% | $
Quotes you view appear here for quick access.

Freeport-McMoRan Inc. Message Board

goldmanpillageandsack 50 posts  |  Last Activity: 6 hours ago Member since: Apr 27, 2010
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • goldmanpillageandsack goldmanpillageandsack 6 hours ago Flag

    Indeed, When you read the fine print of the GLD prospectus, you quickly realize that it is not backed by anything other than paper & promises. If you own GLD, you only own "fantasy gold" in my opinion. The following language is part of the GLD disclaimer, "Including but not limited to".

    * the postponement, suspension or rejection by the Trustee of redemption orders under certain circumstances;

    * the failure of gold bullion allocated to the Trust to meet the London Good Delivery Standards;

    * the insolvency of the custodian;

    There are many, many more, but this one strikes at the heart of the issue:

    * the lack of governmental regulatory supervision of the gold bullion custody operations of the Custodian;

    The prospectus is a shocking read and it is clear that as an investment vehicle, more effort is spent protecting themselves from claims or lawsuits than in obtaining and securing adequate supplies of gold bullion to cover the shares sold.

    Sentiment: Strong Buy

  • Since leverage on deliverable gold at the CRIMEX continues to set records, I thought another post on the subject would shed a little more light on the subject. Lehman Brothers collapsed at 43 to 1 so to think that this is business as usual is completely absurd.

    Never - Ever has leverage been this high, and with world tensions rising and the Currency War going "Hot" at the present time, the likelihood of a significant number of traders "Standing For Delivery" is rising.

    I do not pretend that the COMEX will fall to a hard default. The COMEX can not lose. They own the trading platform and set the rules, they can always force settlement at whatever price they see fit. Once the dust settles, they will price gold at the new "market" price and pretend that "no one could have seen it coming".

    The losers will be those that thought their paper contracts were enforceable, and just like MF Global, the losers will find themselves mired in a massive lawsuit with little hope of receiving the gold they thought they had claim to.

    To demonstrate the absurdity of the COMEX as a price discovery mechanism - I offer the following:

    So far in 2015 - The COMEX has delivered a paltry 40 tons of gold.

    Last week - The Shanghai Gold Exchange delivered 65.7 tons.

    The Shanghai exchange delivers 60% more gold in one week than the COMEX has delivered in all of 2015!

    Paper and complex designations of metal are the COMEX devices for price fixing and they have nothing to do with supply and demand. The self appointed "Masters of the universe" will tell you that holding gold is foolish and try to baffle the world with their schemes. But things are getting obvious now and anyone with an ounce of sense can see through their scheme...

    Physical metal has been flowing from west to east for years now as dollars were converted into gold in nations like India, China, Turkey, Iran, and even lowly Russia. At some point the west simply runs out of physical and the charade ends.


    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Oct 3, 2015 7:44 PM Flag

    Notice that the gold price was hammered to take out the new futures contract holders? Then allowed to rise once they were taken out. Now we start trading based on the large volume of contracts in December.

  • goldmanpillageandsack by goldmanpillageandsack Sep 26, 2015 5:28 AM Flag

    With October behind us, the month of December looms large as the next opportunity for a significant price discovery event at the COMEX.

    There are 293,901 Dec futures contracts. This translates to 29,391,000 ounces of gold.

    There are 161,937 ounces of "Deliverable" gold at the COMEX. Therefore the leverage for the December futures contracts alone is 182 to 1 (The whole strip remains at 250+ to 1).

    Most peoples reaction to these numbers is "What the bleep" ??? How can they cover that? The answer is that in truth the COMEX is not a legitimate price discovery market. It is a betting parlor where only 2% of contracts are ever fulfilled. Labeling the COMEX a "Price Fixing" apparatus is far more accurate than considering it a legitimate discovery and delivery market apparatus.

    The math for December is showing that if the typical 2% take delivery they will need about 580,000 ounces of
    "deliverable" gold to fill the contracts against the 161,937 they have now as "deliverable" inventory. A small price adjustment can surely bring out enough sellers to cover that.

    If there is any physical shortage in London or Switzerland and a higher percentage of contract holders using the COMEX as a backstop come calling for their gold, it will be reflected in moderately higher prices.

    Someday the paper traders are going to get called on 3% or 4% or even 5% of their "Paper gold" contracts. Discovery will happen. In the meantime, the game of musical chairs goes on with the familiar music lulling the players to sleep.

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 25, 2015 4:25 AM Flag

    Upon assignment of the options contract it is converted into a futures contract. As soon as those contracts are assigned they will take the price down and monkey hammer the holders of the new futures contracts. Watch for it!

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 24, 2015 5:02 PM Flag

    I understand your thinking and regenwulp's as well. And appreciate your thoughtful posts.

    For years people have been hammering on Marrone about his management or mis-management of the company. I agree that his compensation is over the top, but I think he has built one heck of a good mining company.

    Why it is so undervalued is quite puzzling to me. I do not think that it is so much his management as the massive attack on commodities companies by the big financial houses. Take Bank of America for instance. They do not allow their brokers to buy the stock for their account holders unless the account holder requests the purchase of the shares. and to be clear, B of A brokers do discourage account holders from buying the stock. There seems to be a co-ordinated war on gold mining stocks by the big five brokers.

    Also: The Banks were hammering on Yamana for its exposure to South America and then when Marrone bought Canadian Malartec they smashed the stock. It is simply strange that this company can be selling for these prices.

    I'm thankful though because buying it at these prices is like buying lifetime options.


  • goldmanpillageandsack goldmanpillageandsack Sep 24, 2015 1:56 PM Flag

    The tape is really interesting now…

    on the call side:

    573 contracts have come into the money at the $1,125 strike.
    597 at the $1,140
    685 at the $1,150.

    It would be extremely unlikely for the COMEX to allow the close to be above $1,150. If they do, and the price holds through the assignment of the futures contracts, it might be "game on".

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 24, 2015 12:22 PM Flag

    I was looking at the futures options strip and I found what looks like "The Tell" on recent market action.

    There were over 1,000 puts at the $1,125 strike (mostly specs) and they are getting hammered today.

    The tape tells the tale!

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 24, 2015 11:11 AM Flag

    Hmmmmmm, Would you rather have them release it now or after gold goes up? I am in the camp of waiting until after the new year. Having been more than patient for Yamana to turn around, I can wait a few more months. Enjoy!

    Sentiment: Strong Buy

  • goldmanpillageandsack by goldmanpillageandsack Sep 24, 2015 10:28 AM Flag

    It is an ultra thinly traded month so this rise in price may be allowed to stand, if only to break the pattern of slam downs on expiration days.

    It will be interesting to watch.

    Of far greater interest will be November and December expirations given the higher volumes of contracts and low "deliverable" stocks at the COMEX.

    If leverage at the COMMEX continues to grow from it's present record 255 to 1 level, I would expect some fireworks in the gold markets.

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 24, 2015 9:56 AM Flag

    Leverage does not matter "Until It Does"…

    Today is gold futures options expiry on the COMEXand unlike the last twenty or so expirations gold is UP on expiration day. Since this is a thinly traded month it is not a big deal in terms of quantity, and because the options expiry slam down has been so predictable and tradable it may just be a "See; We do not always manipulate the prices lower on expiration" type of thing.

    Unless the leverage on physical is starting to be seen by strong hands that can not resist the potential here.

    My thoughts are that this fire does not get going until the larger delivery months of November and December get here. But then again, todays trading action (up $23 as I type) with such a low volume of futures options expiring begets close observation.

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 18, 2015 8:47 PM Flag

    Just to keep you informed: The leverage has now risen to 255 to 1 on the COMEX. Registered and deliverable inventory has fallen to 162,034 ounces and gold is up about $36 since I started this thread.

    A few individuals are putting down this reporting because "Nothing has broken yet." As an observer of this anomaly, and observer of the markets for many years, I can attest that this degree of leverage has never happened before.

    Lehman collapsed with leverage of 43 to 1. No one of importance saw the collapse coming then and those who did were laughed at. The leverage simply did not matter "Until It Did", and then it mattered big time.

    In spite of this, I still do not see an outright default at the COMEX, they have mechanisms to settle for "paper" via the "Force Majeure" mechanism and in the same manner as MF Global, "if you did not possess it, you did not own it." The point is: if there is a problem in one of the physical markets in Switzerland or Asia or London, the COMEX is positioned for a price dislocation.

    One thing those stories in the Kitco article fails to make clear is that only "registered" gold is deliverable to fulfill futures contracts. Yes, all the gold in the warehouses could satisfy demand if it was up for sale. But it is not for sale. It is only stored there.

    The registered (deliverable) gold at the COMEX is 162,034 ounces and total inventory held for private hands in storage is 6,716,000 ounces. In total, it is less than one month's supply of what is physically delivered in China, India, Russia and Turkey. Things have changed in the gold market. Actual delivery has virtually ceased at the COMEX. The COMEX is now incapable of participating in "Price discovery" through the discipline of delivery and is being used as a paper backstop for markets that do actually have to deliver physical metal. Market dynamics have changed, the COMEX has only delivered 40 tons of gold so far in 2015. In Singapore alone, 1,755 tons have been delivered

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 15, 2015 6:24 PM Flag

    I have followed the registered stocks available on the COMEX for many years and there has never, ever been 229 owners per ounce of paper contracts in the history of the COMEX. That is a simple fact.

    It is true that there are other "eligible" physical stocks at the COMEX. But, and it is a big but, those ounces are gold that is stored at the COMEX, stored for owners and it is not "registered" for sale at todays prices.

    CPM and Barclays have their motives for their statements, but they do not accurately reflect the low registered stocks available at this time. Furthermore, their statement that "ratios are in-line" is a falsehood of the first degree.

    Now lets look at your statement that Barrick "Has $2 billion in cash and just eliminated $3 billion in debt." Another lie. In the first half of 2015, Barrick eliminated only $250 million of debt on $2.45 billion of unclosed/unrealized asset sales. They announced that they "targeted $3 billion of debt reduction" but it remains nothing more than a target. Barrick has not done what you stated. Furthermore, Barrick's cash position has declined by $577 million in the first half of 2015.

    In addition to the lack of Pascua-Lama's lack of production Barrick announced that production was 11% and 27% lower for the three and six month period compared to 2014. Barrick also lowered guidance again for full-year production by nearly -300,000 ounces.

    As of June 30, 2015, Barrick's debt was $12.8 billion… Ouch!

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 15, 2015 2:19 PM Flag

    To be a little clearer: I do not think that the COMEX will be the source of the market dislocation. It is my opinion that some smaller physical market (like Switzerland or even the LMBA) will start a cascade that will reach the COMEX in short order. Once a market that has substantial hypothecation of metal becomes illiquid gross exposure becomes net exposure… Should be interesting to watch!

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 14, 2015 1:45 PM Flag

    Sometimes it is hard to take you seriously. Anyone who would discount supply and demand as a primary predictor of price by suggesting that the cobasis applicable to wheat based on wheat being "consumed" vs all gold being continuously available is missing considerable "logic" in their comment.

    Gold does in fact leave the market through direct physical purchase in multiple forms including: hoarding of bullion by banks and financial institutions, jewelry purchases, individual investors who wish to use it to store value against central bank sponsored inflation and to a small degree, industrial uses.

    To suggest that all gold ever mined is available at quoted prices is simply wrong.

    To point to "Elliot wave theory" as validation is kind of humorous as Elliott wave theory is at best a rear view mirror indicator and if you follow Elliot wave predictions vs reality you find that Elliot wave investors lose big time on a regular basis.

    The main point of this posts simple observation that leverage is now at 229 to 1 is that there is a massive paper supply of gold and a small physical supply at the COMEX. Backwardation of the futures strip has occurred because of that lack of immediately available supply.

    Yamana is in a good position because it has not sold gold forward if the price of gold re-sets to reflect the underlying supply vs demand without the veneer of paper trading.

    At best, your cobasis tidbit supports the observation of gold futures backwardation through the reduction of anticipated supply through unopened mines like Pascua-Lama.

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 12, 2015 4:27 AM Flag


    Leverage reached 229 to 1 yesterday as deliverable gold dropped to 182,611 ounces.

    With Goldman Sachs taking delivery of over 400,000 ounces in August for their "House accounts" I think that I am not alone in recognizing the tightness in physical supply at these prices.

    Futures are solidly in backwardation and taking delivery today costs a premium to what you pay if you wait to take delivery. This situation is the opposite of normal where a premium is paid to the spot market.

    Most in the financial markets would say that this means nothing, after all gold is nothing but a shiny rock, a "barbarous relic". But I take a different path on the subject. Supply and demand do make a difference in the long run. Major market dislocations result when things get this distorted.

    Sentiment: Strong Buy

  • goldmanpillageandsack goldmanpillageandsack Sep 11, 2015 1:21 PM Flag

    It is a bit more complicated than you seem to understand. One example of Barrick's impending disaster is the Pascua-Lama project. They have spent over 5 billion dollars on development of the mine in anticipation of 800,000 to 850,000 ounces of annual production that was supposed to start in June of 2014. The cash they received for the futures they sold is gone, spent, history… So what if they carry some profit on some of those futures. The money to buy them back is gone and they have a lack of capacity to deliver. (Especially since the mine continues to cost over $120,000,000 per year to remain on "care and maintenance" in anticipation of its continued development.) Adding insult to injury, there is another $3 ++ billion in costs before the mine can be opened in three years (if they get the permits)!

    1. How do you suggest that Barrick buys those futures back with money they have spent and or gold they do not, and will not have to deliver?


    2. How do you suggest the 228 holders of futures contracts at the COMEX settle their contracts against each physical "deliverable" amount of metal?

    Sentiment: Strong Buy

  • goldmanpillageandsack by goldmanpillageandsack Sep 10, 2015 7:28 PM Flag

    Say what you will, but this is not normal. COMEX stores of registered gold are now down to 185,314 ounces and leverage has spiraled to 228 to 1.

    In addition, Sprott gold funds are seeing large redemptions as investors scramble to take delivery of actual metal. Companies like Barrick have sold futures forward based on previous plans to open new mines. Now that the mine plans have been canceled, they have to deliver metal to the market and they are short of production to do it.

    Yamana does not hedge or sell forward contracts on gold production. Despite the low share price, it is in a strong position to take advantage of any increase in the price of gold.

    Stay closely tuned to the inventory & leverage levels at the COMEX and remember, given time, markets have always broken through price fixing and manipulation. 100% of the time...

    Sentiment: Strong Buy

  • Reply to

    Nationalization discount

    by thermonuke Sep 3, 2015 9:43 PM
    goldmanpillageandsack goldmanpillageandsack Sep 6, 2015 1:10 PM Flag

    Good thinking! Just when I was thinking the Argentine risk drag would go away, we have Brazil stalling and looking to raise taxes on anything they can. Buying Yamana at these prices reminds me of buying a lifetime option. Stupid cheap stock relative to it's asset bad and cash-flow.

    I remember APPL and AMEX at $2.00… Ten years later they were rock stars again...

    Sentiment: Strong Buy

  • It is hard to believe, but a new record has been set at the COMEX this week. There are now over 126 paper owners for every ounce of deliverable gold at the COMEX. In London, the physical drawdown of stocks is rumored to be of similar proportions.

    It seems like a twisted game of "Musical Chairs" as 126 players wander around one chair listlessly thinking the music will never stop.

    Ultimately, we know that the music will in fact stop, (most of us learned that in the first grade) but traders have been conditioned to close their eyes, plug their noses and profit as they watch the regulators turn their heads the other way.

    Imagine the price suppression you can create by being able to sell 126 objects that you do not possess against the one you do. Insane leverage when you consider that Lehman collapsed at 40-1.

    Sentiment: Strong Buy

11.83+0.65(+5.81%)4:03 PMEDT