Robert Kientz: Commodity Markets, A Complete Con Game?

In this much watch interview, Robert provides us an excellent overview of the commodities market and goes in-depth into the lack of transparency. He exposes the numerous problems with these exchanges and the lack of accountability.

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Tom welcomes a new guest Robert Kientz who is the editor and publisher of Gold Silver Pros. He explains how futures markets are supposed to work as a mechanism to protect producers and users by hedging. However, these markets have morphed into something quite different as they are now massive paper speculation markets.

He defines the meanings of eligible and registered along with open interest, volume, and settlement.

He says, "The problem with the CME website is that it is difficult to match up the numbers." They only keep a few days of public records, and for more data, you have to pay a lot. The CME group does not provide any formal accounting statements that you would expect from a company. It's impossible to prove their data one way or the other.

Back in April, the CME Group dropped a couple of bombshells in a document about position limits. These statements show a shift in their criteria for eligible metals by fifty percent. This document was released a few days after they reassured investors that they have the metals. Anyone with metals on the Comex should be concerned by these statements appearance in a relatively obscure document. They have recently doubled the number of suppliers from where they can source gold from, seemingly by weakening their standards.

The CME Group is not auditing the exchanges; they are only approving the facilities where metals are stored. He discusses a document from Yale Law that details why these commodity rules exist in the first place, which is due to corruption issues in the past. There was a crisis of confidence in the 1970s, and we still have one today. The CFTC was created because of a lack of confidence in the market participants ability to self-regulate. Where is the CFTC today?

The COT report on shorts for silver has been ten times the amount of global annual production. Why, over a few months, do we see ten times annual production hedged. How many of these shorts are naked and how over-leveraged are these markets? He believes a lot of market participants do not have confidence that the metal exists.

Shadow contracts permit same-day metal delivery, essentially turning these "future" markets into a spot market for immediate physical. They might run out of gold and silver by December, and we could see a fundamental change in the way metal prices are discovered worldwide.

Time Stamp References:
0:25 - Purpose of commodity markets.
3:50 - Defining Comex terms.
8:00 - Lack of proper auditing and data.
11:50 - April 1 - Comex Inventory Assurances.
13:25 - April 9 - CME Memo regarding "Eligible".
18:00 - April 9 - CME Memo - un-approved depositories.
19:00 - Partial sample of new Comex approved vendors.
20:00 - Comex Vendor Risks and "Chain of Integrity"
22:00 - Comex "Role of Market Regulation"
23:30 - Yale Law "Manipulation of Commodity Futures"
25:00 - Random sample page from above document.
25:50 - Why we don't know what is going on in these markets.
27:00 - Commitment of Traders discussion - 10x silver.
30:00 - Why the Comex drives the gold/silver spot price.
32:00 - What happens if they can't deliver and contracts.
34:00 - Explaining "Shadow Contracts" - immediate delivery.
37:00 - Fundamental change in valuing metals?
38:20 - Obscurity of players in these makets.
40:00 - Challenging the CME Group. Silence.
41:30 - No accountability in the commodity markets.
42:30 - Nobody wants an audit.

Guest Links:
Website: https://www.goldsilverpros.com
Twitter: https://twitter.com/goldsilver_pros
YouTube: https://www.youtube.com/channel/UCBUqGiXIR5fz83FtqRSOq3g
E-Mail: robert@goldsilverpros.com

Supporting Links:

Roberts video The COMEX Gold & Silver Raid Explained From A to Z
https://www.youtube.com/watch?v=YGjagnwc7Wk

Manipulation of Commodity Futures Prices- The Unprosecutable Crime
Note: choose "Open in Browser":

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1707522
https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1185&context=yjreg

COMEX Bombshell - Most eligible vaulted gold has nothing to do with COMEX
https://www.bullionstar.com/blogs/ronan-manly/comex-bombshell-most-eligible-vaulted-gold-has-nothing-to-do-with-comex/

CME Group admission of problems with estimating eligible gold liquidity for the futures exchange.
https://www.cmegroup.com/content/dam/cmegroup/market-regulation/rule-filings/2020/4/20-184.pdf

CME Group - Precious Metals Physical Delivery Process
https://www.cmegroup.com/trading/metals/files/precious-metals-delivery-process.pdf

CME Service Providers Spreadsheet
https://www.cmegroup.com/rulebook/files/service-providers.xls

#RobertKientz #GoldSilverPros #COMEX #CME #COT #Futures #CFTC