Warren has a cool animation showing the addition and redemption of pallets of gold bars out of GLD's vault, done in the style of the old PC disk defrag programs, at the screwtapefiles blog.
A few comments on the 5 minute animation (see screenshot below):
- During the redemptions in 2013, most of the bars are taken from the bottom, that is, the recently added stuff. Makes sense, this stuff is easier to access.
- But note much of the redemptions are from all over the place. Some of that is explained by them "hunting" for 9999 bars as Warren discussed in emails. He will have a follow up post taking this animation analysis into more detail showing this.
- In the pic below the area just above the empty bottom area is really stubborn, something about those bars they don't redeem from, even though they are more recently added than the bars in the first half of the pic above that section.
Okay, So What Does This prove?
ReplyDeleteGLD IS BEING DRAINED AT AN ASTRONOMICAL RATE.
What other evidence of bankster intervention and malfee-sense do you people need?
GLD Inventories down 41%-- Gold down roughly 38%
SLV Inventories Up-- Yet, Silver Prices Down by a similar amount to gold.
Isn't this enough evidence?
Agreed re: the 'stubborn stock'. This could be used as an argument to say this section of the vault is 'up the back' - rare to say we found a mechanic for pallet selection, but it looks valid.
ReplyDelete@Jake, it doesn't 'prove' anything, it's just a vault visual - way more detail than we ever had before. But I do think it hammers another nail in the coffin of the 'gld has no gold' meme .. because they would now have to explain why the 'fake' data yields patterns like this.
rgds,
Warren
Fantastic work Warren very clever.
ReplyDelete"Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results."
Machiavelli
Could we be seeing a Denarius episode, where in the end there is so little silver covering it simply rubs off.
ReplyDeleteI do wonder over the new found abundance of gold plated replica coins available upon Ebay nowadays. Where are they coming from and why do it ?
The gold plated coins seem to be ever more brazen and now some even seem to be exact replicas with no visible gold plated warning.
ReplyDelete1 Oz Austalian Kangaroo Elizabeth $100 Pure .999 24k Fine Gold Clad Bullion coin
Ebay $8.50AUD
This item even has the Perth Mint mark it seems?
Jake, still waiting for any evidence, perhaps if slv inventories were up despite trading at a steep discount to other silver markets this would be fascinating, but it has not happened.
ReplyDeletemikey-
ReplyDeleteWhat I'm referring to is that shills have repeatedly attributed the depletion of GLD, since roughly 12-2012, because of the drop in price, (that GLD must sell off their gold as price declines).
Yet, as the silver price has dropped during that same period, the SLV inventories have actually increased.
Athough the GKD inventories SHOULD decrease with gold price declines, not only is it's inventory declining at a faster rate than would otherwise be justified by its price decline, the gold isn't showing up elsewhere---certainly not in the comex inventories and not anywhere else that can be verified. So where is it?
CHINA---and since it'll never be coming back, when gold prices finally increase, there will not be enough gold to justify the same low price reflected when GLD last contained much higher inventories. Thus, a much higher price for gold is in our future.--
Conversely, there still seems to be a large upply of silver available at either SLV or silver comex. I would thus conclude, the Chinese and/or other countries, haven't as yet, started to raid these silver inventories.
Of course, once london gold has exhusted itself supplying supplemental gold to shore up the continual raids along with the fact that once the gold inventories drop to levels where the banksters can no longer funtionaly operate the GLD/comex, I surmise the silver inventories will have suffered their first raids by then.
Additionally, we, the USA, will foolishly keep the price of gold and silver too low so that it facilitates the above-mentioned process at even faster acceleration rates than we're seeing today.
Two typos exist in the above comment. It's annoying that these comments cannot be edited.
ReplyDeleteThird paragraph: "GKD" should read "GLD"
Sixth paragraph: "funtionaly" should read "functionaly"
"Athough the GKD inventories SHOULD decrease with gold price declines"
ReplyDeleteI am curious as to why you think this?
And yes the lack of editing is annoying, but i make more typos than most so I am pretty forgiving when i see them from others.
ReplyDeleteMikey-
ReplyDeleteIn the end, I believe the main factor determining the "bottom" of metals prices will be the supply of physical. Once the banksters run out of everything they can plunder, prices will no longer be kept down by simple bankster criminal manipulation.
Thus, chasing the reasoning behind the paper prices of these two metals is a waste of time. This is why I've been so critical of those hypesters such as Silverdoctors Jim Willie, SGTReport,KWN, TFMetalsReport, Mike Baloney,David Morgan,James Turk, Etc.
All they do is hype the price. Sure, the prices will increase in the future, but why is the paper price important?---Paper prices are for banksters.
If gold goes to $5000 will you exchange your ounce of gold for 5000 pieces of bankster IOU's? I'll answer that--Of course not.
Your strategy at that point will be to hold the paper shit only long enough to run to the grocery store to spend it on needed items if available.
Concurrently, since loaves of bread will be priced at $20, your gold will have proved its worth by mantaining its purchasing power against the value of the future labor required to produce and deliver that loaf of bread to the store so you can buy it.
Therefore, measuring your worth in something that has no value is pointless. Your only solution is measuring your worth in ounces of precious metals.
ETF inventories do not have to move in line with the price. The reason is because it depends on the mix of clients and why they bought.
ReplyDeleteFor example, in the case of the Perth Mint we haven't seen any radical change in our total Depository holdings, because we have more buy and hold long term type investors.
If you look across all the gold ETFs you see different rates decline or increase in their holdings. Each ETF has a different mix of clients or targets different types of clients.
GLD for example has/had a very high % of insitutional holders, hence I'm not surprised to see a lot of liquidation there. XetraGold or http://www.etc.db.com/ for example have both been quite flat during 2013.
In an un-manipulated, un-corrupted -non bankster-infuenced properly price-discovered market, GLD inventories should reflect the lower gold pries to reflect share redemptions and sales.
ReplyDeleteThe gold inventory shouldn't drop that dramatically, as the increase in the supply of outstanding shares should drop the price of GLD as their supply has increased relatively in relation to the gold inventory.
But the Chinese have bought, and subsequently are redeeming, large blocks of shares,(100,000 at a time) in order to obtain physical gold -- draining inventories at an "astronomical rate, (much faster than normal) .
Thus, GLD inventory is drained and shipped to China. (please refer to my songs describing this).
Conversely, on price rises, inventory should increse as gold should be bought to reflect the increased share demand along with the normal increases of GLD shares.
This would tend to keep inventories close to unchanged over time manifesting a slight uptrend in inventory levels, with minor fluctuations.
Additionally,this would also tend to re-enforce investor confidene that stability in the ETF was maintained.
However, at times, we've seen the GLD custodian issue new GLD shares, thus increasing the outstanding amount without buying equivalent gold or buying insufficient gold simultaneously.
This acts to suppress the otherwise normal increase in GLD price, making the GLD a very poor vehicle for "gold investment".
However, The GLD ETF is an ideal vehicle for bankster shenanigans, "mal-fee-cents", corruption and gold manipulation as gold inventories can be compromised without regulatory oversight.
But, move along---this is just normal scamming.
So Bron, tell me-- What if everyone who held shares of GLD were to redeem them understanding that the block redemption rule were to be lifted?
ReplyDeleteWould everyone receive their rightful amount of gold?
Wait!--I'll answer that--NO!
Why?---I'll answer that too, There aint enough gold because the corruptable custodian has obligated much of the GLD inventory to other third parties.
Thus, we can all move along, as this is just normal scamming (please see my songs that refer to these subjects)
Bron, you will never be able to convince me that GLD issues a "reasonable" share amount, maintaining a reasonably similar share/gold ratio of shares,while simultaneously buying gold on the market as price rises.
ReplyDeleteConversely, GLD does not sell a reasonable amount of gold as shres are sold maintaintaing a reasonable share to gold ratio.
Instead, the banksters play games and the share-holders get shafted. (Tomorrow, I'll try to modify the song "Shaft" to describe this phenomenon)
Thanks for the comments Jake. You are aware that the mechanics in GLD allow the AP to create and Redeem shares. You also know the only way to do this is to collect enough shares, or collect enough physical gold to create the shares, therefore there is no way to issue new shares without new gold.
ReplyDeleteAs to price direction and stocks of physical, you hit it, it is about what the individual investor wants to do. If he sells shares, then the price of gld will fall RELATIVE to gold. But GLD shares will fall on their own accord without any selling at all if the underlying gold price falls, regardless of share activity.
Also, you are aware there is an independent third party audit of the GLD vaults?
Do you track any of the instances of shortcomings you mention?
I much prefer your comments to your songs btw, maybe if you added music?
I guess the core of what I am getting at "(that GLD must sell off their gold as price declines)."
ReplyDeleteThat is not the case.
Mikey-
ReplyDeleteI guess I just don't believe anything put down in words that's been written by a bankster. Okay, okay---they can't issue new shares unless they add gold to their inventory. This makes their dilemma even more difficult in that finding gold when they need it will be difficult unless paid for at much higher prices.
One example of the "instances of shortcomings" includes the "shoring up" of the comex gold using GLD gold, where comex contracts can be exchanged for GLD shares. This allows for comex to essentially default until supplies from "other sources" are exhausted.
But getting back to my original comments, I think the most important aspect of the "GLD draining" is the fact that replacing the gold that has gone to China will be impossible.
Again, once gold prices increase, something's got to give--meaning a shortage of shares--then and a higher price for gold that increases at a faster rate than it has already declined.
As for an "independent party" who audits?---LOL!
Tell that to those MF Global Clients--nuff said.
I wonder if that is in their prospectus?
Warren-
ReplyDeleteThanks for admitting it doesn't prove anything. I watched this video a couple of times. I'll admit this must have been extremely tedious to construct, but conclusions are needed.
Of course GLD has an inventory of gold, And it's not "all gone", but the amount removed in such a short time IS the story.
I just don't get anything more from seeing that "this bar in the back" might have been removed before or after "the bar in the front" or from "its right or left".
The only real aspect I notice watching this is that there is less gold at the end.
My question still remains. Now that a large quantity of gold has moved East from Western holdings, what will happen when gold prices advance and GLD needs to replace the lost gold?
I'll answer this and you tell me if I'm wrong--I think the gold that has and will have been shipped to the east is PERMANENTLY gone. Thus, western ETF's will need to buy gold at ever higher prices as they will need to replace their lost gold at ever increasing accelerated rates.
At some point in the future, a trigger point "supply crunch" will materialize.
Will it materialize at a point when GLD has only 500 Tonnes? who knows?
Simple math can help estimate future GLD holdings if depletion rates continue as they have for the last 4 years.
Since 12/16/2010, GLD has been losing approx 13022 oz per day every day including weekends and holidays.
The 3-week average of this number that slightly smooths this data currently reads at a loss of 13329 oz/day. This number has become quite stable after 4 years of data is compiled.
Using this number, the GLD inventory can be projected just to get an order of magnitude look at what it might be a few years from now.
Barring events such as what happened in the 6 months beginning in 2013 where the GLD inventory lost 12 million oz., GLD should contain only 516 tonnes by April 2016 (a loss of another 300 tonnes).
Similarly, The gold comex is losing about 3830 oz. per day on average in that same
time frame. This has been occurring even as GLD gold is probably being used to "shore-up" the comex inventories.
Projecting comex is more problematic in that it could just be receiving gold from other sources to keep it's corrupt operation going.
However at present depletion rates, the gold comex could drop to 4,500,000 total oz. by April 2016.
At some time before that something's got to trigger a halt in these incredibly high depletion rates.
Conclusion the year 2015 should be very interesting to say the least.
"what will happen when gold prices advance and GLD needs to replace the lost gold?"
ReplyDeleteSince they don't have to replace it there should be no problem.
Think of an example with one ounce of gold.... i sell a paper claim on a single ounce of gold to you, i then go buy one ounce of gold and lock it away. If the price goes up your paper claim is worth more, so is the ounce of gold locked away. You decide to sell, i pay you the new price and sell the physical gold.
Price movements up and down do not necessitate any buying or selling.
"that GLD issues a "reasonable" share amount, maintaining a reasonably similar share/gold ratio of shares,while simultaneously buying gold on the market as price rises"
ReplyDeleteFirstly, GLD doesn't issue nor by gold or have to maintain any share/gold ratio. There are three separate entities involved, APs, Trustee & Custodian.
Secondly, because an existing holder of GLD can sell to a new buyer of GLD, it is possible for the holdings of GLD to remain stable when the price is going up or down. The only time GLD shares are created or redeemed is when there is an imbalance in buyers/sellers and the APs then, and only then, step in and pick up that net difference.
"As for an "independent party" who audits?---LOL!"
GLD's independent inventory auditor is Inspectorate, and they do the GoldMoney audits, so I suppose that means by your logic James Turk's business is also a scam?
"the "shoring up" of the comex gold using GLD gold, where comex contracts can be exchanged for GLD shares"
That is a myth, GLD cannot be used to settle a Comex contract. That myth comes from people who do not understand what an EFP Exchange for Physical transaction is and thus completely misinterpreted the annoucement a few years ago when GLD was allowed to be one of the legs of an EFP.
i missed the comex/GLD mention. EFP is one thing Bron, but even before that, the bars for GLD won't play nice with comex requirements (and vice versa). GLD bars can't settle comex, and comex bars can't be used to create shares of GLD.
ReplyDeleteWell---This is such a load off my mind!---All my worries were dissolved in just two comments!
ReplyDeleteI am so relieved that all is well---GLD is honest, The banksters are angels and everything is above board!
WHEW!
Now---we can all just move along and be happy!
Oh---and I guess manipulation, bankster collusion, rug pulling, ghost bids, raids on silver & gold prices,London price fixing and banksters jumping off buildings is either a "myth" or can be explained away as coincidence ?
Well---Excuse me!---Thanks everyone for turning me around on this!
Given that HSBC the custodian can also use subcustodians based in London, then it's possible that some of the AP redemptions could have been filled with bars from the vaults of the subcustodians such as JPM and the Bank of England or indeed other subcustodians.
ReplyDeleteWarren, would this theory have an impact on the graphic structure of the way the bars look to have been withdrawn and the stubborn stock etc?
@Man, yes it does have an effect BUT .. the percentage of bars that we can detect coming from other funds is very low (less than 1%). This is because of two factors: 1. vault-to-vault jumpers are not common and 2. we don't have much data from the other vaults. It is true that some bars may have come from BoE but we've never been able to prove it. In the advanced version I will demonstrate the ETF Securities bars which filter in and out of the GLD stock (as a different color).
ReplyDelete@Jake, you are correct - my post was lacking some conclusions, it was deliberate - I'm saving these for the next post this was more just to get people familiar with the concept and demonstrate that we reached a new milestone with the data - the ability to visualize individual pallet movements - No one has ever done this before to my knowledge and it can lead to more advanced study.
Don't forget - my motivations are actually to establish evidence for manipulation if it exists. I prefer to do this with hard empirical evidence but the scientific route is slow and it takes time to formulate the right questions from the data. In regards to the 'value' of the charts, well that is subjective. Very few people will be affected or care about dark bullion or pallet movements - it takes a fair amount of effort to package the info to make it interesting.
Jake, now you are putting words in my mouth. You were mistaken on the mechanics of GLD, which is not uncommon. That was the extent of my intended commentary. It extended to pointing out there is an twice yearly third party audit. You dont have to believe it, but it exists (more than can be said for ft knox or the like)
ReplyDeleteWarren, I don't necessarily mean bars coming from other ETFs, I just mean bars that were initially added to GLD but never resided at the HSBC vault in the first instance. For example if bars (in an earlier unrelated transaction) had been purchased by an entity that is one of the Authorized Participants such as UBS, Barclays, Morgan Stanley or Goldman Sachs, and the bars had been allocated to their account at the Bank of England or the JP Morgan vault, then later, the AP used that gold for baskets of creation orders to deliver to GLD, then this gold may end up in GLD without being in the HSBC vault. Now, according to the prospectus, GLD gold can be temporarily located at other subcustodians, but an effort should be made to deliver it at some point to the HSBC vault. But, say if the HSBC vault was full (or too small for all of GLD when it was 1300 tonnes +), or there was some other logistical challenge, then GLD could have significant bar holdings at the other London vaults. Then during redemption their might be some agreed pattern by the APs about redeeming from certain vaults before others, for example, leave the Bank of England bars, and take from the JPM vault or vice versa.
ReplyDeleteWarren, by saying, "...my motivations are actually to establish evidence for manipulation if it exists..."
ReplyDeleteYou are saying you aren't convinced by all the other evidence?
Before I start in on an answer to this, I need to repeat that I am not concerned about paper pricing of metals. In the end, after the banksters have plundered all the gold and silver, physical pricing will remain.
Now--let's just define "manipulation" in the context of paper metals trading:
It is the result of outside forces preventing the normal price discovery afforded a trading vehicle over any given time example.
Thus, if such patterns appear that can be PREDICTED on a regular basis, it can be concluded that proper price discovery is not being allowed to occur.
Since market makers who are not obligated to the same trading rules, such as margin and position limiting, who hold "book" on all trades which is not transparent to other traders, and who also trade the same markets, it must be concluded that they are the likely "outside forces" who are potentially the culprits.
So, your saying these predictable times "when rug-pulling occurs, usually around the US Times of 8PM EST, 12pm est, 7AM EST, around Fed meetings and Jobs Reports are reflective of true price discovery?
Do you also think that the holding of resistance levels this low (around $21), for silver, at a time when currency is being printed into oblivion, can be considered normal?
By the same token is the incredible un-corrected paper US stock market rise justified at a time when even fake economic numbers that supposedly prove "economic recovery", can be seen as laughable?
As I've already indicated, I respect the hard work you've put forth to generate such a difficult-looking program to depict a phenomenon that has about as much meaning as developing a program that tracks the order in which leaves fall from a tree.
However, if you're still trying to prove manipulation of metals (suppression), by the application of some gold bar shuffle program inside the GLD, you're not seeing the big picture. You're in the weeds.
Every time I think of these subjects, Manipulation, Paper Pricing Of Metals, Banksters, I always come back to the same conclusions any physical metal holder can refer to:
Excluding short-term fluctuations, meaning months-years, today’s one ounce of gold locks in the value of the labor required to produce the goods and/or services that will be exchanged for that one ounce of gold in the future on average meaning within a measurement gauge in decades of time. This is why gold/silver preserve purchasing power, on average, over the course of time.
Any other discussion of paper pricing of metals is just for entertainment purposes as all paper pricing will go to its natural state of ZERO.
Regarding Bron's Comment: "...The only time GLD shares are created or redeemed is when there is an imbalance in buyers/sellers..."
ReplyDeleteAgain, this comment reflects an attitude of looking in the weeds trying to find answers that are broad-sweeping and much more macro in nature.
Let's get back to the big picture. As I said to Warren, spending a lot of time trying to document the order in which leaves drop from a tree only to come to the same conclusions simple math could have shown, (that there are less leaves on the tree at the end, than at the beginning), is similar to time spent in a gerbil's treadwheel.
Okay, Bron--Although I'm not predicting GLD will lose 300 tones in the next two years, if buyers and sellers are still "balanced" when GLD has only 500 tonnes of gold left in its inventories, I suppose this is no cause for concern that the ETF has relatively lost most of its gold to China never to be returned again?
And what of the other ETF inventories that have also lost a lot of their gold holdings as well?
NO PROBLEM?
Doesn't anyone think this will create a situation of low supply/high demand?---Just the kind of condition the banksters DO NOT want?
What about the gold comex inventories?---Again, I'm not predicting a loss to a level of 4.5 million oz. by 2016, but if indeed the drain continues at it's present pace, no one thinks such inventory loss rates will be a trigger that sparks high demand sometime sooner?
Meanwhile, US debt level increase rates at their current pace predict a total US debt of 19 trillion by April 2016, and this is meaningless also I'm assuming?
Jake, i think you are mistaking the tail for the dog, these ETFs are a very recent i nventiln to allow retail investment in commodities without the need to buy a futures contract which can be costly, intimidating, require margining, etc... it also allows you to participate without having the challenges of storing and insuring the commodity yourself.
ReplyDeleteFor all the etfs whose mechanics i am familiar with (including GLD), i see gains and drops in inventories as simply a measure of the retail investors interest in being exposed to the underlying commodity.
Prices going up and down have no direct causal effect on inventories of the underlying commodity.
mikey---
ReplyDeletezzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
@Man, thanks for the explanation. We've certainly looked for some of the patterns you describe but never found any. The mingling with ETF Securities bars do confirm the HSBC vault location for much of the stock. Studying the serial numbers shows us that some bars added to GLD are already 'aged' so they were most likely already part of the LBMA system in London.
ReplyDeleteYou raise an interesting point, because it is actually a possibility that the HSBC vault is too small (physically) to house all the gold claimed, so I like your interpretation of that clause in the GLD prospectus! Proving it will be difficult but I will look for patterns. Note: if someone out there can leak me a copy of the Bank of England's bar serial numbers (all 400,000 of them) then we will get a really clear answer.
@Jake, I've never called for 'manipulation' or 'no manipulation', but I have lobbied for a precise definition of Fraud. I know that fraud occurs, I just want to know the mechanics of how they do it. Using the right definitions will lead to a deeper understanding, it's the reason I experiment with charts like this. rgds.
Jake...you're assuming that GLD has to replace or find more phyz gold in order to fulfill shareholder custodial accounts.
ReplyDeleteI think GLD at some point will close if inventory gets low enough (350-400 tonnes) and the remaining big players reclaim that tonnage for themselves.
Everyone else will quickly get cash settled before the gold price skyrockets if a shortage does indeed exist to the level it's been hyped about.
There's so many shills out there blaming GLD and everything else for their perma-bullish blown calls the past 3 years.
People have been calling for a gold or silver shortage to manifest itself for years and nothing close to a Comex or LBMA default has occurred yet.
But if they did, they would quickly cash settle the accounts with a premium maybe.
The current legal system or various market enforcement entities will look the other way just like they've done with the Libor fixing and other recent "fixed" markets.
Slap on wrist fines as usual and that'll be it.
The hypester shills out there would always have you believe we're on the cusp of something big....any day/week/month/year(s) from now.
Jim Rickards claims on Koos Jansens blog that somebody from Perth Mint told him that SAFE from China bought 600t of Gold in June/July 2013. Could you please comment in this.
ReplyDeleteThanks.
http://www.ingoldwetrust.ch/interview-jim-rickards-on-the-death-of-money
See http://www.perthmintbullion.com/au/blog/blog/13-10-07/China_Surreptitiously_Acquiring_Gold_Via_The_Perth_Mint.aspx
ReplyDeleteI also discussed this with Jim in an email in September 2013. Most likely he has probably forgotten about it given his hectic interviewing and promo schedule recently.
Excellent comments. Thanks!
ReplyDeleteTrying to be clear on ETFs, so the money is made by the top and particluarly the APs ?
When theres mass buying by the '99% investors' the price rises above the ETF net asset value.
The APs step in sell to the '99%' while buying cheaply from the ETF distributor in the set amount,
which only they are allowed to do.
Similarly mass selling the other way round ?
Easy Money especially if they can keep it volatile and even generate or manipulate the direction with
greed/fear emotions.
Seems the same cream spread coming off, just different game.
Is it clear that ETFs are regulated on the assets NOT the mechanism ? Seems there could be many ways to ensure compliance.
ETFs are coming for Bitcoin.....so the 99% can get in on that other 'mined commodity'.
"It's clearly a budget. It's got a lot of numbers in it."
George W. Bush
Compliance - X gold bars TICK. ETF distributor to AP Compliance TICK because X gold matches Y number AP shares. AP to 99% compliance NO Check required, values hedged, no issue limit...?
ReplyDeleteI think you're overstating the cream APs get from market making for ETFs - the buy/sell spread is extremely tight and not sure with all the APs competing with each other that ETF prices diverge too much from the spot gold market.
ReplyDeleteVolatility is their friend however, no money to make if people don't trade