And furthermore....(God bless bill Murphy and LeMetropole Cafe and GATA)
posted on Oct 20, 2009 07:03PM
(Edit this Message from the "Fast Facts" Section)
10/20 Rob Kirby - Update to Addendum: Q and A
Update to Addendum: Q and A
In my second to last piece, I wrote about physical “allocated” gold trades that were settled in London during the week of Oct. 5 under highly unusual circumstances two weeks ago. Here is the definition of allocated settlement:
Some short definitions: an unallocated account is an account where specific bars are not set aside, and the customer has a general entitlement to the metal. This is the most convenient, cheapest, and most commonly used method of holding metal. The allocated account, on the other hand, is an account opened when a customer requires metal to be physically segregated, and this needs a detailed list of weights and assays….
Since ALLOCATED SETTLEMENT requires the seller to provide the buyer with a “detailed list” of specific bars and weights – wouldn’t this create problems if said bars also appeared on the GLD bar list of Sept. 25? [There is a copy of the GLD Sept. 25 bar list linked at Kirbyanalytics.com in the left column].
Can a uniquely identifiable bar of gold really be in two places at once?
If such were the case, wouldn’t this create a DIRECT lineage from GLD inventory [HSBC the custodian] to intermediation by the Bank of England in aid of J.P. Morgan and Deutsche Bank?
If the items above are all accurate, wouldn’t it also imply that perhaps the most important document in the Gold World – right now – would be the bar list [with serial numbers and specific weights] that accompanied these allocated settlements during the week of Oct. 5?
Since such a document hasn’t surfaced already, might perpetrators feel like they’d “dodged a bullet”?
Of course, if all the above were true – and one wanted to ensure that a repeat of such an embarrassing situation did not happen again – might they want to make “hasty” provisions to replenish their physical bullion stocks?
If / when such a bar list surfaces, wouldn’t it amount to a “wooden stake” through the hearts of a bunch of “fiat-vampires”?
Wouldn’t it make sense that parties “who really knew the scoop” might be busy RIGHT NOW trying to accumulate still more physical? Wouldn’t you do the same?
If all of this is correct, wouldn’t the gold market be accurately described as the equivalent of Mt. St. Helens -perhaps days / weeks at the most - before it blew its top?
All very good questions, no?