Over the Counter Gold & Silver Trading to be ILLEGAL Starting July 15 2011

Discussion in 'Money, Investing & Precious Metals' started by IrritatedWithUS, Jun 18, 2011.

  1. IrritatedWithUS

    IrritatedWithUS Well-Known Member

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    I just got this emailed to me from a friend who also posted it on a forum. If this is true, this is scary and welcome to Hell...

    From: FOREX.com <[email protected]>
    Date: Fri, Jun 17, 2011 at 6:11 PM
    Subject: Important Account Notice Re: Metals Trading
    To: [email protected]

    Important Account Notice Re: Metals Trading


    We would like 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.

    Sincerely,

    The Team at FOREX.com



    If this is true, this is scary. Confiscation is right around the corner, just months away...BURY YOUR THINGS

    Just checked with sgtreport.com and they have a story on this same thing, the same email. They received it too!!! Same with InvestmentWatchBlog. You can see theirs at http://investmentwatchblog.com/important-account-notice-re-metals-trading/

    Tyler Durden from Zero Hedge also confirms this as well as P.C. Mallon of Hedge Fund Law Blog. Robert Wenzel on the Economic Policy Journal reports it as well.
     
  2. IrritatedWithUS

    IrritatedWithUS Well-Known Member

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    NOW THAT I'M NOT IN FREAK-OUT MODE, I hope it means something else.

    I hope this means that it's meant to apply to trading on margin on products without physical delivery. I hope it means it's going to be illegal to trade paper where there's no possibility of actually taking delivery....

    If it doesn't mean that, then we are SCREWED
     

  3. slick

    slick Active Member

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    I cant find a solid answer to this even tho it seems to be all over the internet ughh.. Cya Slick
     
  4. IrritatedWithUS

    IrritatedWithUS Well-Known Member

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    I've been communicating with all my contacts. Half think it's only for paper trade and the other half says we're up the creek without a paddle and to hide your things...

    A friend said "It applies to paper/digital trading only. You can still buy and sell physical gold and silver after this date. They are effectively shutting down the illegal digital trade business in PM's. It's unlawful, and this is actually a GOOD thing! Not for the gold and silver bugs though. The price of PM's is gonna drop like a rock when this happens. Possibly even beforehand.. This news has investors spooked. They are gonna sell sell sell!!!"
     
  5. Immolatus

    Immolatus Just getting started. Always.

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    The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business.

    What I get out of this is 'no margin trading', and no derivatives.
    Am I correct?
    If so, this should have no effect on us, except to drive down the price, I think? This should effectively stifle demand from 'big money' market players. I assume this would cause a buying spree right now, from those who actually want the stuff, but I would guess that most of these traders just want to play the market and dont want physical delivery. I would also assume that said resultant buying would pale in comparison to the large market traders. Then again, how much effect to these contracts have on the price of the commodity anyway, assuming that they dont want physical delivery, and everyone knows it? Does a stock option create actual demand (and therefore effect the price) of a stock, whether its a put or a call? I wouldnt think so? Is that even a correct analogy?
    If thats true (that contracts dont affect actual demand and therefore price) then the price would go up, right? Thats above my pay grade. :confused:
     
  6. power

    power ExCommunicated

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    Just a quick look but it seems like this might stop some of those who sell metals without owning the metals they sell.
     
  7. IrritatedWithUS

    IrritatedWithUS Well-Known Member

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    I tried reading through the 2,000+ page document. I spent an hour skimming through. After contacting most of the online bullion and blogs and getting emails back stating they got the same emails from FOREX, we thought :shtf:
    zerohedge posted their email (same as mine) on the front page of their website.
    There was a momentary freak-out. To tell the truth, I'm still a little. I need 100% confirmation. Guess I won't get that until Monday.
     
  8. Clarice

    Clarice Well-Known Member

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    This may apply to only paper trades at this time, but it will open the door for more strict policy in the future. Prepare for the worst and Pray for the best.
     
  9. Davo45

    Davo45 New here

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    I fail to see how this would make the price go down, it looks like the price should go up, i.e. there will be no more paper/digital in PMs only physical PMs. In short, if a trader/broker can't deliver physical PMs to a buyer within 28 days they can't sell them. Supply is limited while the demand is high, that has never meant a price reduction in history. I don't see where this is a bad thing.

    I believe you're right in your belief that this action should cause the price of the PMs to go up Immolatus. There have been too many investors being hosed by these paper/digital PM trades, they don't actually own anything but useless paper/digital data. At worst the traders who've been engaging in this are like the proverbial scam artist who attempt to sell property which doesn't exist. i.e. ocean front property in Minnesota. At best, they've been selling PMs they don't have/can't get, i.e. selling actual ocean front property
    that isn't theirs.
     
  10. power

    power ExCommunicated

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    It is very possible that this is a good thing for those people who choose to buy physical metals. Bad thing for those who want to sell something they do not own.
     
  11. Immolatus

    Immolatus Just getting started. Always.

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    As I said, this is way above my pay grade. Since it didnt cause any massive change in the prices, is it safe to assume we are making a bigger deal out of it than it really is? I would have assumed that if this is a big deal , then the price wouldve had a massive move in one direction or the other.
    I guess the effect really depends on whether or not demand for these derivatives actually affects the price. Maybe it doesnt. Maybe (hah!) these traders arent interested at all in the commodity itself, and just the paper trade and the money involved. Theyll move on to something else. Greek CDS's anyone?
     
  12. HarleyRider

    HarleyRider Comic Relief Member

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    I just hope they don't move on to something else like "ammunition" or "firearms". :eek:

    I've been "collecting" one ounce or less silver bars (no coins) for awhile. I'm not sure what the price will end up at, but when the SHTF the price should be pretty high, and at least I will have something of value for trade.
     
  13. IrritatedWithUS

    IrritatedWithUS Well-Known Member

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    Citigroup was one of the last financial companies to admit that gold will be $1,600+ per ounce by the end of 2011. I've been snatching up fractional gold (1/10th oz, 1/4th oz) this year as well as silver ounces.