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How the gold banking system operates for surreptitious price suppression
10:36a ET Saturday, December 3, 2016
Dear Friend of GATA and Gold:
Bullion Star in Singapore this week produced a primer about the international gold banking system, showing how central banks use it to create a vast amount of imaginary "paper gold" for largely surreptitious price suppression in defense of their own currencies.
Bullion Star explains: "Even if the bullion banks have access to borrowed central bank gold stored at the Bank of England, that gold is owed to the lending central banks, and therefore has multiple claims on it. If there was a run on the fractional-reserve bullion banking system by customers wanting to convert their unallocated positions to allocated gold holdings, analogous to a bank run where all customers want to withdraw their cash at the same time, this could lead to some serious problems in the ability of the bullion banks to provide the required gold. Such a situation would undoubtedly require cash settlement of customer positions, a move that would see the price of paper gold collapse while the price of physical gold would skyrocket."
Bullion Star's primer is headlined "Bullion Banking Mechanics" and it's posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
We Are Amid the Biggest Financial Bubble in History;
When It Bursts, Bullion Owned in the Safest Way Will Protect Wealth
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Switzerland, Singapore, and Hong Kong remain extremely safe jurisdictions for storing bullion. Avoid exchange-traded funds and digital gold providers where you are a price taker. Ensure that you are outright legal owner of your bullion. If you do not own segregated bullion that you can visit, inspect, and take delivery of, you are exposed.
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