How ZH’s Discovery of JPM’s Top-Secret London Gold Vault Could End JPM’s Alleged Gold Manipulation

Yesterday we reported that ZeroHedge via excellent investigative journalism had discovered the top-secret location of JP Morgan’s London gold vault- namely 60 Victoria Embankment.
Numerous SD readers have inquired as to the significance of the story, and why the discovery of the specific location of JP Morgan’s gold vault should matter to precious metals investors (or to JP Morgan for that matter).  The answer as to why this is so significant for JP Morgan lies in rehypothecation.

Once a precise location, holding specific goods can be pointed to by a creditor, the creditor will quickly seek a Writ of Attachment.  The gist of receiving the writ for JP Morgan is: “Hey, turn over this specific XXX to the court, so the court can give it to the proper owner; and don’t you dare move it until the court says OK.

All diehard gold bugs suspect, of course, that through leases, derivatives, futures and [etc], JP Morgan has geared the bejezus out of the bullion, regardless of who the legal owner(s) are, regardless of whether the gold is supposedly allocated or unallocated (think MF Global).

So the thought that JP Morgan might have to send its legal team in to court to do battle with barbarians at the gate – the 120 banks looking for assets – is juicy. And a true headache for JP Morgan, because if or when it happens, JP Morgan no longer controls the situation.

 

2013 Year of the Snake 10 oz .999 Silver Bars
As Low As .99 Over Spot At SDBullion.com!

Submitted by SD reader SiouxWestern:

 

Here is the germane paragraph from the excellent ZH article:

”The total value of the bullion exported in these operations approached $430m at current market prices, and it weighed 10.4 tonnes. The other distinguishing factor was the identity of the recipients, or “consignees” as they are known. According to documentation seen by The National, they were all companies associated with the al Gosaibi family of Saudi Arabia. The al Gosaibis have since fallen out spectacularly with their partner, Maan al Sanea of Saad Group, in the biggest corporate scandal to hit the Middle East, leaving about 120 banks worldwide with debts estimated at up to $22 billion and a decreasing likelihood of getting their money back.”

Presumably, one or more attorneys for the “120 banks” who stand to lose up to $22 billion,  have been getting the run-around by various institutions, including JP Morgan, in trying to locate assets (that is, find out where precisely they are located). All a big game of hide-the-ball, facilitated by all kinds of ball-hiding techniques well-known to readers (protector trusts, etc.)

And – ahem – JP Morgan specializes in these services.

But once a precise location, holding specific goods (“identified” goods, under US Uniform Commercial Code parlance), can be pointed to by a creditor (that is, pled to a court with specificity), the creditor will quickly seek a Writ of Attachment (basically, a judicial lien which freezes specific property) and/or a Writ of Replevin.  The Writ of Attachment might be even more dangerous here, for JPM.

The gist of receiving either writ, for JP Morgan is: “Hey, turn over this specific XXX to the court, so the court can give it to the proper owner; and don’t you dare move it until the court says OK, otherwise you [JPM] are personally liable to the creditors for conversion of their property.

The laws applicable to bailees (like JP Morgan) are opaque but generally result that a bailee will (i) implead (ie, turn over) the property to the court, because in theory the bailee has no ownership in the property, he is just the storage clerk, and (ii) give notice of the wri to anyone who appears in the bailee’s records as having some legal interest in the property. Those folks getting notice thus have the chance to run into court and fight off the claiming creditors.

All diehard gold bugs suspect, of course, that JP Morgan isn’t a simple bailee; rather, through leases, derivatives, futures and [etc], JP Morgan has geared the bejezus out of the bullion, regardless of who the legal owner(s) are, regardless of whether the gold is supposedly allocated or unallocated (think MF Global), regardless of …. pretty much any assumption one might have. Borderline lawless, but certainly not the orderly quartering of gold that one is told to believe.

So the thought that JP Morgan might have to send its legal team in to court, not to be chummy with the two Saudi groups who appear to be hiding the gold, but rather to do battle with barbarians at the gate – the 120 banks looking for assets – is juicy. And a true headache for JP Morgan, because if or when it happens, JP Morgan no longer controls the situation.
And its complicated status as “not simply a bailee” would be in court documents, for all to see. The 120 bank creditors don’t give a whit about JPM’s or the Saudi’s claims of “privacy.”

NB to any attorney reading this: Be sure to deliver your writ to Brinks, who will then be on notice that they cannot be moving gold OUT of the building, willy-nilly.

This really is a keen development, if only for commercial attorneys and creditor geeks. But in today’s tautly-levered world, pretty much anything can be the flap of the butterfly’s wings which set loose the upset of a system.

-SiouxWestern

 

OPM Silver Round Promo 2 with Border

Comments

  1. Dear friends,
    the all system is going to hell. Banksters and goverments ..god help us. In the and we will win. Parabolic move is near. Silver bomb is about to explode.
     
    All the best to all.
     

  2. Pardon me while i mention my total lack of faith in the judicial system with respect to anything …judicial. The system has been usurped by those that can buy the justice they desire. This charade ends when it can no longer stand because of the infinite weight of scrutiny it will ultimately bring to bear. When that time will be I don’t even think God Himself could answer with any certainty but it is good to see that there are still decent people constantly and earnestly searching and uncovering truth no matter how hidden and obfuscated it may be.

    • You’re not the only one that lost its faith in the judicial system because a lot of people like me also lost it. Actually, I almost totally lost my faith into this system where I don’t trust the fiat currencies, the economy, the financial institutions, the police, the government, the judicial, the politics and more! That’s why all of your stuffs, skills, etc. should be independent from this system so that they won’t become obsolete after the collapse.

  3. The answer seems straight forward, move the gold fast before they come…..no?
     
    Ten tons can be moved pretty readily, or am I missing something?

    • 730 good delivery bars give or take. Easy to move. There is no way that they would store that much gold in this Flimsy shell of a building. Its offices! Love to see what  Lloyds of London would price up the insurance on this place!
       
      I been to this place once with a mate of mine who was working for Price Water House Cooper. Its just flimsy offices made from the usual cubical hell.
       
      Hey now that’s an Idea, if you want to find the Gold check out insurance documents instead of delivery/Invoice notices. Whats that? there are none for 60 Victoria Embankment? hmmm What about public liability which might be in the public domain, after all there is a safety hazard there where all those big yellow bricks are being put on the van, where there’s a blame there is a claim after all ;)
       
      As I have said, this place is a temporary storage facility, yes they take delivery here, but keep it on premises for more than 48 hours. Sorry, I am laughing here. If there is that much gold in that building, who’s up for a bank job, looks like a piece of piss.
       
       

    • They also, very likely, have a secret transport tunnel behind mommies arse.
       
      This map shows an old underground going straight from Victoria Embankment to BoE’s vault.
       
       
      http://en.m.wikipedia.org/wiki/File:Tube_map_1908-2.jpg
       
       
      And, they just couldn’t keep their mouth shut..
       
      http://mobile.bloomberg.com/news/2011-09-08/london-entrepreneur-sees-a-gold-mine-in-developing-unused-subway-stations.html

  4. Sorry, still not getting the importance of a piece of paper in the public domain. Let’s play this role out. An investigation is taken on the basis of this delivery contract, JP Morgan produce 6 documents to prove that they  are not in possession of the gold, stating that it was moved some place else and this place is a holding facility. Doesn’t matter if gold is discovered on the premises, J P Morgan will claim that its someone else’s gold and produce all the documentation to prove it. A search will not be required because the documentation in place backs the story. Gold is very fungilble after all and one LBMA good delivery bar looks very much like another. What we need is an audit, physically counting all the gold and silver in all locations and match it up to the paper market. This will be the only thing that will kill the double counting. But paper rules the world and the law of the land favour the rich.

    • “But paper rules the world and the law of the land favors the rich.”
      But paper assets won’t rule the world forever once this system collapses with is inevitable and the rich are becoming richer because of the fiat paper scam. All we have to do is buy more physical precious metals and others will automatically join us when hyperinflation hits the paper currencies.

  5. Another story which is made into a big deal here that will be forgotten in probably less than a week.

  6. I still belive in victory, in real price of 1 silver oz. If the real price is 20 $ or 10 $ is ok with me. Manipulations must be distroyed.

    • Hmmm I am having second thoughts about “bringing down the system”, I am making a good living here selling silver that’s worth only what its perceived to be. Hey maybe all these conspiracy sites are really working for JP Morgan, to shift all their surplus Silver onto the people who are fighting against them. Right on Brothers and Sisters.
       
      If the system is brought to its knees, surely the price of Silver will get dragged down with it? Something is only worth something if it is perceived to be valuable. The best place for Silver and Gold to be priced is in a market where we are all on full alert for a melt down. Perceived risk is the best source of wealth in the world. Look at insurance, its all about managing perceived risk and to how much one is willing to bet against it happening.
       
      Although I take the mick out of this story, mainly because the evidence and investigative journalism is so poor, I do want to see JP Morgan fail in a pool of vomit induced fear. But the journalism must be sound. 1 Document does not make a case.

  7. Waiting for Silver….respect. If you live good with selling, that”s ok with me.  I wish you 200$ per oz.
     
    All the best

  8. The flaw in this article is quite simple to spot:
    Given how adept JPM has been at getting the law to look the other way, why should they have anything to worry about from the courts – especially in the country which is based upon the banking empire?

  9. I still wonder. All this speculation based on the boogie man is coming to get them with legal papers and ‘if/when the courts make JPM…..’ and ladeda on & on. The courts are not going to make JPM do squat so the premise of hypothecation and rehypothecation & allocated vs. unallocated and the same bars leased out x amount of times while those bars are counted on a dozen other banks/equity firms books over and over is still to me a tempest in a tea cup. Yep, for sure it is going on, and yep for sure is and has been illegal as hell for ages but no legal system is going to touch it. Didn’t little ‘ole MFG tell ya’ll to go get stuffed and get away with it. Ya’ll think JPM is going to be made accountable at this point in time regardless of wherever the hell their supposed gold is stored? If the legal system does eventually ‘touch’ it and brings JPM and the collective bunch of b’tards down into a pile of smoking ruins then you can be assured the worlds commercial system as we know it may be over. If that happens then you’ll know their plan worked….. 

  10. Empty the building of the stashed gold and give it back to the true owners and use the newly emptied space to build small jail cells to hold the criminals in business, banking and government. It would also be a good idea to install some gallows and some spectator seating for the little people to watch the festivities from.

  11. Perhaps maybe JP Morgan will simply switch the location or throw the gold bars in the ocean and say that they have “lost” them before it’s too late. Anyway, I don’t have to worry about my wealth inside other people’s or companies’ vaults because I know what “If you don’t hold it, you don’t own it” means! ;)

  12. What gold, anything in that vault s long gone overnight

Speak Your Mind