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Rick and Chris discuss collateral as it has recently related to gold.

Big Al
June 27, 2014

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84 Comments
    CFS
    Jun 27, 2014 27:29 AM

    I posted these comments yesterday:
    http://www.bloomberg.com/news/2014-06-26/china-finds-15b-of-loans-backed-by-falsified-gold-trades.html
    Public security authorities are also probing alleged fraud at Qingdao Port, where copper and aluminum stockpiles may have been pledged multiple times as collateral for loans. Steps by the Chinese government to rein in credit by raising borrowing costs in recent years created a surge in commodities financing deals that Goldman Sachs Group Inc. estimates to be worth as much as $160 billion.
    Reply to this comment
    On June 26, 2014 at 4:33 pm,
    CFS says:
    Of the as much as $160 billion in transactions projected by Goldman, $80 billion may involve gold. For the rest: $46 billion copper, $13.8 billion iron ore and $10.3 billion soybeans, according to a March 18 report.
    The primary non=Chinese bank that may be affected appears to be Citicorp.
    For some commodities financing transactions, owners of raw materials sitting in ports use receipts from warehousing companies to get credit from banks, which they then put to work in high-yielding investments before repaying the debt.
    Other deals involve a Chinese buyer placing orders for commodities with overseas companies and then applying for a letter of credit from a bank, which they use to import the materials. The buyer can then sell the consignment in the domestic market and use the money onshore at a higher interest rate before repaying the original loan.

      Jun 27, 2014 27:06 PM

      Al your interview with Gary is actually an interview with exeter…please fix.

        Jun 27, 2014 27:21 PM

        My mistake and I will fix it, thanks much.

      Jun 27, 2014 27:28 PM

      Thanks cfs.

    CFS
    Jun 27, 2014 27:35 AM

    I also posted this yesterday:
    On the gold front,the best info learned from China is that the missing inventory at Qingdao may be 80 billion dollars worth or 1900 tonnes of gold. The missing inventory will force holders to try and locate real metal. This will without a doubt break the shadow banking system in China.

      Jun 27, 2014 27:40 PM

      In China it is called fraud and in the West it is called derivative or fractional reserve system. One is legal and the other isn’t. Someone is going to loose their head, seriously.

      I think a lot of these frauds are between two willing parties. One party fake the storage and the other (banker) will lend to him willingly and receive kickback. The bank is the loser.

      Many of these people have been arrested during the years especially recently. The new leaders seems willing to handle tough issues now. It is known in China for a long time and people hate it.

        Jun 27, 2014 27:49 PM

        In AFRICA its called ethnic cleansing ! The corruption is total ! Al world !

          Jun 27, 2014 27:35 PM

          To an extent you have to be absolutely correct, Franky!

        CFS
        Jun 27, 2014 27:03 PM

        The Bank of England cracks down on mortgages … Mark Carney supposedly outlines measures to keep lid on housing market at the Bank’s Financial Stability Review … The Financial Policy Committee (FPC), which is in charge of financial stability, stressed that – while household indebtedness did not pose an “immediate threat” to the economy – it wanted to stem an increase in the number of Britons taking on high levels of debt. – UK Telegraph
        My Comments: Intelligent men would take action to prevent asset bubbles.
        Free-Market Analysis? A small group of powerful men announce they are fixing prices throughout Great Britain; the press has nothing to say? Just like America!
        These same individuals describe their actions as “breaking new ground.” The Bank of England under Mark Carney has outdone itself: It has graduated from fixing the price of money to fixing the price of mortgages. Do the hoi poloi not realize that politicians handing the economy into the control of shylocks is doomed to end badly?

        Money , especially fiat, in some sense is amorphous but there is nothing vague about buying or refinancing a house. This is out-and-out OBVIOUS price fixing, the kind of thing that Richard Nixon did in the US in his peak of power. (And we all know the end of his arrogance.) Or are memories nowadays really shorter than the life-span of sewer-rat?

          Jun 27, 2014 27:21 PM

          Housing bubble is easy to fix. Just raise interest rate and mortgage down payment. Unfortunately, these leaders want their cake and eat it too.

            CFS
            Jun 27, 2014 27:04 PM

            Lawrence, You do realize only a very few countries have fixed interest rates. England is not one of them (for more than a few years).
            Your suggestion would cause mass mortgage default.

            bb
            Jun 27, 2014 27:54 PM

            I gotta agree with Lawrence on this one, but cfs is correct too
            economics, its political choices.
            this is why its too important to be left to the “experts”.
            not that anything will change today but im just for people understanding what they are decideing on.
            altho they really don’t care enough to look into it anyway.
            so, I guess its buy the house at low interest and rent them.

            Jun 27, 2014 27:38 PM

            If there is massive default, it means people cannot afford house at first place. Market should decide this not a smart man. A normal economy has both pain and joy.

        Jun 27, 2014 27:31 PM

        Lawrence, it will be interesting to see how this evolves particularly in China!

          Jun 27, 2014 27:46 PM

          China needs clean up corruption. People already take law into their own hands in many cases. A lot of people are so greedy that are willing risk their life to gain wealth illegally. In a long run, there must be some mechanism to prevent it from happening.

            bb
            Jun 27, 2014 27:18 PM

            a change in consciousness Lawrence, not going to happen until we have a large enough crises to do it for us. maybe no water, no jobs a war a bacteria, or the ever popular alien invasion option.
            whatever it is, my guess is it has to be forced on us, everywhere at once, the corruption is rampant.

      Jun 27, 2014 27:29 PM

      Again, Professor, I repeat that I think everyone will find the first two segments on the Weekend Show to be really interesting.

    CFS
    Jun 27, 2014 27:37 AM

    If you guys read your own blog, you might be better informed! tut-tut.

      Jun 27, 2014 27:18 PM

      Can’t keep up with all your news clips CFS!

      Jun 27, 2014 27:39 PM

      Who are you referring to cfs?

        CFS
        Jun 27, 2014 27:52 PM

        Big Al, This section with Chris and Rick would have been better if they had all the facts.
        Gold is missing in Qingdao.
        Not a trivial amount. 1800 tonnes was used as collateral.

        Probably a fraction of that several times over, but none at all has been located so far.
        When the Government of China realized the magnitude of the problem, news flow dropped to a drip.

          Jun 27, 2014 27:50 PM

          Either missing or have multiple loan against it. I guess it is pretty hard to sell the gold which is not there unless you are the government.

    Jun 27, 2014 27:37 AM

    CHINA CHINA THE US ( WEST is CRAZY ) ! The ELITE make the european union bicker ! And the US help pay for it ! http://online.wsj.com/articles/obama-proposes-500-million-to-aid-syrian-rebels-1403813486

    CFS
    Jun 27, 2014 27:39 AM

    No Franky, The West is sane, but we have a traitorous President.

    We need to borrow a guillotine from France.

      Jun 27, 2014 27:43 AM

      AL THE PRESIDENTS OF THE WEST !

    Jun 27, 2014 27:20 AM

    Good insights guys. My first impression was this Chinese rehypothecation scam would hurt gold but in fact it is making no real difference at all. All the talk of inflation seems to be carrying more weight. I guess if people believe it then it will be self reinforcing. Gold meanwhile looks stalled out in suspended animation but that won’t last too long. I am surprised it has not done much if any correcting to be honest.

      Jun 27, 2014 27:32 AM

      The first refuge in the China metals scam will be the US$, ‘Bird, which will give you the “rally” you’ve been expecting. That will punish gold, momentarily, too but the scales will fall from the eyes quickly when the realisation sinks in of who’s been left hung out to dry, and in what real assets. July is going to be ONE FUN MONTH!

        Jun 27, 2014 27:54 PM

        You cannot use USD in China. People may flee to local currency. US dollar is not important and there are a lot of it.

      Jun 27, 2014 27:46 PM

      A lot of us are Bird. Rick and Chris are looking for a bit of a pull back.

    CFS
    Jun 27, 2014 27:28 AM

    David Morgan talks about Fakes:
    https://www.youtube.com/watch?v=k1KZk3ha1Ds

    Bird, Gold is in a secular Bull Market. However not a free trading market. I believe it is totally manipulated. To maximize bank dealing profits, gold will not be allowed to go over $1320 this week, as I previously reported.
    The interesting questions are:
    Will the US Dollar be propped up just before closing today and will the Dow get its 3:30 pm ET Friday afternoon boost.

      Jun 27, 2014 27:32 PM

      Unfortunately, in part because the video with David Morgan is 4 years old, some of the things he says are not true, such as silver being too cheap to be faked. Silver today is faked more often than gold. You can’t just simply use the “ring test” to see if silver is fake or not as David implies. Not all silver rings exactly the same. He also mentions about silver coins not really being faked. Well today they are faked probably by the millions from you know where, China. There are now some fakes that are being made that have the same dimensions and weight as real silver and they are getting closer to having the details of the coin or bar correct then they were in the past.

        CFS
        Jun 27, 2014 27:39 PM

        I could not find a recent video on the subject,JMiller, but wanted to warn against fakes……particularly rare coins.

          Jun 27, 2014 27:35 PM

          that is why you want to get them graded ,sealed ,certified by a real grading service, who offers insurance against such fakes…..

            CFS
            Jun 27, 2014 27:07 PM

            The problem is the secondhand market in supposedly real grading service fakes.

            Jun 27, 2014 27:09 PM

            There is a problem there Jerry. It is indeed worth the time to counterfeit silver coins as we are discovering with all the knock offs coming out of China but the cost of testing and grading individual silver pieces is prohibitive.

            Jun 27, 2014 27:36 PM

            BIRD…..my reference was to RARE COINS………..not $20 silver…….it take $30 to grade a coin..but, if you are buying a gold coin it is well worth the investment and added insurance. People dealing in rare coins have been privy to China for some time now., this is not new………..Coin newsletters , have been showing these coins , and the packaging is not the same………..plus , Each coins graded by a professional grading service has a certification number associated with each and every coin……

            Jun 27, 2014 27:44 PM

            There have been fake coins around for decades………..people alter the mint mark , shine coins, clean coins, acid coins, etch coins……..on and on ……Any coin collector has seen and heard of FAKE RARE COINS…….and I bet anyone that has collected coins has been screwed at least once, in their collecting career………..

            Jun 27, 2014 27:55 PM

            Jerry, CFS and Bird,

            I, for one, appreciate these comments. Thanks

          bb
          Jun 27, 2014 27:35 PM

          no offence to those being taken in by fake rare coins, but if you cant actualy see what your buying…..well, wrong I know but I would have a hard time feeling sympathy.
          lol, can you imagine the press needed to manufacture a good fake? heck they could be more valuable than the real ones. as fakes.

          quick story, in 1967 there were some Canadian “fakes” minted at the rcmint, double struck, once regular and the 2nd time the coin was moved and struck again. Yes, the guy worked there.
          in 67 I held the “wolf” never bought it but a few months ago I saw them on ebay, I reported to the ccp and rcmp, NOBODY cared. ebay did take them off when I told them they were “criminal” coins but the police sure didn’t care. I told them I must be vey old, at one time breaking into the mint and minting your own coins would have been “frowned upon”, but not now. I asked a Calgary cop about it, he said its the same thing as a guy robbed on the street, no manpower to bother with it.

            Jun 27, 2014 27:56 PM

            HOw do you feel about paying your taxes, bb?

            bb
            Jun 27, 2014 27:01 PM

            well, al, ive been in hospital a few days now, the care is unreal, pretty girls, doctors coming by, heck, I almost feel on holiday.
            right now, I gotta say my taxes have been well spent.
            a little “corruption” never really hurt. lol

        Jun 27, 2014 27:54 PM

        Funny Mr. Miller, but I know David pretty well and he did not look the same as he did about a month ago when I visited with him in Spokane!

          Jun 27, 2014 27:40 PM

          Al,

          I do not have a clue what you mean. I said nothing about his looks so I am confused by the statement you made to me.

      Jun 27, 2014 27:06 PM

      The dollar has been in a very tight trading range for nine months now as it rises and falls between 79 and 81.50 approximately. I don’t see a lot of action pushing it up or down despite the EU interventions.

        CFS
        Jun 27, 2014 27:11 PM

        You need to watch more closely Bird….I have posted twice in this forum recently when the dollar has been kicked up a bit. Of course it usually happens at weird hours, during low trading volume.

          Jun 27, 2014 27:18 PM

          Weird hours is when I am awake since I am on the other side of the planet. You still in Europe by the way?

            CFS
            Jun 27, 2014 27:36 PM

            In Indiana at the moment, but I fly to California next week.

            Jun 27, 2014 27:57 PM

            Storms okay where you are, Professor?

      Jun 27, 2014 27:53 PM

      Who is Gold Money Foundation.

      And, I could find no alexa rating for the website.

      Know anything about this?

        CFS
        Jun 27, 2014 27:59 PM

        Isn’t Gold Money Foundation Bill Murphy?

        bb
        Jun 27, 2014 27:03 PM

        goldmoney is J Turk? my guess anyway.

    Jun 27, 2014 27:29 AM

    On our way to $1224.

      Jun 27, 2014 27:58 PM

      Dallas,

      I really don’t think so!

      Maybe you can laugh at me later. That would be okay as we all need a good laugh. Just trying to help!

    CFS
    Jun 27, 2014 27:33 AM
      Jun 27, 2014 27:00 PM

      Thanks CFS, that is not even close to being surprising!

    CFS
    Jun 27, 2014 27:39 AM

    Nothing in the press, and certainly not in the US press, has much to do with the price of gold.
    Gold is in a WORLD MARKET. China is buying as much as it can without majorly raising the price. Russia is buying, India is buying, Switzerland is buying.
    Somewhere down in the noise come US buyers.
    When the US/UK runs out of stolen physical, the price of gold will be totally out of US hands.

    Jun 27, 2014 27:06 PM

    I don’t know about you guys but I think this stock market is likely the most boring market I’ve lived in. Even 2007 was more volatile, news driven, and reactive than this one. Very similar to portions of the 70s and 80s with one caveat: this new market is going straight up. Bubbles must be the new norm and the public must be okay with it.

      Jun 27, 2014 27:02 PM

      I completely agree with you Tenyear. It is incredibly and predictably obvious as to what is going on. Currently there is absolutely no need for “research reports’ originating from Wall Street.

    CFS
    Jun 27, 2014 27:14 PM

    I don’t think the Dow is in a bubble. It is manipulated, and not a regular market…..How many times do I have to point out Manipulation? Look at what I have written over that last few years; all from fundamental analysis of money printing and options and futures data, with the point of view of maximizing bankers profits.

      Jun 27, 2014 27:02 PM

      You know man, you have some pretty good insights for a science guy!

    Jun 27, 2014 27:39 PM

    This restraint of the price of metals is testament to the powers of price management by the elite and their faithful servants. No doubt it will continue until it can’t.

    Jun 27, 2014 27:51 PM

    Inspite of the fact that I am a anti homophile and a racist by virtue of being white among other reasons I do tend to sample opinions and do inspect sources of information.
    Today at KWN there were a couple postings which I think are worth a read. It is nothing earthshaking as we all ready suspect that there is something wrong. The important thing is that more people who have a following are saying the obvious.
    As a general rule have a look and do your own thinking.
    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/27_Celente_-http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/27_Paul_Craig_Roberts_-_The_Entire_U.S._Gold_Hoard_Is_Now_Gone.html_West_Desperate_To_Keep_Ponzi_Alive_As_Gold_Is_Gone.html

      Jun 27, 2014 27:11 PM

      STEVEN NO 3 ! In 1 THIME CAN’T OPEN GOD LOVE’S YOU !!!!!!!!

    CFS
    Jun 27, 2014 27:14 PM
      Jun 27, 2014 27:20 PM

      A good man ! I hope wak up sheeple !!!!!!!!!!

      Jun 27, 2014 27:06 PM

      I have never watched this fellow. (No inference should be made that this statement reflects any opinion from me.)

      Care to give an opinion either here or via my gmail. I would appreciate it.

      Thanks

          Jun 27, 2014 27:17 PM

          You are losing your mind, Franky! You already have this posted. You really want the producer’s job don’t you!

        CFS
        Jun 27, 2014 27:23 PM

        USAWatchdog.com is a website that produces videos and commentaries on Precious metals and politics, about 4 or 5 a week for several years. (Although videos are more recent, which causes me bandwidth problems when I am off travelling)
        Greg Hunter is passionately conservative, most of the time, despite his claim not to be. Here is his own write up.

        Greg is the producer and creator of Greg Hunter’s USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin.

        Greg Hunter’s USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.

        Greg is a hard hitting reporter who has a history of getting to the truth no matter how difficult the subject. Some of his stories include “Dangerous Deadly Depleted Uranium Munitions,” where Hunter uncovered the Army’s failure to warn our troops of their exposure to radioactive dust on the battlefield.

        In a story called “Produce the Note”, Hunter uncovered in 40 percent of foreclosures the bankers cannot prove they legally own the property. If an embattled homeowner knows that fact, it could mean the difference between being thrown out in the cold and having a roof over his head.

        And in a report in March of 2008, Hunter exposed the hidden fact the banks were in trouble and the economy was headed for a fall. Greg warned viewers of the coming problems long before other reporters picked up on the looming financial catastrophe. In 2009, many in the mainstream media said things such as “no one saw the crisis coming.”

        Hunter joined ABC News in 1999 from WTSP-TV in Tampa. He has earned a “National Headliner Award,” an International “Freddie Award” for health and medical reporting, as well as investigative reporting awards from both the “Society of Professional Journalists” and the “Radio Television News Directors Association.”

        CFS back again…. I find he occasionally makes a mistake or is missing information, but not often. He clearly sifts through a lot of material in preparation.
        Out of 50 videos I might guess he will over-exaggerate in 3, be missing information in 2.
        If he makes a mistake it is usually by omission of facts. I don’t remember specifically faulting his logic recently. (He used to have more of a tendency to believe things he read in blogs, but is rightly less trusting nowadays.)

          bb
          Jun 27, 2014 27:23 PM

          I like usa watchdog. great attitude.

            Jun 27, 2014 27:55 PM

            Most people just assume the bankers have the note on the mortgage…
            just like they assume federal notes are actually worth the value printed on them.

            …dumbed down over decades…its virtually impossible to educate the masses.

            until its too late…& it will be for most when it eventually all goes ar$e up.

            Jun 28, 2014 28:17 AM

            skeeta……….you are spot on …….concerning the education of the sheeple

        Jun 28, 2014 28:57 AM

        Not sure about him personally*, but he does get interview some very knowledgeable people who get little airtime elsewhere.

        *Tried to get him open a debate on the John Williams inflation estimates – eg with Mike Ashton, who harshly criticises them (albeit with *many* straw man arguments) here:
        http://mikeashton.wordpress.com/2014/05/20/hot-button-issue-rant-warning/

        But Mr Hunter doesn’t seem to have time for such details &/ conclusions that might not fit the specification ;). So I watch with my bias detector switched on.

        Jun 28, 2014 28:16 AM

        big OWL………you should give Gregg at watchdog a listen to………has some great guest on his show……which might be good for your show, since, we are all talking the same issues…………….just trying to be helpful …………….respectfully………..jr.owl