Adrian Douglas: The LBMA joins the gold squeeze cover-up

By Adrian Douglas
Sunday, July 25, 2010

The London Bullion Market Association has just taken the highly unusual step of blocking access to statistics relating to the trading activities of its member bullion banks. This information has been available to the public since 1997 but as of this week it is available only to LBMA members. (See

Similarly it was recently discovered that the Bank for International Settlements didn't feel it necessary to announce its involvement in the largest gold swap in history, 346 tonnes. (See Reference 7 below.) The BIS swaps instead were discovered only because a market analyst dug through the footnotes of the bank's financial statements.

These developments have all the hallmarks of cover-ups.

In June the LBMA trading statistics showed that in May 2010 the average net daily trading in gold by LBMA member banks jumped a massive 50 percent from the month before to 24 million ounces each day from 16 million ounces each day. That translates to $7.5 trillion annually. If an operation is running on a razor-thin fractional reserve basis, such step changes are often fatal.

It appears that a run on the bullion banks has commenced.

There is a cover-up of back-door injections of liquidity of physical gold, and the LBMA now is trying to conceal trading information.

There has been much debate about how investors, politicians, and regulators didn't see the 2008 financial crisis coming, and lack of transparency was cited as a key reason. Clearly those who have been manipulating the gold market are trying to skulk deeper into darkness. They have a lot to hide.

Investors could have been blindsided by the events of 2008, but anyone who misses the writing on the wall about what's going on in the bullion markets is just foolish. The bullion banks have sold far more metal than they can deliver, and more and more customers are asking them to deliver. This has led to back-door bailouts and cover-ups.

Anyone who has "unallocated" bullion should be very concerned. The LBMA itself describes owners of "unallocated bullion" accounts as "unsecured creditors." That means that the account holder has no collateral or title to any bullion.

Bullion bank unallocated account agreements require the bank only to settle in cash for non-performance. That means when the physical squeeze that is evolving takes gold and silver prices to multiples of the current price, holders of unallocated metal accounts will not get any bullion, nor will they be compensated at the prevailing market price.

I interpret the LBMA's move to secrecy as a sign that the opportunity to get real metal is closing fast.

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References:

1. Adrian Douglas: Proof of Gold Price suppression -- Gold and the U.S. Dollar:

>http://www.gata.org/node/8820

3. Adrian Douglas: It's Admitted to the CFTC: London Gold Market Is a Ponzi Scheme:

>http://www.gold-eagle.com/gold_digest/baron907.html

6. Adrian Douglas: IMF Can't Explain Gold Sales Now Without Revealing Squeeze:

>http://www.gata.org/node/8803

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Adrian Douglas publishes the Market Force Analysis letter (