tag:blogger.com,1999:blog-6089228851855763774.post4591165697178331530..comments2024-03-29T07:10:06.022+08:00Comments on Gold Chat: Fractional reserve bullion banking and gold bank runs - how can I default on thee? let me count the waysBron Sucheckihttp://www.blogger.com/profile/00530576934994289879noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6089228851855763774.post-64113829371274635122014-02-11T05:20:07.173+08:002014-02-11T05:20:07.173+08:00The problem is that it's not a real gamble for...The problem is that it's not a real gamble for the big entities. And yes a trade might fail, although there's little chance it will at those levels. Don't forget that these are players for the long run. It sure is a gamble for those whose intention it was to gain fiatmoney and not the physical gold in the first place. These people might take the short position in going naked short. If you want to be a really big player you've to put some gold on the table, otherwise they can call your bluff too easily.<br />I get the impression you do not understand the long and short side of a trade. And for your information, yes, this is also applicable to other markets too.<br />And I do not believe in gold manipulation, but in fiatmoney manipulation, but that's another story, although there probably are some overlaps.<br />It is quite common to make some (small) sacrifices to get a better position for the end game. Do I need to remind you of Rothschild after the battle of Waterloo? When you have enough influence in the market at a particular moment, you'd be able to steer its direction and make your trades. And the Bullion Banks interact in between.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-13614696913229380342014-02-10T21:24:49.638+08:002014-02-10T21:24:49.638+08:00" This all can be arranged in minutes." ..." This all can be arranged in minutes." Yeah, Einstein, one doesn't need physical to gamble like this, and one can try to do the same in other markets too. Except that it's going to be a crapshoot, and you might lose some. Unless, of course, you're one of those gold conspirators who only believe gold manipulation, but only gold manipulation, always works.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-61833232782096384702014-02-10T11:11:36.541+08:002014-02-10T11:11:36.541+08:00"the only way for a banks "paper" a..."the only way for a banks "paper" assets to remain "as good as gold" is for them to mature into gold"<br /><br />Justin, my series of posts are not about banking, but about bullion banking - all of a BBs assets mature into gold.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-7991382042834040322014-02-10T05:14:38.848+08:002014-02-10T05:14:38.848+08:00I would be more interested in the parties (entitie...I would be more interested in the parties (entities) that make use of the BB during those raids. If I were such an entity, had a lot of gold and wanted some more, either in fiatmoney (for new position) or gold (physical), and sold a big lot (covered), waited for the price to drop and bought it back, that would be an easy gain wouldn't it. This all can be arranged in minutes. And if the lots of physical I took out of the market are not too big at one time, who would notice.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-1629187167993160682014-02-09T14:17:12.860+08:002014-02-09T14:17:12.860+08:00Hey golduggers, how come you get butt-hurt about n...Hey golduggers, how come you get butt-hurt about naked gold shorts, but not about naked gold longs, nor about naked shorts in other markets such as stock futures or commodity futures markets?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-31260918613892939452014-02-09T08:50:12.704+08:002014-02-09T08:50:12.704+08:00"a default can occur because of a failure on ..."a default can occur because of a failure on the asset side, not just from a run from the liability side"<br /><br />You have it mixed up Bron, a run on a bank is ALWAYS the result of a failure on the asset side.<br /><br />Forget Fekete & go straight to where he took most of his theory from, Melchior Palyi, who was only laying out classical banking practice.<br /><br />A liquid bank can never liquidate - suffer a run. If its assets are of a quality "as good as gold" then gold will bid for the banks assets at next to no discount, since those assets should mature within 90 days.<br /><br />Of course the only way for a banks "paper" assets to remain "as good as gold" is for them to mature into gold. <br /><br />Reserve ratios & any other mathematical constructs mean nothing. There is no limit to the quantity of paper gold a bank can have if it remains a standard quality. <br /><br />What's the superior standard of quality? If you don't know that by now Bron, you are lost.Justinnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-6334356018997649952014-02-09T05:08:45.695+08:002014-02-09T05:08:45.695+08:00Bron, just make sure that you keep PMGold in top ...Bron, just make sure that you keep PMGold in top shape, don't worry about what the other banks are doing. Another thing that Perth mint can do is take product off the market whenever the manipulators of the gold price and silver price manipulate. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-33987736462930359402014-02-08T08:06:06.789+08:002014-02-08T08:06:06.789+08:00Mencius Moldbug,
Shills or loons, are those my on...Mencius Moldbug,<br /><br />Shills or loons, are those my only two choices?<br /><br />Looking across the assets listed here http://goldchat.blogspot.com.au/2014/02/fractional-reserve-bullion-banking-and_4.html my opinion (as there is no data) is that there is significant naked shorts. Some meager evidence for that is the fact that the BBs decided to provide quotes for GOFO and have lease rates derived. You would think it would make more sense to quote the lease rate (like they do for all fiat currencies) and derive GOFO, particularly as the lease rate would be use in the calculation of many other derivatives.<br /><br />The inference is that they picked GOFO as that is the rate/market where the volume/action is - that is the rate what their clients (miners and speculators) want, not a lease rate from which the client then has to dervie GOFO.<br /><br />Secondly, GOFO is the rate that "nets" lease and interest rates and is what the speculator earns/pays if they leave the cash with the bank with whom they are going short.<br /><br />Thus the emphasis on GOFO by the BBs tells us that this is the market with the volume and that these naked positions are collaterised by the BB with the cash from the sale. That is why I focused on the trading/execution risks associated with collateral - volatility, liquidity, gap etc.<br /><br />Another issue is that for the BB to pay the naked short an interest rate on the cash from the short sale it has to then lend that cash out, does it not. So as we peel the onion, we find that the collateral against client shorts is some non-gold bank loan asset.<br /><br />Thanks for the question, I'll incorporate this answer into a subsequent post.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-75375520495116887332014-02-08T07:48:11.153+08:002014-02-08T07:48:11.153+08:00Strannick,
You missed the bit "..., in our e...Strannick,<br /><br />You missed the bit "..., in our example." In no way was I claiming that any or all BBs have a 50% current ratio. The fact that you set up that deliberately deceptive straw man says a lot.<br /><br />No one know what a BBs current ratio is, as BBs do not reveal their gold balance sheets, just their overall balance sheet. Sometimes you can get a bit of an insight, see here http://goldchat.blogspot.com.au/2010/04/king-world-news-scotia-certificates.htmlBron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-40180560033634523262014-02-08T05:24:56.930+08:002014-02-08T05:24:56.930+08:00"... Anyone in the blogosphere thinking other..."... Anyone in the blogosphere thinking otherwise (or continually claiming that a gold/silver price explosion is around the corner while it's done nothing but drop)..."<br /><br />This is a lie. Have a look at the gold price since 2000. It has risen. So if you are going to tell us that the price has dropped maybe, include a time-frame, eg. between March of year nnnn & September of year nnnn, it has dropped, and THEREFORE based upon these facts, the price will never explode.<br /><br />What a load of complete nonsense. This anon isn't Dave from Denver, or Turd Ferguson, or ranting Andy is it? What is readily apparent, is that one of these anon's who has started posted here recently, is really antagonistic to Bron. I guess that says it all... Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-80679713381850678692014-02-08T04:22:13.541+08:002014-02-08T04:22:13.541+08:00As for My Respect For Bron's Articles on Fract...As for My Respect For Bron's Articles on Fractional Reserve Banking":<br /><br />Try to earn a small return, the earning's not too tough;<br />Be more bold and go for gold, that's when the going's rough.Jakenoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-89981729294200834982014-02-08T02:19:35.270+08:002014-02-08T02:19:35.270+08:00The $64K question in my mind, to which I've ne...The $64K question in my mind, to which I've never seen a really satisfactory answer from either the shills or the loons, is:<br /><br />We can take it for granted that BBs run matched, not maturity-matched but at least value-matched, metals books. They also have some physical to cover their liabilities. But what are their other assets?<br /><br />Someone - not the BBs themselves - is issuing virtual gold. It doesn't seem like all this virtual gold can be backed by forward production commitments from, you know, actual gold mines, in an era when the hedgebook is negligible.<br /><br />So what is this stuff? There are only three possibilities I can think of. One, somewhere at the end of the chain there's a naked short. Two, somewhere at the end of the chain there's a CB position. Three, some combination of 1 and 2...Mencius Moldbughttp://unqualified-reservations.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-35815650541090155832014-02-08T01:49:58.148+08:002014-02-08T01:49:58.148+08:00Strannick says, "...This article is truly wor...Strannick says, "...This article is truly worthless. The questions is whether its useless...."<br /><br />Doth inspires a limmerick:<br /><br />This article is truly worth-less. The questions is whether its use-less.<br />Use the data, don’t just-guess,<br />Knowledge saves you great dist-ress,<br />Helping you your skills as-sess.<br />Our Great Society Of Larg-essJakenoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-91478179947433831732014-02-08T00:29:34.244+08:002014-02-08T00:29:34.244+08:00The current gold story underway is a multi-decades...The current gold story underway is a multi-decades long story that still has many years to play out because TPTB, the BB's and CB's aren't ready or willing to capitulate back into any type of gold standard.<br /><br />Anyone in the blogosphere thinking otherwise (or continually claiming that a gold/silver price explosion is around the corner while it's done nothing but drop) is full of BS and full of themselves and more then likely a subscription or bullion selling shill.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-7459284554758541942014-02-08T00:29:18.978+08:002014-02-08T00:29:18.978+08:00Bron creates a hypothetical current account ratio,...Bron creates a hypothetical current account ratio, then from it, extrapolates that bullion banks have a 50% reserve ratio. From that specious reasoning and obfuscation worthy of Jeff Christian, Bron starts claiming that gold commentators don't use precise terms correctly, like rehypothecation. This article is truly worthless. The questions is whether its useless because of ignorance or useless because it is deliberately deceptive. Strannickhttps://www.blogger.com/profile/03437325266897586336noreply@blogger.com