tag:blogger.com,1999:blog-5673441815180854503.post8753877607160289136..comments2023-09-10T09:54:59.309+01:00Comments on Screwtape Files: How can we trust the Bar List Data?Louis Cypherhttp://www.blogger.com/profile/07670126160101669248noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-5673441815180854503.post-71400352640351561562012-11-13T02:57:25.474+00:002012-11-13T02:57:25.474+00:00Comments originally numbered (12-25) relating to F...Comments originally numbered (12-25) relating to Freegold critique have been <i>relocated</i> to a (dedicated) page.<br /><br />>>> <a href="http://screwtapefiles.blogspot.com.au/p/freegold-debated-by-smri.html" rel="nofollow">HERE</a> <<<<br /><br />Anyone wishing to discuss the topic further should do so in that place (any related comments will be relocated automatically).<br /><br />For the last 12 months, Screwtape Files has been actively studying social media manipulation. The 'discussion' which occurred here regarding Freegold is a direct match for the <b>'forum-sliding/topic dilution'</b> pattern, regardless of original intent. Ever since 'Amber' appeared on the scene (spruiking the Wynter Benton Myth) we have been concerned that our blog may be the target for discussion manipulation. As a result I have a higher-than-usual level of paranoia and while it may well be that the smoke alarm got set off by the toaster, anything deleted on this thread is restored on the <i>dedicated</i> page. --regards, WarrenWarren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-39990280143467440222012-11-12T12:59:12.671+00:002012-11-12T12:59:12.671+00:00for the sunday pre-game- silver needed to hold the...for the sunday pre-game- silver needed to hold the 200-day SMA and it did, finishing a gann 7 weeks down!<br /><br />On the technical front, gold is starting to post bullish signal once again on moving averages, RSI, STOCH and MACD. Further, gold printed a bullish<br />engulfing candlestick pattern on the weekly chart (lower low, higher high and closing near the high), in the process recording its first weekly higher<br />close in five weeks after being rejected at $1,796.<br /><br />...would think gold liked the fact that isreal fired into syria for the first time since 1973<br /><br />cheers!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-74972480893089155602012-11-10T14:01:39.562+00:002012-11-10T14:01:39.562+00:00@Warren James @SMRI
You address the core problem ...@Warren James @SMRI<br /><br />You address the core problem with the freegold debate as it stands; there isn't one. <br /><br />Freegold does seem convincing on many levels, but the only people who have attacked/tested the idea (that I know of) have been pretty stupid (goldbugs and silverbugs mostly). <br /><br />I am reading back through FOFOA back-catalogue and wish there someone as thorough and knowledgeable as FOFOA and VtC to disagree with them/test their ideas.<br /><br />One FOFOA commenter has been there for years, trying to agree with himself and others in the most convoluted ways possible. Blocking the trail indeed. <br />Lord Sidcuphttps://www.blogger.com/profile/08413661458819093344noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-11512490951452949132012-11-10T10:09:44.702+00:002012-11-10T10:09:44.702+00:00Thanks Victor, that's two votes for a tighteni...Thanks Victor, that's two votes for a tightening of definition for Level 4 - 'leasing'.<br /><br />How about .. "<b>Level 4: Does the bar list represent real bullion in the vault which is not leased FROM the ETF TO a third party?</b>" - that qualification is Bron's distinction # 2, and if I'm understanding this correctly then that is the only leasing scenario under which the ETF could be implicated, i.e. if the leased metal was then bought by another party and delivered into another ETF then that's a problem. As Victor points out (and which can be read in Bron's linked article), leasing metal in most cases is a '<i>liability denominated in LBMA-grade ounces</i>' and not specific to the bars in question. Under Brons distinction #1, an ETF buying and receiving delivery of bars which are being being 'leased by someone else' - my understanding is that this is a legitimate scenario (according to notes sent to me by KD).<br /><br />If I get at least one 'yes' for the more-precise definition I'll update it with notes. I think leasing is a worthy topic to explore for those who are trying to understand that (level 4) space - since it is so often mispresented, but I doubt we'll be doing many articles on it.<br /><br />p.s. re:'<i>multiple parties having title to the same bar being outright fraud by the custodian</i>' - yep absolutely. I may yet refine Level 3 definition with this clarification too, since that's what I'm trying to isolate.Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-19801604942686622492012-11-10T07:36:19.619+00:002012-11-10T07:36:19.619+00:00I think we should make the term 'leasing' ...<br />I think we should make the term 'leasing' more precise because the James Turks of the internet want to tell us that the same bar belongs to more than one owner once gold is leased. That's nonsense.<br /><br />Here is how you lease gold:<br /><br />Both parties operate unallocated accounts. Let's say I want to lease gold for 3 months. So I would go short spot unallocated and purchase a 3 month gold forward with the same counterparty. The combination is a swap for which I have to pay 3-month GOFO. When I go short spot unallocated, I receive cash which I can invest at x%. The lease rate I receive for my gold is therefore x-GOFO.<br /><br />This is a financial transaction, and title to my gold does not change.<br /><br />Now my counterparty may request allocation of their long spot unallocated position (depending on our small-print: if I trade OTC with a BB, this is part of the contract. If I trade with a gambling outlet such as IB, allocated is explicitly ruled out).<br /><br />If they request allocation, they receive title to the bars, but I no longer have title. Title is unambiguous. Only once the forward comes due and I get the unallocated back, I can ask for allocation myself and receive title to the gold again. Note that these will be bars different from those I originally owned.<br /><br />Leasing is not a source of ambiguous title to specific bars.<br /><br />The only way you can have multiple parties having title to the same bar is outright fraud by the custodian.<br /><br />Victor<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-50345858468908886692012-11-10T03:55:56.031+00:002012-11-10T03:55:56.031+00:00@SMRI, I personally don't have the intellectua...@SMRI, I personally don't have the intellectual firepower to address Freegold theory but I do agree the topic is important enough to be worthy of bold debate - I'm just not sure what the right approach is. Do you feel like composing an extensive write-up? Maybe we can help.Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-33689782806026488632012-11-10T03:07:28.148+00:002012-11-10T03:07:28.148+00:00@Bron, thanks. I tried multiple revisions of the t...@Bron, thanks. I tried multiple revisions of the text attempting to include the leasing information that you and KD supplied me - eventually deciding I couldn't fit it all in. The leasing stuff is worthy of a few independent diagrams as well as a breakdown of bullion banking and metals accounting procedure which you've shown me in the past. In my opinion, the general public grossly underestimates the amount of industry knowledge required to debate successfully at level 4 and beyond.<br /><br />@S Roche, thanks. Bron and I have discussed the possibility of a 'self-serve' web page which allows anyone to query a bars current location and ETF history. This would be easy to construct and would go a long way to uncovering evidence (or not) for Level 3 argument. That feature however, is currently being driven by the level of external interest, which is zero. My contact details are on our profile page so the information is just a phone call away! (just have to scroll further than BrotherJohn did).<br /><br />@SMRI, for what it's worth, I think FOFOA operates somewhere between level 5 and level 6. The amount of experience and research required here is immense, so any challenge has to be equally complex. For this reason, I've always wanted to buy a ticket to "<i>FOFOA vs. Martin Armstrong in the cage of death - premiere event</i>".<br /><br />The tiered argument structure also helps explain the silverbug tension!! Anyone operating at a higher level of argument will consider the people clinging to lower argument levels '<i>ignorant</i>', and people with lower level arguments will consider anyone from the more complex arguments, '<i>arrogant</i>'. Eventually though, as the raw data gets refined and packaged for general consumption, the lower argument levels have fewer excuses.Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-43171648356919175382012-11-10T01:05:38.380+00:002012-11-10T01:05:38.380+00:00Very good indeed Warren. Like the grammar analogy...Very good indeed Warren. Like the grammar analogy.criswahttps://www.blogger.com/profile/16254453087114053983noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-10294303270327048862012-11-09T23:19:19.168+00:002012-11-09T23:19:19.168+00:00Warren: Excellent article.
somanyroadsinvesting: ...Warren: Excellent article.<br /><br />somanyroadsinvesting: In FOFOA's defense, I have never seen him question that GLD has the physical metal. The "paper gold" he refers to as suppressing the price is unallocated, fractional reserve bullion bank gold. He regards GLD as a different type of "paper gold," in that per the prospectus, it is not a direct claim on gold but on a fund designed to track the price of gold via arbitrage. Only those with large numbers of GLD shares can exchange them for the physical metal, so if FOFOA's predicted decoupling of paper and physical price comes to pass, then GLD may be drained of its metal and shut down, with small holders forced to settle for cash at the then-current paper price.DHhttps://www.blogger.com/profile/12659072274932468580noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-31469458023562300642012-11-09T23:00:42.796+00:002012-11-09T23:00:42.796+00:00Just a point on the idea that "the bars in th...Just a point on the idea that "the bars in the ETFs are leased". Need to distinguish between 1. bars being leased from someone and given TO the ETF and 2. bars FROM the ETF being leased to someone. <br /><br />Two compeletly different situations with different implicationsBron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-76394170044122195382012-11-09T19:48:06.678+00:002012-11-09T19:48:06.678+00:00Warren, I really like the tone of your response. W...Warren, I really like the tone of your response. Were the critiques as gently reasoned?<br /><br />I would have thought the opportunity to check one's bar numbers would have seen you inundated with requests, or comments at least, as it is DIY. <br /><br />It can only mean one of three things: Everyone who cares has physical in their own possession; Everyone who cares does not read Screwtape (not possible); Everyone who cares owns bugger-all metal...<br /><br />Or...everyone who cares has been quietly checking their bar numbers and then, thinking why wait, withdrawing their metal from the system...game theory in action. <br /><br />Compare the timing of your posts and the latest rise in metals prices, a perfect correlation. The next phase of the metals' shot to the moon, the race for physical possession, started here.<br /><br />Delicious irony. Well done.<br />S Rochehttps://www.blogger.com/profile/18070519576321568415noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-21587376699850484812012-11-09T16:07:01.465+00:002012-11-09T16:07:01.465+00:00subbing commentssubbing commentsmilamberhttps://www.blogger.com/profile/17412309240173757052noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-22968300571863265562012-11-09T15:36:19.297+00:002012-11-09T15:36:19.297+00:00Good analysis as usual. I like the way you guys an...Good analysis as usual. I like the way you guys analyse stuff. I would love a good debate/analysis on the whole "paper" gold trade as FOFOA refers to it. The LBMA gold trading mkt etc. I find it odd everyone gives FOFOA a pass in this area but make fun of all the easy silver targets on the web. In a recent video FOFOA asked if someone bought 'real' gold or 'GLD paper' gold. A basic underpinning of his Freegold theory is that somehow the price of gold now somehow does not reflect the true physical price and is obscured by massive amounts of paper trading. Yet there is almost no discussion of this on the FOFOA bog, seems to be taken as a given.<br /><br />I like to keep an open mind and understand as much as possible. Over there I feel they have stopped inquiring, which I think is dangerous.<br /><br />I have decided to stop posting comments or questions on FOFOA's blog. There does not seem to be any desire there to critically think about alterntive theories or ideas. It has become completely cult like.<br /><br />I recently posted this comment and was immediatly made fun of. Despite the fact i never agreed or disagreed w the theories in the interview just thought it was an interesting discussion.<br /><br />---<br /><br />Listened to this recent podcast on Hyperinflation. The professor studied every known hyperinflation and even found some ones never before discovered. Was an interesting discussion. In regards to the US he doesnt think hyperinflation is a risk now, said when the time comes the fed will suck the liquidity out.<br /><br />He also makes an interesting pt that people are focused on the growth in the Fed balance sheet which he calls 'state' money, but really only accounts for 15% of total broad money (refers to some M4 number). So while 'state' money has gone up(tripled since Lehman) it has been more than offset by decline in banking and shadow banking money creation so he actually makes the argument is the fed has actually been weak in their response when in context of overall broad money aggregates. And broad money creation has been anemic.<br /><br />http://www.econtalk.org/archives/2012/10/hanke_on_hyperi.html<br />----<br />Considering the main outcome FOFOA predicts is hyperinflation in the US I would find it interesting to spend an hr and hear the views of probably the foremost expert on hyperinflations in the world. Probably can't hurt, right? But seems like they find no value in that over there.<br /><br />Hope to have some good debates and intelligent discussions in the future here. ThxAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-71778966510826904002012-11-09T13:44:47.807+00:002012-11-09T13:44:47.807+00:00The discussions around leasing are the easiest one...The discussions around leasing are the easiest ones to <i>mis</i>understand, and it's a shame the bar list data can't really help in that arena.<br /><br />I also just wanted to add that I'm not attempting to categorize the entire precious metals blogosphere, just adding some tools for enabling discussion. I'll be referring to these levels in later posts. Regards, WarrenWarren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.com