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A New Wrinkle In The Paper Gold Con Game - Craig Hemke

A New Wrinkle In The Paper Gold Con Game - Craig Hemke
By Craig Hemke 4 years ago 12276 Views No comments

August 10, 2016

Here's a story that came out earlier today. Maybe it's just me, but it's easy to see a Bullion Bank plot here. For months, we've documented all of the various points of demand for gold in all its forms. And now, as The Bullion Bank Paper Derivative Pricing Scheme is being stretched to extremes, suddenly the LME wants to offer another form of paper gold with which to screw everyone.

And note who's involved here...not only is it the LME working in conjunction with the Evil Of Evils Goldman Sachs, they're all "working in conjunction" with The World Gold Council. IF ANYTHING SHOULD PROVE FOR YOU ONCE AND FOR ALL THE THE WGC IS A SHADY, NASTY AND WORTHLESS ORGANIZATION, THIS SHOULD DO IT! Here's your link from Reuters detailing the news:

LONDON, Aug 9 The London Metal Exchange (LME) said on Tuesday it is planning to launch spot and futures contracts for gold and silver in the first half of 2017, adding to its list of products which includes copper and aluminum.

The 139-year old exchange is working in collaboration with the World Gold Council, an industry body backed by gold mining companies such as Barrick Gold and Goldcorp, and is supported by five banks and proprietary trader OSTC, which have committed to provide liquidity.

"The initiative has been driven by the need for greater market transparency, to support and aid ongoing regulatory change, provide additional robustness to the precious metals market, broaden market access," the exchange and its partners said in a statement.

Financial market transparency has been a major focus for regulators after evidence of price manipulation in lending rates between banks in the Libor scandal in 2012.

As regulators continue to review commodity markets, the bullion industry is braced for further changes that could ultimately include a mandatory central clearing or more expensive bilateral trading.

Banks and bullion operators have looked for ways to preserve London's role as a major global trading centre, while increasing transparency of a market which can trace its roots back to the 17th century.

The London Bullion Market Association (LBMA), another industry body whose members are mostly banks, refiners and dealers, separately asked exchanges and technology firms in October last year to bid for services such as a gold exchange or a clearing platform.

London currently dominates the global over-the-counter gold trade with an estimated $5 trillion changing hands every year, while New York's Comex contract sets the benchmark for futures.

The LME plans physically delivered spot, futures and options contracts. The gold will be 100 ounces in size (worth around $133,600 at current prices) and silver 5,000 ounces. All contracts will be cleared through LME Clear, the exchange's clearing house, which has an annual traded notional value of $12 trillion.

LIQUIDITY

The World Gold Council CEO Aram Shishmanian said that they had initially engaged with around 30 firms, but only Goldman Sachs, ICBC Standard Bank, Morgan Stanley , Natixis and Societe Generale signed up to support the contracts from the launch day.

After the transformation of precious metals benchmarks in 2014, led by a regulatory drive to make them more robust to attempts of manipulation, banks have become more cautious.

Several of them have run into trouble with regulators over misdemeanours in their precious metals trading business.

The benchmarks are widely used by producers, consumers and investors to trade and value the metal. Gold and silver are among the eight major market benchmarks that are regulated by Britain's watchdog Financial Conduct Authority (FCA).

Frankly, my favorite part of the entire article is this:

Several of them have run into trouble with regulators over misdemeanours in their precious metals trading business.

"Several of them have run into trouble over misdemeanors"....GIVE ME A BREAK. Misdemeanors. That's pretty funny.

Anyway, the new "gold" contract looks to begin trading by summer of next year. (Maybe the entire fraud will have collapsed by then?) Here are the actual specs. Have a look and see if you notice a rather critical distinction/component of this latest fraud: http://lme.com/metals/precious-metals/gold/

Here, please allow me to help. What word jumps off the page at you from this screenshot below? (Hint: It starts with a "U".)

So the new, "physically-settled" LME gold contract is one where "seller transfers unallocated gold to...the LPMCL member bank (Goldman)...and buyers receive unallocated gold at any LPCML member bank (Goldman)". THAT SOUNDS LIKE A GREAT FREAKING DEAL! WHERE DO I SIGN UP?

But, seriously, what a gigantic SCAM this all is! These Banks will do literally ANYTHING to perpetuate their Paper Derivative Pricing Scheme. This latest move to collect gold and fees while scamming investors into believing that they own "physical gold" is just another example. And again, that the WGC is "collaborating" in this con should tell you all you need to know about that organization, too.

You don't own it unless you hold it. Period, end of story. Sadly, as we've come to learn over the years, everything else is just a Banker scheme to screw you.




Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.


The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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