It's not a conspiracy theory. The bullion banks went short physical because lease rates were below 1%. So - they leased the gold, sold it, converted the $$$ into bonds. It's called carry trade. The same story was with Yen, which would shoot
up if there were no intervention. 5,000 tonnes leased by central banks is well documented, although some suspect it's more, and a lot more. Now, their short physical position is enormous, they would want to protect it would they not? And they sure can! Since the volume of trade in derivatives is 50 times higher than in physical. In derivatives, on the other hand, physical gold never changes hands. Just spook the speculators out of their longs, and you can walk the price of gold down. Bull markets take care of naked shorts, though, eventually, and in a remarkable fashion.
The commercials are net short "only" 500 tonnes on COMEX. Nothing compared to their physical short. They want to short on COMEX, because it has more effect on price. They have to pay for their losses right away, though, unlike their physical short... |
