On Estimating Population of Gold Bars

I owe reader Michael H an answer to the question of "how many of the 200,000 bar signatures we see, are from GLD?". The answer is 158,289 i.e. roughly 80% of all bar signatures we know about, have appeared in GLD at least once, the other signatures are known from 18 other ETF's. Now I need to explain why I thought this worthy of sharing in a post.

GLD inventory continues to decline and many theories abound regarding the 'drain'. I like most of all the recent TFMetals article discussing the GLD decline, it amuses me that the guy refuses to address (head on) the issue of whether the inventory is real or not - best I can make out is that Turd is not in a position to admit the metal is real, too bad since it affects the stability of some of his other arguments. Some good discussions came out of that thread - in particular I was interested in whether the 'real or not real' is a black & white question:


I wish my data could help with this question but it only makes things muddier - the key problem is 'which percentage is real, which is fake, and how can it be proved?'. Breaking it into falsifiable tests actually ends up working heavily against the initial assumption. Random example - deciding that all the Russian gold bars are fake would eliminate a small percentage but then you have the hairy task of researching which refiners are not legitimate, perhaps one might decide 'JSC Ekaterinburg Non-Ferrous Metal Processing Plant' is a fake refinery but then you have to contend with established history. Having the refinery is real but the bar numbers are fake then you have to wonder what became of the rest of the gold bars they produced ... and so on. Successfully debunking all those steps means (congratulations) you may have conclusively proved that 11 bars are fake ... now for the remaining 201,221 bars across 70 different refiners - I hope you can see the effort involved to conclusively prove a given percentage of the inventory is not real. I haven't ever seen this level of analysis from the 'no-metalists' to support their version of events, and I can only hope that hopefully stronger models (of the gold market) will always replace weaker models, like with Bron Suchecki's casual demolition of Dave in Denver's shortage claims.

Gratuitous shot of Russian Gold bars (not Ekaterinburg).
The 'no real metal' folk have a big job ahead of them,
disproving images like these and countless others.
I digress. What are the '200,000' bar signatures? For those following the database project, you may know that this number is the number of unique gold bar signatures we've seen float through the data, over a period of 3 years. Some are bar signatures we see come and go, we're calling this 'dark bullion' when we see it moving off the ETF register. The highest recorded figure (mine) is the peak in December 2012 @ 109,318 bars. Currently our tally shows 86,453 bars in GLD* (link) and historically we have seen a cumulative 158,289 bar signatures appear in the HSBC vault.

* IMPORTANT NOTE: Some of the signatures we see will be a result of re-classifications. This is a limit of reading error with the data and for now it is safe to treat my figures with a plus or minus 3%. Also there are a few small discrepancies like we see 86,453 bars while the most recent document says 86,452 we're looking into this. The numbers here indicate time of writing and are really more of a 'BACK OF THE ENVELOPE' calculation, pending further processing.

The dark bullion data will cause some difficulty for Mr Turd Ferguson because if he is already not liking the idea of all the gold (in GLD) being real then he will certainly not appreciate my suggestion that the GLD data shows us an image of real inventory 180% larger than what is officially listed.

My gold numbers currently come from 19 different gold ETF's - represents approximately 56,830,903 fine oz of 'currently visible' gold (however because I've been away recently, only the SLV and GLD records have been brought up to date as of 3rd May 2013, some of the older goldmoney records are quite stale).

Nick Laird of Sharelynx tracks a wider range of ETF's as well as the comex inventory- his tally is even larger; accounting for 86,150,408 oz of visibly held registered gold as of 7th May 2013. (note: there are a few ETF's that I don't track because their bar list is either not generally accessible or not processable - like ZKB for example).

So, my total bar signature count is closer to 201,232 gold bars, expressed as fine oz:
the breakdown is: GLD (34,676,331) + plus other ETF's (22,154,572) = 56,830,903 total Visible oz.
A further 23,697,515 oz is currently 'invisible', for a total of around (80,528,418 fine oz). Astute readers will notice here that the dark bullion calculation here (63% of visible gld) doesn't completely match the 80% figure at the top of the article. Although I lack the time to fully explain that, the reason is because some bars which have appeared at least once in GLD, do appear in the other ETF data as well. This would be best represented graphically*.

Anyway, the reason I'm really writing is that while pondering these figures last weekend, as well as an observation from Bron Suchecki regarding Johnson Matthey's market share, I came to a nifty conclusion that might allow us a small insight into the total size of the 'gold pool' that these banks have command of. A few months ago I wrote about a peculiar formation of 6-digit bar sequences from refiner Johnson Matthey, it appears to start at '100000' and appears almost unbroken with the highest being 217,272. This suggests a production run of at least 117,272 bars (which we know has spanned several years). NOTE: Sequence does contain some duplicates.

In the data (scrubbing out some duplicates, and using round numbers from here) we know of approximately 64,000 bars in that sequence (~54%), and we might surmise that the remaining 53,000 bars (~46%) must be out there somewhere - with the best classification for those being 'Ghost Bullion' (since we cannot measure them directly although we see something, and some bars may already be dead but appear alive). My main point is the Johnson Matthey Sequence represents 32% of our total known signatures (sample size), so if we could say that the distribution of JM bars in the large sample of gold we can see fairly and consistently matches the distribution in the London Gold 'pool', then we could put forward that the total expected bar signatures is somewhere in the realm of:

Total London Gold bars = ( 117,272 / (32/100) ) = 366,475 bars = approx. 146,590,000 oz = approx. 4,559 metric tonnes. This crude estimate is much lower than Bron Suchecki's estimate of the total size of the OTC 'dark pool' market, but really I guess I just wanted to demonstrate if you're still thinking in terms of 'oh noes there is a shortage of 400 oz gold bars' then you need to be slapped hard ... REALLY HARD.

* Apologies for the crudity of these ideas being put forward. I'm still under the pump at work and hence incredibly time-poor, but I wanted to float these ideas for discussion.

p.s. Most of these totals were approximates at time of writing. Today, I see that GLD is still being 'drained', however in perspective against the total amount of gold floating around out there, the amount being 'drained' becomes a 'YAWN' event - for now, anyway. Wake me up when 50% of GLD is gone.

p.p.s. The typical defense of the 'no-metalists' is that they will quickly jump to the 'oh the gold is real but there are multiple claims on it' line of argument ... no no no, not good enough unfortunately - you gotta stick to one interpretation because otherwise it's like chasing each-other around the maypole. I discuss the stratified levels of argument here: 'How Can We Trust the Bar List Data?'

80 comments:

Endzeit said...

How do you interpret the drain of the GLD but not the drain of SLV, although Silver has fallen much more?

Additionally how do you explain the fact, that while the GLD is drained, that COMEX eligible and now also registered Gold is rapidly draining, too, while CRIMEX Silver in the warehouse is incresing?

And last but not least:
How do you explain the extremely low GOFO? (the price to pay to lend money with gold as collateral -> low GOFO = low interests to pay to lend money against gold)

Warren James said...

@Endzeit, the best answer is that the bar list data doesn't contain any interpretations for what you've asked. Same for GOFO, I don't study it so I don't have an opinion (sorry). But, why should there should have to be any correlation between gold and silver? The two are not the same.

This is my advantage - that I can just describe the gold stock picture as aggregate. I leave the market interpretations for those who have a vested interest in market interpretations.

What I will offer the following: I think that silver inventory is increasing because there is shitloads of silver on the market at the moment. Main reason? because the same dark bullion effect we have in gold, is also present in silver (but it is more pronounced).

Personally, I think the GLD inventory is changing because the big banks are playing silly-buggers with the inventory and price. God only knows what the bastards are up to this time (and he's not telling us). Bear in mind that the GLD inventory is just moving from 'visible' to 'not visible' so it's business-as-normal, i.e. "the banks are changing things to suit their own interests, whatever that may be".

If we see a complete or partial 'drain' of GLD then I think that's a different story. Unfortunately it would mean we lose a lot of visibility to the world's stock of gold, but at least we have all this great data in the meantime.

Warren James said...

(and just to clarify that) ... the reason the bankers would prefer to play games with gold and not silver is that I believe gold is the true monetary metal (and that silver is an industrial metal). So any monetary shenanigans will be related to gold.

Bron Suchecki said...

Good work. I have more respect for those saying the ETFs have no gold than those saying it is partially backed.

I would like someone to say how much % is backed and how much % is faked bar numbers.

Anyway, these discussion are a bit of a lost cause as they often can't see the contradictions in what they claim. Eg if ETFs don't have metal and thus money flowing into them has suppressed the price (ie no real gold was bought), then when it flows out it isn't pushing the price down.

S Roche said...

Bron,

So, the gold that isn't there is not driving the price down when it's sold?

Man, with logic like that count yourself lucky you own the Perth Mint.

victorthecleaner said...


Warren,

nice work! I have some comments and questions. (Btw I do think the gold is real).

If you see a bar leave the ETFs and enter the "dark pool", you don't know who owns it. It might be the bank, supporting their reserves, but it might also be the grandson of the prince of Abu Dhabi. In the latter case, the bar is unlikely to pop up again any time soon even if the bank fails. The bar might also have been melted down into jewellery or 1kg bars that have been sold over the counter.

So what I would be interested in is the rate at which bars leave the ETFs and the rate at which known bars return to the ETFs. Also which proportion of these bars returns to the ETFs, or, alternatively how "old" these returning bars are, i.e. how long they have been outside the ETFs in the meantime.

Victor

Warren James said...

Hi VtC, You are exactly right regarding the fate of a bar in the pool. You'll be happy to know your question is more or less the focus of my dark bullion study and that we'll have those figures for both silver and gold. The data concepts are so large I've been reduced to socializing the details over time.

My day job gets in the way of the comprehensive study, otherwise we would have it already. Also, the age of bars will require more detailed study on the numbering sequences (p.s. it's a study that the Perth Mint would probably have resources to do, but I struggle on my own). The good news is that large inventory changes like the one we're experiencing and passage of time end up increasing the resolution of the picture we see. Regards, Warren

Bron Suchecki said...

S Roche - I was trying to put myself in their mind - if the ETF doesn't have any gold, then when people sell the ETF shares there is no physical gold being sold.

Lets just not think about how an ETF with no gold is arbitraged to the real spot physical gold price, oh sorry, the APs (all of them) are colluding and just going naked short when they sell ETF shares and any money they lose when they buyback the ETF shares is made good by the Federal Reserve (assumingly in a pool with other central banks otherwise the other CBs get a free ride).

S Roche said...

Bron,

I think I must have been in Denver when I wrote that...and surely you mean "any money they loose", other than that you seem to have a pretty good understanding of how it all works.

duggo said...

Dear Warren
It's only because you are " I'm still under the pump at work and hence incredibly time-poor" that you actually have time for this sort of work. When you "retire" you don't have time for anything. It'll take me most of my day to appreciate your hard work.

" I think that silver inventory is increasing because there is shitloads of silver on the market " Obviously "shitload" is the group terminology for many Silver bars. Which is rather amusing when you see various Silver sites banging on about the shortage of Silver and then offering their readers special offers.

Most of the people shouting about shortages are either selling the stuff or relying on advertising from their reader base.

I have a modest 500+ ounces of Gold stashed away in various places (I feel a meme cartoon coming on) and have become resigned to the fact that one month I'm "wealthy" and the next I'm 'poor". I wonder how the Bullion Banks and Perth Mint see it? Their "worth" is going up and down like a yoyo.

Surely big Gold bars are disappearing all the time as they get melted down to ever smaller bars, coins and jewellery. Does anyone keep a record of that?

Warren James said...

@Duggo, haha, yes - true. I felt I had to upgrade my vernacular to better highlight the scientific discrepancy between the story the raw data tells and the opines of the silver blogs. When I write my final set of definitions I will be sure to include that one.

p.s. I assume the Mints would keep records of the serial numbers they put to melt, but assuming it is collected at all, getting access to that data would be difficult and certainly won't be made public because it gives away all sorts of details for the mint operations ... i.e. even if Bron had that info I doubt he is in a position to share it. Ditto for anything inside Royal Canadian Mint Canada or Rand Refinery. So that's a real limit of resolution that we have with the bars data, so any graph viewing the aggregate has to factor in those things we can't know (known unknowns, etc). I've really enjoyed this data challenge, to be honest.

Endzeit said...

Dear Warren,
thanks for reply.
You write:
"... the reason the bankers would prefer to play games with gold and not silver is that I believe gold is the true monetary metal (and that silver is an industrial metal). So any monetary shenanigans will be related to gold."

So this statement means nothing else, than the behaviour of the GLD, the inventories and price does rationally not fit.

I had the impression from your articles, that paperbugs and gold-haters see them as support of their opinion that bankers are manipulating LIBOR, energy-prices, currencies, bond-prices, ICAP, greek budget-data for EU-membership, naked short selling, fraud of mortage documents, almost everything, but only the gold-market was the unmanipulated one (despite IMF and central banks had admitted it themselfes to manipulate it).
Ignorance is a bliss for paperbugs.

Glad you do not follow "binary thinking" like "Turd" is wrong, therefore the gold markets are not maipulated.

Endzeit said...

MR. Suchecki,

I'm shocked, that the Perth Mint has leading people, who are not informaed about the PROVEN conspiracies of the banks!

You cannot imagine that a handful of APs can conspire, although a dozen of banks had manipulated the LIBOR for many years?

You cannot imagine that, although GS was conviced of naked short selling?

If your naivety is any measure for the establishment, I completely understand, how it was possible that MBS were rated AAA and everyone was relying on the provided data.

Since 2008 the world financial system was THREE times at the brink of total collapse (post Lehman, and two times EUR+greece). That is not the number from a blog, but it is from the highest ranking officials.

How can a person in a position of yours, after all the conspiracies of the banks that have become public, still ignore the TREMENDOUS interests, that the trust into a monetary system that is built on nothing else than trust, is protected with ALL METHODS available?!
And - even worse - although we have the PROOVE how these forces have been conspiring for years, even decades to rip of others?!

Every intelligent person who is informed about the history of the FED, which was created by the bank-cartel, for the bank-cartel itself, should become VERY careful before claiming that strange behaviours were absolutely normal.

If you are not familiar with the history of the FED, I suggest to watch a certain video. A cartel that was capable to turn the intention of politics to break the power of the NY money-trust into an agenda FOR the money-trust (and how they doid that!), already 100 years ago, should NOT be underestimated.
Or are you in your position only, because you are spreading wrong trust into a system that has been proven to be totally rigged?

http://youtu.be/eF0-Pm1Q-nM

ampmfix said...
This comment has been removed by the author.
Bron Suchecki said...

Duggo, the Perth Mint doesn't own any of the metal in our business so it doesn't matter to us what happens to the price. The metal is owned by our unallocated clients, they are the ones experiencing the wealth yoyo. That is the whole point of the Perth Mint's business model. Your comment tells me the Mint has a long way to go in communicating its business to its potential clients properly.

Bron Suchecki said...

If we don't keep track of how much of a coin's mintage we melt down when they are sold back to us I doubt we record bar numbers melted down, who has the time to do that and to what end?

S Roche said...

Seeing how marijuana is now legal in Denver it all makes sense. The latest from Dave, as endorsed by Turd Ferguson:

http://truthingold.blogspot.com.au/2013/05/the-truth-about-gold-being-drained-from.html

I have previously defended Turd to most comers, but he has lost me with his unquestioning promotion of this.

Warren James said...

Google's ever-zealous spam filter is causing some issues @ the minute, please bear with us as we rescue various items from the spam bin.

Hey S Roche, thanks for the link to Dave in Denver's new article, sort of. I like how he practically says in the same breath that Asia is buying all the gold that London doesn't have, it made my head hurt (again). Now I need some more whiskey.

I also note from his narrative he is now in the business of 'connecting the dots' which I thought was our Screwtape Files copyright tagline. He needs to be slapped hard, really hard.

S Roche said...

WJ,

Yup, and the way you free up gold if you need to buy it is to reduce the price. I was previously in favor of legalized marijuana.

S Roche said...

@Endzeit,

I have read Bron state many times that he believes there is manipulation but that it does not amount to suppression.

I agree with him on the first: that there is manipulation and that it cuts both ways: up and down. I trade gold so I watch the price about 18 hours a day and I have often seen the price "walked" up a trend line, bounced before the 5 minute or hourly or daily changeover so as to paint the charts to represent whatever that large trader wants. I have also seen in US trading, when the price would not rise in Asian trading, that the price has been walked up to a critical level just to be smashed down again. As you state, lots of markets are manipulated.

As to suppression, for me the jury is out. Obviously, it will be resolved in the physical market. Unfortunately the skerricks of real information about possible suppression, and the real and obvious motives for doing so, are drowned out by the over-abundant ravings of lunatics. This may be a deliberate ploy of The Cartel.

S Roche said...

@E

I should also remind people of the smash-down in gold prices moments before the SNB announced the "peg". This is sufficient evidence of manipulation/suppression, but gets lost in the fog of bullshit. As I surmise, The Cartel may be verrrry clever that way.

S Roche said...

@E,

(Sry, no edit button)

Re Bron's views on manipulation this is a good place to start:

http://goldchat.blogspot.com.au/2009/06/death-of-gold.html

The key is volatility, we have seen a bit of that recently.

Louis Cypher said...

@Bron,
Do you guys make or buy your gold planchets? Sorry not 100% clear on that.
If you make them would it be possible to just take note of some random bar numbers?
I realize it might be a privacy issue but country of origin or even refiner is good enough if that's all you can do.

It might be instructive.

Also wondering is that common practice for mints in general to just care about weight and not worry about origin or record bar numbers etc.? or is that part of the mint process outside of your day to day knowledge base?

For instance if some Libyan bars showed up would anyone even take note or notice? If not I have a really good idea for money laundering :)

Endzeit said...

@S.R.
The smash on that day, when the world lost maybe the last safe currency, the CHF, which became pegged to the wrongly constructed EUR, is an excellent example.

Also two or three days before the monstrous Japanese QE was announced, Gold also got smashed during the asian hours.

We should never forget what Paul Volcker admitted: His biggest mistake was, that he didn't "intervene" much more in the Gold market...


ps: will give Bron's views about manipulation a detailed look. Tx.

Quinvarius said...

LOL. Your ghost bullion is bullion you saw at one time but can no longer locate. So you "assume" that it is still in the system. Bro, that is not good work. That is you making a massive leap based on no data. It is the most illogical thing I have heard all week. Prove the ghost bullion is in the system. I rest my case on that.

Further, GLD gold is locked in the LBMA system. Yes, it can have the multiple claims on it that you dismiss. People with unallocated gold don't get serial numbers. Their gold could be the same as GLD gold. And you know what it would look like if they got scared and started going allocated or pulling their gold out of the LBMA altogether?...THIS.

Stop bashing other people like Turd when you clearly have no idea what is really going in or how things even work. Count bars and provide data. Keep your massive assumptions to yourself. Because you don't know. You don't have any facts. You are just making radical assumptions based on no facts whatsoever.

Warren James said...
This comment has been removed by the author.
Warren James said...

lacking the appropriate quip ...

@Quinvarius: Massive leap, yes. No data, no. The dark bullion effect is my analysis of three years worth of data; the rate of 'return to the register' is normally around 30% with new additions. Don't worry, I'll be carefully wording my articles to qualify the bullion classifications so that confusing them (like you've done in your first paragraph) will be near-impossible.

Bron Suchecki said...

"Do you guys make or buy your gold planchets?"

We make our own and supply them to other mints.

"If you make them would it be possible to just take note of some random bar numbers?"

Planchets don't have bar numbers, not sure what the question is?

"common practice for mints in general to just care about weight and not worry about origin or record bar numbers etc.?"

We refine all of Australia's gold, so most of our source material is straight from mines, so we know where that comes from.

We do a bit of scrap from Australia and Asian region. This is usually coming to us via aggregators like pawn chains, jewellery chains and bullion banks. We only deal with known entities with proper process in place to verify ownership of what they buyback. Most of that is jewellery but can include some bars (only up to kilo size).

We do not buy 400oz bars off the street. If someone did want to sell us physical we would want proof of ownership which basically involves them telling us where they got them from (showing bar list from the entity they bought them from) and us verifying from that entity. That entity would have to be a know bullion market firm. I haven't heard of us every doing that, none of the "I have a tonne of gold to sell" have ever eventuated, they are all scams.

Of the times we have needed more metal than we get from our refining we ship in large bars from London. That would come with a bar list but it is not like we, or the rest of the industry, have some shared massive database of bar numbers that we all update for the good of everyone else.

Any sizable amount of metal we take in would come with a bar list, so there would be a record of the bars melted. It is just as docs filed away which can be pulled out of archieve if needed, but not like we have some massive ledger of bars we made and dates when they were melted - no point doing that for yourself as you need everyone to tell you when they are melting your bars. All that work for what?

The control is not on the bar numbers themselves (the WHAT), it is on WHO you are acquiring the metal from and whether you can be sure they have title to it. If you are not sure of that then you run the risk of taking in stolen property and will have to return the metal (or equivalent, if melted) to the rightful owner.

duggo said...

Dear Bron

" it doesn't matter to us what happens to the price."

and

"the Mint has a long way to go in communicating its business to its potential clients properly."

I know I'm thick sometimes but the business model seems to be by what you are saying:-

"Dear client we are in the business of flogging you precious metal. Much of our precious metal is made in to nice pretty coins that are limited in their number and on which their is an added cost over the spot price of Gold. We have no interest in whether this is a success for you personally or whether you experience a loss. You might be lucky and sometimes make a profit but in any event we make money whichever way it goes"

Have I got this straight now?

Warren James said...

@Duggo, same could be said of Apple, or any business.

"Dear [customer] we are in the business of flogging you [iProduct]. Much of our [iProduct] is made in nice pretty packages that are limited in their number and on which is an added a premium on the [price of production]. We have no interest in whether [iProduct] is a success for you personally or whether you experience [resale value fluctuations]. You might be lucky and [sell your iProduct at] a profit but in any event we make money whichever way it goes".

I'll admit the analogy doesn't go all the way, but it might help isolate some concepts. The business which does not manage their exposure to stock and manufacturing costs, won't be in business for long. But the mints (all of them, not just PM) are responding to demand (for their product). rgds,

S Roche said...

Duggo,

My take was that the business will be here tomorrow, regardless. That is a good thing, seeing one day buyers might want to sell.

Cynicism will only take you so far. Please don't mistake, as Sartre did, disenchantment with truth. I am casting no aspersions, merely making a request.

Bron Suchecki said...

Thanks for the defence guys but duggo's blunt statement is correct in a way. I think however you have to look at who our owner is, that is the west australian government. A few points to consider:

1. The govt like all govts always has more things to spend on than it has money. It does not want to tie up billions of dollars of taxpayers money in gold inventory that it can spend now or use to pay down debt (which has costly interest).

2. It could borrow the gold at low lease rates, but then we have depository clients who are willing to let us use their metal for nothing, so why do that?

3. You might argue that if they owned the gold in the Mint it would go up in value and easily payback any loans taken out to buy the gold. But the govt isn't interested in such risky speculation cosidering it has a wide range of views by its taxpayers who would give it a hard time if gold fell. Therefore it is conservative and doesn't want to own gold. If it thought there was a majority of voters who would want it to own gold then that might be different.

So we are a conservative organisation who lay off our risk to our willing clients which means we will survive no matter what happens to the gold price and produce somewhat stable and low risk profit for our taxpayers.

If you have a better business model let me know.

Louis Cypher said...
This comment has been removed by the author.
duggo said...

Dear Warren and SR
The reason I wrote the above comment about Perth Mint was the his previous put-down comment " Your comment tells me the Mint has a long way to go in communicating its business to its potential clients properly." A trifle arrogant I thought especially as I have an account with Perth Mint so I think I do know something about them. So far I have not taken it's use up. The arrogance makes me wonder if I ever will.

Perhaps Dave in Denver and Bron have more in common than I thought.

Louis Cypher said...

Thanks Bron,
I wasn't clear in what form your stock was delivered.

duggo said...

Dear Warren

Your analogy with Apple was not to my mind correct.

Bron wrote:- "" it doesn't matter to us what happens to the price." In other words "where OK Jack".

Now I would think the price of Apple products matters to them and I would also think that the customer's experience of an Apple product matters a great deal to them.
I also find that the experience of being a customer with BullionVault and Goldmoney is re-assuring because of the communications I have received.

BullionVault have really effective web sites with instant access and multiple currencies where as my experience of opening an account with Perth Mint was long-winded. To be fair though the guy I dealt with a Perth Mint was helpful and friendly. The drawback with Perth Mint was communication. Telephone or email. Also you were dealing in $US or Aussi Dollars. I like to be "hands-on" not relying on the telephone or email. The only advantage I could see with Perth Mint was that you could "park" money in their unallocated account for no cost and got the benefit/disadvantage of the fluctuation in Gold price. These things might have changed now. But "unallocated accounts" are only as good as the paper they are written on and the perceived "care and responsibilty" shown towards the customer. The statement " it doesn't matter to us what happens to the price." doesn't somehow give that confidence to me.

Warren James said...

@duggo, if it helps, I know Bron is working on a 'research' section of the Perth Mint site, it is one of his goals to clearly outline the operations of how the mint generally operates - let me tell you it's an eye opener getting into the details of bullion bank accounting.

If you msg me privately, I'll do my best to fill you in on some of the details. We're all here to learn, always have been. rgds,

Kid Dynamite said...

@duggo -

disclosure: I have no experience dealing with the Perth Mint.

now: I think that all Bron was trying to say is that Perth, just like Jp Morgan (contrary to the beliefs of the 'tards), doesn't really care what happens to the price of metal (aside from the fact that changes in price can affect demand). They don't lug big directional exposures.

I'd use mortgages as an analogy: your mortgage lender doesn't get rich/poor every time interest rates move because he's hedged that risk.

same with Perth/JPMorgan/Bullion Banks and gold/silver/platinum whatever.

Bron Suchecki said...

I left a long 3 point response to duggo but it seems lost, bugger if I'm going to do this again on blackberry (assuming this goes through).

And no it wasn't meant arrongantly it was meant as it read, we don't explain our business model well.

Bron Suchecki said...

Not saying your thick duggo, saying we aren't communicating well.

duggo said...

OK OK I'm obviously feeling sensitive. Must be that time of the month.

Actually I'm sure Perth Mint does care about the wellbeing of it's customers despite the "deadpan" "we don't really care what happens to the price of metal that's the customer's problem" response of Bron. He was probably still feeling annoyed about Dave in Denver.
Perth Mint does special limited edition coins (I have a Gold 2oz Year of the Snake). I'm sure people don't buy these coins and expect them to go down in value over the longterm. I'm sure Perth Mint doesn't want the price of Gold to go down to where it's not economical to mine the stuff. So really in effect if the price of Gold doesn't increase then lots of people could find themselves out of a job and there wouldn't be anyone investing in any of their accounts.
So as the sheep usually pile into PMs when they price is rising so the business for Perth Mint must pick-up.
But then again perhaps Perth Mint is run by a bunch of Socialists. What do I know.

Warren James said...

** Blogger is moving some comments to the spam bin automatically for some reason, so there will be some gaps here and will appear to have misfired - the items have been restored, apologies [on behalf of Google] to anyone trying to follow the disjointed conversation ***

for example some of the above items were written without knowledge of the previous items being held in blogger's spam area.

endzeit14 said...

Today I was informed by Google, that "suspicious activities" occured at my account. Therefore they "had to suspend" it until I would provide them my telephone number!
They have been trying to get my telephone number everytime I got logged out, but I had always declined and skipped that step and could log in afterwards.
Today it was no longer possible to skip this procedure!

First they lured YouTube-users into linking their YouTube with Google-accounts, then they tried to get the phone numbers more or less voluntarily and now they permanently take the accounts down, if you don't give them your telephone number!

Therefore I have to use now a different platform (LiveJournal).

The positive effect was, that I searched the net and found out, that LiveJournal seems not to be under control of the totalitarian NWO globalists (russian).

Searching the net, I also learned that many other people have experienced the same development with their google accounts.

THEN I FOUND THIS FRIGHTENING VIDEO:
http://youtu.be/899BcE-U8UQ

btw thanks to this repression I gave the Yahoo search engine a try after a long time and was surprised that it delivered excellent, way better results! And Yahoo also offers 1st class seach options, like searching forums.

If you like freedom, try to avoid to use google and do not give them your personal data!

endzeit14 said...

Another potential eyeopener about GOOGLE:

http://youtu.be/O_L_MoQxTuA

S Roche said...

Heads up: GLD inventory up 2.71 tonnes May 9th...

S Roche said...

@Endzeit,

Today's gold trading in Asia is a good example of the Interbank market being manipulated. The daily changeover on the Netdania chart was painted to achieve:

1. Confirmation of a 3 day trendline with some volume selling into 23:59 UT to drop the price;

2. Some volume buying to re-confirm the trend-line from underneath at $1461

As I write this the spot gold price is bumping up against $1461 certainly making it look like it is being held there awaiting some selling which will be encouraged by the way the chart now looks.

If $1461 gives way, and gold breaks above that level, then of course it is just the righteous fundamentals of gold asserting themselves again.

Having written this no doubt the gods of the market will now make an example of me.

Bron Suchecki said...

"So really in effect if the price of Gold doesn't increase then lots of people could find themselves out of a job and there wouldn't be anyone investing in any of their accounts."

Duggo, you have to distinguish between the Mint benefiting from the gold price going up and us trying to force our owner to own our inventory (which I dealt with in the Thu May 09, 11:04:00 AM comment above).

In any case, even if the govt bought the $3 billion or so of our inventory, that is not going to make much difference to the price in the long run, but expose our profits to huge volatility for which the WA taxpayer is unlikely to have much tolerance for.

For example, we make $40m profit but a 10% drop in price would require us to book a $300m loss. You just have to be realistic about what the wider voting population will currently accept.

I think it is supportive enough for the govt to own and guarantee a busines making it easier for people to invest in gold.

duggo said...

I have to be honest Bron whenever I see "government" involvement I steer clear of any company or organisation. It was one of the reasons I eventually hesitated with Perth Mint when I discovered how much they were involved. The UK government stole some shares from me awhile back and "once bitten twice shy."

One mantra that seems to be regularly trotted-out in the financial blogs is the use of "hedging". Once again I'm probably wrong but the impression I get is that as long as the mystical system "hedging" is involved the companies cannot lose and always smell of roses. To me it's like believing in a perpetual motion machine.

I'm an amateur when it comes to finance and the precious metals World so I can easily find myself expressing nonsense. Now in my past I used to run a major section of an international airline. I always made a profit which is extremely difficult in the airline industry. That's my field of expertise.

The joke in the industry was that you could make more money by putting the capital in a bank and collecting the interest rather than going to all the trouble of actually operating an airline. Now if everyone was to do this where would we be? So you see there must be more to running a business even in the precious metal World than just the dispassionate juggling of finances.

duggo said...

Just read this on Armstrong Economics
" France has shut down buying gold for cash and limited ATM machines handing out cash as well"

Armstrong obviously doesn't know that ATM machines in Europe have always been "limited" since the word go. About E350. Took E350 out today.
The local "coin and currency" dealer in Antibes is alive and well and buying and selling just like any other day.

Do you think Armstrong buys his information in or just makes it up himself?

costata said...

endzeit14,

Very interesting tale about Google and phone numbers. This may explain the problems that I have been having with Google. Thank you.

Bron Suchecki said...

I agree that most hedging programs are not as bulletproof as companies think. They involve counterparty exposure - if the person on the other side of your hedge doesn't pay out (goes bankrupt) then you aren't hedged.

We don't hedge, which is what your "juggling of finances" statement implies, like we have some balls up the air we have to manage and counterparty exposure. The unallocated business model avoids all that.

I have a one hour presentation I give to new accountants and IT people to explain conventional hedging (eg futures) and contrast to what we do, so it is not easy to explain in a few words.

As an example, say you just want to live in a house but not take the risk that house prices will go do (or have the money). So you rent. You don't buy the house and then "hedge" it by selling it back to someone for settlement in the future.

As a renter you don't have any "hedging risk". At the end of your lease you just walk away, doesn't matter to you if house prices have dropped, if it has depreciated, needs repairs etc. Renting is pretty riskless, would you not agree?

Same with Perth Mint, we are just "renting" our gold, not buying it and hedging it.

Louis Cypher said...

On google. A quick search for free VPN's and using one will hinder Googles data collection. In general it's getting to the point where google, FB etc will want your phone number, shoe size and all sorts of personal data to allow participation in gmail etc. Use a different search engine and install Opera or similar as your browser.
Recently I have been getting captcha prompts to prove I am not a robot or some such rubbish in order to search for something beyond my normal search patterns whether running through Chrome, Fiefox or Safari.

It's not a govt plot or anything it's just these jackasses are in a race to to collect as much data as possible to sell other companies targeted lists of consumers relevant to their products.

I am also 99% certain google and linkedin share data as I have seen evidence they are cross referencing gmail accounts with real linkedin profiles.

duggo said...

Dear LC

Just join up to GMail with Hide My Ass Mail dot Com.
Then alter your mobile phone number slightly but keep a note of the number you give them. Use a good VPN as well.
Keep fooling the buggers at their own game. It's good fun.

endzeit14 said...

LC,
please watch the videos I provided. Claiming it's not a big brother plot is simply ignoring the facts!

IIIC, you need cookies to log in. A VPN I guess will not help andif it helps, you also give your login data to the one who is running the VPN.

Why use the tools of your enemys and enemys of freedom? Every user makes them stronger! Every search makes them money. Money the alternatives are losing!

Using alternatives means supporting them and weaken the enemies of freedom.

duggo,
for logging in you need to allow cookies on your PC so hidemyass will not help.

USING THEIR SERVICES MEANS SUPPORTING THEM, MAKES THEM STRONGER AND MAKES THE ALTERNATIVES WEAKER.
It's your choice.
I have made mine last week and I miss nothing. And btw it feels nice to remind myself, when I use Yahoo or Ixquick, that that the money otherwise would have gone to the evil and now supports the alternatives.

milamber said...

subbing so I can forward endzeit14's posts to the NSA. Not that they don't already have them, but sometimes BB needs a helping hand.

Milamber

duggo said...

@endzeit14

I also only use StartPage and Ixquick.

endzeit14 said...
This comment has been removed by a blog administrator.
Warren James said...

I'm a bit overworked, I don't want any animosity but I see both sides - primarily that milamber's comment was meant as lighthearted humour, and that we have indeed lost many of our civil liberties simply by using anything electronic. Unfortunately living in today's society simply means that we must participate in this present orwellian framework ... or starve. Call it the number of the beast or whatever, doesn't matter - one of the only things we have left to call our own is the civilized mind and if we lose that then it's game over.

This is a draft of a simple STFU guidelines for posting a comment
(in no particular order), which we may or may not choose to enforce depending on situation. Sorry.

1) Keep it polite

2) Keep it clean

3) Keep it impersonal

4) Keep it honest

5) Keep it unemotional

6) Keep it on topic

7) If possible, keep it interesting and/or amusing (which could overide some of the above).

------ we are working on new content (e.g. I'm doing some database dark bullion work this evening), but it does take a while to prepare (150+ million rows to process). Sorry for the wait.

Warren James said...

I've created a new 'open forum' post which is dedicated to discussing Google's wrongs. Just be sure to use an anonymous proxy and throw-away account if you put comments there ;p

[They already have my phone number, so it's too late for me.]

milamber said...

@endzeit14,

It's called humor.

But I see I didn't put a :) on it, so you didn't read it as such.

I will endeavor to be clearer in the future, so as not to imperil your skin.

http://www.youtube.com/watch?v=0OnpkDWbeJs&feature=youtube_gdata_player

And just so there is no confusion.....

:) :) :) :) :) :) :) :) :)

Milamber

endzeit14 said...

Where is the difference between the Orwellian media ridiculing everyone who is concerned and this kind of posts?
And Warren, if you still can laugh about it, then enjoy the time, because one day when the financial ponzi system implodes they will remember who was running this blog. And you could become a "terrorist" faster, you could ever imagine.

Only fromt he past two days:


IRS Conservative Witchhunt Started In 2011 With High-Level Officials Involved
http://www.zerohedge.com/news/2013-05-11/irs-conservative-witchhunt-started-2011-high-level-officials-involved

Guess What’s Hidden In The Immigration Bill? A National Biometric Database For Citizens
http://www.zerohedge.com/news/2013-05-11/guess-what%E2%80%99s-hidden-immigration-bill-national-biometric-database-citizens

Keep it amusing and funny!

milamber said...

they have more readers?

and how can warren be labelled a terrorist, when everyone knows he is a shill for the banksters?

Milamber

Warren James said...

uh endzeit ... it's because we're just average folk enjoying a bit of dark humour about things we have no direct control over - it's a coping mechanism. Go read a Terry Pratchet book you'll feel a bit better about yourself and the folly of mankind.

To be frank I wish I had the time to worry about more things - here in Australia they are already talking about raising the retirement age to 70 so my future is already stolen. I am genuinely horrified at the state of affairs. Don't even get me started about taxation. We are of the same ilk but perhaps not the same expression. Regards,

p.s. Milamber, our application for JP Morgan sponsorship was politely declined so technically we are not bankster shills at this time.

duggo said...

Let's get it straight people. We are all working for Goldman Sachs..... even when we think we aren't. All governments work for GS and we are just slaves of the government so...............

Don't worry Warren I'm 71 and have been retired for 14 years. Life is so busy I don't know how you manage to actually work.

By the time you retire life expectancy will be 140 with no pension and no money. So keep stashing that Gold away.

By the way if you want to stay fit and healthy find a good source of Buckminsterfullerene in olive oil (C60). My mental age has always been between 13 -15 so with the help of buckballs I'm trying to close the gap. It's doubled the age of rats so friends tell me I've got a good chance. Do you think they are trying to tell me something?

milamber said...

@ Warren,

That is exactly what a bankster shill would say.

Milamber

and so there is no confusion for some other readers...

SMILEY FACE
:)
LOL
SMILES
giggles

Slow Loris Larry said...

Just in case anyone missed it, the following piece by Alasdair MacLeod at GoldMoney.com has some interesting observations on the regulation of GLD and SLV, as well as some information on the LPMCL of which I was not aware:

http://www.goldmoney.com/gold-research/alasdair-macleod/the-role-of-gld-and-slv.html

SSL

victorthecleaner said...


SLL (or SSL? hacker?),

I am not sure McLeod understands London that well. Asking the FSA about the custodial agreement doesn't make much sense because the custodian neither offers any financial services nor does he issue or advertize any securities. Although the same companies act as banks elsewhere, just being a custodian wouldn't make them regulated.

Offering custodial services is not that different from valet parking, isn't it? Is your local parking lot regulated by the FSA? I don't think so. The same question would apply to Brinks or ViaMat with their vaulting and armoured transport services.

Finally, what he writes about GLD doesn't make that much sense either. GLD holds allocated gold and so isn't exposed to any counterparty risk. The trustee rather owns individual bars.

The main risk with GLD is rather that the trustee decides to wind down the trust. In this case, the trustee would sell the gold OTC and pay the investors cash. This may happen precisely during those two weeks during which you don't want cash and at a spot price at which you wouldn't be able to find any gold elsewhere.

But this risk is present also with GoldMoney. It seems to me that McLeod is desperately trying to say something negative about GLD and is just making stuff up. The problem is that what's really negative about GLD applies to GoldMoney (and the Sprott funds), too.

Victor

endzeit14 said...

@victort.
Don't you really understand the term CONFLICT OF INTEREST?

Your post reminds me of the post of Dynamite Kid, who claimed, that fractional reserve FIAT money banks would not care about the price of gold.

Kid Dynamite said...

Endzeit -

no one gives a crap about the price of gold except the goldbugs..

not sure if you've noticed, but the fractional reserve fiat money banks make money trading metals every single quarter, regardless of what happens to the price.

that's because they do not, contrary to the lies that have been repeated to you over and over again, have big directional (ie, short) positions in gold/silver

endzeit14 said...

"no one gives a crap about the price of gold except the goldbugs"

Statements of central bankers themselves proove otherwise.
The buying of central banks prooves otherwise, too.
And 5000 years of history of money also indicate reality differs slightly from your thesis.

Bron Suchecki said...

Quote: "My reason for writing to the FSA was to establish if allegations were true that bullion owned by these two trusts was being used in contravention of custody agreements”
 
OK, so if I (a competitor) just allege that GoldMoney is leasing out their client’s gold, should the Jersey regulators spend a lot of time and effort investigating it when I don’t provide any hard evidence, just, you know, I’m suspicious? Maybe the regulator ducked the issue because they thought this was unsubstantiated. Given GM's conflict of interest in this matter, they need to provide more than just allegations.

There are plenty of good reasons to not buy the ETFs, GM doesn't need to resort to this sort of stuff IMO, when you point a finger three point back at you, they should just focus on the positives of their own product.

Having said that, yes the bullion market is largely self regulated.

milamber said...

@ KD,

Do you include the following groups in the definition of "goldbugs":

CB's that hold gold on their balance sheet (and some even mark it to market every quarter)
-The IMF
-Certain oil exporting countries
-Miners
-The other holders of the roughly 170,000 TONS of above ground gold that never gets consumed.

Milamber

Kid Dynamite said...

Milamber,

does the US/Eurozone/China/anyone else have any more or less trouble running their country/economy/society when the price of gold (which, as you noted, they own) rises or falls?

#rhetorical

and yes, my "no one gives a crap" was perhaps an exaggeration. what I meant was

a) the big banks don't give a crap because THEY DO NOT HAVE BIG SHORT POSITIONS and
b) as I've explained multiple times, increasing gold prices do NOT signal the demise of fiat currency, regardless of how many times goldbugs want to repeat that falsehood.

milamber said...

@KD,

I'll buy that. I think that "gold bugs" are idiots.

But not everyone who owns physical gold is a "goldbug". That is what I was trying to get at.

But where (I think) you & I disagree is in regards to the role that gold plays in the IMS.

I don't think that the US Treasury department holds gold bullion because of tradition. Nor do I believe that the ECB has it on its Balance sheet MtM every quarter out of tradition. Understanding those reasons seems pretty important, IMO.

Milamber

SugarLover said...

Refreshing to see Jim Sinclair as the latest to acknowledge that paper gold is likely to separate from physical eventually, whilst at the same time rejecting most of the bells & whistles usually attached to such an event.

All CIGAs are fortunate that he is open to new ideas, as well as him having a huge amount of knowledge and experience of the markets. And he seems to have an excellent BS detector too, rejecting utopian dreams of the future for what they are.

'Kid....how many Argentinian pesos does it take to buy an ounce of gold? or would there be no sellers?

victorthecleaner said...

endzeit14,

Don't you really understand the term CONFLICT OF INTEREST?

We want to try and relax a bit, don't we?

The conflict of interest is precisely as follows: As long as unallocated gold is still being allocated (and so paper gold is as good as physical gold), running an ETF is about the fees. Since neither the trustee nor HSBC, the custodian, are short paper gold, there is no issue with a conflict of interest.

One day, however, there may be a serious problem with the US dollar and a situation in which the banking system runs out of its gold reserve.

On that day, there will be a huge conflict of interest because in that situation, paper gold and physical gold would be different. What's funny about McLeod's article is that GoldMoney will basically have the same conflict of interest as the trustee of GLD. They would be tempted to close shop, pay their investors cash and sell the physical gold OTC. Sprott, too.

Victor

endzeit14 said...

So many strawmans to hide the simple fact, that FRACTIONAL RESERVE BANKING is dead in the moment, trust into the Ponzi is gone.

Contrary to the CRIMEX Goldmoney is not engaged in fractional bullion banking. But the GLD and SLV trustees are...
Your loved banks even were charging fees for physical storage from their customers although they didn't even have any physical.

The conflict of interest arises from the fact, that Gold is money and if the fiat-money system is at the brink of collapse, so are the banks as major parts of the legalized ponzi-scheme.
Gold has no counterparty risk and begins to shine, when monetary systems fail.
Do you now understand the conflict of interst?

Slow Loris Larry said...

@ Endzeit

All your post does is spew out a laundry list of faith-based, counter-factual (or at least problematic) assertions, but no actual arguments.

Let me count them: 1) demise (past tense) of fractional reserve banking; 2) disappeared trust in ‘the Ponzi’; 3) the fractional bullion banking of the CRIMEX, GLD and SLV; 4) capitalising Gold (as if it were God); 5) calling it money (which kind?); 6) fiat money at the brink of collapse; 7) banks as major parts of the legalised ponzi-scheme; 8) gold without counter-party risk (but plenty of other kinds?); 9) but getting more and more shiny; and 10) ongoing monetary system failure.

Unlike those you joust against, who provide reasoned (and reasonable) arguments, all you do is proclaim your strongly held beliefs, and then jump to the some conclusion about ‘conflicts of interest’ unnoticed by your assumed, and presumed willfully blind, ‘enemies’.

Please, let’s try to keep this site focused on what meagre ‘facts’ we can accept without serious question, and actual logical conclusions we can derive from them. All you do is to display all the signs of someone whose cultish beliefs have been exposed, which I alluded to in a previous post in a different thread.

endzeit14 said...

SLL,
why are you lying, too?

1. It's a FACT that Goldman Sachs was convicted of naked short selling!

2. It's a fact, that some of the very big banks were colletings fees, while they held their customers in believe to have the physical, but all they did was holding paper contracts. They even admitted on court, that this would be common practize.

3. It's a fact, that only a fraction of the long futures is backed by the physical stuff.

4. It's a fact, that fractional reserve banking collapses as soon as the percentage of reserves is depleted.

5. It's fact, that Paul Volcker admitted, that he should have intervened more in the gold market.

6. It's a fact, that when Hjlamar Schacht, chief of the german central bank, visited the NY FED, and the governor Strong wanted to show him the German gold, that he couldn't find it. That was already in the 1920s, only 7 years after the FED was created.

7. It's a fact, that THREE TIMES the financial system was on the brink of total collapse since 2008.

I find it very telling, that you attack me with false accusations ("no facts"), when I argue the conflict of interest of fractional reserve fiat money banks being custodians of the biggest gold- and silver-vaults in the world!

"Gold is money, everything else is credit." J. Piermont Morgan

But here some posters can claime, that banks wouldn't care about the POG and no one critizices their lies. Instead I am attacked for doing so. Very telling.

But I don't have the impression, that the writer of this blog has an anti-gold agenda. He is honestly trying to dissect the disinformation.
But certain posters here are clearly spreading disinfo and try to put this blog into a anti-gold-context.

Studies showed the big impact of commentaries on the perception of articles. Comments even can turn the intention of articles into the oposite, because the mass of the people is not capable to judge articles themselfes, but looks first what others are thinking about it.

My impression is not, that the writer of this blog is running this blog with an anti-gold agenda. My impression is, he honestly tries to dissect disinfo by bringing up facts. Spreading straight lies and wroing propaganda FOR a legalized monetary ponzi system seems not to be his agenda.

That you too have shown your true face now, is certainly of help...

Warren James said...

So many facts, so little time.

Folks, this thread has run it's course, I'm closing off the ability to add any new comments. Actually, I'm doing it for the benefit of a friend who is on a NAWIA course so I don't want my article to be the reason he falls off the wagon.

Thanks for all the great feedback, I have been doing more dark bullion processing and I'm generally excited about the results, will be sharing it again soon. Regards, Warren