Robert Kientz: Commodity Markets, A Complete Con Game?

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:

Talking Points From This Episode

  • How Futures are supposed to work.
  • Defining COMEX terms.
  • Bombshells and weakening standards.
  • Lack of transparency and audited statements.
  • Shadow contracts and same-day deliveries.

Robert Kientz is the editor and publisher of Gold Silver Pros.com. Their premium (formerly paid) subscriber digest emphasizes long-term, cycle investing in the precious metals markets. He is also the author of the 2010 book, Drop Shadow: The Truth About the Economy.

Roberts’s work has been featured on Yahoo Finance, Market Watch, NASDAQ.com, Seeking Alpha, Talk Markets, Stockhouse, Mining Feeds, APMEX, Gold$eek, Financial Sense, Technically Speaking, and Silver Doctors, among others.

Roberts’s formal education consists of a Master degree in Information Security and a B.Sc in Business Administration. He started in finance two decades ago, receiving college instruction in accounting, finance, marketing, and global business.

He has also completed government-issued financial license programs in the commodities, Forex, bonds, insurance, stocks, and precious metals markets.

Further, he has over 18 years of experience as a real estate investor, having founded and run two Texas companies that purchase, rent, manage, and sell investment real estate.

Robert started Gold Silver Pros in 2018 after writing on various other financial blogs for almost ten years. Their research is based upon over twenty years of investment experience in the bond, stock, real estate, commodities, Forex, and precious metals markets. One of the key concepts he learned from a generation of investing is recognizing bull market cycles and focusing one’s energy on specific investments designed to take advantage of these infrequent opportunities.

Asset cycles can last for decades. The current gold asset cycle is the largest Robert has ever charted. His service will show you how to capitalize on what he believes to be our lifetimes’ most significant generational wealth pattern.

Guest Links:
Website: https://www.goldsilverpros.com
Twitter: https://twitter.com/goldsilver_pros
YouTube: https://www.youtube.com/channel/UCBUqGiXIR5fz83FtqRSOq3g

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
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1707522 – Click Open in Browser
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

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