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Thread: COMEX

   
   
       
  1. #11
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    Re: COMEX

    Quote Originally Posted by Amadan
    http://www.galmarley.com/framesets/fs_monetary_history_faqs.htm

    Amadan,

    Very interesting. Looks exactly like the Rat Race.

    My take: During times of financial systemic failure, hold gold as protection. But it is not necessarily a permanent solution. But in the oncoming financial tsunami erupting from the US, it is probably the best solution for the next couple of years.
    py

  2. #12
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    Backwardation and Cotango

    I had trouble figuring out the 2 terms above. I think Prof Fekete's article explains it quite well in the attachment.
    py

  3. #13
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    Dr Schoon: More on backwardization

    Dr Schoon offers hope for freedom from the the slavery of debt in this article. That hope can only come about if we hold gold.

    http://www.drschoon.com/articles%5CT...esBackward.pdf
    py

  4. #14
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    Re: COMEX

    Quote Originally Posted by pywong
    Quote Originally Posted by GoldChan
    i don't think COMEX gold will default in Dec.
    Because the volume is not as big as COMEX silver.
    There are many clever ways to do back door settlement in the event of delivery failure
    such as roll-over the contract to a future delivery date with some penalty.
    Wouldn't roll-over require the agreement of both parties?

    Are you suggesting that the roll-over can be executed even if the buyer of the short demands delivery?
    in the past, this is what happen in Aug 16, 2006. when Nickel was defaulted.

    Here are some excerpts from the LME’s press release of August 16 –
    "Those with short positions in nickel falling prompt on Friday 18 August 2006, and on subsequent prompt dates until further notice, who are unable to effect physical delivery an/or unable to borrow metal at a backwardation of no more than $300.00 per tonne per day, shall be able to defer delivery for a day at a penalty of $300.00 per tonne. Those with long positions for prompt on those days who are subject to deferred delivery shall be entitled to compensation of $300.00 per tonne per day
    Commenting on the announcement, Simon Heale, LME Chief Executive said:
    "Nickel stocks are at historically low levels and we now have a genuine material shortage. Our first priority is to ensure that trading remains orderly and to prevent the risk of settlement defaults."

    >>
    You see the Exchange is protecting those who shorted. Because those who shorted are big financial players. You will see that in the future.


  5. #15
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    Re: COMEX

    Quote Originally Posted by GoldChan
    in the past, this is what happen in Aug 16, 2006. when Nickel was defaulted.

    Here are some excerpts from the LME’s press release of August 16 –
    "Those with short positions in nickel falling prompt on Friday 18 August 2006, and on subsequent prompt dates until further notice, who are unable to effect physical delivery an/or unable to borrow metal at a backwardation of no more than $300.00 per tonne per day, shall be able to defer delivery for a day at a penalty of $300.00 per tonne. Those with long positions for prompt on those days who are subject to deferred delivery shall be entitled to compensation of $300.00 per tonne per day
    Commenting on the announcement, Simon Heale, LME Chief Executive said:
    "Nickel stocks are at historically low levels and we now have a genuine material shortage. Our first priority is to ensure that trading remains orderly and to prevent the risk of settlement defaults.">>
    You see the Exchange is protecting those who shorted. Because those who shorted are big financial players. You will see that in the future.
    GoldChan, let me see whether I can understand this.

    The short-sellers defaulted on nickel and are unable to deliver. The LME fined them $300/tonne/day until such time as they can deliver. This money goes to the long buyers. I don't have a problem with that. If they delay 10 days, the short-sellers deliver the nickel and compensate another $3000/tonne. How does this protect the short-sellers?
    py

  6. #16
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    Re: COMEX

    The price of nickel around that time was USD13/= / lbs.
    1 tonnes is about 2240 lbs.
    2240 x 13 = USD 29120/=
    So a USD300/= per tonne per day is 1% penalty.
    WHich I think its not a lot? Just delaying the delivery only to protect the short by fiat currency.
    After 16th August 2006, nickel price peaked at about USD24/ lbs at April 2007. in 6-9 months later.
    If you factor in the penalty , I think its not much.

    Quote Originally Posted by pywong


    GoldChan, let me see whether I can understand this.

    The short-sellers defaulted on nickel and are unable to deliver. The LME fined them $300/tonne/day until such time as they can deliver. This money goes to the long buyers. I don't have a problem with that. If they delay 10 days, the short-sellers deliver the nickel and compensate another $3000/tonne. How does this protect the short-sellers?

  7. #17
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    Re: COMEX

    Dear PYWong,
    There is a big differences between
    a) Forcing the shorted seller to deliver by forcing them to buy the metal at existing market price so that they can meet the delivery deadline. Thus, price will increase at least 5% per day for continuously 3-5 days.
    b) Allow them to deliver at a later date by paying a small fine of 1%.

    After I have read through Ted Butler commentaries, in silver market, manipulation begins as far back at 1983. So, I think its very naive for us to believe that COMEX default will end the manipulation. Manipulation will still goes on forever as long as there is greed.



  8. #18
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    Re: COMEX

    Quote Originally Posted by GoldChan
    Dear PYWong,
    There is a big differences between
    a) Forcing the shorted seller to deliver by forcing them to buy the metal at existing market price so that they can meet the delivery deadline. Thus, price will increase at least 5% per day for continuously 3-5 days.
    b) Allow them to deliver at a later date by paying a small fine of 1%.
    Yes, GoldChan. You do have a point there. I remembered when Daim and Mahathir tried to corner the tin market in London, the LME changed the rules and they lost a few hundred million. This loss was then transferred to another sucker - you know who.
    py

  9. #19
    Join Date
    Dec 2008
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    134

    Re: COMEX

    Its 11th Dec, Comex deliveries stands at 42.7% Didn't smell any default coming around the corner..

  10. #20

    Re: COMEX

    Quote Originally Posted by pywong
    Quote Originally Posted by GoldChan
    Dear PYWong,
    There is a big differences between
    a) Forcing the shorted seller to deliver by forcing them to buy the metal at existing market price so that they can meet the delivery deadline. Thus, price will increase at least 5% per day for continuously 3-5 days.
    b) Allow them to deliver at a later date by paying a small fine of 1%.
    Yes, GoldChan. You do have a point there. I remembered when Daim and Mahathir tried to corner the tin market in London, the LME changed the rules and they lost a few hundred million. This loss was then transferred to another sucker - you know who.
    Hey! This is interesting. New to me. Who is the sucker?

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