Comex Snaps: Gold Dilution Hits Record 542 Oz For Every Ounce Of Physical

Meanwhile, the aggregate gold open interest remained largely unchanged, at just about 40 million ounces.

 

This means that the ratio which we have been carefully tracking since August 2015 when it first blew out, namely the “coverage ratio” that shows the total number of gold claims relative to the physical gold that “backs” such potential delivery requests, – or simply said  physical-to-paper gold dilution – just exploded.

As the chart below shows – which is disturbing without any further context – the 40 million ounces of gold open interest and the record low 74 thousand ounces of registered gold imply that as of Monday’s close there was a whopping 542 ounces in potential paper claims to every ounces of physical gold. Call it a 0.2% dilution factor.

More…

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Why is this important? As anyone familiar with Atlas Shrugged, the looters raided every asset with impunity for two simple reasons: they knew the system was going to collapse and they knew they would be safe with their stolen assets when they went to the secured bunkers or villas. If you cannot see the looting at an unprecedented level, I have some paper gold to sell you.

The collapse is very close.

David DeGerolamo

      
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3 Responses to Comex Snaps: Gold Dilution Hits Record 542 Oz For Every Ounce Of Physical

  1. Average Joe says:

    Ah, but from chaos comes orders….as on New World.

  2. LT says:

    The collapse is not imminent, it is ongoing. As I stated several years ago, “Nothing as big as the global economy crashes over night – even a truly sudden crash takes a year or more to manifest at this scale, but we are indeed witnessing such a crash. Like a train wreck in extreme slow motion, it is happening now, all around us.”

    I stand by that statement, and it is indeed happening all around us. However, a ‘train wreck’ is not a particularly effective analogy to illustrate the complexities, and the inescapable reality of that point beyond which no recovery is possible, without first hitting bottom (at least once). In truth, a plane crash is a better analogy -- almost any fault is recoverable, if you have sufficient altitude in which to right the aircraft. But as altitude is lost, the likelyhood of survivng an adverse event decrease rapidly -- and if it falls below a certain airspeed and altitude, the aircraft *is* coming down, whether there is a runway to receive it or not, because even at 100% throttle, the incredible momentum of all that mass cannot be redirected from its downward track before it crashes back to earth. In aviation terms, we call this lack of forward velocity which results in a precipitous loss of lift a “stall”.

    Well, the momentum of our economy, and essentially every other national economy in the developed world, are well below that ‘stall speed’. What comes is as inevitable as it is painfully slow in its blossoming; but for all its ponderous indolence, it is all the more magnificent for the supreme ruination which it brings.

    For reference, see --
    http://ncrenegade.com/editorial/the-middle-of-the-end/
    http://ncrenegade.com/editorial/us-exports-off-the-cliff-all-else-soon-to-follow/

  3. Grandpa says:

    And, LT…as has been recorded on several occasions… once the pilot realizes he is out of airspeed, altitude, and luck… his final comment as he continues to fight to recover the unrecoverable is…. “….aw, shit”
    That’s where we are… “aw, shit”

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