Dear Friend of GATA and Gold:

The TF Metal Report's Craig Hemke, writing today at Sprott Money, does the math on the last year's worth of the use of the "exchange for physicals" mechanism of settling gold futures contracts on the New York Commodities Exchange. Hemke calculates that nearly 2.4 million Comex gold contracts have been settled this way since last November, totaling 7,442 tonnes of gold.

This total, Hemke notes, is 260 percent of annual gold mine supply and nearly equal to all the gold claimed to be vaulted by the members of the London Bullion Market Association, the Bank of England, and the Comex itself.

How can this be?

Hemke concludes:

"There are no 'exchanges for physical' taking place at all -- at least not in the sense of actual, unencumbered, and allocated physical metal. Instead, EFPs are just another part of the great scam known as The Fractional Reserve and Digital Derivative Pricing Scheme, where alchemized digital and unallocated gold is foisted upon the masses, who blindly accept 'exposure to the gold price' as a substitute for the real thing."

There's another question here, which GATA has put in writing to the U.S. Commodity Futures Trading Commission without yet getting a response, despite recruiting a member of Congress to prod the agency. That is, how does the commission regard EFP reporting, since it can't possibly be accurate in any conventional sense?