"short from 15,000 tonnes to 22,000 tonnes. In silver, probably 1 billion ounces

[gunDriller]

"Many have asked me how many tonnes of gold, the banks are short.

In my humble opinion, they are short anywhere from 15,000 tonnes to 22,000 tonnes. In silver, probably 1 billion oz.

These metals have been leant and then sold for dollar bills and never repaid back to the central banks. On their balance sheet of the central bank is one line: gold and

" gold receivable".

The loaned gold and the loaned silver will never see the central vaults from which it came."


from
http://harveyorgan.blogspot.com/

so - how close are JP Morgan & HSBC to an LTCM type meltdown (LTCM had a naked short gold position of 400 tons when that mess happened in 1998).

silver @ $21 - BUT it's not like JP Morgan and the other bullion banks can just go out and buy 1 Billion ounces. sure, they have $21 Billion cash, BUT - if they tried to settle their short positions, it's not like the price would sit tight at $21.

so ... what would happen ?


i was talking to a mortgage broker at Chase (part of JP Morgan) yesterday. i felt like asking, "what happens to the loan if JP Morgan goes bankrupt ?"

[Neuro]

The game is coming to it's logical conclusion. Default! Expect a crash of spot and futures prices. Maybe not now, but it is coming. They may be able to cover the deficit by losing a lot of money on their short positions by a massive buying back of said shorts.

[Dogman]

There will be a humongous sucking sound that would be heard around the world and the
shit WILL have hit the fan. And then there will be not enough rope or light poles to hang
the body's.

[joe_momma]

thanks gun driller - was about to post this -

The comments about Anglo's trying to get out its hedge (i.e., they've already sold years ahead of their production) was telling - the central banks leased their gold, commercial banks all took future positions to cover the outright immediate sales - now there's a bit of a pinch - Anglo is probably screwed and will have to honor the deliveries.

I am curious to see how far down the POG can be pushed before the September contract expiry.

[Book]

Will any physical be able to be bought at those prices? Does the dollar also default?



http://www.gunthorp.com/images/bullets%20favorites.jpg

[Neuro]

The game is coming to it's logical conclusion. Default! Expect a crash of spot and futures prices. Maybe not now, but it is coming. They may be able to cover the deficit by losing a lot of money on their short positions by a massive buying back of said shorts.



Prices crash, then what? Will any physical be able to be bought at those prices? Does the dollar also default?

the price crash is because physical delivery from the exchanges will cease. Expect the price of physical to become astronomical... Depending on where you are and local demand and functioning markets. In other places expect government banning of trading in PMs. It will effect everything, and probably set off SHTF in a big way.

[gunDriller]

I am curious to see how far down the POG can be pushed before the September contract expiry.


i was thinking $1220. $1200 if something else crashes, like the stock market.

[gunDriller]

i was thinking $1220. $1200 if something else crashes, like the stock market.


Thats possible too. Great way to cover.
[/quote]

i notice that the "low price" keeps creeping up.

i remember when i came back from visiting a GIMer friend in October 2009, gold was right at about $1040.

now a year later and the low is $1200.

that's a 15% rate of annual appreciation (or, conversely, depreciation of the US $).

i notice a trend ! ;D