China buys LME

[Mega]

Why?
http://www.telegraph.co.uk/finance/m...-Exchange.html
Mike

[ST]

Re: China buys LME

Why?
http://www.telegraph.co.uk/finance/m...-Exchange.html
Mike

Why not? produces profit and better than sitting on depreciating dollars..... and may come in handy some rainy day as a pawn.

[astonas]

Re: China buys LME

Why not? produces profit and better than sitting on depreciating dollars..... and may come in handy some rainy day as a pawn.

I think this is pretty significant. China is serious about becoming a world player, and wants to have the currency that is most liquid to gold. Expanding the LME into China is a big step in that direction, and this lets it happen much more easily.

China is busy playing Go while everyone else is looking at the chess game in Europe.

[Mega]

Re: China buys LME

http://www.telegraph.co.uk/finance/c...-Exchange.html

Allows them to buy more Gold quickly?
Mike

[astonas]

Re: China buys LME

http://www.telegraph.co.uk/finance/c...-Exchange.html

Allows them to buy more Gold quickly?
Mike

Yes, at the very least that. But more significantly, since the Chinese government is the major shareholder, should a temporary closing or restricting of the market be in China's interests, that could happen. If it were in any other country's interests, it might not. The Exchange could even conceivably declare that a given currency had become too unstable to accept as a unit of exchange for gold, and REALLY amplify a crisis. Not to mention what an unscrupulous owner might be able to do with the fact that the London Good Delivery Bar is the world-accepted standard for physical gold.

It's true that all of the above is idle speculation, and any given concern is unlikely to be realized. But for those on this site who take gold seriously (and I think many do) the passing of the LME into the hands of the Chinese government (with whom a quiet competition for power seems to be underway) cannot be a good thing for the west.

[Mega]

Re: China buys LME

I think your right, as i see it:-

A. China users to power to keep the price cheap
B. Users the power to force phyical delivery
C. Users the power to bid UP the price once she is ready (I hope to God because i no work & a "Golden windfall" would be most welcome)

Mike

[globaleconomicollaps]

The truth: there is zero gold in LME's vaults

I think your right, as i see it:-

A. China users to power to keep the price cheap
B. Users the power to force phyical delivery
C. Users the power to bid UP the price once she is ready (I hope to God because i no work & a "Golden windfall" would be most welcome)

Mike

What is he relationship between the LME and the LBMA?

http://goldchat.blogspot.fr/2010/06/...es-vaults.html



http://www.lme.com/media_resources/10783.asp
14 June 2010
The truth: there is zero gold in LME's vaults
There has been a lot of speculation recently about how much gold is held in London against unallocated accounts, see some examples below:

Bix Weir: "... stay away from COMEX/LME good delivery gold and silver bars ..."

Arnold Bock: "... there is little bullion in storage at the London Metals Exchange or New York's COMEX ..."

Bob Chapman: "... Do you really think that the COMEX and LME would deliver the gold even if they had it ..."

John Dizard: "Many of them apparently prefer to have their gold in vaults near where they are, Mr Smith’s “middle of nowhere”, rather than in LME or COMEX warehouse receipts."

Jim Willie: "A clearinghouse held a Letter of Intent to supply the London metals exchange with 250 metric tonnes of gold bullion."

I am now prepared to finally reveal the truth - there is actually NO gold in the vaults of the LME (London Metals Exchange). Now I know this is an explosive claim and I'm sure you'll want to know if I can back it up with proof. Well, go to the LME website and tell me where you see gold mentioned?

That's right, gold isn't mentioned. The LME is a base metals exchange and does not trade precious metals. Problem is this makes the commentators quoted above, who talk about gold on the LME, look foolish. In my opinion, if you do see a commentator make the mistake of thinking gold trades on the LME it is an indication that they don't know what they are talking about with regards to precious metals and you should treat their analysis with caution.

Gold is traded in London over-the-counter, in other words in direct deals between counterparties. There is no gold exchange in London. There is the London Bullion Market Association (LBMA), but that is just a trade association and it does not operate an exchange or have any vaults.

You may think I'm being a bit hard on those who confuse the LME and LBMA. You might argue that it is a reasonable mistake, since they are both in London and both deal in "metals".

To that I would say what sort of credence would you give a commentary by a stockbroker who talked about Pepsi trading on NASDAQ, or Microsoft trading on the NYSE? Would you feel comfortable following stock advice from someone who did not know which exchange a stock traded on?

Confusing LME and LBMA is actually worse than that because the LME is a base metal exchange whereas the LBMA is just a precious metals trade association - a basic Google search would reveal that.

Sorry, I don't think there is any valid excuse. Getting LME, LBMA and gold mixed up is a sure indicator that one has no actual precious metals market experience, an example of ultracrepidarianism. In which case, how can you trust them to know what is really going on, how can you know they haven't made other mistakes in their analysis of the gold market?
Posted by Bron Suchecki at 22:21
Labels: Ultracrepidarianism

23 September 2010
LME and LBMA announce LBMA Gold Forward Curve

The London Metal Exchange (LME) and the London Bullion Market Association (LBMA) will begin collecting data for forward gold rates from September.

The new venture will see the publication of gold rates up to ten years forward. This will bring new transparency to the London gold bullion market where currently only spot rates are distributed.

The LBMA Gold Forward Curve will be created from data supplied by the LBMA’s eight forward market makers, which include some of the world’s biggest banks.

Their data will be processed by the exchange’s LMEdcs system and distributed to subscribers by the LME’s network of licensed data distributors from early next year.

“This partnership with the LBMA demonstrates that both organisations and their memberships are willing and able to work closely together for the benefit of the London market in a changing financial climate,” said Joanna Stuart, the Project Lead on Precious Metals at the LME. “The LME has many capabilities and experience that it can share with the LBMA and help the latter maintain its leading position in the OTC gold forward markets.”

The LBMA Forward Curve will serve the need for transparency and information in the vibrant OTC bullion market and the LME and LBMA aim to launch further data series.

“This is a very significant development in the history of the LBMA,” said Stewart Murray, Chief Executive of the LBMA. “I would like to thank the eight Market Makers for their positive attitude and the flexibility which they showed during the past six months of negotiation.”

The project is entirely separate to the LME’s joint venture with LCH.Clearnet to launch a clearing service for OTC gold forward contracts from November 29.

It is also independent of The London Gold Market Fixing Ltd. This company, composed of five LBMA market makers, publishes an internationally recognised benchmark in the form of the twice daily gold fix at approximately 10:30 am and 3 pm UK time.

About the London Bullion Market Association

The London Bullion Market Association is the London-based trade association that represents the wholesale over-the-counter market for gold and silver in London. Its eight forward market making companies are The Bank of Nova Scotia - ScotiaMocatta, Barclays Bank PLC, Deutsche Bank AG, Goldman Sachs International, HSBC Bank USA NA, JP Morgan Chase Bank, Société Générale, and UBS AG.

About the London Metal Exchange

The London Metal Exchange is the world's premier base metals market. It offers metals price risk management tools including futures and options contracts for aluminium, copper, tin, nickel, zinc, lead, aluminium alloy and NASAAC, steel billet, plastics and the minor metals - cobalt and molybdenum. In 2009, the total value of trading was $7.41trillion, and the Exchange finished the year with 5.96m tonnes of material on warrant in 633 storage facilities across 39 locations globally.
http://www.lme.com/

[astonas]

Re: The truth: there is zero gold in LME's vaults

Thanks for the correction, GEC.

I was indeed confusing the two. While shifting control of base metals can still have sinister overtones, it isn't in the same vein as similar control of monetary metals.