tag:blogger.com,1999:blog-5673441815180854503.post3616013369242146666..comments2023-09-10T09:54:59.309+01:00Comments on Screwtape Files: A different view of GLD (part 1 of 4)Louis Cypherhttp://www.blogger.com/profile/07670126160101669248noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-5673441815180854503.post-81519389240296836252013-07-06T12:44:02.857+01:002013-07-06T12:44:02.857+01:00Warren,
No apologies necessary.
If you think I ...Warren,<br /><br />No apologies necessary. <br /><br />If you think I can bring anything constructive to the debate (i have my doubts), then I would be more than happy to help out. <br /><br />Just let me know what you want me to do. <br /><br />Milambermilamberhttps://www.blogger.com/profile/17412309240173757052noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-72441310190420927252013-07-06T05:00:37.717+01:002013-07-06T05:00:37.717+01:00"Cold Gold"...I like it!
In respect of ..."Cold Gold"...I like it!<br /><br />In respect of London volume that the 2011 LBMA survey revealed, I remember being amazed at the volume of settlements during the 1990s, they dwarfed anything since. So, I am not surprised that there are caches many multiples the size of GLD quietly sitting cold in the dark...waiting for what? Future generations of Arab SWF directors, to use as collateral, to sell in times of need?<br /><br />Btw, 1M GOFO dropped to 0.015% on Friday, if it goes negative then expect fireworks...Victor figures that more paper will be created or GLD will be raided but I am thinking that those options were available in 2008 and yet 1M GOFO went negative Nov 20/21, 4 weeks after the low...but, if Victor is right then maybe it doesn't go negative ... yet.<br /><br />ps, A matter of house-keeping: I apologise for the rat reference some posts ago Jd'A, I withdraw it unreservedly to save anyone the trouble of finding it and sin-binning it as it deserves.S Rochehttps://www.blogger.com/profile/18070519576321568415noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-88214347944546668662013-07-06T02:45:45.978+01:002013-07-06T02:45:45.978+01:00Hey Milamber, those are good observations - it is ...Hey Milamber, those are good observations - it is certainly an interesting situation where each party is describing the industry in the context of their best understanding, and where those observations conflict - the only logical explanation is that some pieces of the puzzle are still missing by one or more party.<br /><br />I <b>very much apologize</b>, but your comment above which was 95% FOFOA related, was relocated to the 'Freegold Discussion' page.<br /><br />For what it's worth, the discrepancy between the different market interpretations of GLD withdrawals would make a very good discussion - if you want us to host it here I'm more than happy to give you 'Author' privileges, then at least there can be a dedicated spot for it.<br /><br />The process of writing is a great tool for articulating and refining your own set of research ideas as well as garnering feedback. Collectively we're all a bit jumpy from recent events, but there is no problem when the article is specifically dedicated to the topic.<br /><br />Let me know if you're interested :)Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-44541601062630504912013-07-06T02:28:48.581+01:002013-07-06T02:28:48.581+01:00Warren,
Thanks, Yes that does help. At least it h...Warren,<br /><br />Thanks, Yes that does help. At least it helps in understanding that it is probably impossible to determine with any level of accuracy what percentage of unallocated gold (in size) is available for purchase at spot.<br /><br />As I have mentioned in the past, my quandary is that I believe Bron & that he is honestly reporting what he sees at the Perth mint. But I also believe that ANOTHER was honestly reporting what he was seeing. <br /><br />And yet (on first glance) the two views don't seem to line up together. Thus the considerable room for debate. <br /><br />I look forward to the remaining posts on the dark bullion.<br /><br />Thanks again.<br /><br />Milambermilamberhttps://www.blogger.com/profile/17412309240173757052noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-36850594793735519982013-07-06T01:59:36.764+01:002013-07-06T01:59:36.764+01:00@Milamber, unfortunately no - the data can't t...@Milamber, unfortunately no - the data can't tell us that level of information. However attaching an approximate 'age' to the bars will reveal another level of interpretation. Basically what Bron said.<br /><br />As we dig deeper into 'what is gld from an inventory perspective' I fear it is becoming very boring (which is essentially what Bron and AD are pointing out above), and all of the juicy conspiracies I once hoped to find, are becoming more distant.<br /><br />I've never been able to figure out the sub-custodian or physical vault layout from the data, but I think the picture is slowly emerging. Part of our problem is that we don't have every single historical bar list, but the data does appear to be layered somewhat (at least from when HSBC took it over) so we can glean some clues from that. I do know that Bank of England is a sub-custodian and I suspect this is where the decades-old bars are (and will probably stay). Most of the bars we see being 'removed' or 'added' are reasonably recently refined. Again this tallies with what Bron describes (back of the vault).<br /><br />But also to give a better perspective on your question (although it's not answerable), we do know that the gold comes from considerable other reserves which are 'somewhere'. Sometimes when bars get added, they are bars which have been poured many years ago (cold new bullion) so there appear to be repositories several times larger than GLD that we don't have ANY visibility to. Hope that helps.Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-35638780193888719642013-07-06T01:27:29.292+01:002013-07-06T01:27:29.292+01:00"BTW does somebody have a list of all those &..."BTW does somebody have a list of all those "sub-custodians"?"<br /><br />My understanding is that the sub-custodians are primarily the security carrier companies. That is, the inclusion of sub-custodians was to cover in-transit movements and temporary holdings of metal. It is not meant that the ETF metal is held all over the place.<br /><br />Milamber - the reality is more mundane. See my comments on the WGC's involvement in the ETF here http://goldchat.blogspot.com.au/search?q=wgc+gldBron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-11021852458871715702013-07-05T17:56:20.218+01:002013-07-05T17:56:20.218+01:00'Or is that wishful thinking'
Is that a r...'Or is that wishful thinking'<br /><br />Is that a rhetorical question?Gary Morganhttps://www.blogger.com/profile/09934552877086935070noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-8192241427062726522013-07-05T15:59:10.680+01:002013-07-05T15:59:10.680+01:00Warren,
As usual, great work.
Quick question fo...Warren,<br /><br />As usual, great work. <br /><br />Quick question for you: <br /><br />Will there be any way to ascertain who, where & why the gold in GLD came from when it was first set up?<br /><br />IE did the WGC wake up one day and say,<br /><br /><i>"Hey guys. We got a tremendous amount of unallocated physical just sitting around w/o an owner (and even more mining & scrap supply coming online over the next decade)and we want to churn an income on it through the selling of partial ownership shares via a new thing called an ETF" </i><br /><br />Or did the LBMA wake up one day and say,<br /><br /><i>"HOLY CRAP! 97-99 nearly blew us out of the water. We were saved by Gordon (like what else was he going to do), but as we all know, the end is near. However, we have to do something so that we (collectively) know where all the remaining unallocated bullion is so that we don't screw ourselves as this puppy goes down sometime over the next decade. <br /><br />So, let’s pool all the remaining unallocated into one central repository and to satisfy the western investor’s demands for “gold” exposure, let’s sell it as a paper investment that is easy to get in and out of, well until we wind it down that is :)<br /><br />We’ll go with this new thing the quants down the hall came up with (The nerds call it an ETF). No, John, not a CDO (please try and keep up. The CDO's will include MBS's and that will be part of the subprime dump.Fannie and Freddie backstop 90% of the mortgage market so you know they will get saved. And anyways, Angelo has the corner on that, doesn’t he? Plus, he aint in the LBMA, so screw him too!”</i><br /><br />Or is that wishful thinking to believe that the data will be able to show how it did come about?<br /><br />Again, kudos!<br /><br /><br />Milambermilamberhttps://www.blogger.com/profile/17412309240173757052noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-64072153813153313972013-07-05T13:35:22.371+01:002013-07-05T13:35:22.371+01:00I am trying to imagine how the bars are handled in...I am trying to imagine how the bars are handled in real life. Like Bron suggests that the dude is lazy and only graps the first bars he gets his hands on in the vault.... ;)<br />This is kind of hard for me to imagine, that the bars are physically handled at all anyway, except somebody really wants it to refine it into some retail product. Until then, why handle them physically, but rather exchange ownership virtually, while they never move physically? (I guess this is also what your dark bullions would suggest?)<br />GLD says that the bullion is held at the custodian HSBC USA, London or in the vaults of sub-custodians.<br />Hmmmm, lots of different places....<br />BTW does somebody have a list of all those "sub-custodians"?<br />And maybe some of these places have more physical entries/exits than other (maybe because located at a refiner instead of some deep storage in Switzerland?)<br />Greets, ADAdvocatusDiabolihttps://www.blogger.com/profile/05290930478826481037noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-62063458817729076102013-07-05T13:14:43.975+01:002013-07-05T13:14:43.975+01:00Hi AD, those are good questions. The short answer ...Hi AD, those are good questions. The short answer is that there's no information like that and the best we can do is put together clues. From our information we do now see that bars tend to travel together in blocks (e.g. one pallet of 80 bars), and that the selection for removal/adding is also performed on a pallet basis.<br /><br />Yes, I think you're right - the 'dark duration' figures above do give a sense of the flow inside the vault, in the sense that those bars must be the 'accessible ones' vs. the 'hard to get at' bars as Bron notes above. but it's still only a blurry picture.<br /><br />I'm increasingly of the opinion that tracking the movements doesn't matter and I am probably wasting my time except it's very nice to see normal 'vault operation' distribution patterns. One would think that if the bars were not really present they would not go to so much trouble (to include all these details). That has a lot of value to me and it's one of the reasons I'm sharing it.<br /><br />Some of the other studies (part 3 and 4) will look at the block-based movements and hopefully give a really good view of how the bullion is arranged. What I'm really keen to see is a feel for the churn going on with the removals - e.g. are they removing 'deep' bars or just the ones which were added most recently? The goal is to get a sense of different 'removal types' and then see if there is any price correlation (yes, still hunting). Regards, WarrenWarren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-73680768415115691482013-07-05T10:15:05.267+01:002013-07-05T10:15:05.267+01:00maybe somebody asked or pointed out before, just w...maybe somebody asked or pointed out before, just wondering:<br />Could those bar appearances maybe also be related/effected to the geographical position/location of the different vaults where the different bars are at (added/removed)?<br />Are there information which bar is stored/added/removed at which vault?<br />Does it matter or doesnt it?<br />Just wondering, thoughts?<br />Greets, ADAdvocatusDiabolihttps://www.blogger.com/profile/05290930478826481037noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-59794495375954654742013-07-05T06:14:38.179+01:002013-07-05T06:14:38.179+01:0085% before 90 days and 24.1moz prsent in every bar...85% before 90 days and 24.1moz prsent in every bar list points to a lot of bars sitting up the back of a vault that the vault guys just want leave alone to minimise their work.<br /><br />I think a Weir Bix cereal would have zero nutritional value.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.com