First, let’s attempt again to discern what the heck an “exchange for physical” really is, because the truth of the matter is, no one really knows. When we first wrote about EFPs back in April of 2018, this was the best summary explanation we could find:
So, these are “ex-pit transfers between two parties”. OK. If that’s the case, then EFPs are best categorized as a swapping of positions between two parties. Given the volume of these transfers each day, it’s safe to assume that the two parties in question here are almost always Bullion Banks. And what are “Bullion Banks”? These are the banks that manage the physical delivery market in London… and they operate hand-in-glove with their trading desk operations on the COMEX in New York.
(By the way, the conspiracy to rig and manipulate prices between London and New York trading is precisely what the U.S. Department of Justice is currently investigating under the RICO statutes… an investigation that has already yielded six indictments, including the former head of JP Morgan’s global precious metals desk, Michael Nowak. It’s noteworthy that up until his indictment, Nowak also proudly served on the board of directors of the LBMA. Read more here: https://www.zerohedge.com/markets/abject-corruption-exposing-financial-political-complex-protecting-its-own-gold-manipulation)
Anyway, back to the EFPs. Though this practice of “ex-pit transfer” has been around for decades, the use of this scheme has increased dramatically in the past several years, possibly coinciding with a similarly dramatic increase in total contract issuance and open interest.
How does the CME itself define an EFP? Here’s a link, an excerpt of which is pasted below: https://www.cmegroup.com/trading/metals/precious/g…
Note the last line above. “EFP is a key component in pricing OTC spot gold”. Dutch money manager Gijsbert Groenewegen offered to provide his expertise and insights to this process back in 2018, and back then, he suggested that the dramatic surge in EFP use was also a tool for Banks to directly impact price. Groenewegen theorized that The Banks do, in fact, now use EFPs as a means to control prices off-exchange and through the deliberately-opaque OTC markets. This is worth considering, and you can read his article here: https://www.tfmetalsreport.com/blog/8942/guest-pos…
But let’s get back to the sheer volume of EFPs at present, because in the end, I believe it helps to reveal again the utter scam, sham, and fraud of the current digital derivative andfractional reserve pricing scheme .
From the CME Group’s own website, it is explained that futures contracts and EFPs are utilized by “gold traders” who “frequently trade OTC with Banks to hedge gold transactions”. OK, that sounds legitimate. You’ve a big position and you’d like to hedge it? Go right ahead...
- Source, Craig Hemke via Eric Sprott's, Sprott Money
(By the way, the conspiracy to rig and manipulate prices between London and New York trading is precisely what the U.S. Department of Justice is currently investigating under the RICO statutes
Anyway, back to the EFPs. Though this practice of “ex-pit transfer” has been around for decades, the use of this scheme has increased dramatically in the past several years, possibly coinciding with a similarly dramatic increase in total contract issuance and open interest.
How does the CME itself define an EFP? Here’s a link, an excerpt of which is pasted below: https://www.cmegroup.com/trading/metals/precious/g…
Note the last line above. “EFP is a key component in pricing OTC spot gold”. Dutch money manager Gijsbert Groenewegen offered to provide his expertise and insights to this process back in 2018, and back then, he suggested that the dramatic surge in EFP use was also a tool for Banks to directly impact price. Groenewegen theorized that The Banks do, in fact, now use EFPs as a means to control prices off-exchange and through the deliberately-opaque OTC markets. This is worth considering, and you can read his article here: https://www.tfmetalsreport.com/blog/8942/guest-pos…
But let’s get back to the sheer volume of EFPs at present, because in the end, I believe it helps to reveal again the utter scam, sham, and fraud of the current digital derivative and
From the CME Group’s own website, it is explained that futures contracts and EFPs are utilized by “gold traders” who “frequently trade OTC with Banks to hedge gold transactions”. OK, that sounds legitimate. You’ve a big position and you’d like to hedge it? Go right ahead...
- Source, Craig Hemke via Eric Sprott's, Sprott Money
