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SGM Precious Metals: JPMorgan Leads the Banking System Rush to Gold & Silver w/ 60K COMEX Contracts!
As we watch the Syria circus on TV the banks are rushing to corner the gold & silver market before the 'flight to quality' rush begins. Sept. for 6 decades has been the worst month for stock losses & this year will out do anything seen in DOW history
By: SGM Precious Metals & The Elemental Economist
HSBC House Account: 13,768 deliveries. Total issuance: ONE.
Scotia House Account: 8,932 deliveries. Total issuance: 4,259
DeutscheBank House Account: 5,918 deliveries. Total issuance: 1,746
Barclays House and Customer: 5,384 deliveries. Total issuance: 908
JPM Customer: 1,444 deliveries. Total issuance: 16,758
JPM House: 547 deliveries. Total issuance: 15,181
Desperate to cover & eliminate their 50,000 contract short position but not wanting to buy futures contracts for fear of disrupting the building price collapse, JPM decided to eliminate most of the position by settling short contracts in physical metal. They planned on re-acquiring the metal in the near future at lower prices. So confident were they, they even used customer gold to settle over 1/2 of these obligations.
June marked the bottom for the manufactured “correction”
The BPR simply aggregates the positions of the 4 largest US bullion banks & the 20 largest non-US bullion banks. So, it’s impossible to say with certainty how the 59,473 contract net long position is divided. But consider this:
On the 2/5/13 BPR, the 4 US banks had a combined net short position of 69,300 contracts. After 5 months of deliveries & a $500 price drop, the 4 banks had flipped to 59,473 contracts net long. Now, go back up & reconsider all of the delivery totals listed above. Can you connect the dots?
JPM decided late last year to rig the gold market lower in order to create the ideal conditions under which they could flip a 50,000 net short position to a huge net long position. Price, delivery notices & the CFTC-supplied reports document that they accomplished this feat by covering & delivering shorts while at the same time buying longs.
If this is the case, & JPM is now net long a massive amount of gold futures, the COMEX delivery pattern should change. Instead of JPM being the primary issuer, they should be the primary stopper. The other banks should now be the issuers, particularly the non-U.S. banks as the Aug BPR showed them to have a net short position in excess of 22,000 contracts.
Exactly that has happened this month! As stated above, of the 4,075 total contracts deliveries in August 3,414 were stopped by JPM with 3,151 for the house account. Which firms have been issuing? Deutsche issued 1,116, Barclays 447 & Scotia 463. That’s a total of 2026 or 49.7%. Note that all 3 are non-US banks!
This proves that Ted is correct. Not only is JPM net long the entire 59,473 shown on the Aug BPR, their position is likely even higher, offset in the net total by a net short position held by the other 3 US banks in the report.
What happens next? Right now, the total open interest for the typically slow delivery month of October is just 23,758.
More significantly, the total open interest of the Dec. contract stands at 229,838 (60% of the ENTIRE COMEX gold complex) & this is where JPM likely holds the majority of its net long position. If that’s correct whats going to happen in December? Is JPM going to stand for delivery AND, if JPM stands for delivery in December, are they going to attempt to extract 20,000 contracts or more worth of gold from the other BBs? If the other BBs get wind of this, are they just going to standby & wait to deliver or will they begin to move net long before it even gets that far? And then you’re only left with Spec Shorts who don’t have the capability to deliver 2,000,000 oz of gold because they don’t have it. They’re just short the paper!
All of this could & should set off a buying frenzy/short-
US megabanks have worked in collusion for 2 decades to choke out gold & silver appreciation to run cover for the feds money printing have now dramatically altered their strategy. They are no longer interested in suppressing metals to aid the FED but instead are now aggressively reversing their strategies to not only allow the 2.5 decades of appreciation to take place, but have also positioned themselves to be enriched by this long overdue gold & silver explosion ironically ahead of the Sept stock blood bath.
For 61 yrs Sept produces the greatest period of net losses in stocks. This time metals will run at the exact point where the DOW bubble begins to deflate. This reversal of capital will create the vacuum that will ensure tremendous stock & bond losses unlike we have ever witnessed.
The BBs appear to be turning on one another & this brinksmanship is of epic consequence. There will be many left out in the dark (both institutions & individual investors) when the rush to precious metals begins as it will be every man for himself.