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Another Great Oxymoron: "LBMA Transparency"

 -- Published: Tuesday, 20 November 2018 | Print  | Disqus 

By Craig Hemke

On Tuesday, significant gold news was made when the London Bullion Market Association finally began its long-awaited disclosure of gold market size and trading volume. If anything, all their first report revealed was the sheer magnitude of the scam and the fraud that persists in the current system.

A summary of the report, along with a brief interview of LBMA CEO Ruth Crowell, can be found at this link:

Here are the three main takeaways from the LBMA's "disclosure":

1. An average of $36.9 billion of gold and $5.2 billion of silver change hands each day in London's over-the-counter market.

2. The average daily dollar volume of LBMA OTC gold trading exceeds the combined daily dollar volume of the FANG stocks in New York.

3. Total LBMA digital derivative daily trading volume is actually less than the digital trading volume on the COMEX in New York.

Let's tackle these one-by-one, in an attempt to display once again the sheer magnitude of the fraud and scam being enforced upon the world by this current LBMA/COMEX Fractional Reserve and Digital Derivative Pricing Scheme.

First, how many ounces of digital metal are changing hands over the course of an average day, when $37B worth of "gold" and $5.2B worth of "silver" are traded? At $1200/ounce for gold, that's about 31,000,000 ounces. At $14, that's about 372,000,000 ounces of silver.

For gold, those 31,000,000 ounces equate to nearly 1,000 metric tonnes. The entire world mines only about 2,800 metric tonnes of gold per year, so your average day in London sees trading volume of over 1/3 of TOTAL annual mine supply. For silver, the world mines about 880,000,000 ounces annually, so total daily LBMA silver volume is closer to 42% of annual mine supply. Traded. In one day.

Next, the daily dollar volume of this LBMA gold trade is listed at $37B. This exceeds the combined daily dollar volume of the FANG stocks (which some argue drive the entire U.S. stock market) by a whopping 43%! Think about that particular statistic for a moment, and then file it away for the next time some fiat-pusher tries to claim that gold is "antiquated" or a "pet rock". The dollar-volume of the daily trade clearly suggests something completely different.

Lastly, note that the daily trading volume of digital ounces is actually reported to be greater on the COMEX in New York, where total volume regularly exceeds 50% of total mine supply. As you know by now, the COMEX simply trades digital derivatives of gold, and the bi-monthly physical delivery charade is miniscule. In fact, the entire current COMEX system of 525,000 contracts of open interest (52,500,000 digital ounces) is supported by a foundation of just 8,025,418 ounces, of which only 128,451 ounces are marked as "registered" and immediately deliverable.

What have we learned from all of this "transparency"? Nothing new, of course. But hopefully this helps shed light upon what a scam this all is. This is not gold bullion or silver bullion that's being traded. The numbers alone make it a physical impossibility.

So think about it. The prices of gold and silver are currently determined by the trading of digital derivatives,which have next-to-zero connection to the physical metal. The price that is discovered is the price of the digital derivative itself and not the physical commodity. And the supply of the digital derivative is nearly endless, as The Banks have a monopolistic ability to create a nearly infinite amount.

Traders of digital gold in London and New York have zero claim to any physical metal. They simply have "exposure to the gold price". Thus, when this fraudulent system eventually collapses (as all systems built upon a foundation of lies and deceit ultimately do), the rush to claim actual physical metal with clear title will be historic, and the resulting conflagration will be spectacular to behold.

When the London Gold Pool failed in 1968, the Bankers conspired to create a new system, one which relied upon the alchemy of unallocated accounts, promissory notes, counter-party risk and unlimited derivatives. However, just as all previous attempts to manage and manipulate the gold price have failed, this current scheme will fail, too. All that these latest "disclosures" from the LBMA accomplish is to shed some light upon the sheer magnitude and scope of the current, fraudulent system.

Since 2010, we have warned that you must take action to prepare for the time when this current system fails. My hope is that as you learn more about the confidence scheme/game that is the current pricing system, you'll understand better the need to "prepare accordingly" through the acquisition of your own personal hoard of physical precious metal. You can hold it at a trusted gold bullion storage company or in your personal safe. You can hold it in gold bullion coins or silver bullion bars. Take your pick. Just be sure you own some before the LBMA/COMEX system meets its inevitable demise.

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report found at, an online community for precious metal investors.

The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.You may copy, link to or quote from the above for your use only, provided that proper attribution to the author and source is given and you do not modify the content. Click Here to read our Article Syndication Policy.


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