1.47%.  The gold lease rate for the 3 month level thawed a bit and its rate is now 1.12%.  Silver’s lease rate is exactly equal to libor.  The comex prices of silver remain close to backwardation.


The employment picture is lousy:


08:30 Jobless claims for w/e 20-Dec reported 586K vs. consensus 558K
Prior week revised to 556K from 554K. Continuing claims for w/e 13-Dec reported 4.370M vs. consensus 4.410M. Prior week revised to 4.387M from 4.384M.
* * * * *

US new jobless claims surge to 26-year high

WASHINGTON, Dec 24 (Reuters) - The number of U.S. workers filing new claims for jobless benefits jumped by 30,000 to a 26-year peak last week, government data on Wednesday showed, as the country's year-long recession continued to chill the labor market.

Initial claims for state unemployment insurance benefits rose to a seasonally adjusted 586,000 in the week ended Dec 20 from a revised 556,000 the prior week, the Labor Department said. It was the highest since the week ending Nov. 27, 1982.

Analysts polled by Reuters had forecast 560,000 new claims versus a previously reported count of 554,000 the week before.

A Labor Department official said there were no special factors influencing the data and no noticeable impact from severe winter weather in northern parts of the country.


The income picture is also pretty bad:


08:30 Nov Personal Income (0.2%) vs. consensus 0.0%; Spending (0.6%) vs. consensus (0.7%)
PCE Deflator y/y reported 1.4% vs. consensus 1.5%; PCE Core yy reported 1.9% vs. consensus 2.0%. Prior Income revised to 0.1% from 0.3%.

·        *


This came over the wires early in the session:


Financial Condition of TARP Bailout Companies Likely Worse Than Publicly Disclosed, Analysis Finds

More Than Eighty Percent Employ Aggressive Accounting and Likely Will Experience
Restatements and Other Adverse Events

LOS ANGELES--(Business Wire)--
The vast majority of financial services companies being bailed out under the Federal Troubled Assets Relief Program (TARP) are likely in worse condition than publicly disclosed, according to an analysis announced today by Audit Integrity, an independent research firm that measures corporate integrity risk.

More than 80 percent of TARP financial services companies have a "Very Aggressive" or "Aggressive" Accounting and Governance Risk (AGR) rating based on their most recent regulatory filings. As a result, these companies have a high statistical likelihood they will restate their earnings and suffer from other adverse events, including regulatory actions, shareholder litigation and bankruptcy. By comparison, two-thirds of the more than 7,000 publicly-traded North American companies rated by Audit Integrity have "Average" or "Conservative" ratings.

The AGR rating is a forensic indicator of the transparency and reliability of a corporation's financial reporting and identifies metrics most highly associated with financial statement fraud, as measured by SEC enforcement actions.

"As a group, these are very risky companies. The use of federal money to bail them out should be pause for concern on several levels," said Jack Zwingli, CEO of Audit Integrity. "Unfortunately, the odds are that a number of these companies will fail at some level in the future, which raises the concern that the Federal Government is throwing good money after bad. At a minimum, before we hand over government funds to these firms, we should demand a thorough review of their accounting and corporate governance practices. The recipients of the bailout money should be required to run their business with integrity."

The Audit Integrity analysis focused on the 25 financial services companies that have received more than 90 percent of TARP funds to date. Of the 14 financial services companies that received "Very Aggressive" ratings, ten were among the recipients of the largest amounts of TARP money, including:

* American International Group, Inc.
* Bank of America Corporation
* Citigroup, Inc.
* Fifth Third Bancorp
* Goldman Sachs Group, Inc.
* J.P. Morgan Chase & Co.
* Merrill Lynch & Co. Inc
* Morgan Stanley
* PNC Financial Services Group, Inc.
* Wells Fargo & Company

General Motors Corporation and Ford Motor Company, which have been mentioned for
possible TARP bailouts, also have low Audit Integrity ratings.

Audit Integrity`s analysis is available on or by calling

About Audit Integrity

Founded in 2002, serving investors, insurers, auditors and corporate finance professionals, Audit Integrity is a leading independent research firm that rates more than 7,000 public companies based on their corporate integrity. In addition to its flagship Accounting and Governance Risk (AGR) ratings, Audit Integrity also forecasts class action litigation risk, material financial restatement risk, and equity performance risk. The statistical correlation of these ratings has been confirmed by internal and third-party tests. Audit Integrity has offices in Los Angeles and New York City. For more information, please visit

This came out after the market closed.   Please read carefully what this Japanese official stated today.


Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says

Dec. 24 (Bloomberg) -- Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.

The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes "drastic measures" to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.

"It’s difficult for the U.S. to borrow its way out of this problem," Mikuni, 69, said in an interview with Bloomberg Television broadcast today. "Japan can help by extending debt cancellations."

The U.S. budget deficit may swell to at least $1 trillion this fiscal year as policy makers flood the country with $8.5 trillion through 23 different programs to combat the worst recession since the Great Depression. Japan is the world’s second-biggest foreign holder of Treasuries after China.

The U.S. government needs to spend on infrastructure to maintain job creation as it will take a long time for banks to recover from $1 trillion in credit-market losses worldwide, Mikuni said. The U.S. also needs to launch public works projects as the Federal Reserve’s interest rate cut to a range of zero to 0.25 percent on Dec. 16. won’t stimulate consumer spending because households are paying down debt, he said.

U.S. President-elect Barack Obama wants to create 3 million jobs over the next two years, more than the 2.5 million jobs originally planned, an aide said on Dec. 20. Obama takes office on Jan. 20.

Marshall Plan

Japan should also invest in U.S. roads and bridges to support personal spending and secure demand for its goods as a global recession crimps trade, Mikuni said.

Japan’s exports fell 26.7 percent in November from a year earlier, the Finance Ministry said on Dec. 22. That was the biggest decline on record as shipments of cars and electronics collapsed.

Combining debt waivers with infrastructure spending would be similar to the Marshall Plan that helped Europe rebuild after the destruction of World War II, Mikuni said.

"U.S. households simply won’t have the same access to credit that they’ve enjoyed in the past," he said. "Their demand for all products, including imports, will suffer unless something is done."

The plan was named after George Marshall, the U.S. secretary of state at the time, and provided more than $13 billion in grants and loans to European countries to support their import of U.S. goods and the rebuilding of their industries

Currency Reserves

The Japanese government could use a new Marshall Plan as a chance to shrink its $976.9 billion in foreign-exchange reserves, the world’s second-largest after China’s, and help reduce global economic imbalances, Mikuni said.

The amount of foreign assets held by the Japanese government and the private sector total around $7 trillion, Mikuni said.

Japan will also have to accept that a stronger yen is good for the country in order to reduce excessive trade surpluses and deficits, he said. The yen has appreciated 23 percent versus the dollar this year, the most since 1987, as the credit crisis prompted investors to flee riskier assets and repay loans in the Japanese currency.

"Japan’s economic model has been dependent on external demand since the Meiji Period" that began in 1868, Mikuni said. "The model where the U.S. relies on overseas borrowing to fuel its property market is over. A strong yen will spur Japanese domestic spending and reduce import prices, thereby increasing purchasing power."

The usa have provided funding for the bailouts equivalent to 8.5 trillion dollars. Its Federal Debt is approximately 10.6 trillion without this new funding.  If you add the Fannie and Freddie bailout of 5 trillion dollars and the new 1 trillion dollars of new spending by Obama you will have by Feb 09 a new Federal Debt of 26 trillion dollars or 180% of GDP.  This is by far greater than any other nation on earth.  Italy which is on the verge of bankruptcy has 104% of Debt to GDP.

You can now see why Japan and of course China are very worried about the foreign reserves which are dominated in usa dollars.


The housing sector is still is disarray.  So we still have bankers banging their heads against the wall.


Many say that bankers refuse to lend because of all these credit defaults by mortgagees.  

This is true, but we also have bankers banging their heads against the wall because the consumer refuses to pay for goods.  We have a demand strike to go along with the credit default spiral.


Speak to you on Saturday.


Tuesday, December 23, 2008

Dec 23.08.commentary


Good evening Ladies and Gentlemen:


Not much to report tonight.  Gold was hit after lousy  economic results.


The first economic news to report was the housing sector.  As I have pointed out to you on many occasions, that if the housing sector does not improve, the economy weakens further.


Here are the news events from the housing sector:


10:00 Nov New Home Sales reported 407K vs. consensus 415K
Prior figure revised to 419K from 433K
* * * * *

U.S. November home sales fall 2.9 pct

WASHINGTON, Dec 23 (Reuters) - Sales of newly built U.S. single-family homes slowed in November to the weakest levels since 1991, according to Commerce Department data on Tuesday that offered fresh evidence of housing market distress.

The seasonally adjusted annual sales pace of 407,000 was down 2.9 percent from October and was the lowest rate since January, 1991.

Economists polled by Reuters had forecast sales would notch a 420,000 rate compared with a downwardly revised 419,000 in October, previously reported as 433,000.

The median sales price rose to $220,400 from $214,600 in October. The median marks the half-way point, with half of all houses sold above that level and half below.


10:00 Nov Existing Home Sales reported 4.49M vs. consensus 4.93M
Prior figure revised to f.91M from 4.98M.
* * * * *

U.S. existing home sales plunge 8.6 pct in November

WASHINGTON, Dec 23 (Reuters) - The pace of existing home sales plunged a record 8.6 percent in November to a 4.49-million-unit annual rate, while the median home price dropped for a fifth straight month to $181,300, a National Association of Realtors report showed on Tuesday.

The median home price fell 13.2 percent on an annual basis, the largest drop since NAR began keeping records in 1968 and probably the largest since the Great Depression, Lawrence Yun, NAR chief economist told reporters.

Economists polled by Reuters were expecting home resales to set a 4.90-million pace. October's figure was revised downwards to 4.91 million, from 4.98 million.


10:02 Oct. House Price Index reported (1.1%) vs. consensus (1.3%

First of all, new home sales plummeted much more than expected.  These homes are used as collateral to the banks and the prices on homes are not moving up.


Existing home sales plunged by a full 8.6% in vomember.  The median home price dropped for the 5th straight month to 181,300.

Libor remains at 1.47%.  The lease rate on silver remains at 1.42% but gold lease rate fell to 1.16 for the 3 month lease.

Silver is almost in backwardation.  Gold is in contango slightly.

The GDP results for November were reported.  Here are the figures:


08:30 Q3 GDP reported (0.5%) vs. consensus (0.5%); Personal Consumption (3.8%) vs. consensus (3.7%)
GDP Price Index 3.9% vs. consensus 4.2%; Core PCE 2.4% vs. consensus 2.6. end


The economy is very weak.


This was the big news of the day:


U.S. Stocks Decline on Carmaker Debt Concern; GM, Ford Slide

Dec. 23 (Bloomberg) -- U.S. stocks fell for a second day on speculation that emergency loans won’t be enough to save the auto industry as the government confirmed the economy contracted the most since 2001 in the third quarter.

General Motors Corp., which received $9.4 billion in assistance from the government last week, and Ford Motor Co. slid more than 15 percent after their debt was cut deeper into junk. Textron Inc., the maker of Bell helicopters, tumbled the most in seven years after saying profit will trail forecasts and it will exit most of its finance businesses.

“The money that we saw committed last week just addresses the short-term situation,” Walter “Bucky” Hellwig, who manages $30 billion at Morgan Asset Management in Birmingham, Alabama, said of the automakers. “The whole consumer mindset is in a process of change as layoffs increase and unemployment ticks higher. It’s very easy to postpone the purchase of an automobile.”...


The stock market fell by 100 points today on concern about GM and Chrsyler debt.  GM fell below 3.00 for the first time in 100 years.


There was also tragic news tonight as a fund manager for BNParibas, the French bank who invested his clients funds in Madoff investments committed suicide.


I will speak to you tomorrow.




Monday, December 22, 2008

Dec 22.08 commentary.


Good evening Ladies and Gentlemen:


Gold closed up by 10.00 to 846.30 and silver remained unchanged.

The following  is the highlight at the silver comex:



On 12/12 the total COMEX silver inventory stood at 126,826,996 ozs but the dealer registered inventory was 77,756,068 ozs while the eligible inventory was 49,070,928 ozs. Today, 12/22, the total inventory stands at 126,845,345 ozs which shows almost no change from 10 days ago. However, it is not the total COMEX inventory that matters; it is how much the dealers have to meet delivery requirements. The dealer’s inventory (registered) stands at 67,186,284 which is down by 10,569,784 ozs since 12/12 while the customer inventory (eligible) stands at 59,659,061 ozs an increase of 10,588,133 ozs. What this means is that investors have taken delivery of 10.5 Mozs over 10 days but have not taken it off the exchange (yet?). None the less this is extremely bullish as this is 10.5 Mozs of silver which is not available to the dealers. At this rate of depletion of dealer inventory the dealers will be out of silver in 67 days…i.e. February 2009. It will be interesting to see how low the dealer inventory gets before the short squeeze comes into play!
Cheers  end.

Here are two of the big stories of the day:


Commercial Loan Defaults May Triple as Rental Income Declines

Dec. 22 (Bloomberg) -- U.S. commercial properties at risk of default could triple if rental income from office, retail and apartment buildings drops by even 5 percent, a likely possibility given the recession, according to research by New York-based real estate analysts at Reis Inc.

Lenders that used optimistic rent estimates to grant mortgages beginning in 2005 stand to lose as much as $23.1 billion, or 7.02 percent, of total unpaid balances if landlords lose 5 percent of net operating income, according to Reis. Analysts examined data on 22,890 properties that together may account for unpaid loans of about $329 billion in 2009, said Victor Calanog, director of research….


Japan Exports Plunge Record 27% as Recession Deepens

Dec. 22 (Bloomberg) -- Japan’s exports plunged the most on record in November as global demand for cars and electronics collapsed, signaling more factory shutdowns and job cuts are likely as the recession deepens.

Exports fell 26.7 percent from a year earlier, the Finance Ministry said today in Tokyo. That was more than the 22.3 percent decline estimated by economists and the sharpest since comparable data were made available in 1980....





If commercial loans  plummet, then you will see major hits on company earnings on Wall Street.


Japan’s plunging exports are a sign that demand has dried up completely.


The Baltic dry index fell again today and it has fallen over 92%.  Ships have no cargo to carry.







Libor continues to decline falling to 1.47%.  Banks are still not loaning.

Bernie Madoff when arrested, stated that the total lost money was somewhere around 50 billion dollars. 

The total dollars so far reported by victims is somewhere around 17 billion dollars.


The question is where is the rest of the fraud?


Madoff also reported that he mimicked the major banks.  Did he lease gold from the central banks knowing full well that the entire industry is a fraud?


In the Madoff crime, many people reported to the SEC that it was impossible to trade the number of the options that Madoff claimed he made.  The open interest on the option was too small for the billions of dollars of trades necessary.


This should have opened the eyes of the regulators that this was an outright scam.

Did the regulators looks the other way, because they knew that they could not expose the massive gold short?


Something to think about…


Speak to you tomorrow.



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