Gold/Silver OTC trading illegal for US residents after July 15, 2011?

Originally posted by JR MacBeth
reply to post by jaguarsky

 

With the price of gold artificially high...

Gold is "artificially" high?

Care to elaborate?

I would like to know what criteria is being used to set the price of precious metals.
I too, believe it is artificially high (so are diamonds) and when the bubble bursts, it will fall back down to where it would have been other wise.
I remember the Hunt brothers, lol

Originally posted by Troublesome
I guess i'll be an illegal precious metal dealer hustling that bullion by the corner bodega. I got those ounces cheap...hit me up!

ROFL
Thanks for the humorous visual, I needed that, lol

I thought this would be interesting....

reply to post by ripcontrol


In my thread I found this looking something up....

Great Depression

Countries such as China, which had a silver standard, almost avoided the depression entirely

.

Can someone verify this... or would it be due to more under developed area... but ouch if it is not....

Originally posted by jefwane
I concur with OBE1 and others, this is notable but not really that big of a deal. Getting things on a double blinded exchange w/ enforced margin supervision is always a good idea.

Why can't they force CDS which trade OTC onto a similar exchange? That I'd really like to see

.

Those are accredited investments most likely that are only available to net worth 1MM+ or institutions. Just like gas and oil DPP's or limited partnerships.

I am not even sure if accredited investors can participate in that market. Most likely just institutional trading.

Everyone needs to slow it down a bit. I think too many of you are jumping to conclusions that are not accurate. I also don't think everyone is on the same page. The Dodd-Frank act was implemented in 2010, and was instituted as an attempt to regulate Wall Street. There is no executive order like was stated in the op, and if you do not believe me, just go the White House website and see for yourself.

For any financial research, such as for this thread, should be done through the Securities and Exchange Commission's website, as it is accurate. I do not know the source that this article is based on, but for things
this important, I would not trust any website that doesn't have a dot gov extension.

Originally posted by QuantumDisciple
This helps explain it

"Elimination of OTC Metals"

... in other words OTC precious metals. ...

This only involves leveraged or margin trading.

edit on 18-6-2011 by QuantumDisciple because: (no reason given)

Unless I'm missing something, coffee, cocoa, corn, pork bellies and other things fall into the "leveraged" or "margin" category. What "leveraged" means is that you are controlling a large amount of money with a relatively small amount of money. For example, one coffee contract is 37,500 lbs of coffee. If you paid market price of 2.60/lb you'd have to fork out $97,500 to control one contract.

Since most commodity traders don't actually take delivery of a contract, they buy and sell contracts on margin. Margins vary but coffee is currently about $5,400 per contract.

The same concept holds true with precious metals. Most people never take delivery of gold or silver. They have a useless piece of paper that say's they "own" it. This will not affect REAL, tangible precious metals. That is what you want to have your hands on when the dollar crashes because you can actually trade with it. You can't trade with a piece of paper that says you "own" it. When our economy is borked and the dollar is worth about 3 cents, gold or silver bullion or coins will still have value.

I believe all of the "We Buy Gold" stores that have popped up over the last several years are actually tied to the government. They are trying to reign in as much gold as possible before the SHTF.

Anyway, no. OTC doesn't mean walking into a pawn shop.

OTC contracts An over-the-counter contract is a bilateral contract in which two parties agree on how a particular trade or agreement is to be settled in the future. It is usually from an investment bank to its clients directly. Forwards and swaps are prime examples of such contracts. It is mostly done via the computer or the telephone. For derivatives, these agreements are usually governed by an International Swaps and Derivatives Association agreement. This segment of the OTC market is occasionally referred to as the "Fourth Market." The NYMEX has created a clearing mechanism for a slate of commonly traded OTC energy derivatives which allows counterparties of many bilateral OTC transactions to mutually agree to transfer the trade to ClearPort, the exchange's clearing house, thus eliminating credit and performance risk of the initial OTC transaction counterparts.

Source

reply to post by General.Lee


OTC is an unregulated market. That is the difference.

Try finding the "market depth" of EUR/USD on FXCM or FOREX.COM. Or try to find a time and sales of all trades.

You could keep looking forever because you will not find them. Think about that for a while.

Forex markets ( OTC ) markets are a quasi scam. The only difference would be a real ECN like Interactive Brokers, and IMO that is still shady as &***. The only positive is that you can profit from the quasi scam. Well, statistically only about 6% do, but it doesn't stop the other 94% from trying.

reply to post by jude11


BIG UPDATE:
Another Broker Halts Trading In Gold And Silver Products

Specifically, CMC has said that beginning July 29, it will no longer offer nor roll any of its existing gold and silver CFDs. What is curious is that unlike Forex.com, which advised clients it is halting comparable trading on July 25 as pertains to spot OTC products (XAU and XAG), CMC's halt is impacting gold and silver futures.

So futures are to be affected in some way now. Very curious.

reply to post by Skerrako


This policy is likely to affect the gold market in very noticeable ways. As I posted here, the gold/silver market could go up or down on this dramatically. It all depends on price discovery once these vehicles have been eliminated from the market or when certain vehicles are forced to raise gold reserves. If the gold market discovers there is far less gold than these pieces of paper lead people to believe then the price could go up VERY high. If, however, the amount of gold available is on par or above what is established by current market valuation(which includes paper) then the price will either flatten or tick down substantially. The latter, in my opinion, is not very likely.

I'm expecting gold to go through the roof. Physical is going to get a huge boom out of this policy.

I search the White House website for Executive order 6102 part 2 and found the original, but not part 2. I have e-mailed Patriot Trading Group for their feed back about this and am waiting for a reply. www.allamericangold.com These are the people I deal with and they are highly reputable. I am awaiting their reply, probably today sometime.(Monday 06.20.2011) This may be another ruse like the one about ammo going up 500%, that did not happen.

reply to post by JiggyPotamus
ok so you say go to a site like this www.cftc.gov... so where is the ban on gold? where is SEC on 401k and Ins as a 401K just asking for your thoughts

Originally posted by CarlitosAmsel
There you have it: skinnyreporter.com...
or google by yourself "Executive Order 6102 obama"

Obama bans wealthy from hoarding gold

Link

BRUSSELL SPROUT

Get it ?

CarlitosA, you are incorrigible!

A couple of notes on the ETFs like GLD & SLV. These unleveraged instruments are traded on regulated exchanges as opposed to OTC, so they're excluded from the new Dodd-Frank regs. They don't push, set, or drive Gold/Silver market prices in either direction...on the contrary. ETF's simply follow, or 'track' the spot price of the underlying commodity. The correlation between share price and spot price is maintained through a dynamic interplay involving Trust Authorized Participants (aka: bullion banks/broker dealers), arbitrage opportunity, and the ETF share-creation/redemption mechanism.

Kid Dynamite has written a series of good primers on the topic. Coincidentally, this one just happens to cap on ZH.

No, GLD Is Not Overdue to Buy 200 Tons of Gold: An ETF Lesson Part II

Originally posted by bekod
if any one wants to read the hole text off eh law her it is www.opencongress.org... it is a long one, from the link

Enrolled Bill 383,013 word count 4,478 Changes Show Changes 50%

i would like to know where the other 50% is; Man that is a lot of changes, wonder what the real bill had, or did not have that it has now. Probably need to in law school just to ask.

edit on 19-6-2011 by bekod because: text correction

this i just found after reading from the above link; get the aspirin out if you read it for there is a lot to this and we the people are well... read this for you self www.sec.gov... there is no copy and past allowed so you just have to read it, if some one can copy and past pleas do so

reply to post by Dbriefed


In Soviet Union trading silver and gold was a criminal act. Many were jailed for even having gold or silver at home.

They will get it all from you. It is a big club and you are not in it... the game is rigged.
They don't give a # about you, at all, at all, at all, at all... (George Carlin)

reply to post by OBE1


ETFs can be levered. When you have companies selling ETFs to products they physically don't have it is leverage..(or fraud depending on who you are)

It is my under standing from reading the law and sub sec and as amended the gov and the law as it stands has resurrected this law as seen here with the same penalty's yes i know it is from the wiki link but i can copy this en.wikipedia.org... and this is one we all should take note on but hay do not take my word for it or skip it for i know what is coming you should too

A year earlier, in 1933, Executive Order 6102 had made it a criminal offense for U.S. citizens to own or trade gold anywhere in the world, with exceptions for some jewelry and collector's coins. These prohibitions were relaxed starting in 1964 – gold certificates were again allowed for private investors on April 24, 1964, although the obligation to pay the certificate holder on demand in gold specie would not be honored. By 1975 Americans could again freely own and trade gold.

this is to take effect on July 15 of this year folks i will add both links to this law here is the bill as voted in congress signed by the pres www.opencongress.org...
and this one www.sec.gov... it is of the law of
1934 renewed as law 2010 in the hole, compare 1934 act with the 2010 act the only dif is the revised dates 1940 1956 1978 1990 2001 2010, the 1978 date is when you could have all the gold you wanted too no limit, now your lucky to have or soon will be that is , a 1/4 oz. do you not get the feeling that ww3 is soon to come '34 too '41 is how many years??

Originally posted by projectvxn
reply to post by OBE1

 

ETFs can be levered. When you have companies selling ETFs to products they physically don't have it is leverage..(or fraud depending on who you are)

I'd have a better understanding of your position if you would name one.

Thanks

reply to post by OBE1


JP Morgan and their silver paper. I think it's an ETF if I'm not mistaken and I do believe there is a lawsuit over it. But it's been a while so i could be wrong.

reply to post by projectvxn


JPM is fighting a few suits that pertain to alleged illegal activities on the futures exchange. I think the charges involve price manipulation with respect to their outsized Comex Silver position - futures are commonly are traded using leverage.

I don't have any vested interest in gold,but maybe this article I came across will be helpful in understanding this topic. It isn't lengthy.

Here's their Bottom Line...

Bottom line: If you understand the "Kimberely Process" which certifies which diamonds are not "conflict diamonds", you have to understand that the process won't stop at the mining source. Eventually all gold will be required to be "proved" that it comes from a non-conflict zone and there is no way that can even be attempted without a serial number on each coin. We are not there, yet. But the program announced by the World Gold Council is sadly another significant step toward the attempt to track all gold. The attempt will be made.

www.economicpolicyjournal.com...