New LME gold and silver Reference Prices: Will anyone notice?

Submitted by Ronan Manly, BullionStar.com

On 29 August, the London Metal Exchange (LME) began publication of a set of daily reference prices for gold and silver. These reference prices aim to capture and reflect paper gold and silver market prices as at 10:30 am, 12:00 midday, and 3:00 pm London time.

Anyone familiar with the former London gold and silver fix auctions, or the successor LBMA Gold Price and LBMA Silver Price auctions, will know that the LBMA gold auction is conducted twice daily at 10:30 am and 3.00 pm London time, while the silver auction is held once daily at midday. These auctions are also for unallocated book entry gold and silver (paper gold and silver) in the London market. ICE Benchmark Administration (IBA) is the auction administrator for both of these LBMA auctions.

Peak Liquidity

As these new reference prices published by the London Metal Exchange are timed to report ‘market’ prices for gold and silver at exactly the same times as the LBMA Gold and LBMA Silver auctions, they add an element of future competition between the LME and ICE in the benchmark price provision business. However, the LME’s prices for both gold and silverare calculated at each of the 3 times of the ICE / LBMA auctions, i.e. at 10:30am (LBMA morning gold auction), 12:00 (LBMA silver auction) and 3:00pm (LBMA afternoon gold auction), periods which the LME describes as having ‘peak liquidity’.

In July 2017, the LME launched a suite of gold and silver futures contracts (LME Gold and LME Silver) for the London market, 2 of which are Spot daily contracts in gold and silver, respectively. Under the hood, these new gold and silver daily reference prices published by the LME are just volume weighted average prices (VWAP) of these LME Gold and LME Silver spot contracts calculated over a 2 minute window at the relevant times each day (i.e. 10:30 am, midday, and 3:00 pm) based on trades on  the LMEselect trading platform. These contracts also represent claims on unallocated book entry paper gold and silver in the London market.

Therefore, the LME reference prices are not based on any auction trades, and merely use prices ‘discovered’ (generated) on the LME’s own trading platform at the time of the LBMA / ICE auctions. Given that these new LME reference prices only began to be published on 29 August, there are only about 50 daily data points so far for each of gold and silver. All prices since 29 August can be seen on the LME website for gold and silver.

Different But Similar

But are these LME prices the same as those generated by the ICE / LBMA daily auctions? No, they are not the same, but they are similar. The reason both sets of prices are not the same is that they are derived differently. The LBMA price resulting from an auction is the price derived in the final round of an auction when the imbalance between the auction’s buy and sell volumes is in tolerance (less than 10,000 ounces). The LME reference prices are average prices calculated (and volume weighted) using trades executed on the LME’s trading platform over a 2 minute interval from the start of an auction until 2 minutes after the start of an auction.

The LBMA auction prices and the LME reference prices are similar in that they are both based on market activity over similar time periods within the wholesale gold and silver markets, and in practice (or at least in theory), arbitrage trading should act to keep prices in the OTC market, and in the LBMA auctions, and in COMEX precious metals futures trading, and in LME gold and silver futures trading in line with each other.

Like their predecessors the London Gold fix and London Silver fix, the LBMA Gold Price and LBMA Silver Price are used every day to value everything from ISDA contracts to  gold-backed ETFs, and the daily auction prices are also referenced widely in the global precious metals industry to execute trades involving miners, refineries, bullion banks, central banks, jewellers and coin shops. In short, these LBMA gold and silver reference prices are the dominant incumbent reference prices, and they also qualify as Regulated Benchmarks regulated by the UK Financial Conduct Authority. But will anyone end up using these new LME precious metals reference prices? Possibly, but it could it a while.

In 2018, the LME intends to offer trading based on its new gold and reference price reference levels. According to a Reuters article from 10 October:

“As of mid-2018 participants will be able to trade at those prices, Chamberlain [LME CEO] said, with technology being developed to match buy and sell orders for execution at the settlement price.

‘Benchmarks take a long time to evolve,’ he said. ‘What we can do is put in place the infrastructure, show that we have day after day of robust prices, but ultimately it is for end-users to decide what they want to use."”

Being able to trade at the LME reference prices will add more relevance to the published numbers and could add legitimacy in terms of market data and financial media interest.

Conclusion

Right now the LME gold and silver reference prices are published daily and are “available for market participants to use free of charge.” But real world usage in the sense of being used to value precious metals funds, contracts or transactions looks to be a case of “down the road” rather than today.

Ideally the London gold and silver markets do not need an additional benchmark reflecting fractionally-backed unallocated gold and silver trading, but a benchmark and reference price reflecting the trading of real physical gold and silver. However, as the LME has chosen not to upset the status quo of the London unallocated trading system, a system which remains one of the key determinants of the international gold price, then real physical gold and silver reference prices in the London market will unfortunately remain a pipe dream.

This article originally appeared on the BullionStar.com website under the same title.

WATCH: Illegal ICE Raid Shows How the US Is Starting to Look Like Nazi Germany

A disturbing warrantless raid by ICE agents was captured on video this week showing how the US is quickly slipping into tyranny.

Former Sheriff Joe Arpaio found guilty of ‘contempt of court’

MARICOPA COUNTY, Ariz. (INTELLIHUB) — Former Arizona Sheriff Joe Arpaio claims that he did not intentionally go against a previous ruling by a federal judge when he turned illegals over to authorities but was still charged with criminal contempt.

America’s toughest sheriff told authorities that he did not authorize DHS or ICE to turn illegal aliens over to U.S. Border Patrol and claimed that the judge’s ruling wasn’t very clear.

In 2011 a judge ruled that ‘just because someone is in the country illegally doesn’t mean that law enforcement can arrest them.’

One American Civil Liberties Union supporter said that she can’t wait until the day comes that the former sheriff is behind bars.

“Experts believe that Arpaio will not go to jail,” a Fox News staffer reports.

Featured Image: Gage Skidmore/Flickr

©2017. INTELLIHUB.COM. All Rights Reserved.

It Begins: ICE Raids Innocent LEGAL Family and Shoots Their Dad

Belmont Cragin, IL — Answers must be demanded over the inexplicable shooting of a wholly innocent man in the Chicago area home he’s owned for decades, as ICE agents — ostensively searching for the man’s adult son — opened fire on the homeowner despite children just months old sleeping nearby.

And no one knows why U.S. Immigration and Customs Enforcement raided the house in the first place — they’re citizens.

ICE claims the family man had a gun. His daughter begs to differ.

“It’s a lie when they say he was holding a gun. He doesn’t even own a gun,” railed Carmen Torres, who was asleep in the basement with her one-year-old daughter and husband when the immigration police blasted through the door. “They shot my dad. They shot him, and I don’t know why.”

Official explanations beyond rudimentary factual accounts of the shooting have not been forthcoming — even as the man who did nothing illegal recovers in the hospital.

In fact, Torres, like the rest of his family — including the son allegedly targeted by U.S. Immigration and Customs Enforcement agents — are not in the country illegally.

They’re documented American citizens — and have lived in the same location in Chicago’s Belmont Cragin neighborhood for over 30 years.

“They didn’t say anything,” Carmen Torres asserted for the media, adding that, besides her daughter, a 5-month-old and 9-year-old were in the home during the ICE invasion. “They just came in and pointed pistols in our faces and dragged us out. We didn’t even have time to dress or grab milk for the baby.”

But the discrepancies between the nascent official narrative and eyewitness testimony from family and friends in the home at the time of the botched raid only grow stranger from there.

“A spokesman for ICE said that ICE Homeland Security Investigations agents were attempting to arrest a person when a second person pointed a weapon toward the agents and as a result, an agent fired his gun and wounded the man,” local ABC7 summarized.

According to dna.info, 56-year-old Torres “was hit in his left arm and taken to Stroger Hospital, where he was in serious condition, police said. ICE said the wounded man was not the person they came to arrest.”

Whether or not Torres brandished a gun — or if the father even owned a firearm — will now ostensibly be examined in investigations already launched by ICE’s Office of Professional Responsibility, as well as the Chicago Police Department.

However, one factor central to this single, controvertible example of an ICE immigration raid gone violently awry, and portentous of any to follow, is Chicago’s status as a sanctuary city — a designation prohibiting local law enforcement from cooperating with federal authorities to round up those believed to be in the United States without documentation deemed mandatory by the State.

Despite that and other protections sanctuary cities provide immigrant families, ICE maintains authority to conduct sweeps for undocumented people — whether or not the location takes issue with its presence — leaving little recourse, even in the supposedly safest spots in the nation for those scared of being wrongly deported.

To wit, Chicago Police responded to the shooting, but a spokesperson for the department said officers had not participated in the raid.

Infuriated city aldermen — who just voted unanimously to renew Chicago’s safe haven status, despite potential loss of government funding courtesy of the Trump administration — preliminarily condemned the raid as illustrative of law enforcement brutality and ICE’s dangerously expanding authority.

“ICE’s guns blazing raid on a northwest side home filled with sleeping kids is exactly why the City of Chicago should refuse to collaborate with ICE. ICE routinely violates the American people’s constitutional rights,” inveighed Alderman Carlos Ramirez-Rosa in a statement cited by ABC7. “This guns blazing ICE raid deepens my resolve to organize my community so we can keep each other safe from the threat posed by ICE.”

Others proffered similar concerns.

“We’re going to have to talk to CPD to find out if this was a coordinated effort, because if it was in any way, that raises concerns about us as a sanctuary city,” explained Alderman Gilbert Villegas, who represents the 36th Ward, where police terrorized and fired upon this family of innocent Americans. “Is this our future in Chicago with Donald Trump as president?”

While the ICE agent may have been justified shooting Torres if the as-yet debatable detail of his raising a gun first proves true, Villegas expressed qualms about the overall legitimacy of the raid, given incongruent accounts of what occurred.

“The community’s got to be nervous about this, and rightfully so, because you have a right to be in your own home without being intimidated,” Villegas observed. “I’m conflicted because I haven’t got all the details [of the incident] yet, but from the way this has started to play out, it looks like an overstep by an overzealous ICE agent who’s just trying to follow Trump’s orders.”

Officious immigration agents might indeed be the perversely authoritarian outgrowth of President Trump’s disputatious and exhaustive effort to round up anyone lacking appropriate permissions to be in the country.

One skittish ICE agent proved to be a nightmare for Felix Torres — but the entire agency received a law-and-order pat on the back from the new administration.

Last month, as immigration raids gained momentum, the Department of Homeland Security issued two memos seeming to give teeth to contentious mass deportations and the raids preceding them — enjoining ICE agents to, in twisted essence, take back their power.

Of the dual memoranda, Vanity Fair reported,

“D.H.S. outlined a radical shift in U.S. immigration policies, constituting a wholesale rejection of the approach under President Barack Obama. Among other things, the new Trump policy—which the president described as a ‘military operation’—calls for the hire of 10,000 new Immigration and Customs Enforcement agents and broadens the definition of ‘removable alien.’ It allows Border Patrol agents to target undocumented immigrants convicted of any criminal offense—no matter how minor. A New York Times report, based on interviews with 17 I.C.E. agents and officials, suggests that this has emboldened and empowered federal immigration agents across the U.S.”

Nationalists subscribing to Trump’s particular brand of, get out of America if you don’t belong here, consistently praise the same immigration raids striking terror into the hearts of citizens, legal residents, and undocumented workers, as necessary to cleanse the nation of an ostensive unproductive, criminal element.

However, everything about the shooting of Felix Torres instead intimates a phenomenal abuse of concentrated power by federal agents working outside the bounds of local authority.

And that Torres’ family are U.S.citizens residing inside the boundaries of a sanctuary city could evince a transformation of Immigration and Customs into America’s first — if semantically unofficial — experiment with a national police force.

Rumored to be in the planning stages for years, a federal police force remains the substance of conjecture and debate; but, for ICE to assume the chimerical powers of local law enforcement and that of a federal agency belies a categorical blurring of lines — the same lines meant to protect individuals and honor differences in governance by state.

Empowering the already powerful ICE agents could prove to be an horrific error in judgment.

READ MORE:  Entire Domestic Flight Detained, Forced to "Show Papers" as ICE Looked for Non-Existent Immigrant

In fact, although ICE refused multiple media requests to clarify why agents descended on the home, or to confirm the subject of the raid on Torres’ home, were refused — but an unnamed and unverified source told ABC7 there are allegedly weapons charges outstanding against the adult son.

That absolutely should not alleviate concerns or excuse the raid and shooting, even marginally. Once again, this is a family of American citizens living in a sanctuary city — as a weapons charge falls indisputably in the jurisdiction of local police.

“Why was, basically, ICE here? What was the reason ICE was here?” queried Rosa Reyes of Communities United — asking the one question most in need of an answer.

“If it has to do with a police matter, it has to be the actual police from Belmont-Cragin taking care of the matter, not ICE.”

No matter where you fall on the spectrum of opinion concerning immigration, the Wall, border patrol, or anything pertaining to Trump’s terrifying attempt to clean house, that arms of the government have ceased effectively communicating with each other — must sound a chorus of alarm bells.

Villegas and other aldermen attempted to gather information from ICE on the non-fatal shooting of Torres, but were either rebuffed or met with stony silence. An announcement from ICE is slated for release later today.

“They’re treating our office like we’re nobody,” Villegas opined, “so that tells me that I have to talk to the congressmen and the senators to get some answers on this issue, but this is very alarming.”

Court Orders US Army Vet Who Served 2 Afghanistan Tours Deported to Mexico

Chicago, IL — Miguel Perez Jr., of Chicago, Illinois, is a battle-scarred U.S. Army War veteran who proudly displays his patriotism in the tattoos he wears; a Statue of Liberty, a battle cross representing  a fallen soldier, as well as the U.S. Army Special Forces insignia that reads “To liberate the oppressed.” However, because this country is hell bent on “sendin’ them brown folk back where they came from,” Perez will be thrown out like yesterday’s trash.

A Chicago judge has ruled that Perez must be deported to Mexico in spite of him putting his life on the line for this country — not Mexico.

On Sunday morning, family and supporters gathered at Pilsen church in Chicago to voice their outrage over this insanity.

“My son fought for this country, not for Mexico,” said Perez’ mother Esperanza Medina.

Three decades ago, Perez and his parents came to the United States legally. Having fallen in love with the United States, Perez became a legal permanent resident and even enlisted in the US Army to fight for — what he thought — was his county.

Now, however, after the US military got what they wanted from him, Perez will be deported “back to where he came from!”

Perez, like millions of other kind and caring people, got involved in drugs. He never hurt anyone. However, police caught him with a substance deemed illegal by the government (cocaine), so he was arrested and thrown in prison. Even though he served his ostensible ‘debt to society’ in jail, it is this charge the judge is using as grounds for deportation.

READ MORE:  Government Can Only Wage War Elsewhere for So Long, Before it Inevitably Comes Home

According to the Chicago Tribune Perez’ attorney, Chris Burgin “argued in court that his client’s life would be in danger if he were sent back to Mexico, where he hasn’t lived since he was 8. According to human rights activists and advocates for deported veterans, drug cartels target former U.S. residents, especially veterans with combat experience, to work on their behalf, and those who don’t comply are at risk.”

However, the judge isn’t buying it and denied the torture claim last week.

According to ABC 7, Perez’s attorney appealed the judge’s ruling and reached out to U.S. Sens. Dick Durbin and Tammy Duckworth, both Illinois Democrats, asking to give Perez retroactive citizenship starting on the day he first served his country in the Army.

In spite of the appeal, however, Perez is still being held captive in an ICE facility and the deportation remains underway.

In the land of the free, you can put your life on the line for a government that will repay you by kidnapping you and sending you to another country.

Country, I was a soldier to you.
I did what you asked me to.
It was wrong, and you knew.

Country, now I’m just a stranger to you.
A number, a name; it’s true.
Throw me away when you’re through.

Home of the brave and the free; the red, white, and blue.
I wish it was true.

–White Buffalo

Matt Agorist is an honorably discharged veteran of the USMC and former intelligence operator directly tasked by the NSA. This prior experience gives him unique insight into the world of government corruption and the American police state. Agorist has been an independent journalist for over a decade and has been featured on mainstream networks around the world. Agorist is also the Editor at Large at the Free Thought Project. Follow @MattAgorist on Twitter, Steemit, and now on Facebook.

Shameful: Green Card-Holding Iraq War Vet Now Fighting Deportation

Miguel Perez Jr., of Chicago, Illinois, is a battle-scarred U.S. Army War veteran who proudly displays his patriotism in the tattoos he wears; a Statue of Liberty, a battle cross representing  a fallen soldier, as well as the U.S. Army Special Forces insignia that reads “To liberate the oppressed.”

Even though Perez, who was born in Mexico, served two tours of duty during the Gulf War, the same government he fought for is now trying to deport Perez back to the country of his birth. The 38-year-old is fighting deportation because he was caught with cocaine back in 2012. While in prison, Immigrations and Customs Enforcement (ICE) identified Perez as a candidate for deportation, even though he grew up in the U.S. since he was 8. Perez, who’s married, also has American-born children, “anchor-babies” as some wish to characterize them. That fact alone should be enough to keep Perez from being deported, but the government is weighing all its options, nonetheless.

Perez’ mother said when he returned home from the war, he got caught up in the wrong crowd. Chicago immigration judge Robin Rosche will decide the Army veteran’s fate. His lawyer, Chris Bergin is using a United Nations resolution against torture as defense against the deportation.

According to the Chicago Tribune Burgin “argued in court Monday that his client’s life would be in danger if he were sent back to Mexico, where he hasn’t lived since he was 8. According to human rights activists and advocates for deported veterans, drug cartels target former U.S. residents, especially veterans with combat experience, to work on their behalf, and those who don’t comply are at risk.”

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The fear is when and if Perez gets deported, he’ll be used to push the drug cartels’ agendas, possibly being militarized for violent actions on behalf of the organization. Bergin said, “There’s a pattern of impunity of the government either participating or looking the other way clearly in human rights abuses,” placing the burden on the U.S. government to ensure his safety if deported.

Anastasie Senat, ICE lawyer for the Department of Homeland Security said, “I understand it’s a sympathetic case because he has served our country…But it is Congress’ law that I’m called to enforce and that we are called to enforce and to respect, and in this situation there is no discretion.”

In a recent hearing before the judge, Perez addressed the seriousness of the decision whether or not he gets deported. “This is the same as somebody fighting a life sentence,” Perez told Judge Rosche. “The outcome of this determines the rest of my life spent away from my society, my way of life, my loved ones and not to mention, my country. … This is my country regardless of what happens here.”

The final hearing took place in February. Judge Rosche has yet to make a ruling with is expected any day now. Perez’ immigration case began mid-way through President Obama’s second term in office. But with a renewed push to deport undocumented immigrants by the Trump administration, more cases like Perez’ will likely arise.

The Army veteran’s participation in the illegal drug trade also serves to illustrate just how failed the American war on drugs really is. We’ve devolved so far as a society that a green-card-holding Army veteran who suffers from post-traumatic stress disorder from blast-related injuries, can potentially be deported for getting caught up in the failed drug war’s dragnet.

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Whether or not the Trump administration chooses to show compassion towards Perez’ case, and intervene, is yet to be seen. All the family can do now is wait, and hope that their father, husband, and son doesn’t get kicked out of the country he once loved enough to fight for.

Entire Domestic Flight Detained, Forced to ‘Show Papers’ as ICE Looked for Non-Existent Immigrant

New York, NY — (RT) Travelers entering New York City after a cross-country flight were met by border agents who insisted everyone show them official identification. They were seeking to serve a deportation order on an illegal immigrant.

On Wednesday, Immigration and Customs Enforcement (ICE) alerted Customs and Border Protection (CBP) at John F. Kennedy International Airport in New York City that an undocumented immigrant was suspected to be arriving on Delta flight 1583 from San Francisco.

CBP officers were at the gate to check every deplaning passenger’s ID, until they identified the person ordered to be deported by an immigration judge.

Officials say the suspect, who was convicted for domestic assault, driving while impaired, and violating an order of protection, was not found on the plane.

In a Thursday statement from CBP, they said that the agency “often receives requests from our law enforcement partners to assist in various ways, including identifying a person of interest. CBP will assist when able to.”

Jordan Wells, a staff attorney with the New York Civil Liberties Union, said that this is not an ordinary occurrence.

“They’ll occasionally pull someone off of a flight, or officers will come on and make an arrest,” Wells told the Independent. “It’s a much more surgical thing than setting up a dragnet. That’s what is so alarming about the way that this played out.”

Matt O’Rourke, a passenger who was asked to show his ID, said that a flight attendant repeatedly told the plane full of passengers to have their identification.

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“I flew almost 200,000 miles last year,” O’Rouke told the Gothamist. “I’ve never had my ID checked getting off a domestic flight.”

CBP* says in a statement that the two agents were working on behalf of ICE to assist with a removal order from an immigration judge pic.twitter.com/q0yh6x90hU

— eli m. rosenberg (@emrosenberg) February 23, 2017

Another passenger on the flight, also named Matt, said that agents did not seem to be looking for anyone in particular.

“There was an older couple behind me, probably in their 70s. They gave my ID and theirs the same amount of scrutiny,” Matt, who did not give his full name for fear of retribution, told the New York Daily News.

“I want everyone to be safe, but I also want to protect everyone’s civil liberties,” he said.

The search prompted two passengers to post pictures of the event on Twitter, which quickly went viral, with everyone from Chelsea Clinton to Edward Snowden retweeting the images.

These are customs agents forcibly checking the ID of every passenger deplaning from Delta flight 1583 tonight at JFK. A domestic flight. pic.twitter.com/fHMgyzCjo5

— Britton Taylor (@brittontaylor) February 23, 2017

@CustomsBorder I was on that flight too. Adding #s to “often” would ease concern. Even the flight attendants had never heard of that.

— Amy Lanigan (@lanigan) February 24, 2017

America. 2017. Now we have to show IDs to board and get off? To gate agents then ICE officers? Just want to be clear (at least for today). https://t.co/QTxpFTNGlT

— Chelsea Clinton (@ChelseaClinton) February 23, 2017

On Friday, a CBP spokesperson told Rolling Stone that the ID check was “consensual” and that officials “did not compel” anyone to show their ID.

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However, the CBP’s search authority rules do not mention passengers traveling on domestic flights are subject to searches.

“CBP has the authority to collect passenger name record information on all travelers entering or leaving the United States,” the CBP website says.

Under the Trump administration, the Department of Homeland Security has issued new guidelines that empower customs agents to have “full authority to arrest or apprehend an alien whom an immigration officer has probable cause to believe is in violation of the immigration laws.”

Two memos from DHS outlined new “expedited removal” rules in accordance with Trump’s executive orders on immigration that would allow any illegal alien to be deported at any time.

Antarctic research lab threatened by 30-mile long crack on ice, vacated

Goddard Space Flight Museum/Flickr

ANTARCTICA (INTELLIHUB) — A 30-mile long crack that appeared on the ice has made researchers extremely nervous, prompting them to “vacate” their encampment entirely.

This will mark the first time in 60-years that the British research facility Halley VI will be shut down due to rapidly changing conditions on the ice shelf which have pinned in the facility between two massive fissures.

A massive new crack in the ice opened up all the way down to sea water for a 30-mile span. The average thickness of the ice in the area is estimated to be about 400 feet, which will allow the research team to eventually return and relocate the 8 detachable pods.

“[…] when the time comes the pods can be towed on their ski-like feet,” PBS News Hour’s Julia Griffin explained.

The team’s Director of Science David Vaughn said the facility feels like a “large ship on the ice, looking out across the vast expanse of essentially nothingness.”

Vaughn said that the two cracks have made the ice shelf as a whole “very unpredictable.”

“Maybe the ice shelf will go back to a new equilibrium in time, but at the moment we just can’t predict with any certainty how long that will take.”

©2017. INTELLIHUB.COM. All Rights Reserved.

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Protests Erupt as Longtime Arizona Resident and Mother Hauled Off in Deportation Van

February 9, 2017   |   admintam

(COMMONDREAMS) Guadalupe García de Rayos, a decades-long resident of Phoenix, Arizona and mother of two, was unceremoniously arrested and hauled away in a deportation van late Wednesday, one of the first deportations of an undocumented immigrant with no violent record to occur under President Donald Trump’s anti-immigrant executive order. Rayos’ sudden arrest provoked outrage from local community members and rights advocates. Protesters, including Rayos’ two children, pleaded with federal agents to let Rayos go and surrounded the van to stop it from leaving, with one person even tying himself to a wheel of the vehicle. A local reporter posted photos from the emotional standoff on Twitter:

#BREAKING– Crowd of about 40-50 protestors blocking #ICE deportation vans in PHX. #GuadalupeGarcia believed to be inside. family in tears. pic.twitter.com/nD3BoVNfS7

— Gadi Schwartz (@GadiNBC) February 9, 2017

#GuadalupeGarcia looking at her son through the window of an #ICE van. Protestors are blocking the van to halt her deportation pic.twitter.com/MRtO0lqhGZ

— Gadi Schwartz (@GadiNBC) February 9, 2017

Police ultimately removed the protester from the wheel, arrested a total of six people, and the van drove away. Rayos’ family confirmed that she was deported to Nogales, Mexico, on Thursday. Watch a video of the protest, which lasted over an hour, here:

“We’re living in a new era now, an era of war on immigrants,” Rayos’ lawyer, Ray A. Ybarra Maldonado, told the New York Times.

Rayos came to the attention of Immigration and Customs Enforcement (ICE) officials in 2008, when she was discovered to be undocumented during a raid ordered by the former anti-immigration sheriff Joe Arpaio of the theme park where she worked. The Los Angeles Times explains:

Guadalupe Garcia de Rayos, 36, had lived in the country since she was 14. She was arrested in 2008 during a workplace raid ordered by then-Maricopa County Sheriff Joe Arpaio at Golfland Sunsplash amusement park in Mesa, Ariz., and convicted of felony identity theft for possessing false papers.

A mother of two, she continued to live in Arizona and checked in with ICE every six months. On her scheduled meeting Wednesday morning, she arrived at the ICE field office in Phoenix surrounded by supporters. An immigration attorney later told the crowd outside that Garcia de Rayos had been arrested.

“We all knew something could be different this time with the new administration,” said Carlos Garcia, director of the advocacy group Puente Arizona, to the LA Times. “She went in with the lawyer and didn’t come out. That was pretty much all there was.”

The New York Times explained the difference between the immigration policies of President Barack Obama—who deported millions of people, more than any president in history—and President Donald Trump, who has pledged to deport five times as many:

The Obama administration made a priority of deporting people who were deemed a threat to public or national safety, had ties to criminal gangs, or had committed serious felony offenses or a series of misdemeanor crimes. Ms. Rayos did not fit any of these criteria, which is why she was allowed to stay in the United States even after a judge issued a deportation order against her in 2013.

That all changed under Mr. Trump. Among the 18 executive orders that he has issued since taking office on Jan. 20 is one stipulating that undocumented immigrants convicted of any criminal offense—and even those who have not been charged but are believed to have committed “acts that constitute a chargeable criminal offense”—have become a priority for deportation.

Kansas Secretary of State and former Trump advisor Kris Kobach is also promising to extend Trump’s executive order to the state level, and introduced a bill empowering state and municipal law enforcement to enforce federal immigration laws and deport undocumented immigrants. “What it does, basically, is set the stage for a scorched-earth approach for immigrants in this country,” said Clarissa Martinez, deputy vice president of National Council of La Raza, to McClatchy.

Meanwhile, Puente Arizona is urging supporters to call ICE headquarters and Arizona senators to demand Rayos’s release and return to her family, as well as circulating a petition on Rayos’ behalf that has already garnered thousands of signatures—demonstrating that human rights advocates are not about to let Trump get away with his xenophobic immigration policies without a fight.

“It’s not fair that my mom might be taken away for providing for my family,” Rayos’ 14-year-old daughter Jacqueline said in a statement Wednesday. “Working should not be a crime… I’m not scared of [Trump,] I’m going to keep fighting to have justice and my mom back.”

Supporters are also rallying and demanding justice for Rayos on Twitter under the hashtag #GuadalupeGarcia:

#guadalupegarcia Tweets

---

This article (Protests Erupt as Longtime Arizona Resident and Mother Hauled Off in Deportation Van) by Nika Knight, originally appeared on CommonDreams.org and is licensed Creative Commons 3.0. The Anti-Media radio show airs Monday through Friday @ 11pm Eastern/8pm Pacific. Image Credit: Puente Human Rights Movement. Help us fix our typos: edits@theantimedia.org

Bullion Banking: Part II - The Risks and Concerns

Submitted by Ronan Manly, BullionStar.com

The first part of this series "Bullion Banking: Part I - The Mechanics and the Players" highlighted that contemporary bullion banking operates as a fractional reserve gold banking system in which paper gold is created out of thin air. It also looked at the identities of the 30-40 bullion banks operating in the global gold market and explored some of their activities. Part II now looks at the structural risks inherent in the modern bullion banking sector and the concerns posed by bullion banking activities.

Unallocated Positions rarely result in Physical Delivery – Demand is Diverted to Paper

Since unallocated account transactions in the London bullion market are rarely used for physical delivery of gold, the trading of such paper gold diverts demand into paper gold that would otherwise have been channelled into real physical demand. Therefore, the price of physical gold is not reflecting the demand that it would have reflected if paper gold alternatives did not exist.

In a recent commentary about how to classify unallocated bullion accounts in the context of new MiFID rules for financial instruments, global law firm Dentons described unallocated bullion as synthetic gold and as a derivatives transaction and Dentons also highlighted that paper gold’s holders never intend to take delivery:

“Although the terms of the unallocated bullion account usually provide for the account holder’s right to demand the physical delivery of gold, the reality of unallocated bullion trading is that buyers and sellers rarely intend for physical delivery to ever take place. Unallocated bullion is used as a means to have “synthetic” holdings of gold and so obtain exposure to the price of gold by reference to the London gold fixing.

“If physical settlement and cash settlement are two mutually exclusive concepts (as they are in our view) and if cash settlement entails a derivatives transaction it follows that, if physical settlement does not take place in connection with unallocated bullion, then unallocated bullion is a form of derivatives transaction.“

Only a Tiny Fraction of Gold Trading in the Bullion Banking System is Physical Trading

Each month the LBMA publishes gold and silver clearing statistics which are sourced from LPMCL data. This data represents average daily clearing volumes of loco London gold transfers between the five LPMCL members during that month. The clearing figures reflect three components:

a) transfers of unallocated gold between parties within a member’s book and between the books of the five LPMCL members

b) transfers over the five members allocated gold accounts at the Bank of England

c) physical shipments of gold from LPMCL members accounts

In August 2016, the average daily clearing figure for gold between the five London gold clearers was 18.8 million ounces per day. This equates to 585 tonnes of gold loco London transfers cleared per day. With approximately 250 trading days per year, this equates to 146,250 tonnes of gold cleared per year in London. Given that the LBMA is on record as saying that trading volumes in the London gold market could realistically be 10 times more than clearing volume (since clearing volume represents netted trading volume), then this would imply 5,850 tonnes of gold traded each day in the London market, and 1,462,500 tonnes of gold traded each year in London.

Given that world gold production (physical gold) throughout history is about 190,000 tonnes, half of which is held in the form of gold jewellery, and given that production from gold mining operations is about 3,000 tonnes per annum, then it should be obvious that the astronomical trading figures in the London gold market have nearly exclusively nothing to do with physical gold demand and supply trading and everything to do with speculative trading and other forms of unallocated account churning and transfers. This level of activity can only be possible if bullion banks have created huge amounts of paper gold through the use of unallocated account balances.

The LBMA does not currently publish any trading figures for the London gold market, nor any data on the volume of physical gold trades or transfers undertaken in the gold market by its bullion bank members versus the volume of unallocated or paper trading transfers. Could this be so as to hide the mammoth activity of paper gold trading?  Note that as of late 2016, the LBMA has promised that it will begin to implement some type of trade reporting of bullion market trades in 2017, but the details of such planned trade reporting remain unclear at this time.

95% of Transactions in the London Precious Metals Markets are in Unallocated Metal

Although the unallocated account market is opaque, the representatives of the London precious metals markets did publish one eye-opening statistic about unallocated account trading a few years ago, perhaps inadvertently. This statistic was in an April 2013 HMRC / LBMA / LPPM joint publication on metal transactions and Value Added Tax. This HMRC/LBMA/LPPC memorandum stated that:

“Investors acquire an interest in the metals, although in most situations, physical delivery will not occur and in 95% of trades, trading in unallocated metals will be undertaken.”

“95% of transactions are in unallocated metal: therefore, because they are treated as services, the location of the underlying metal is not relevant.”

Given this 95% of unallocated trading, the wholesale London precious metals market run by the bullion banks is nearly entirely a fractional reserve system with a very small backing of physical precious metal. The memorandum also stated that:

“Spot and forward trades are predominantly in respect of unallocated metals and can be closed out before the contract maturity date – they can be cash-settled, rather than the underlying metal being physical delivered”

Interpreting this 95% of transactions in unallocated gold, the London gold market is primarily a fractional reserve gold banking system, with a limited underpinning of physical gold underneath it, and with hedge funds and other speculators trading huge volumes of paper gold. The scale of unallocated precious metals holdings in the London wholesale market was starkly confirmed by then LBMA CEO Stewart Murray in May 2011 to a gathering at the LBMA Bullion Market Forum in Shanghai, when he stated that:

“Various investors hold very substantial amounts of unallocated gold and silver in the London vaults.”

What Murray meant is that various investors held substantial claims against bullion banks for whatever gold and silver was in the London vault pool that was not allocated.

Credit Risk and Counterparty Risk

Since an unallocated gold account with a bullion bank merely represents a claim against that bank, a buyer of unallocated gold is merely an unsecured creditor of that bank and is taking on credit risk against the particular bullion banking institution that they enter the unallocated account agreement with. The unallocated account agreement also entails general counterparty risk since the bullion bank is the other side of the agreement. Such credit risk and counterparty risk would not arise if a customer was holding fully allocated and segregated precious metals.

Template for an Unallocated precious metals account in the London market

LBMA Clearing Data hides leveraged Spec Trading and rolling of Gold Deposits

In 2003, the then chairman of LPMCL, Peter Fava, provided a once-off glimpse into some of the trade types that were behind the huge clearing volumes in the London Gold Market[11]. Fava’s list of such trades included the following:

• Central bank gold deposits, rolling over monthly, and the hedging transactions connected to that borrowing


• Interest rate swaps and longer-term collateralised agreements


• Speculative trading activity on a leveraged, forward basis that is closed out before maturity


• Investment fund participation via spot transactions * (generally netted by the counterparty banks against EFPs – exchange for physicals) but if not netted would show up in clearing


• Interbank market trading (multiple times per day)


• Consignment accounts in physical markets, notably Istanbul, Dubai and India, with purchases out of the consignment account hedged loco London


• Gold-backed Exchange Traded Fund (ETF) creation and redemption trades using unallocated

You can see from the above list that very little of the trade types have anything to do with real transactions for physical gold or real physical demand for gold. The leveraged speculative trading and the investment fund activity underscore the disconnect between the physical gold market and paper gold trading which is in essence just a form of betting on “the gold price”. The bullion banks benefit in commissions and fees from the very high trading volumes of paper gold, without having to hold physical gold in reserve.

Gold Backed-ETFs Prop Up and Support the Unallocated Account System

The April 2013, the HMRC / LBMA / LPPM document on value added tax (referred to above) also stated the HRMC’s opinion on gold-backed ETFs and highlighted that ETFs perpetuate the unallocated gold account system while sourcing their metal holdings from the general London pool of metal that backs this system:

“The deposit and withdrawal of metal related to the issuing and redemption of securities is predominantly on an unallocated basis and therefore via book entries. Generally, the metal is already within the wholesale market.”

As stated in the [ETF mechanics article], this is concerning because:

“Investment flows into gold-backed ETFs channel gold demand that might otherwise have gone into physical gold into products whose supply is met by tapping the pool of LBMA bank controlled gold inventories and even central bank gold lending.”

Importantly, there is zero transparency into where the large gold-backed ETF custodians, i.e. HSBC and JP Morgan, actually source gold ETF inflows from. It appears that they source this metal from an opaque pool of wholesale gold that is held in the London market.

The London Gold Market continues to Extend its Unallocated System Infrastructure

Every new product and process that have been recently developed for the London Gold Market makes use of and perpetuates the London Gold Market’s fractional reserve / unallocated paper gold infrastructure. The LBMA gold price auction, which in March 2015 replaced the London Gold Fixing, and which is now administrated by ICE Benchmark Administration (IBA) on behalf of the LBMA, still uses unallocated gold as the settlement asset in the auction. According to the IBA Gold Auction Specification document, the “underlying asset is “Spot Loco London Gold (unallocated)”.

While this new auction could have been totally redesigned to use physical gold transfers, like the physical settlement system used by the Shanghai Gold Exchange (SGE), this was never going to happen since the LBMA was running the competition which chose the winning service provider to administer the new auction, and the LBMA is at pains to protect the unallocated system since this system is operated by the LBMA’s most influential members, the bullion banks.

In another development, the London Metal Exchange (LME) is planning to launch a new suite of gold and silver futures contracts for the London market in the first half of 2017. These futures, to be known as ‘LMEprecious’, will, in the words of the LME, ‘respect the London market’, i.e. they will utilize unallocated gold transfers and again perpetuate the unallocated system. Specifically, the new LME settlement procedure is as follows:

“Physical settlement one day following termination of trading. Seller transfers unallocated gold to LMEC account at any LPMCL member bank, and buyers receive unallocated gold from LMEC account at any LPMCL member bank.”

ICE (Intercontinental Exchange) has also announced competing exchange-traded gold futures which it plans to launch in February 2017. These futures will also settle via unallocated accounts. According to ICE:

“The contract will be settled through unallocated loco London gold vault accounts using LBMA Good Delivery Rules.”

The absurdity of calling something an ‘unallocated gold vault account’, when it’s merely an electronic account representing a claim against a bullion bank which holds no gold, or very little reserves of gold on a fractional basis, should be obvious to see.

CME Group has also announced that it too will launch London gold futures contracts that will deliver unallocated gold loco London.

Nearly all LBMA system Gold under Title of Central Banks and ETFs

In September 2016, BullionStar produced research into how many tonnes of physical gold were actually held in the LBMA vaulting system in London, concluding that there were 6500 tonnes of gold in the London market, 4725 tonnes of which was at the Bank of England, leaving 1775 tonnes at the other vaults.

Of the gold in the other vaults, 1679 tonnes was held in allocated form by the gold-backed ETFs, again meaning that there was a very small residual (less than 100 tonnes) to back total outstanding unallocated account claims.

Even if the bullion banks have access to borrowed central bank gold stored at the Bank of England, that gold is owed to the lending central banks, and therefore has multiple claims on it. If there was a run on the fractional reserve bullion banking system by customers wanting to convert their unallocated positions to allocated gold holdings, analogous to a bank run where all customers want to withdraw their cash at the same time, then this could lead to some serious problems in the ability of the bullion banks to provide the required gold. Such a situation would undoubtedly require cash settlement of customer positions, a move which would see the price of paper gold collapse, while the price of physical gold would skyrocket.

No Transparency in the London Gold Market

There is a total lack of transparency in the London Gold Market. There is no trade reporting and no position reporting. This means that there is no visibility into the amount of paper gold trading vs trading related to physical gold, and no visibility into the volume of outstanding unallocated positions vs the amount of physical gold backing those positions. Therefore, there are no metrics as to the size of the fractional positions, i.e. the ratio of unallocated positions to allocated positions. The bullion banks have as of yet not cooperated in releasing trade information, so it appears they are protecting the status quo. The regulators, in the form of the Bank of England and the FCA, are also compliant by not devising a mandatory system of trade reporting, which incidentally would be very easy for them to do.

Some of the other transparency deficiencies in the London Gold Market include the following:

• The locations of the commercial gold vaults in London are not published by the LBMA. Compare this to New York, where the vault locations that are use and approved by COMEX are publicised and well-known.


• No confirmation of the identities of central bank & bullion bank customers at the Bank of England. The Bank of England does not even say how many bullion banks hold gold accounts with it, let alone the identities of these banks.


• There is no official data published about the London Gold Lending Market. Nothing at all.


• The Gold offer Forward Rate (GOFO) and Forward Curve submissions were discontinued by the LBMA banks as of January 2015.

See BullionStar seminar speech “The Gold Market – Where Transparency means Secrecy” for more details about the lack of transparency in the London Gold Market.