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Charlatan or an Ignoramus? - Page 2
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Thread: Charlatan or an Ignoramus?

  1. #11
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    Quote Originally Posted by Mike Phillips View Post
    Just to stick to the arguments. Hommel is wrong about the roles of metals as money. Precious metals are not a medium of exchange, nor a unit of account. Fiat currency continues to be able to perform these roles, at least for the time being. The role that fiat money is failing at is as a store of value. Since 1971 the fiat currencies of the World have been debased, recently in a gross manner. Even though metals are volatile, they do function as a store of value. We can expect them to hold their value against debasing fiat currencies over the medium term.
    Matt, may I ask you, as a market professional, what you think about the large open interest for the July delivery month in Comex silver? With only a couple of days before first notice, we still appear to have a large number of longs apparently standing. Is this normal? it appears to be many tens of millions of ounces.
    For every long there is a short. Ask me the same question the day after 1st notice day. That is the day when we could see if there is real significance to the number, because by that day any long positions absolutely have to have full contract value in their accounts, or their clearing house will automatically close out the trades. Delivery is at the discretion of the seller and is done on an oldest trade basis, but I have seen cases where one seller swoops in and delivers bunches of material all in one day. Also, keep in mind that open interest figures are always one day behind to allow for corrections of outtrades.

  2. #12
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    Quote Originally Posted by Mighty Moose View Post
    Sorry to burst your bubble, Mike.
    It looks like you won't be waiting much longer for precious metals (specifically gold) to be 'officially' recognized as money ...even by the fiat pushers, themselves.
    Eventually, there's no where for the banksters to run but back to gold ...even if it kills most of them.
    I would wager that's a silly and wrong idea in the next 1-2-3-5 years, but given your history of not honoring bets, that would just end up making you three for three.

  3. #13
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    Default July Comex delivery

    Quote Originally Posted by Matthew Shelley View Post
    For every long there is a short. Ask me the same question the day after 1st notice day. That is the day when we could see if there is real significance to the number, because by that day any long positions absolutely have to have full contract value in their accounts, or their clearing house will automatically close out the trades. Delivery is at the discretion of the seller and is done on an oldest trade basis, but I have seen cases where one seller swoops in and delivers bunches of material all in one day. Also, keep in mind that open interest figures are always one day behind to allow for corrections of outtrades.
    Thanks Matt. We will see what happens. There just seems to be a huge open interest just three days before first notice day. In a physical delivery market that suggests to me that some real material is about to change hands. One clarification; when you say "delivery is at the discretion of the seller", I assume you mean that the DATE of delivery is at the discretion of the seller until the final date for delivery. He/she has no discretion as to WHETHER he/she delivers physical metal once the contract is mature. They are then totally on the hook to deliver good delivery bars assuming the buyer has posted the full amount of consideration. I feel that with all that is going on with the World's monetary system, and the recent market treatment of gold and silver as a "safe haven" asset, a non trivial number of the longs are going to stand for delivery. I am sure that every effort will be made to meet the demand for physical, but at some point it may be difficult if not impossible to find enough metal at the current "official" price. Whether this happens this month, who knows? But every "market anomaly" has its day of reckoning.

    Thanks for all your info.

    Mike

  4. #14
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    Quote Originally Posted by Mike Phillips View Post
    Thanks Matt. We will see what happens. There just seems to be a huge open interest just three days before first notice day. In a physical delivery market that suggests to me that some real material is about to change hands. One clarification; when you say "delivery is at the discretion of the seller", I assume you mean that the DATE of delivery is at the discretion of the seller until the final date for delivery. He/she has no discretion as to WHETHER he/she delivers physical metal once the contract is mature. They are then totally on the hook to deliver good delivery bars assuming the buyer has posted the full amount of consideration. I feel that with all that is going on with the World's monetary system, and the recent market treatment of gold and silver as a "safe haven" asset, a non trivial number of the longs are going to stand for delivery. I am sure that every effort will be made to meet the demand for physical, but at some point it may be difficult if not impossible to find enough metal at the current "official" price. Whether this happens this month, who knows? But every "market anomaly" has its day of reckoning.
    Thanks for all your info.
    Mike
    It is faintly more complicated. Silver and Gold in Comex futures are technically "certificate" deliveries. The certificates representing physical metal being held in the exchange warehouses such as the HSBC basement in New York City. If you take delivery, your brokerage house is initially handed the certificate, which can be held in what is called 'street' name, or at slightly added costs, in your name. In either case, the certificate could be walked across the street for actual delivery, and it's up to you whether you have it placed in a Brink's truck, or the back of your station wagon. If it is in street name, a registered representative of your brokerage house has to pick it up, if it's in your name, you have to stop by their offices and pick up the certificate, and then pick it up yourself. Right now it would be the equivalent of walking down the street with a near $150,000 bill in your wallet. Usually, this would be for 'unallocated' bars, which means you would get 5,000 ounces off the shelf, but not any specific 5,000 ounces. If was a certificate for allocated, it would be assigned to specific bars with their own serial numbers on a very different set of shelves.

    The bottom line of the "at the discretion of the seller" point in this case is mostly financial. The metal has long ago been delivered to the exchange warehouse, it is the certificate and it's monetary value that gets transferred from house to house (or to your mailbox if that's what you prefer). The metal is already sitting there and waiting for you if you want to "back the truck up".

  5. #15
    Join Date
    Apr 2009
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    Default Thanks

    Quote Originally Posted by Matthew Shelley View Post
    It is faintly more complicated. Silver and Gold in Comex futures are technically "certificate" deliveries. The certificates representing physical metal being held in the exchange warehouses such as the HSBC basement in New York City. If you take delivery, your brokerage house is initially handed the certificate, which can be held in what is called 'street' name, or at slightly added costs, in your name. In either case, the certificate could be walked across the street for actual delivery, and it's up to you whether you have it placed in a Brink's truck, or the back of your station wagon. If it is in street name, a registered representative of your brokerage house has to pick it up, if it's in your name, you have to stop by their offices and pick up the certificate, and then pick it up yourself. Right now it would be the equivalent of walking down the street with a near $150,000 bill in your wallet. Usually, this would be for 'unallocated' bars, which means you would get 5,000 ounces off the shelf, but not any specific 5,000 ounces. If was a certificate for allocated, it would be assigned to specific bars with their own serial numbers on a very different set of shelves.

    The bottom line of the "at the discretion of the seller" point in this case is mostly financial. The metal has long ago been delivered to the exchange warehouse, it is the certificate and it's monetary value that gets transferred from house to house (or to your mailbox if that's what you prefer). The metal is already sitting there and waiting for you if you want to "back the truck up".
    Thanks Matt, that is very useful.

    Mike

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