CHINA GOLD EXCHANGE DEFAULT - CASH SETTLEMENT- Here comes the pain

Another domino...

While we have become used to the almost daily trading-halts in Japanese government bonds, when the CME reports that Silver trading was halted four times overnight, it is increasingly clear that this market is anything but 'normal':

*SILVER TRADING WAS HALTED FOUR TIMES OVERNIGHT, CME GROUP SAYS
*SILVER TRADING WAS STOPPED FOUR TIMES IN 20-SECOND HALTS
*SILVER TRADING WAS HALTED IN `STOP-LOGIC EVENTS', CME SAYS

Yet somehow, amid all this 'extreme' volatility in 'safe' collateral assets, we still do not hear of funds blowing up (yet). While central bankers would seem to disagree, there really is no stability without volatility and the more that vol is suppressed, the more extreme the inevitable 'event'.

www.zerohedge.com...

Paper Gold and Paper Silver are about to find their true market value which is zero. Currently Physical Gold and Physical Silver prices have almost disconnected from the Paper discovery scam. Paper prices will slam to zero in the biggest flash crash in history when paper price discovery completely disconnects. Halting is nothing but last minute tactics to prevent that from happening.

reply to post by METACOMET


Nice catch on this one Meta. I also have to agree w/PlanetX...I would think that the forum would be all over this. Runs on Gold and Silver in the near term are going to create huge instability within the rest of market. This has very far reaching implications, at least in IMO.

reply to post by maddog3n8


You wonder why there are so many scandals at this moment in time?

They want peoples attention elsewhere.

Can you please explain how this article indicates that China wants to drop the price of gold and how that would benefit them.

Are they not one of the largest holders of gold on the planet?

A lot of people in China who thought they owned a Gold position will actually find out they have paper today. People will be scrambling to get physical, The Shanghai Gold Exchange appears to have stopped delivering gold, - going to be strains on getting your hands on precious metals.

Now they can keep on manipulating the market, but I am starting to see dealers not caring at all about the "spot" price.

Originally posted by pyramidikal

Originally posted by ShadellacZumbrum
reply to post by maddog3n8

 

Then I guess it is a good thing that American Currency is No longer backed by Gold or Silver.

If you have purchased Gold at the $1800+ dollar an ounce price you might want to sell before it goes back to $300-$400 an once.

Gold will never drop below 1,000 an ounce in your lifetime. If a cache was found, or a giant vein was found or a new mine discovered it could theoretically drop it a bit but I think it's pretty clear 1,000 is the safe number it will rest on. Due to high demand it'll still trade higher than that.

How is that pretty clear? I haven't seen anything yet to explain how gold ispossibly still even sitting about $750/ounce. If I don't see it down to 700 in my lifetime, i'll have to assume tha means my days are seriously numbered.

Originally posted by dogstar23

Originally posted by pyramidikal

Originally posted by ShadellacZumbrum
reply to post by maddog3n8

 

Then I guess it is a good thing that American Currency is No longer backed by Gold or Silver.

If you have purchased Gold at the $1800+ dollar an ounce price you might want to sell before it goes back to $300-$400 an once.

Gold will never drop below 1,000 an ounce in your lifetime. If a cache was found, or a giant vein was found or a new mine discovered it could theoretically drop it a bit but I think it's pretty clear 1,000 is the safe number it will rest on. Due to high demand it'll still trade higher than that.

How is that pretty clear? I haven't seen anything yet to explain how gold ispossibly still even sitting about $750/ounce. If I don't see it down to 700 in my lifetime, i'll have to assume tha means my days are seriously numbered.

Due to rising labor, environmental, energy, royalites and other costs, the cost to mine an ounce of gold has gone up tremendously over the past decade or so. By definition 12 years ago when gold was under $300/ounce, the cost per ounce was similar or less. However, few gold companies are mining gold for less than $500 per ounce these days, and for many the cost to produce an ounce is over $1000.

Think about what would happen to the supply if the price were to go below $1000 per ounce. Many gold producers would be putting their mines on care and maintenance even before that point if it looked like the longterm trend was down. And what happens to price when supply goes down?

However, we are reading of record DEMAND in physical gold and silver from around the world, so obviously there is a big disconnect between the paper price and the physical price. Many who want the protection of gold and silver but only hold their paper proxies are beginning to realize that is no protection at all and are dumping the paper for the real thing. Plus the usual manipulation of the price down in order to cover shorts. Plus the propaganda for the sheeple that gold and silver are "bad" investments. And of course to keep lipstick on that pig that is "fiat".

The truth is not that the value of gold and silver have risen over 500% or more in a decade, but that the US dollar and many other major currencies have been devalued by 80% - 90% over the past decade or so, more since Nixon closed the gold window, and about 99% since the FED came into existence in 1913.

Just read Zero Hedge as some on here have pointed out if you want a better, clearer picture.

reply to post by PlanetXisHERE


Excellent answer, thank you! I've never really thought about the production costs, etc., as part of the equation, but i've been railing against the $5-10k/oz folks for years now, mainly because they don't understand that debt:GDP matters, while "debt itself" does not mean much of anything. Growing money supply isn't a concern either as it relates to commodities, but supply commensurate with demand does.

Anyhow, thank you for the great answer. Its a rare day when you learn something on the intermets. : )

One cannot eat gold. They can easily engineer a famine which will make gold cheaper as people rush to convert gold back to cash to buy food.

Gold is very volatile right now and one cannot predict the correct price easily.

Originally posted by dogstar23
reply to post by PlanetXisHERE

 

but i've been railing against the $5-10k/oz folks for years now, mainly because they don't understand that debt:GDP matters, while "debt itself" does not mean much of anything. Growing money supply isn't a concern either as it relates to commodities, but supply commensurate with demand does.

You're welcome but I'm not sure we're on the same wavelength, but that's okay, maybe you can enlighten me.

Sure, absolutes are rarely useful yardsticks, but also what matters is what tools the "FED" is using to stimulate the economy, and what is working, what is not, and what is likely not to in the future - and what will happen if the FED has no more tools that work.

For example, in every recession since the depression, low interest rates were the solution that quickly pulled us out and back into growth. However, that didn't work in the 2008 crash, and monetization/printing money on a scale not seen before was attempted. This worked well in 08-11, albeit with ZIRP still in effect.

However, monetization seems to be having no effect now, and ZIRP is useless as a driver this time. With most of the world economies in the same boat, the only course seems to be a race to devalue, as many have observed. Sure China will keep chugging along, but it is not strong enough yet to pull the rest of the world out of recession/depression.

With demographics the way they are for 3 of the top world economies, Japan, the US and Europe; there are no major demographic economic drivers on the horizon. The logical conclusions are either massive deflation; or the choice governments and central banks choose 99 times out of 100, monetization and beggar thy neighbour policies through devaluation. Policy makers inevitably choose the latter, which logically leads to hyperinflation, it is just a matter of when. When that happens $5K - $10K per ounce gold will look cheap.

Not to mention the public's reaction when they learn Fort Knox is virtually empty.

Physical precious metals never go to zero, whereas many forms of paper - such as currency, stocks, bonds etc have done so time and time again and will do so again.

However, as I said above, before acquiring some/more physical precious metals (that is ones you can hold in your own possession), I would advise having all your survival supplies topped up.

I'm actually going to buy gold as it drops. This is all a scam to get people to sell their gold while the elites buy them all.

When the engineered collapse is complete. I willl be a rich man.

The whole reason why the US government has been buying up gold is so that China can't cripple the market.

From what I have seen of the India and Turkey gold markets, their buyers are insatiable, those two markets don't show any signs of slowing down anytime soon.

Originally posted by ShadellacZumbrum
reply to post by maddog3n8

 

Then I guess it is a good thing that American Currency is No longer backed by Gold or Silver.

If you have purchased Gold at the $1800+ dollar an ounce price you might want to sell before it goes back to $300-$400 an once.

It's only good for the federal reserve and the federal government cause fiat money can be printed infinitely but
currency backed by precious metal has limits on the amount of cash that can be in circulation!
I doubt gold will drop much! This could just be a ploy by China to both lower the cost of gold while dumping their
US treasuries for cheaper gold!

I was concerned that this "voluntary surrender" of the authority to trade came only after the admission that the exchange was operating below the minimum standard set by regulators; namely, that you have enough cash to cover nine months of operations.

Seems to me this curious development might just be a polite way of saying that technically, they were sinking.

I see this as a financial* controlled-demolition. Now the reason for it may not the same as a the cause of it... but ultimately, the "market" is effectively "owned" by the bank... and the 'house rules' seem to be in play.

* - understand my opinion, that regardless of the specie you choose to trade with; speculation is risk taking... and all of this so-called "trading" - top to bottom - is a game.

The limits of cash-on-hand are established to give 'confidence' to the risk-takers.

Holy crow!

I'm about to get some much overdue shut-eye but I hope somebody makes a thread about what the markets are doing right now!

Interesting developments....