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War and Conflict • London Muslim Killers Known To Security Forces
WOOLWICH HORROR TOUCHES RURAL ENGLAND: Police swoop on house in Lincolnshire village as it emerges ‘Islamists who killed soldier’ are British born and known to security services
Suspect identified on internet forums as Michael Adebolajo
He was filmed ranting with bloodied hands shortly after the attack
Police raid house thought to be his father’s home in Lincolnshire village
Suspects in attack on a soldier are not believed to be part of a terror group
Both have been arrested and are being treated in separate hospitals after being shot by police
David Cameron: ‘We will defeat violent extremism by standing together’
Radical preacher Anjem Choudhary knew one of killers and has warned of more ‘lone wolf’ attacks in the future
Read more:
http://www.dailymail.co.uk/news/article … llers.html
Statistics: Posted by yoda — Thu May 23, 2013 5:59 am
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Gold and Silver • CFTC Investigating London Gold, Silver Price Fixing For Mani
CFTC Investigating London Gold, Silver Price Fixing For Manipulation
Submitted by Tyler Durden on 03/13/2013 17:05 -0400
http://www.zerohedge.com/news/2013-03-1 … nipulation
BarclaysCommodity Futures Trading CommissionDeutsche BankHFTLIBORMarket ManipulationPrecious Metals
Years after the CFTC, under the leadership of Goldman’s Gary Gensler, theatrically agreed to investigate whether the price of precious metals was manipulated during trading – whether systematically or ad hoc – only to let that inquiry fizzle and drop the whole idea proclaiming there is manipulation, the commodity futures regulators are once again taking a look at shady activities originating at London. Or rather, it is "discussing internally" whether the daily London gold and silver price fixing is open to manipulation.
We are confident that this latest noble CFTC effort will be for naught: after all wholesale market manipulation like that of Libor and the energy market, is only contained to those sectors. It is preposterous and inconceivable that bankers, anywhere and especially in London, would be tempted to intervene illegally and push gold prices lower. After all, it is not like a surge in gold and precious metal prices is indicative of a loss of faith in the status quo and fiat money, and thus an embeded status quo oligarchy would have any interest in keeping precious metal prices lower. Which is why we urge the CFTC to promptly forget this latest charade, and to instead focus on much more productive things: like ignoring the creeping takeover by HFT of all commodity markets as well as complaining to Congress about its low, low budget.
From the WSJ:
The Commodity Futures Trading Commission is discussing internally whether the daily setting of gold and silver prices in London is open to manipulation, according to people familiar with the situation.
No formal investigation has been opened, the people said. The CFTC is examining various aspects of the so-called price fixings, including whether they are sufficiently transparent, they said.
Gold prices are set twice daily by five banks via teleconference, while three banks set silver prices. The fixings are then used to determine spot prices world-wide, including jewelry and sales from mining companies to refineries. The prices also help determine the value of derivatives tied to the metals.
The London gold market fix dates from 1919, and now sees twice-daily conference calls involving units of five banks: Barclays, Deutsche Bank AG, HSBC Holdings PLC, Bank of Nova Scotia and Société Générale.
Spokespeople for Barclays, HSBC and Deutsche had no immediate comment. Representatives from the other two banks couldn’t immediately be reached.
The silver fix, dating from 1897, involves Scotia, Deutsche and HSBC.
"[The fixings are] not arbitrary, it’s very much done on a demand supply basis until a price is arrived at. It’s fully transparent, it’s nothing like Libor," said a spokesman for the London Bullion Market Association, the trade organization that sets the standards for the quality of gold and silver traded in the London market, but do not run the fixings.
Well that settles that, because in a world in which any real assets are the biggest scarcity, would those who have direct and constant access to money created out of thin electrons, prefer to quietly accumulate gold, physical gold not its paper manifestations, in order to preserve their wealth, at low or high prices?
This should not be trick question.
Statistics: Posted by DIGGER DAN — Thu Mar 14, 2013 7:37 am
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International News • JP Morgan’s infamous CIO London Office taking a leave of ab
So it looks like the week is getting off to an interesting start with the head of
RISK at JP Morgan’s infamous CIO London Office taking a much needed, and well overdue leave of absence later this month (as in the next 4 days!).
JPMorgan Chief Risk Officer Hogan to Take Temporary Leave
http://www.bloomberg.com/news/print/201 … leave.html
JPMorgan Chase & Co. (JPM) Chief Risk Officer John Hogan, whose tenure included the bank’s worst-ever trading loss, will take a temporary leave for personal reasons beginning later this month, he said in a memo to staff.
"I’m looking forward to taking this time off to spend with my family and friends," Hogan wrote in a memo obtained yesterday. Deputy Risk Officer Ashley Bacon will fill in until Hogan returns this summer, he said. Hogan discussed his plans with top managers including Chief Executive Officer Jamie Dimon, he said.
Hogan, previously chief risk officer for the investment bank, took his post a year ago, about three months before the New York-based company disclosed a large and illiquid trading position at the chief investment office. The holdings lost more than $6.2 billion in the first nine months of last year and JPMorgan’s market value dropped more than $50 billion in the weeks after the so-called London Whale episode become public.
The contents of the memo were confirmed by Joe Evangelisti, a spokesman for JP Morgan, which ranks first by assets among U.S. lenders. The stock gained 1.7 percent yesterday to $47.16 in New York.
The bank, in a 129-page internal report released Jan. 16, described an "error-prone" risk-modeling system in the CIO that required employees to cut and paste electronic data to a spreadsheet. Workers inadvertently used the sum of two numbers instead of the average in calculating volatility. The firm also reiterated that London traders tried to hide losses.
END
You know that term…"Where there’s smoke, there’s fire"? Well, when it comes to the JPM London CIO office it’s more like…"Where there’s FIRE coming from every orifice, there’s a WEAPON OF MASS FINANCIAL DESTRUCTION going off"!
Now’s a good time to use the search function on the www.RoadtoRoota.com website and search for the term "CIO". LOT’S AND LOT’S OF DIRT!
Should be a fun week on our Road!
Bix Weir
www.RoadtoRoota.com
JPMorgan Chief Risk Officer Hogan to Take Temporary Leave
By Dawn Kopecki – Jan 26, 2013
http://www.bloomberg.com/news/print/201 … leave.html
JPMorgan Chase & Co. (JPM) Chief Risk Officer John Hogan, whose tenure included the bank’s worst-ever trading loss, will take a temporary leave for personal reasons beginning later this month, he said in a memo to staff.
“I’m looking forward to taking this time off to spend with my family and friends,” Hogan wrote in a memo obtained yesterday. Deputy Risk Officer Ashley Bacon will fill in until Hogan returns this summer, he said. Hogan discussed his plans with top managers including Chief Executive Officer Jamie Dimon, he said.
Hogan, previously chief risk officer for the investment bank, took his post a year ago, about three months before the New York-based company disclosed a large and illiquid trading position at the chief investment office. The holdings lost more than $6.2 billion in the first nine months of last year and JPMorgan’s market value dropped more than $50 billion in the weeks after the so-called London Whale episode become public.
The contents of the memo were confirmed by Joe Evangelisti, a spokesman for JPMorgan, which ranks first by assets among U.S. lenders. The stock gained 1.7 percent yesterday to $47.16 in New York.
The bank, in a 129-page internal report released Jan. 16, described an “error-prone” risk-modeling system in the CIO that required employees to cut and paste electronic data to a spreadsheet. Workers inadvertently used the sum of two numbers instead of the average in calculating volatility. The firm also reiterated that London traders tried to hide losses.
Risk Models
The company found more flaws with its risk-modeling systems in other divisions over the course of the almost eight-month review that Dimon, 56, said the bank is fixing.
The report blamed managers, many of whom were reassigned or left last year, for roles in failing to halt the loss. The executives include former Chief Investment Officer Ina Drew, Barry Zubrow, ex-head of companywide risk management, and former Chief Financial Officer Doug Braunstein.
“Mr. Dimon bears ultimate responsibility for the failures that led to the losses in CIO and has accepted responsibility,” the bank said.
Hogan, who declined to comment, was among top executives who questioned Dimon in the years after the financial crisis about why the CIO didn’t have as extensive or robust risk controls as other departments, people who witnessed or participated in those conversations said last year.
The report said that Hogan, 46, “did not have sufficient time to ensure that the CIO risk organization was operating as it should. Nevertheless, the Task Force notes that there were opportunities during the first and second quarters of 2012 when further inquiry might have uncovered issues earlier.”
Hogan received a bonus for his work in 2012 that included 77,287 shares of restricted stock valued at $3.6 million when they were awarded on Jan. 17. He received 95,212 shares the year before that were worth $3.4 million at the time.
To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
Statistics: Posted by DIGGER DAN — Mon Jan 28, 2013 11:22 am
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International News • Banker who jumped from rooftop London restaurant was under ‘
Banker who jumped from rooftop London restaurant was under ‘enormous amount of pressure’ in his job
Charlie Cooper Friday 11 January 2013
Nico Lambrechts, 46, fell seven floors from the Coq D’Argent at No 1 Poultry in the City of London
A banker jumped to his death from a rooftop London restaurant after coming under “an enormous amount of pressure” in his job, an inquest heard today.
Nico Lambrechts, 46, fell seven floors from the Coq D’Argent at No 1 Poultry in the City of London months after starting at investment bank Investec. The venue has since closed all rooftop terraces and ordered a barrier to be installed after four deaths in the last five years.
His widow wept as City of London Coroner’s Court heard how the father of three died of multiple injuries, including severe head wounds, after jumping from the terrace in October last year. He had a long phone conversation with his wife, Adele, moments before his death.
In May 2007, City employee Richard Ford died after jumping from the restaurant’s terrace onto a bus below. Two years later Anjool Malde, 24, killed himself at the same spot after being sacked from Deutsche Bank in July 2009. A third person, businesswoman Rema Begum, 29, committed suicide in the same way only a month before Mr Lambrechts.
The inquest heard how Mr Lambrechets, from Cobham, Surrey, had contemplated ending his life after he was unable to transfer cash from his native South Africa to pay for school fees for his children.
The man who hired him at Investec Asset Management, Domenico Ferrini, told the court how Mr Lambrechts had moved to the firm, which was due to move back to Cape Town, on 1 July last year, after years at rival company Merrill Lynch.
“I think there were a few things he was worried about,” he told the inquest. “Relocating back to South Africa concerned him and the political climate there – was it the right thing? The transition of being very successful in his previous job, and having to re-establish himself at Investec. I tried to help him find his feet, that kind of thing.”
The City of London’s health and safety officer, Rachel Sambells, said talks were underway to raise the height of the wall on the terrace to 2m by using metal bars.
“The terraces have been closed off in the main part and a security guard has been employed to patrol the area,” she said. “If anyone is up alone up there he approaches them and makes sure they don’t have the same intention.” Volunteers from the Samaritans have also spoken to staff at the restaurant to train them in what to do if anyone tries to jump from the terraces, she added.
Coroner Dr Roy Palmer said he was sure that Lambrechts, of Hillview Place, Cobham, had intended to take his own life on 11 October and was “very sorry” that his widow had lost her husband in the tragedy. “I have to be sure, and I am sure, that he intended to die by his actions,” he said.
“You don’t fall seven floors and go over a wall without that. I do not doubt that he was seriously stressed but I conclude that he killed himself and I am very sorry that he did so in such sad circumstances,” he added.
http://www.independent.co.uk/news/uk/ho … 48565.html
Statistics: Posted by yoda — Sat Jan 12, 2013 1:07 am
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Gold and Silver • Gold Trading Jumps in London
Gold Trading Jumps in London – 26 October 2012
World’s wholesale center sees biggest jump in Gold Trading since summer 2011′s record prices…
GOLD TRADING in London – heart of the world’s wholesale bullion market – leapt in September, writes Adrian Ash at BullionVault.
"The continued economic uncertainty in the Eurozone and US, the end of the holiday period and the start of the Indian festival season boosted clearing turnover," says trade body the London Bullion Market Association, releasing the new data to members on Thursday.
But matched by a sharp rise in the size of gold-backed trust funds traded on the stock market (ETFs), these latest figures really suggest strong interest from hedge funds, investment banks and other institutions around the US Federal Reserve’s announcement of QE3, we believe.
Why QE3 as the catalyst? Because the so-called "smart money" had been hanging on Ben Bernanke’s every word all year…willing him to make free and easy with his electronic printing press once again. And why that group? Because the other potential buyers just weren’t so hot – buyers whose demand would have quickly registered back up the supply chain at the wholesale level – and certainly not hot enough to push Gold Trading through its world center in London to the third highest value on record.
Jewelry suppliers in India have kept a lid on their stockpiling, even ahead of the annual peak in demand due with Diwali in mid-November. Private households (aka "retail" investors) raised their demand in September, but not dramatically, as Bullion Vault’s own Gold Investor Index shows. And amongst those central banks who declare their hand each month to the International Monetary Fund (ie, everyone but China), September 2012 saw them pretty much flat overall as a group.
So you have to guess, therefore, that the so-called "smart money" was the big buyer, helping drive the daily value of Gold Bullion traded through London’s 11 big market makers more than 35% higher in September from August to its highest level since summer 2011′s all-time peaks.
Those 11 market makers – led by global investment-bank and London vault operators HSBC and J.P.Morgan, and all guaranteeing to quote firm Gold Buying and selling prices throughout the day – shifted some $39.2 billion-worth of gold between them on average each day last month. Make a guess at all of September’s other Gold Trading done via smaller bullion banks and dealers, all still quoting prices for settlement in London’s secure and accredited vaults, and the total could have reached to $350bn. That’s the multple suggested by spring 2011′s market-wide survey, undertaken by the London Bullion Market Association on behalf of the World Gold Council.
The aim of that report, in which the LBMA surveyed all its members, was to gauge the true depth and liquidity of the physical gold market. The previous best guess-timate – of a multiple between 3 and 5 times the average daily turnover reported by the big 11 banks – now looks it should stand nearer 8 times. Especially when Gold Trading gets hot, as it clearly did in September.
Some of that hot money has turned tail since. This month’s pullback so far has taken Dollar-gold 4% lower to $1700 per ounce. Perhaps hedge funds, bank traders and other private institutions simply booked early profits off their September Gold Trading. Or perhaps they’re disappointed that QE3 didn’t instantly send inflation soaring.
Give it time. "There is a great deal of ruin in a nation," as Adam Smith calmly replied when told in October 1777 that Britain was ruined by its defeat by the American rebels at Saratoga. It took another 170 years for the British Empire to crest and collapse. Today’s limitless zero-rate money won’t have long.
http://goldnews.bullionvault.com/gold-trading-102620121
Statistics: Posted by yoda — Fri Oct 26, 2012 10:04 am
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Gold and Silver • Bundesbank slashed London gold holdings in mystery move
Bundesbank slashed London gold holdings in mystery move
Germany withdrew two thirds of its vast holdings of gold from Bank of England vaults shortly after the launch of the euro more than a decade ago, according to a confidential report that emerged on Wednesday.
Germany has 3,396 tons of gold worth €143bn (£116bn), the world’s second-largest holding after the US. Nearly all of it was shifted to vaults abroad during the Cold War in case of a Soviet attack. Photo: ALAMY
By Ambrose Evans-Pritchard, International business editor8:24PM BST 24 Oct 2012
The revelation came as Germany’s budget watchdog demanded an on-site probe of the country’s remaining gold reserves in London, Paris, and New York to verify whether the metal really exists.
The country has 3,396 tons of gold worth €143bn (£116bn), the world’s second-largest holding after the US. Nearly all of it was shifted to vaults abroad during the Cold War in case of a Soviet attack.
Roughly 66pc is held at the New York Federal Reserve, 21pc at the Bank of England, and 8pc at the Bank of France. The German Court of Auditors told legislators in a redacted report that the gold had "never been verified physically" and ordered the Bundesbank to secure access to the storage sites.
It called for repatriation of 150 tons over the next three years to test the quality and weight of the gold bars. It said Frankfurt has no register of numbered gold bars.
The report also claimed that the Bundesbank had slashed its holdings in London from 1,440 tons to 500 tons in 2000 and 2001, allegedly because storage costs were too high. The metal was flown to Frankfurt by air freight.
The revelation has baffled gold veterans. The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain’s gold reserves – at market lows – on orders from Gordon Brown.
Peter Hambro, chair of the UK-listed gold miner Petropavlovsk, said the Bundesbank may have withdrawn its bullion in self-protection since it did not, apparently, have its own specifically allocated bars in London. "They may have decided that the Bank of England had lent out too much gold, and decided it was safer to bring theirs home. This is about the identification. Can you identify your own allocated gold, or are you just a general creditor with a metal account?"
The watchdog report follows claims by the German civic campaign group "Bring Back our Gold" and its US allies in the Gold Anti-Trust Committee that official data cannot be trusted. They allege central banks have loaned out or "sold short" much of their gold.
The refrain has been picked up by German legislators. "All the gold must come home: it is precisely in this crisis that we need certainty over our gold reserves," said Heinz-Peter Haustein from the Free Democrats (FDP).
The Bundesbank said it had full trust in the "integrity and independence" of its custodians, and is given detailed accounts each year. Yet it hinted at further steps to secure its reserves. "This could also involve relocating part of the holdings," it said.
http://www.telegraph.co.uk/finance/fina … -move.html
Statistics: Posted by yoda — Wed Oct 24, 2012 1:59 pm
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Canadian • Redford’s half-million dollar tab for London Olympics trip
Redford catching heat over half-million dollar tab for London Olympics trip
Bill includes $113,687 for hotel rooms that were never used
BY DARCY HENTON, CALGARY HERALD OCTOBER 2, 2012
Premier Alison Redford’s controversial delegation to the London Olympics cost Alberta taxpayers’ more than $500,000, including nearly $114,000 for hotel rooms that were booked but never used, according to a report filed on the trip Monday.
Critics, who initially criticized the premier’s decision to attend the Olympics when the cost was forecast at $84,000, were shocked when the total came in more than six times higher.
“Sometimes I am hard-pressed to find words for the absurdity of situations this government gets itself into,” said NDP Leader Brian Mason.
“To spend over $100,000 on empty hotel rooms, or unused hotel rooms, is simply unacceptable. That is an awful amount of money, an awful lot of hotel rooms, and if they can’t plan better than that, then they shouldn’t be the government.”
Premier Redford defended the expenses, saying the trip allowed the government to discuss important qualities of Alberta with the world.
“Every single time that we talk about Alberta overseas, we are growing markets,” she said during an event to salute Olympians and Para-Olympians from Alberta. “We had a great opportunity to develop some strong tourism and cultural ties. Had an opportunity to work with Korean Air about reopening trade links and a lot of opportunity to talk about something important to Albertans, which is the fuel quality directive.”
She attributed part of the bill, such as the money spent on unused hotel rooms, on a “difficult and unpredictable” economy during the Olympics.
“We were able to, in those circumstances, to recover 40 per cent of those costs,” she said.
Two cabinet ministers who travelled with Redford said the Tory government got stuck with a $113,687 hotel bill when it decided last spring to reduce the delegation by 18 people, including four other cabinet ministers.
They said the government asked the hotel to re-sell the rooms, but the market “softened” and the rooms could not be resold.
Tourism Minister Christine Cusanelli said the government still saved $123,000 as a result of its decision to reduce the size of the delegation. She staunchly defended the $518,000 total cost.
“The Olympics were a golden opportunity for our province, the opportunity to promote investment and tell our province’s stories in our words and in person,” she said.
“In this age of technology, we sometimes forget the power of face-to-face conversation. Being there matters.”
Culture Minister Heather Klimchuk said the trip was a good investment that is already showing impressive dividends.
“We feel it was a very effective strategy to bring 17 talented Albertans on the mission,” she said.
“We weren’t the only Canadian province to send representatives, but we were unique in bringing some of our brightest citizens in the flesh. More than a few times I heard the words, ‘Why didn’t we do that?’ from another provincial representative.”
The cost for Redford and the two ministers who made the trip with staff was $87,135.38. An additional $431,144.57 was spent on four luncheons, a reception, a high commissioner’s dinner and accommodation and travel costs ($171,567.30) for 17 Alberta performers and artists, including Corb Lund and Alyssa Reid.
But the Canadian Taxpayers Federation called the forfeiture of $113,687 for unused hotel rooms “a 100 per cent abject waste.”
“Only in the complex money hole of politics would that be considered saving money,” said Alberta spokesman Derek Fildebrandt.
“That, my friend, is politicians’ math.”
He also criticized the government for burying the hotel room expense in a footnote at the bottom of the financial report that he said was “90 per cent political spin and 10 per cent numbers.”
Fildebrandt called on Redford to release the detailed receipts from the trip, as set out in a new policy that came into effect Monday.
“Transparency won’t stop waste, but I think it will make politicians and bureaucrats hesitant to act carelessly with taxpayers’ cash, like we have seen here,” he said.
Redford announced in a news release late Monday she has made available her travel, meals, and hosting expenses, dating back to 2008, in the legislature library to demonstrate her commitment to transparency.
“Albertans expect accountability on how their tax dollars are used,” she said. “I want to personally demonstrate a new era of openness in government and feel it’s important to lead by example.”
She said in an earlier statement that the July 29 to Aug. 4 London mission produced “some good results right out of the blocks” with the announcement a German tour operator is bringing more than 600 travel agents to Calgary and Banff in December 2013.
Cusanelli said the decision was a direct result of the meetings in London and could bring 15,800 German visitors and $16 million to Alberta over subsequent years.
But the official Opposition accused the Tories of fiscal incompetence and mismanagement. Members questioned the decision to send the contingent when the province is facing a deficit that is expected to dwarf the amount forecast last February.
“I think Albertans were outraged when she first announced she was going to London. I think they will be even more outraged when they find out it wasn’t $80,000 as previously indicated — it’s over $500,000,” said Wildrose MLA Kerry Towle.
She said such a costly trip should not have been made when the province was facing its fifth consecutive deficit — a deficit that is now expected to top $3 billion — and when the province has a backlog of schools and roads to build.
But Cusanelli said trips like the London mission plant seeds for future provincial growth.
“Our program in London is a long-term investment in Alberta’s future and a demonstration of how our province will continue to take a proactive approach to engaging the rest of the world to build our economy and our quality of life.”
http://www.calgaryherald.com/travel/Red … story.html
Statistics: Posted by yoda — Tue Oct 02, 2012 1:28 pm
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Canadian • Re: Redford’s half-million dollar tab for London Olympics tr
These aren’t conservatives any more.
Conservatives by definition held to the idea of ‘conserving’. In other words, they weren’t wasteful of money; not their money and especially not that of others.
Statistics: Posted by Deo Vindice — Tue Oct 02, 2012 3:43 pm
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Gold and Silver • London Squeeze Raises Silver Price
London Squeeze Raises Silver Price
http://www.numismaster.com/ta/numis/Art … id=2221608
By Patrick A. Heller
September 04, 2012
Other News & Articles
London Squeeze Raises Silver Price
Scarcer Bullion Dates’ Premium Values Grow
Demand for Fractional Pieces Moving Up
The world’s largest venue for trading physical silver is operated by the London Bullion Market Association. It is an over-the-counter market where buyers and sellers negotiate contracts directly with each other.
Memberships include most major central banks, refiners, bullion banks and their major customers. Contracts are for 1,000-ounce bars refined to a minimum purity of .999 fineness (it was formerly .9999 fineness). Generally, the minimum size contract is for 50,000 ounces.
This exchange is where heavy-duty buyers and sellers of silver trade. In theory, contracts executed there are for prompt delivery of physical metal.
When the price of silver topped $30 about 10 days ago, demand on this exchange surged. The best information I have is that at least two purchases were made then, each in the range of 5-10 million ounces of silver. The sellers simply did not have that much physical silver immediately available to fulfill these contracts. However, the LBMA insisted that delivery of physical silver must be made on the exchange rather than by possible chicanery that could happen if the contracts were settled outside of the exchange.
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The latest reports I have received is that there is basically no physical silver available for immediate delivery in London. In fact, the estimated time for delivery is further into the future than some traders have ever experienced.
To top this off, I also understand that JPMorgan Chase last week raised the price up to $31 that it was willing to pay to purchase physical silver. JPMorgan Chase is widely presumed to have huge short positions in the physical silver market. If the bank is paying as much as $31 per ounce, this is a sign the bank expects short- to intermediate-term prices to exceed that level.
So, if there is such a large supply squeeze for physical silver from the major players in the market, why aren’t premiums rising on the bullion-priced coins and bars? That’s an excellent question, but easy to answer.
Contracts traded under the auspices of the LBMA are priced at a much lower premium than almost any other form of physical silver. Therefore, the demand for immediately available physical silver is for the forms that the refiners can purchase enough below the intrinsic value of the metal that it can profitably be melted, purified and delivered in the form of 1,000-ounce bars to London.
What that means is that forms of physical silver that trade wholesale at or above the spot price are not wanted. Coins such as the U.S. silver American Eagle, Canada’s silver Maple Leaf, Austria’s silver Philharmonic and others won’t help fill the supply shortages.
United States 40 percent silver coins, the Kennedy half dollars struck from 1965-1970, do trade wholesale significantly below melt value. However, refiners are less enthusiastic about processing coins of such low purity because their refining capacities are limited. They can only melt so many tons of raw material per day, so the purer the silver content they start with, the greater number of ounces of pure silver they can produce and sell. Processing lower purity silver during a time of peak capacity operation would reduce profits for the refiners, unless they were able to purchase such silver at a significant discount to silver value compared to what they pay for purer forms.
At present, fabricators are able to keep up with demand for production of 100- ounce and smaller size bars and rounds, for which the manufacturers receive a higher premium than they would be paid for 1,000-ounce bars going to London. So, for the time being, there is no shortage of the smaller bars and rounds.
The largest marginal impact in the near-term supplies of physical silver comes from the wholesale price of U.S. 90 percent silver coins, the dimes, quarters, and half dollars struck up into 1964. If these coins trade far enough below melt value, refiners can purchase them to melt down to make 1,000-ounce bars. If the wholesale market is paying very close to or even above melt value for these coins, the refiners can no longer profitably tap this huge source of physical silver.
Late last week, wholesalers raised their buy prices for 90 percent silver coins so high relative to melt value that refiners can no longer afford to purchase this form of silver. In fact, the ask prices of all major wholesalers were above melt value.
In the short term, there may be slight premium increases in bullion-priced physical silver coins and bars. For a time, supplies will continue to be available with little or no delays. However, the real supply squeeze for 1,000-ounces bars in the London market will divert some physical metal away from the manufacturers of coins and smaller bars and rounds. As time goes on, look for premiums to rise and also for higher spot prices.
The spot price of silver rose 13 percent during the month of August. In my judgment, we haven’t seen anything yet.
Patrick A. Heller is the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/a … nt-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.
Statistics: Posted by DIGGER DAN — Tue Sep 04, 2012 10:39 pm
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