The Legislati Self-Destruct the Paper Gold and Silver Market by July 15th
Dodd-Frank is a sick beast, packed with all sorts of fantastic slippery slopes of confiscation, forced manipulation and ridiculous handouts to the main players who engineered it into existence. But we knew that.
Now comes this from Zero Hedge, which very clearly states they will be imploding the paper metal market in the U.S. as of July 15th. By imploding, we mean blocking for the common man but leaving wide open for the major market players, further proof that their attempts at manipulating this baby into the outcome they want is becoming harder to pull off as time goes by.
First, the email ZH got:
Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
Important Account Notice Re: Metals Trading
We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.
In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.
We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.
The Team at FOREX.com
Remember, we're only talking about paper here. Still, it's disturbing to read that the Land of the Free is more like the Den of Thieves, where the thieves get to write the rules and come after you if you don't follow. You all know what the next step is, and it involves threats, battering rams and search and seizure. You know... for starters. Unlikely? Please, they've proven they can do it, there's nothing stopping them from doing it again.
The actual rule language exempts a transaction if it "results in actual delivery within 28 days or such other period as the Commission may determine by rule or regulation based upon the longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved;" Alas, the commission has decided not to intervene and keep the exemption status window so small as to affect virtually all exchanges which transact in the gold and silver spot market.
God this reeks of desperation.
Head over to ZH for the full story, some interesting commentary from the Peanut Gallery and more details on this move.
Remember the text of the Frankendodd bill reveals all:
To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
It's that "for other purposes" that always worries me. And I'm usually right.