ZeroHedge have picked up on this Wall Street
on bankster owned warehouses restricting deliveries
out to the minimum amount allowed by the LME. The scam is summarised
by the Financial Times: buyers "must keep
on paying rent on the metal even after you have asked for it to be delivered,
giving warehouse companies a guaranteed income stream".
But with no restrictions on how quickly metal can come in (and the bankster warehouses have been bidding for metal to be
delivered into their warehouses from producers) it "has had the effect
of driving the cost of metal in the physical market in the US to the highest
level in more than a decade relative to LME prices". The FT notes
however that this creates the risk that "the LME contract risks becoming
entirely detached from the physical market."
Apart from the storage fee scam, an increasing price is good for the banksters because it makes it easier to sell commodities
as an alternative investment class to institutional investors (see FT
on Goldman Sachs).
Problem is, with lots of metal coming in but restrictions on it going out and
you end up with increasing stockpiles. That doesn't help the story that
commodity prices will rise. Solution: take the metal "off warrant"
which, as FT
Alphaville points out, just transfers it
into a "non-LME storage facilities or simply being classified private
non-LME registered stock in the very same warehouses. Kept out of sight, so
The scam here is that (FT Alphaville
again) "the industry still
reads cancelled warrants as an indicator of physical demand" which is
positive for prices, however "many of the 'cancelled' warrants are ...
not transforming into real deliveries, they’re just being stacked
elsewhere in the same warehouse. In which case the demand they insinuate is
potentially not real at all."
Precious metals are not subject to the warehouse outward restrictions scam
and the spot market is much bigger than futures anyway, from a physical point
of view. However, the "off warrant" scam can be played,
particularly on fools like ZeroHedge who get all excited about COMEX
eligible and registered trends while ignoring (ignorant of?) the
"stock" sitting in ETFs and, more importantly, the dark pool that
is bullion bank vaults. And don't fall for the "its
fractional" false flag. Yeah unallocated is fractional, but what is
missed is that if the amount of fractional is giga-enormous,
then even at 10:1
or even AIGish 40:1, the amount of physical metal
being held in the system is still enormous.
Which is why I am very interested in this ETF bar
list project and am doing what I can to help, as this I believe
holds the potential to reveal just how big that dark pool of stock really is.