Galt's Gulch

Citigroup Just Cornered The "Precious Metals" Derivatives Market

Posted by freedomforall 8 years, 9 months ago to Economics
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"how is it legal that JPM is solely accountable for 96% of all commodity derivatives while Citigroup is singlehandedly responsible for over 70% of all "precious metals" derivatives? Surely even by the most lax standards this is illegal, but what makes the farce even greater is that all of this taking place out of FDIC-insured entities!"
SOURCE URL: http://www.zerohedge.com/news/2015-07-04/why-did-citigroups-precious-metals-derivative-exposure-just-soar-1260

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  • Posted by Herb7734 8 years, 9 months ago
    Let's see if I can stuff this info. into my little pea brain. It looks as if they're going to screw up precious metals like they screwed up paper money. Soon the average schmo is going to get screwed when the collapse comes no matter how he twists and turns and saves and acts responsibly. To quote a perceptive rock band, "Same as it ever was."
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    • Posted by freedomforall 8 years, 9 months ago
      If the schmo deals only with other gold-wise schmos, he might get a fair exchange.
      In other words, stop using the enemy's currency and start using one that has some value.
      A merchant doesn't have to be illegal either. He just has to set his own "exchange rate" for gold to USD.
      Example: I might sell my time for $10,000 USD an hour but I will take 1/10 oz 999 gold ($Galts Gulch) for an hour work. Effectively i would only make sales to Gulchers (assuming they need and value my services) but I would be willing to take USD (and immediately exchange them for gold at manipulated fiat market value.) In reality I would be on strike, except to Gulch customers.
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  • Posted by $ jbrenner 8 years, 9 months ago
    This is an interesting story, but I will honestly admit that I am not sure what it means. Two different huge banks with huge bets on the precious metals derivatives market is pretty scary.
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    • Posted by BrettRocketSci 8 years, 9 months ago
      I agree with you on both points! I don't know what it means exactly except that it ain't good! Long before this article I've seen enough to know all the currency and metals markets are being manipulated to such a degree that we are headed for a major financial earthquake when the laws of economics reveal themselves.
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      • Posted by $ jbrenner 8 years, 9 months ago
        The prices of precious metals are not tied right now to the cost of mining the metals. That can't last indefinitely, but it might last longer than we do.
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        • Posted by Flootus5 8 years, 9 months ago
          Not currently. However the sagging price and the rising AISC (All In Sustained Costs) of gold mining is causing producers to tighten up mine designs. That means high grading the best of the deposits leaving a lot of lower grade rock behind.

          Then it takes much higher prices to warrant going back in to get the low grade that is all that is left. So less ounces produced leading to reduced supply leading to rising prices with demand? In a normal economy, yes. But the precious metals markets are highly manipulated as this derivative play suggests. There can be a disconnect between derivatives and Comex prices but it is also so intertwined it can get mind boggling. And by then, they have removed the mining district from mineral entry because of sage grouse or some other trounced up critter.

          That will all change when fiat currencies collapse. Precious metals are the only real money despite all the propaganda saying they are just commodities.

          An ounce of gold bought you a high end suit and dapper shoes in 1796. Today, a top drawer suit and shoes will cost - about an ounce of gold.

          Gold Miner Floot
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          • Posted by $ jbrenner 8 years, 9 months ago
            That was pretty much the way I saw it too, Flootus. If we ever have a physical Gulch, you and I will be partners. You mine, and I would refine. I am a chemical engineer and materials scientist.
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            • Posted by Flootus5 8 years, 9 months ago
              I don't know if you followed my other post, but a real good chance at putting together a gold mine in a very remote canyon - about as remote as you can get in the lower 48, just got eviscerated by the sage grouse plan of the Department of the Inferior.

              There are some pissed off people.
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  • Posted by $ MichaelAarethun 8 years, 9 months ago
    FDIC somehow doesn't act as a real plus for. me after watching our government drive small banks out of business with regulation manipulation. I feel a lot safer with my tax paid dollars out of the country and in other currency forms. I suppose no where is perfectly safe but I don't get a warm fuzzy feeling after watching feds order banks to take one position then change the rules and bankrupt them and their depositors.
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    • Posted by freedomforall 8 years, 9 months ago
      And the TBTF banks are creating the rules that the government uses to destroy small banks (and S&Ls) to the advantage of TBTF banks. "consolidation" of the banking business into a cartel of TBTF banks didn't happen by free market forces.
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      • Posted by $ MichaelAarethun 8 years, 9 months ago
        Figures two partners in the socialist system working together. Interchangeable as to statist and corporatist. Ever notice the list of billionaires are all Government party supporters - specifically Democrats? Their mob is easier to control - more well trained than this lot I reckon.
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  • Posted by JoleneMartens1982 8 years, 9 months ago
    Aren't we all stocking up on gold? So if that is not included in their little outstanding tirade, what do wed care. I am sure we will see the fall of the paper dollar, its only a matter of time. I have already begun building my bartering system and groups.
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