Katchum's  Instablog

Send Message
Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
My blog:
Katchum's Macro-economic blog
  • Paper Gold Pyramid Scheme Unwinds Right Now? 2 comments
    Jan 24, 2014 4:38 PM | about stocks: GLD

    Pretty breaking news in the COMEX is that we are seeing a start in the unwinding process of leverage in paper gold.

    Zerohedge reports that J.P. Morgan got its largest drop in eligible gold in one day.

    This is how it looks like. Of course with so few real physical gold at the COMEX, the whole paper pyramid scheme will collapse in a jiffy.

    (click to enlarge)

    And the leverage which will collapse too (still a long way to go down), is shown below. When everything unwinds, the paper shorts will have to come up with the real gold as China buys an ever increasing amount at the SGE. This week the SGE had a record delivery of 59 tonnes, the second highest after the 79 tonnes we got last week.

    Add to that the most probable import tax restriction easing of the Indian government and we have the perfect storm for gold. I even sold my copper stocks to buy extra gold mining shares.

    And I didn't even mention the end of manipulation by Deutsche Bank, the increasing investments from China in the gold mining sector and the decreasing supply from high grade mines going into 2015. Nor did I mention the crashing stock market which will make gold soar when investors switch their equities for gold.

    Stocks: GLD
Back To Katchum's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • Ruben12345
    , contributor
    Comments (879) | Send Message
    Great article. It smells but I just don't know where this all goes. The miner sell off yesterday bugs me.
    I have no faith in the big banks as they manipulate gold price
    25 Jan 2014, 08:11 AM Reply Like
  • Katchum
    , contributor
    Comments (601) | Send Message
    Author’s reply » That's just because the stock market crashed 2%. It tends to drag down every sector, even gold mines. Gold was up yesterday.
    25 Jan 2014, 08:23 AM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.