Classic RUN on London Bullion market?

 PAPER GOLD IS NOW SELLING FOR LESS THAN REAL GOLD

DOES LONDON MARKET HAVE THE GOLD TO COVER CONTRACTS ?

It has long been rumored that the London Bullion market and the Comex in New York have been manipulating the price of gold. It also appears that there are more futures contracts, that set the daily price of gold, than actual gold. The mechanisms of the LBMA in London and the Comex discourage the actual taking position of physical gold by fees, contracts, wait times and also possibly barring future business. 

In the last 3 years the Central banks of the world have been buying gold and taking possession of that gold, Central banks that often stored their gold in London and New York have also been taking possession of their gold reserves. Much of this is a reaction to the West's freezing of the assets of Russia at the start of the Ukraine conflict. Many are concerned that under some pretence the big bullion banks will either confiscate or refuse to repatriate their gold.

Gold that is stored in these bullion banks is often loaned to others and contracts are traded back and forth, but the gold never leaves the bank. Gold of ETFS are stored in these banks and the title or contract is just exchanged, again the gold never moves and the banks make it actually difficult and expensive to take possession.

It then becomes possible for the banks, as has been the practice every time that paper receipts are traded and the gold remains in a fixed location to issue more respites than there is gold. Just a form of Fraud. This practice allowed goldsmiths of the middle ages to finance expeditions to the new world and other speculations with the practice of producing more receipts than there was in their actual possession, the gold was actually someone else's gold. When word leaked out that this was occuring, it resulted in the classic RUN on the bank and often the demise of the bad actors.

Central Banks learned this scam well, at one time a U.S. citizen could exchange a $20 paper bill or receipt for 1 ounce of gold. A 1 dollar bill for near 1 oz of silver. Just a side note to this story.

Many central banks, especially the biggest holders of U.S.Treasury debt, China and Japan have been liquidating their treasury notes and buying gold and taking possession of the actual metal. In the last 3 years they and other central banks have taken possession of over 2000 tons of gold. If the trend in 2025 continues it will be over 2000 tons this year. 

At the same time the gold price in the U.S. is higher than in London, so many are moving their gold to New York, then taking possession. The delivery time from the London exchange has risen to 4 to 8 weeks, rather than days as was the norm, raising the concern that they do not have the gold.

Another fact is that the actual metal is traded in Shanghai, were only physical gold is traded for a higher price than paper contracts in London or New York. This creates a flow of gold from New York and London to Shanghai, draining gold from storage into the cash market at a profit, especially for those who want physical possession of their gold.

The same thing is happening to the silver market.

Take note that the new Secretary of Treasury has stated that " The U.S. is going to monetize the assets of the United States into the balance sheet" I am not sure if they now plan to sell re-estate, buildings, or the 8000 tons of gold that are presumed to be stored by the United States, gold that has not been audited since right after WW2.

Anyway, we will see what happens in the coming days in these markets, if the bullion banks can not produce the gold they claim to have, it will be a economic disaster with unknowable repercussions.