Karlsruhe ECB legality decision on a knife edge
“I’m late, I’m late, for an inescapable fate….”
The Slog: The growing news in gold is that the pre-Crash rush to get
out of bank vaults and into heavily guarded wall-safes elsewhere is on
bigtime: and some of the banker promisory notes are looking a little
crumpled. But as the stampede into private assets gathered speed, over
in Germany the Constitutional Court held the power to finally put the
euro to rest.
At close of play last night, the total gold held by JP Morgan had
slumped to a new all time low of 550k ounces, down from 768K the day
before: 268 thousand ounces in one day. This leaves them, however, not with 550k to dispatch, but only 136.4K of so-called eligible gold. Put simply, if the call-back rush continues at that rate, some time very soon JPM will be all ouda COMEX gold.
Since April 25th, the firm has seen a staggering 61.5% of its eligible gold go back to the owners. Yesterday, in one day 28.4% of all of its vaulted gold disappeared home….by far the largest withdrawal ever.
COMEX silver is seeing a similar syndrome. Since April 20th, the
weight repossessed by clients amounted to just over 41m ounces. The
total physical silver held throughout Comex has dropped 30% during that
time. At that rate, there will be no physical silver held in Comex
within five months.
I’ve been monitoring this asset-swoop at The Slog for roughly nine months now.
For the first part of that period, the emphasis was on property –
so-called glitz-bricks – as it became increasingly obvious from gold’s
price eccentricity that the market was rigged. But in the last two
months, there has been a sudden spurt in repossession of gold
one already owns. The top-end property boom, meanwhile, continues on a
near 1 in 3 rising slope: EA Shaw in central London, for example,
reports that rich Asian and mainland European purchasing is still
forging ahead strongly.
What this tells me is that my tingling bladder-meter of Armageddon (found itching away last week)
was probably right: the inside track folks are getting ready to hunker
down in the cellar. They have seen enough data and watched enough élite
moves to know that warbling obese women will be within earshot before
too long.
One move becoming ever more audible in the undergrowth is little
Wolfie Schäuble’s shrill calls for people not be silly. He’s defining
‘silly’ as not doing anything that might stop him being Überstürmbannführerfiskalunion
gemacht. Having tossed aside the wheelchair brakes in his hurry to get
down to the German Court at Karlsruhe, the German finance boss is saying
that “the central bank could be put into an impossible position if it
were faced with conflicting rulings by courts in different euro zone
countries” (not Karlsruhe’s problem) “inflation has been lower under ECB
mandate”(Legally irrelevant) and “the cost to Germany would be
incalculable if the country left the currency union” (Ignoring the huge
potential costs to Germany if stays in the eurozone, and also legally irrelevant).
The legal issue is remarkably straightforward: is anything Draghibank
has done or wants to do going to mean the Bundesgovernment commits a
constitutional crime if it takes part? The overwhelming majority of
legal opinion says yes, it most definitely would. But in the world of Realpolitik, that’s not always how things pan out.
I’m told the Karlruhe judges are evenly split 4-4 at the minute.
There’s more testimony today, and then we should get some white smoke
tomorrow. It’ll be interesting to see what the eurobond market (what’s
left of it) and the currency movers make of a decision against the ECB
and Merkeschäuble. In the meantime, we all wait to see what the next
piece of desperate nonsense is to be pulled out of the frightened
rabbit’s hat. There’ll be more about that from the spoofatron in a
little while, but first of all we’re going to take a short break….
______________________________
FROM THE SPOOFATRON: Global revaluation moves stun markets
Japan close to surrender following development of Newtime by US
The Slog: Global markets were in shock last night as the French central bank
unilaterally decided to float the weight of gold. Launching a new sector
– the Weights And Normality Kneesup (WANK) – Bank de France President
M. Peto Main de Branleur announced that after just five hours of
trading, the weight of gold had increased from 1 to 2.7738 grams per
gram.
“This is a really exciting move by the French,” commented NSBC
economics supremo Drew A. Longside, “it shows a bold and lateral
approach to leverage of which Tim Geithner would be justly proud”. Mr
Longside there was a downside to the short side in that aside from this
being a “big idea”, the upside might be seen by Beijing as offside.
But flying into Paris from his Asian offensive, President Francois
Hollande told newsmen, “My trip was an outstanding success in that
everyone one I met found me deeply offensive, and I have no doubt that
this new French innovation will confirm them in that view”.
Meanwhile, sitting on her favourite 1967 Zil fridge, German
Chancellor Angela Merkel gave a hastily arranged press conference in
Berlin this morning… at which she announced to an adoring press corps
that Germany in turn had launched a new bourse, the DUMM or Density
Uplifting Mass Meter.
“Wolfie came up wizz it while pumping up ze tyres on hiss wheelchair
last night,” she told reporters, “und since the Dumm’s öffenink two
hours ago, our superior German gold’s density has more zan trebled,
which as you know means the mass is increasing. Once again, the same
Franco-German ingenuity that brought you the Greek bailout and the
Cyprus bailin has to ze rescue gekommen.”
Thirteen fatalities were recorded as traders globally scrambled to
buy the newly reweighed and remassed precious metal, only to be told
that it was only for sale to Banque de France and the German Bundesbank.
“I just don’t get why they’re doing this,” said top Belgian dealer
Alice Klar, but ECB boss Mario Draghi called the Franco-German move “a
good start”, announcing by late morning CET that with immediate effect
the euro would be renamed the vino, exchangeable for existing notes at
the rate of 1 to 7,684. “I want all eurozone citizens to know that the
vino in your pocket will not be worth any less as long as you don’t buy
anything with it, but you would be better keeping it in a bottle”.
Scuffles broke out later following a heated debate as to whether the
vino should set at Rhine, French or Italian wine prices. But a delighted
Nigel Avrage said, “This is fantastic news in that as we have no wine
industry it will now be impossible for us to join ever, fwahaw. We could
always rename the Pound the Pint frahhawhawhaw, same again barman”.
Frantic currency brains at the US Federal Reserve worked through the
night to come up with a counter-strategy. A Washington source told the
Spoofatron this morning, “Some of the guys over at Treasury want to
recalibrate time in order to devalue the date to 12.4.1868, a small
0.0o3% cut from its current price of 12.6.2013, working on the basis of
the Assyrans having invented money around 5,400 years ago. We figure
that should get our export drive moving.”
Panic took hold in Tokyo overnight as sentiment moved into
Heavyweight and HiMass gold futures, collapsing the Nikkei. When news
breaks of the Fed’s move, experts believe the Yen will treble in value.
Sales of Hari-Kiri swords were up 650% on the news so far.
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