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Thread: Did the Fed just bailout COMEX?

  1. #1

    Did the Fed just bailout COMEX?

    Good article.

    http://seekingalpha.com/article/3247...-from-the-feds


    On June 1, 2015, JPMorgan added almost exactly enough ounces of physical gold to patch the deficiency between supply and delivery demand at COMEX, avoiding widespread dealer default.

    Declassified documents, along with strong circumstantial evidence indicate that it was not JPMorgan, but its most important customer, the US Federal Reserve, that just bailed out COMEX.

    more at link
    The PM shell game is almost up.
    Last edited by devil21; 06-10-2015 at 10:31 PM.
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  3. #2
    Oh man, the COMEX is going to default any day now because reasons, and my PMs are going tooooo daaaaa moooon!

  4. #3
    Quote Originally Posted by TheCount View Post
    Oh man, the COMEX is going to default any day now because reasons, and my PMs are going tooooo daaaaa moooon!
    Actually the article points out that the COMEX is NOT going to default anytime soon because it is being backstopped by the Fed.
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  5. #4
    People could be persuaded to put their physical gold into play, in the registered category, if a government guaranty on return of the actual gold, along with a thick "envelope" of Benjamin Franklins, is thrown in as a sweetener.
    The good old "fail to deliver". Must be a pretty good money maker to keep taking those envelopes of cash in lieu of physical delivery.

    As a practical matter, large physical gold buyers avoid COMEX partly out of a fear that they might end up with a cash settlement instead of gold. Now that it is clear that the US gold reserves stand behind delivery, this could change. We can now assume that COMEX is going to be backstopped by the biggest gold hoard in the world. It is "too big to fail". Delivery default will not be allowed unless it suddenly rises so exponentially that it becomes too burdensome even for the government to fulfill.
    Either you get an instant gain by taking the extra incentive money to not take physical delivery, or the US government delivers the gold. Seems like a pretty solid bet.
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    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  6. #5
    The Fed does not own any gold. They can't "bail out" COMEX by giving them some. And since money isn't backed by gold they don't care what the price of gold is.

    They do sometimes use swaps- but not with any gold. http://www.newyorkfed.org/markets/liquidity_swap.html
    Last edited by Zippyjuan; 06-11-2015 at 11:42 AM.



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