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Is there any limit to creation of paper gold on the Comex?
3:32p ET Monday, August 3, 2015
Dear Friend of GATA and Gold:
A week ago the TF Metals Report disclosed that leverage in gold futures contracts on the New York Commodities Exchange had reached 116 times the metal available for delivery:
http://www.gata.org/node/15598
Today Zero Hedge reports that the leverage is up to 124 claims per ounce. Zero Hedge's report is headlined "Comex On The Edge? Paper Gold 'Dilution' Hits a Record 124 for Every Ounce of Physical" and it's posted here:
http://www.zerohedge.com/news/2015-08-03/comex-edge-deliverable-gold-dro...
Zero Hedge suspects that the growing leverage signifies that refugees from China's stock market are frantically reaching out for golden insurance, and wonders about a default on Comex gold contracts.
... Dispatch continues below ...
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Since the JPMorganChase gold vault seems to be connected to the gold vault of the Federal Reserve Bank of New York, your secretary/treasurer isn't sure that the Comex leverage figure means all that much. For if the United States is prepared to compromise all the gold it holds in custody for foreign governments, the gold futures price well could go to zero.
Indeed, gold now is priced substantially below its cost of production mainly because Western central banks and their bullion bank agents have figured out how to make metal appear to be in many places at once, perhaps in as many as 124 places. That gold mining company shares continue their fall toward zero suggests that investors figure that no one ever again will need actual metal, at least not for investment purposes, and that the gold mining industry, remaining silent amid the overwhelming evidence of surreptitious central bank intervention in the gold market, has agreed to die quietly and thus truly is worth nothing.
The TF Metals Report last week may have posed the crucial question: What's to stop Comex gold contract leverage from going to 200 times or even 500 times the metal available for delivery?
If there's anything to stop that, it won't be the World Gold Council or mainstream financial journalism.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATa.org
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