Actually that is a good point that is not discussed much. Just the fact that the Comex may not be accurately reporting the open interest would constitute fraud. Never mind all of the other suspected fraud that may or may not be ongoing in the metals pits.

I have heard rumors that there is a monster failure to deliver on treasury bonds, which amounts to counterfitting on behalf of those selling bonds that do not actually exist and cannot be delivered. Monumental fraud... We all know of naked shorting and how the regulators have chosen to 'grandfather' certain outstanding shorts rather than force immediate buying in the market to cover the positions that cannot be matched up with borrowed shares. There are rumors that sovereign CBs have swapped gold and yet it is reported as if the bullion remains unemcumbered, effectively double counting the same bullion.

While all of these scams are alarming if indeed these stories are true, and I think they are, what is really sad is that amounts to fraud on so many levels because it requires the participation of so many people to keep the scam going. Accountants must sign off on it, regulators must look the other way, governments must lie to their own people about how deals are getting done. This kind of institutionalised fraud is sure to blow up eventually and the longer it goes on the more damage gets done.

So if the COMEX is presenting phony data to traders on the total open interest its a major crime in process. Is there no one left in a position of trust in this market that has any integrity? This is just another reason why I own physical bullion. I do not have to trust in the behaviour and honesty of any other party. Paper bullion be damned.

cheers!

mike