ABG

Will COMEX Default on Gold and Silver?

Yes. I agree. I cannot agree with Donatella that the clearing members of the exchange are above reproach, nor that the allegations made against some of them by conspiracy theorists should be dismissed out of hand. Some of the conspiracy theorists, like James Sinclair, for example, are persons of high intelligence and business acumen. What they are saying cannot be dismissed without a thorough investigation, which has never been done.

However, it will be extraordinarily difficult for private actors, like clearing members of COMEX or NYSE-Liffe, all of whom are guaranteeing trades on the futures exchanges, to default, as compared to the U.S. government's gold default back in the 1930s. The government can hide behind eminent domain and related legal theories. The private actors cannot. They face potential criminal liability, and a huge increase in civil liability, upon any default, so, absent a "end of the world" scenario, they aren't going to do it.

Don't ignore the opportunity to buy gold and silver at incredibly cheap prices, without the 20-30% premiums in the real market. The main point is that, even if the conspiracy theorists are correct, and they may be, people should still buy precious metals on the futures markets, as long as they don't get caught by the siren song of speculation, and have the cash to pay, and do pay, for their purchases up front.


On Dec 23 01:40 PM Long John Silver wrote:

> The whole system is based on "TRUST" and "honesty" which are in short supply these days. Even the federal government reneged on the gold
> certificates issued before 1934. Read the Supreme Court "gold cases"
> to see how the highest Court simply sidestepped the "ironclad" promise
> to redeem the certificates in gold coin. As a lawyer, I can tell
> you there's no rule that can't be bent or circumvented once the lawyers
> get into the act. It's a joke. Take physical delivery now so you
> don't have to trust anybody.