The First Paper Default Of A Mercantile Futures Exchange

Posted at 2:20 PM (CST) by & filed under General Editorial.

Dear CIGAs,

As the smoke clears the situation at the Hong Kong Mercantile Exchange begins to take a form we can interpret. The key detail is that there are failed paper contract settlements pending resolution tomorrow. You can be sure that they are metals contracts with no metal behind them, past due for delivery. I expect a cash settlement either in part or whole which constitutes a default. This sounds like the first default of no-metal paper contracts with no-metal in any warehouse to cover it.

If that is so then the emancipation of physical gold from paper gold is in process, and we know the reason for the manipulation of the gold price lower.

Anyone writing to our community that denies gold and silver are manipulated is simply a Trojan horse or a horse’s rear end.

Thank you CIGA David for the heads up.

HKMEx Scandal Widens As 4 Officials Arrested With $1/2 B in False Bank Documents
May 25, 2013

Last weekend we broke the news to US readers that the HKMEx was closing and would cash settle all futures contracts effective Monday, 5/20.
The intrigue around the exchange’s failure exactly 2 years after it’s 2011 launch just increased substantially, as 4 high level HKMEx executives have been arrested after being found with over $1/2 billion in false bank documents.
The HKMEx founder and CEO Barry Cheung Chun-yuen is reportedly now also under investigation for his involvement in the scandal.