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Monday, December 19, 2016

Comex will default/Shanghai will cause Comex to default Part 1

There is a slight premium on the Shanghai exchange for both Gold and Silver. It exists. However as a % of the price it has been between just 1-4% and has rarely gone outside those bands.  
Compare the bid and ask quotes today from Brent and West Texas Crude oils. A nice 5.5% spread.

Yet not a single one of these nutjobs is calling for all the crude in the world to move UK and cause a Nymex default. Here is the funny part, from 2001-2009 (maybe even before that, I was not following the markets back then), WTI (USOIL) actually traded at a premium to Brent and funnily enough Brent deliveries never defaulted.

But surely the overwhelming Shanghai buying is unique. It will create a default soon, will it not?
This idea about the Shanghai exchange creating a default has been one of the biggest godsends to the writers who lure you into buying a subscription. I am going to look at this over a few posts.
When did we first hear of this Shanghai crap?

That retard at Zerohedge talking about the physical shortage causing a default.
"there may not be enough gold to go around if everyone with a futures contract insists on taking delivery of physical bullion."

Followed by the really ominous, 

"That won't end well..."

That was used by multiple articles for fear-mongering with the added catalyst being the Shanghai exchange causing defaults.

 Then Greg Hunter ran with

""Organ says when China and Russia disclose the true amount of gold they hold, there will be a price spike never before seen in the history of the world.  Organ says, “You will see that you will go to sleep at night, and you will wake up the next morning and see gold bidding at $3,000 per ounce, and there will be no offer, and it will rise by $500 a day.  It will come in 2014.  They are running out, they don’t have it.”"
Ok, I really cannot make more fun of a guy with name like Organ, but if listened to him you got your ass handed to you. 
Jim Willie, who also has a name which makes it harder to make more fun of him, ran with this in November 2014 where he calls for the price to go to $7,000 Oz and then to $18,000 Oz. He was so passionate about it, he made an hour long interview video on it.

First $7,000 Oz and then to $18,000 Oz. Least you fucking morons think it is going first to $18,000 and then to $7,000. 
The reason
"Of course, the paper price of gold (and silver) cannot go on forever, because Asian interests loaded with dollars are more than happy to trade them for underpriced gold and silver.  So long as there are real vaults in the West to empty of real gold and silver, Asia will buy it cheap, every month, and not rock the boat while they are benefitting."

Followed a couple of months later by 
“The manipulation is finite, and it is coming to an end.
When the Shanghai shock comes, ALL THE PAPER GOLD STRUCTURES WILL FALL, all the FOREX derivatives will collapse, & all the control rooms will go into panic mode”.

So almost 3 years later, these people sing the same tune every day and still no default. Why?

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