07 June 2013

Fractional Reserve Metals?

Observations of a metals dealer--story carried on silverdoctors.com

"Here is where things get interesting. Every transfer is being rejected multiple times for any reason the old major broker dealer can come up with."


"More interesting is all of the metals which have variable weights like 1,000 Silver, 100 oz gold and 50oz platinum, when the old broker dealer finally does transfer the metals to the new custodian, NONE of the bars are the same in weight or serial number as my clients statements. The old broker dealer is having to come to me and my clients with bars of different serial numbers and weight than the one listed on the statements or from old trade confirms."

Evidently, the writer is not asserting that the metals ultimately received are counterfeit, and ounce for ounce, people are getting their metals. However, as indicated in the rest of the article, what is being sold is not matching what is being delivered, which is an extreme departure from the rather strict rules of the metals trade.

Why the extreme departure? Well, one can only surmise at mismanagement of the inventory at the custodian site... (the most naive of assessments)  ...or worse: metals that don't exist are being sold--which is fraud, of course. This latter seems to be indicated by the delaying tactics (rejecting the transfer) of the original custodial bank, if not simply from the fact that the serial numbers reported to the buyer during purchase and original storage are not the same as what is being delivered when the physical metal actually arrives.

Sooner or later, there will be a run on metals (some people observe that we are in that process and have been for months), and these custodians that are holding ... either a fraction of the gold they claim to hold, or perhaps none of the gold they claim to hold ... will wind up being one of the missing chairs in an infernal game of musical chairs, leaving many depositors standing. This is exactly the same result that happens in fractional reserve banking when a currency crashes.

For those who don't understand fractional reserve banking, I'll keep it simple: you deposit money. They loan it out, but keep a reserve, a certain minimum percentage according to rules established by the Federal... you got it, RESERVE Board. Said board has several tools at its disposal: prime rate, money supply, and reserve requirements as a percentage of deposits. This all works out fine until depositors demand their deposits back more than the bank has in reserve.

Well, with many reports of odd--and probably illegal--trading activity ("naked shorts") in the metals markets, a lot of people invested, who have paper that SAYS they own gold, are asking to hold it themselves, or transfer it to a custodian they trust better than the original seller's custodian. And this is where we get to this story: people aren't getting what they were sold. Equal value, ostensibly, but not the same exact product, if the product ever existed.

This tends to prove that the drop in precious metals prices of late, and even the fact that it isn't rising meteorically, is due not to actual sale of metals, as "they" tell us, but rather the sale of notes that end up not really representing any metal at all, because that much minted metal doesn't exist.Another fraud. Metals owners are being bilked out of trillions of dollars of value that should be there.

The metals community has been talking price manipulation for a long time. The conventional media constantly prate that it's just a supply and demand thing. No, it's not. The "supply" ("gold" for sale) is not as large as we are being led to believe, and what is being sold short appears to be non-existent as minted precious metal. It may exist in the ground, but that is unproven, so it is a hoax, a lie, a fraud. A criminal act, perpetrated by someone or someone(s) who have the wherewithal to: 1. Pretend in a credible manner that they have that much to sell and are selling it; 2. can be protected from criminal prosecution, under present conditions, for sale of naked (not backed by the real McCoy) shorts. This could only be a few players, most notably the banks that do business with, and have probably captured, one or more governments in the western world.

Anyone who still believes that there is plenty of metal to buy, to take delivery on physical precious metal, is invited to go to their local coin shop or bullion dealer, and see if they have any to sell. The places I like to go have not had bullion for several months now, unless it's because somoene needed cash and sold a bunch. But that's gone usually in less than an hour. Like ammunition, it's actually very hard to find bullion or even "junk silver" (circulated coins with 90% silver content) available for sale. How does falling supply produce falling prices? Only in a rigged system. The facts noted belie the claims that those who own gold are wont to sell. No, those who own phony paper are wise to sell... and then buy actual, physical metal. ...if they can find it!

The price of precious metals and other commodities is fixed by players who have an ax to grind, a goal to achieve--and that goal is to get as much and at as little cost as possible. Unfortunately, ethics, law and decency are not part of their equation... thus we call them "banksters." They are not all bankers, but also transnational corporations other than banking, which ... may be ... largely owned... by ... ... banksters.

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The Federal Reserve Board is a group of representatives of the Federal Reserve Banks, which... well, they aren't government institutions--they're privately held banking companies that "live" to make money off of money and desperation. Their motivation is not the national good, but the good of the private banks that constitute the federal reserve.

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