Draining Physical Gold From Funds and Trusts To Supply the Markets of Asia - An Extreme In Speculation

Numbered — God has numbered your reign, and will end it.
Weighed — you are weighed on the scales, and found wanting.
Divided — your power will be divided up and given to others.

Daniel 5:25-28


“QE [quantitative easing] puts beer goggles on investors by creating a line of sight where everything looks good."

Peter Boockvar

It is interesting, but little noted, that during similar price declines, physical gold is removed from the funds and trusts, while silver remains almost untouched.

That is because the 'gold float' of physical gold available to supply the steadily aggressive demand is critically low, whereas silver, while also beaten down by speculators, sees no decline, because there is an adequate supply of physical silver, for now.

Compared to the physical delivery market of Shanghai, the NY Comex looks like a game of Liar's Poker, an exercise in pure speculation, almost like a bucket shop.

The number of 'claims per ounce' in gold has risen once again to 315 claims per ounce offered at these prices.

In the way that the Fed implements it, Quantitative Easing is like beer goggles for financial paper.

A purposely misaligned, an arbitrary valuation and mispricing of risk in any asset class, commodity or currency, can be sustained only by force and fraud. As the fraud becomes weaker and less effective, the force must increase.  Eventually the scheme breaks down, and a more market-based equilibrium will reassert its presence. That is monetary or value theory based on history. 

Gold is moving from West to East, and is unlikely to return anytime soon, and at anything near to these prices.

Our markets will have been weighed, and found wanting.

Silver 'Owners Per Ounce'

Silver 'owners per ounce,' which is the registered (deliverable) supply on the Comex compared to the total contracts for that silver that are open is elevated.   And this is in a relatively inactive, quiet month for silver on that exchange.

Gold and Silver 'Owners Per Ounce' Stress and Leverage

Interesting that gold's 'owners per ounce' metric spiked almost shockingly, although it has subsided from there, but is still much higher than it has been for the past twenty years.

And now silver is spiking higher as you can see in the second chart below.

These are not indications of a hard default, as some have suggested.  Rather, when taken with other data from different sources it suggests that there is pressure on the 'free float of available bullion' for immediate delivery.

Rickards thinks that, at least in the case of gold, there is 100 to 1 leverage on this bullion.  And he may be right.

No wonder that the financial establishment is so off kilter and adverse about the demand for gold bullion and the price.  And it appears that silver, quiet little silver, is bubbling up behind the scenes as well.

These charts are from goldchartsrus.com.

More About 'Potential Claims Per Ounce' Or 'Owners Per Ounce' Charts

Note: I have edited this exchange a bit and added much more detail to the answer for the sake of completeness and coherence.

I thought it might serve a more general interest.


From: xxxxxxxxxxx
To: "arthurcutten'at'yahoo.com"
Sent: Tuesday, March 8, 2016 11:05 AM
Subject: comex owners per oz.

"Number Of Owners Per Ounce Of Registered Gold Goes Exponential"

Hi, can u maybe comment on the latest ratio of owners per oz, my concern is in a controlled paper price PM market does it even matter? will it only matter when the chickens come home to roost on their golden eggs only to find out they arent there.....

thanks,
xxxxx

==========Reply to Mr. xxxxxx======


Dear xxxxxx,

I have spoken about this quite a bit, but I am afraid some do not quite get it even yet, on both sides of the issue. Critics often willfully so, and others I am afraid for the sake of headlines.

The 'owners per ounce' is an indicator of the price relative to the strength of hands holding supply at a given price.

I do not expect this 'exponential claims per ounce' to result in anything like a default since, as others have pointed out as well as myself, the ability to convert eligible gold to delivery is very quick.

So really it comes down to a matter of price. And this is in fact what the Comex told Kyle Bass about holding gold at an exchange licensed warehouse in something other than strictly allocated form.

Now if the price and supply continue to be in imbalance globally, which I think that they seem to be, then we might very well see a market dislocation, most likely coming out of one of the physical markets like London or Asia and spreading to other markets.

And that sort of thing can be resolved in a price jump, which may be substantial, but nevertheless is doable.  This is what I call a 'market dislocation.  It involves that hardly unlikely market phenomenon, at least these days, of a mispricing of risks.

And it would most likely work, unless the exchange does something silly to bail out some wrong-footed insiders. That would be more similar to a de facto default, ie a pre-ordained settlement to 'maintain order in the markets' because of some cited force majeure that really does little more than expose the reckless use of leverage and overly accommodative regulating of trading activity.

This is not likely but it is certainly a possibility, and more likely now that I might have otherwise thought.   I am afraid to say that my opinion on the likelihood of voluntary reform initiated by the actors and regulators is much more unlikely than one might have thought, given all that we have seen in the past fifteen years.   What else would one expects when disreputable behaviour pays so well with so few serious, personal consequences?

I hope this helps to at least clarify what I am saying.

Jesse

Silver Potential Claims Per Ounce of Comex Deliverable Climb To New High

"When running a Ponzi scheme, how does one avoid enormous, unexpected withdrawals, runs on the bank, so to speak, that would pull back the curtain and reveal a little man blowing smoke? One way would be to attract a core of investors who could be counted on to never withdraw more than a small percentage of principal each year."

Mitchell Zuckoff

As you know if you have been following the running commentary here, February has been a deadly dull month for silver on the Comex.

And yet the action in the warehouses, bullion coming and going, has been quite active as you again have heard here many times.

Much of this has to do with the fact that CNT is using their own licensed facility as a means of managing the flows of bullion for their wholesale silver supply business, notably to the US Mint.

As you can see from the chart below, the amount of 'registered silver' has been declining steadily, while the open interest, or number of contracts for this silver sold on the Comex exchange, has been climbing.

And so we have another interesting thing to watch, and which I assume we will be told not to look at, that it means nothing.

The potential claims per ounce of deliverable silver on the Comex Exchange has climbed to a new high. And this in a particularly inactive month.

If you look carefully at the charts below you will see that there is plenty of silver in the warehouses. It is that for some reason not so much of it is in the registered category, which is something 'new.'

Another thing you may notice is the huge hoard of silver in the JPM warehouse, and the declining stocks in the active wholesaler's warehouse, CNT.

Curiouser and curiouser.

Gold Bullion Inventories at Comex Licensed Facilities

Here are some charts showing the status of the gold bullion in licensed Comex private warehouses.

The decline in 'registered' gold, which is gold marked available for delivery process, is striking.

Rather than 'owners per ounce' I prefer to think about that ratio as 'potential claims per ounce.'  That number has declined from the recent spike higher, back to only 386 to 1.

I do not think any rules change is behind this shepherding of gold into the eligible storage, and so much less so as for active delivery.   But if there is such a  legitimate change I would be glad to hear it.

Until I do, it seems the theory that after a three year bear market in prices with accelerating physical offtake in Asia, gold bullion for sale has been left in relatively strong hands that are not inclined to sell at these prices, or risk an unintentional sale in a short squeeze.

Ratio of Open Interest to Registered (Deliverable) Gold on Comex 298 to 1 New All Time High

"And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away...

Repression works only to strengthen and knit the repressed. The great owners ignored the three cries of history. The land fell into fewer hands, the number of dispossessed increased, and every effort of the great owners was directed at repression."

John Steinbeck

The number of potential claims (open interest) to the total amount of gold registered as 'deliverable' into those claims has reached a new high ratio of about 298 to 1.

It appears that JPM has been accumulating physical bullion which, if recent history repeats, it may be prepared to deliver into the demand for gold bullion during the active month of December if required. Some of that gold is being held in the Nova Scotia warehouse, acquired on the October contract, in addition to their own.

There are those who will say that this means nothing.  And yet, we have never seen such high ratios of potential claims to gold marked for delivery before.

A 'New Gold Rush'

Why is this happening now?   It is because those who are holding their gold in the Comex warehouses do not wish to see their bullion swept away in a physical short squeeze that may begin in an overseas market, at these prices.

If a run on the available 'float' of bullion begins in earnest, the unwinding of the high levels of claims per ounce and hypothecation of ownership, especially in unallocated accounts, could provide some serious fireworks.

A determined campaign to control the price of gold, that has been underway since early 2013, led by the new London Gold Pool, is bumping up against shortages in available gold in New York,  London, and Switzerland.  The cause of course is well known, the truly impressive demand for physical bullion in the 'Silk Road' countries of China, India, Russia, and Turkey.

These sorts of things will always end in collapse, as one or two key players begin to withdraw their support and shepherd their national holdings, even repatriating them to their home countries in order to control the integrity of their ownership in an increasingly hypothecated, fragile market.

When the music stops, the rush for available seats may be more disorderly than the money masters will allow themselves to imagine.



Related:  Why Austria Is Repatriating Its Gold From London


These charts are from Nick Laird at goldchartsrus.com.

Comex Registered Gold to Open Interest at New All Time High 207:1

The ratio of open interest to registered gold is at an all time high of 207:1 potential claims per ounce.

Since this is not an active month for gold it is not pressing.

However, the amount of registered (deliverable) gold at these prices has fallen to at least a twelve year low and perhaps more.

Of late the Comex has fallen away from physical delivery in gold, with most of the bullion in the warehouses being held in storage.

More concerning is the overall tightness of the gold market, particularly in the LBMA which serves as a major wholesale physical bullion distribution hub for the world.

Speaking of London, I came acress a brochure from JP Morgan's new London based service for taking unallocated and ETF gold and applying it as collateral in tri-party arrangements around the world.  Leveraging up the assets you might say, adding a bit of income performance to the old portfolio.  Counterparty risk as well I would imagine.

It was a very slick brochure for the high end portfolio managers with excess bullion just laying around gathering dust that might be put to work as they say.

What was particularly interesting is the way in which they describe the gold market in 2011.  Does this sound like the familiar refrain from the financiers and their talking heads?

Here is a brief excerpt.

Gold has many characteristics that make it appealing as collateral. It is liquid, high quality, and traded and priced globally. As counterparties seek to diversify their collateral pools and stringently review their collateral options, gold takes its place amidst other high grade collateral such as government securities and cash.

Gold has the added attraction for collateral takers of being 'right way collateral,' which means that in times of crisis, its price is generally expected to rise, thus providing added protection and diversification to traditional forms of non-cash collateral such as fixed income or equities.

According to John Rivett, global business executive for collateral management, 'It would be difficult to find a more stable and secure asset than gold. Gold shines when there’s a flight to quality: it runs counter to the market in valuation whenever there’s a credit crunch or fear of contagion.'

J. P. Morgan, Golden Opportunities, 2011

'Claims Per Deliverable Ounce' Likely Soars to over 200:1 as JPM Pulls Another Large Tranche

JP Morgan, who as I shared last month tends to move large amounts of gold into the registered (deliverable) category on the Comex just in the nick of time, took another huge tranche of gold out of that category last Friday.

Registered (deliverable) gold is now down 202,000 troy ounces or a little over 6 tonnes,  a level which we have not seen there since Nick Laird started keeping track of the Comex warehouses in 2003.

A quick calculation that awaits the updated open interest figure shows that the 'claims per deliverable ounce' has now likely soared to over 200:1.  We have never seen a ratio that high.

I will put up the 'official calculation' from Nick when the official number becomes available.  We might not see the ratio climb if there has been a plunge in open interest, however unlikely that might seem.

Not just considering the Comex, which I consider to be a atavistic pricing mechanism, a conjunction of several things trouble me in the light of Ronan Manly's second article in his current series.

He does a meticulous estimate that indicates that the levels of unencumbered gold in the LBMA, which some of us have come to call 'the float' of physical bullion, are now so low that he calls it 'a game of musical chairs' to cover the unallocated gold accounts.

You may read Ronan's entire article here.

Things being what they are, I am now persuaded that 'the float' is tight enough so that the probability of a 'break' or dislocation in the physical bullion market is high enough to warrant some extra caution. Not panic, but caution, at least until the situation clarifies, particular with an eye to the historically significant month of December.

The other item that greatly concerned me is Jim Rickards assertion that in this type of situation the price of gold is not likely to go up gradually, but may suddenly rise step-wise, almost overnight, by more than a hundred dollars or so per step.  You may watch it here.

I do not claim to have the contacts or pull that some may have or claim to have.  But I have now seen enough to think that in terms of insurance and conservative investments that caution is warranted, now, rather than later.

So, IF you are an investor, not a short term trader, and are holding some percentage of gold in your portfolio as insurance, you may wish to reconsider any arrangements that you may have in which you cannot exercise reasonable control over your possession of bullion which you have purchased.

This is what I believe Kyle Bass referred to as fiduciary caution.

Particularly at risk of a forced cash settlement would be any leveraged or unallocated holdings with an indeterminate counterparty risk, or what some people refer to as 'paper gold.'

I am not saying that there will be a hard default, in terms of outright confiscation in a bankruptcy court, not at all.  Although that may happen.

But I would consider carefully any arrangements that offer guarantees or assurances that could be satisfied with a cash settlement at a price to be determined by someone else without your consent.  As we saw in 1933, they settled at one 'official price' and then allowed the price to resume some 40% higher.

If you are a short term trader, do what you will, but be mindful of your leverage, and take uncovered short positions at your own risk.  And if covered, carefully consider your counterparty risks, because the bigger players will be lawyered up and looking for patsies and victims.  Again, a hard lesson from MFGlobal.

This market may likely turn extremely volatile, even to the extent of a big down move followed by a sizable move higher.  This is how these jokers roll.  When the going gets tough, they tend to keep doubling down and running a bravura bluff.   This was the story of 'the London Whale.'

In the meanwhile, we will have to bear up as best we can with this ridiculous lack of transparency and secrecy and sound regulatory oversight in public markets in the age of crony capitalism.

I have included the latest silver Comex chart as well.   I have to admit that I do not feel I have the same grasp of silver that I hope to achieve in gold.   There seems to be a steady bleed in the inventories, and one huge difference is that with silver there is no great central pool of it to cover short term gaps in the physical markets through leasing as there is with gold.

So, I will keep an eye on silver, because the premiums there are acting more oddly on the retail level than gold is, and its market structure is such that a festering problem can become a big and obtrusive problem rather quickly, and the central banks would be in a poor position to do anything about it.

I would tend to exercise the same caution with silver investments as insurance as I would with gold.  And so I am.

Gold 'Claims Per Ounce' Spikes Back Up to 126:1

The 'claims per ounce of gold' deliverable at current prices has spiked higher once again, to 126:1.

As soon as the 'active month' of August was over at The Bucket Shop, JPM took a chunk of gold back off the registered for delivery roster.   In the silver market JPM is gaining the reputation for a large physical silver hoard, and the role of a 'fireman' to maintain the stability of leverage in supply and demand.

These spikes higher in the ratio of open interest to deliverable bullion at current prices is not something that has happened in the past fifteen years at least.   And neither has the steady increase in the ratio which we have been seeing in the past couple of years.  This is shown in the last chart.

The Financial Times has finally noticed that the price for 'borrowed' gold bullion that is taken to Switzerland for re-refining and then final shipment to Asia for purchase and withdrawal is rising.

These are signs that one might expect to see in a late stage gold pool in which the manipulation of a market has gone too far for too long.   One thing you can say about the financial speculators is that they never know when to quit.   Remember the London Whale?   He never stopped trying to rig the prices until the rest of the professional participants raised a fuss that he was disrupting the entire market!

The clever quislings for the bullion banks will note that an actual default on the Comex is unlikely, and they are right.  It is not really a 'physical delivery' exchange, but is now primarily a betting shop.  There is plenty of gold in the warehouses, if you do not concern yourself with the niceties of property rights.  And claims can be force settled in cash on a declaration of force majeure.  

Heck, as we saw in the case of MFGlobal,  when JPM shoved to the front of the assets allocation line, even receipts for actual physical gold owned outright can be forced settled in cash.   If you hold gold in a registered warehouse or an unallocated account,  then your ownership is philosophically 'conceptual.'

The physical delivery exchanges are in other places, like the LBMA in London and especially the markets of Asia such as the Shanghai Gold Exchange.

And this is where we will see the first signs of a breakdown in the gold price manipulation pool of the bullion banks, first as signs of 'tightness' in the delivery of metals, and then in the initial 'fails to deliver.'

Rising prices will provide relief.  But the pool operators are not shy about pressing and doubling down, in a familiar pattern of overreach.  Remember the eventual demise of 'the London Whale?'

And although it is hard to believe, perhaps rising prices may not be so easily allowed.

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.   

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it." 

Sir Eddie George, Bank of England, September 1999

And it might not surprise anyone if it turns out that the wiseguy bullion banks are operating under the 'cover' of some bureaucratic boobs and a policy exercise gone horribly wrong.  It would be like giving a platinum credit card to a gambling addict.  Except you do not think that you ever have to pay the bills when they come due, since you are playing with other people's money.

"I have one other issue I'd like to throw on the table. I hesitate to do it, but let me tell you some of the issues that are involved here. If we are dealing with psychology, then the thermometers one uses to measure it have an effect. I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market.  (just a little)

There's an interesting question here because if the gold price broke [lower] in that context, the thermometer would not be just a measuring tool. It would basically affect the underlying psychology.

Now, we don't have the 'legal' right to sell gold but I'm just frankly curious about what people's views are on situations of this nature because something unusual is involved in policy here. We're not just going through the standard policy where the money supply is expanding, the economy is expanding, and the Fed tightens. This is a wholly different thing."

Alan Greenspan, Federal Reserve Minutes from May 18, 1993

Just a little 'perception management' gone horribly wrong, right?   And no one could have seen it coming.

Free Markets At Work - Gold and Silver 'Owners Per Ounce'

"The government is the potent omnipresent teacher. For good or ill it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.

To declare that the end justifies the means -- to declare that the government may commit crimes -- would bring terrible retribution."

Louis D. Brandeis

I was curious to see what the big price smackdown had done at The Bucket Shop relative to the 'claims per ounce' in the precious metals.

I will be checking again tomorrow to see what the little extra kick we saw this morning might have accomplished.

In summary in silver the 'claims per ounce' actually rose a bit. This is not surprising so much because this is an active month for silver, and it clings stubbornly, almost as if by its fingertips, to the $15 handle.

Gold was as you know hit harder, being smacked down by an avalanche of futures contract selling into one of the quietest periods of the overnight trade.

The open interest actually declined a bit, but significant amount of new gold for delivery appeared, so the 'claims per ounce' as I prefer to call it dropped only to about 97:1.

They did, however, break the uptrend which had been driving towards 100:1.

Have you ever heard the rarely told story from the great bull market of the 1920's, about an unremembered  'publicist,' which is a five dollar word for a simple 'bagman,' named A. Newton Plummer?

'An investigation later discovered that business journalists for at least eight papers promoted stocks in their writing in return for bribes. The most embarrassing were at the Wall Street Journal, where reporters who wrote “Broad Street Gossip” and “Abreast of the Market” took payoffs for stock tips in the 1920s.

The revelations about the Journal reporters came out during hearings by the Senate Banking and Currency Committee in 1932, more than three years later, when Congressman Fiorello LaGuardia produced cancelled checks written to the Journal reporters from publicist A. Newton Plummer. The stories based on the bribes had gone as far back as 1923. The Journal ran the story about the testimony before the committee on page 11 the next day.

University of North Carolina, History of Business Journalism

We are very fortunate that such a thing could not happen today.  Can you imagine any self respecting analyst or media type or politician accepting physical checks?  In our modern era it would be much more likely to be hot tips on which way the HFT wind will be turning, or some drinks and dinner, maybe even hookers and blow. The only risks there might be some nasal cartilage or some extra time at the gym.

A. Newton Plummer apparently presented a whole suitcase full of cancelled checks to the Congress in 1932, and wrote a book about it titled The Great American Swindle Incorporated.   There were only 2,000 copies printed.   There is one in my library.

"I would say that practically all the financial journals were on the take. This includes reporters for The Wall Street Journal, The New York Times, The Herald-Tribune, you name it. So if you were a pool operator, you’d call your friend at The Times and say, “Look, Charlie, there’s an envelope waiting for you here and we think that perhaps you should write something nice about RCA.” And Charlie would write something nice about RCA. A publicity man called A. Newton Plummer had canceled checks from practically every major journalist in New York City."

Robert Sobel in PBS, The Great Crash of 1929

Of course with so many other innovations in finance, the information sharing culture of privilege has moved from the inkstained cubicles of 'journalists' to the hallowed halls of the Congress.  This was the most read story of all time at Le Café when first published.   

And since then you will be happy to know that the Congress has officially told the SEC to go take a hike, that they are immune to any laws against insider trading and dealing in dodgy information, apparently even for 'pay.'  There is even a cottage industry of lobbyists who share information with the Congress on behalf of hedge funds.  Nice to see entrepreneurship at the lower levels who can never expect to bring in the big bucks making 'appearances' and giving 'speeches' for fabulous fees.

The precious metal pool operators can surely make some nice profits on their short bets on related items after their latest escapades, and then acquire quality mining assets on the cheap for the next trip up when you know what hits the twirling blades, thanks to their servants' gross mismanagement and policy errors.

Well done.

So many assume that the 'rig' in the metals is similar to the London Gold Pool and past operations that were undertaken in order to support some otherwise unsustainable policy and persuasion initiative.  

 

What if something like this started out that way, but then found its momentum in some mutually lucrative private profiteering that proved too easy and tempting and perhaps inconvenient to stop?  It certainly has been hard of late to overestimate the self-serving venality and audacious excesses of these jokers.

When you don't know, you don't know.  And that is how they seem to like it, what 'it' is.  In a society not of reason and laws but of secrecy and privilege, knowledge, like the ability to print and distribute money, is power.

.

'Owners Per Ounce' of Gold at the Comex

The trend of the 'owners per ounce' on the Comex is climbing as the amount of paper bets increases and the ounces of gold bullion for sale at these prices decreases.

There is more than sufficient gold in private hands to satisfy the demands of the increasingly paper leveraged Comex. Just not as these prices perhaps, despite the heavy handed attempts to knock the open interest out of the hands of the longs.

Comex Gold Rises To A Near Record 107.7 Claims Per Registered Ounce

Well, here we are again.

As you may have noticed from my postings of the Comex Warehouse Gold inventories, lately there has been a significant drop in the level of 'registered' or deliverable gold held there.  And since the open interest or number of contract held by punters and investors is not dropping commensurately, the number of claims per deliverable ounce has risen.  Quite a bit actually.

As a snarky observer pointed out, somewhat presumptuously I thought, there is quite a bit of other gold stored in these warehouses.   It is called 'eligible' gold meaning that it is in the proper format for Comex trading. 

But, I retort, that which is not marked registered is not available for delivery at these prices, unless the owners change their minds.  Or the Comex starts confiscating private gold in storage. And I sincerely doubt they  follow the MF Global method of customer metals inventory management.  Although no on has yet to  pay the price for that one. 

Then again, ownership is a flexible concept in The Grift, which is what the US financial system has become.   And the exchanges are its Bucket Shops.

This can very well resolve itself neatly as it did last time, especially if a friendly possessor of physical gold, let's say a bullion bank or an official non-profit seeking agency like the IMF or the odd money printing central bank decided to lease or deliver some of their physical holdings into the market without regard to price and profit.

Then again, the players might decide to just roll over their contracts and claim checks and just keep the game rolling, taking the rigging skim from related markets and the vig.  This is perfectly acceptable behavior for The Bucket Shop.  It seems to be the new thing for stocks and even bonds as well.   Its a derivative universe.

Or, God forbid, the price of gold could rise to increase the available supply.  But that is very retro economics, certainly not modern, and so yesterday.

Musical chairs with only a limited number of seats is not a problem, if the music never stops and no one tries to sit down.  It's all just a game in The Grift.  And if they ever go cashless and purely electronic, it will be a brave new world of modern money.  Whoops, another bailout, and there went half your savings!   You won't even have to play to pay. 

So let's see what tune the carnival plays on this go round.  And a pleasant time is guaranteed for few, just a few.

These charts are from Nick Laird at sharelynx.com.

Potential Owners Per Ounce of Registered Comex Gold Back Over 50

Please note that this is not all the gold in Comex warehouses, merely that gold which is marked as deliverable at these prices.

Some like to use all the gold in their calculations but that seems a bit presumptuous, to consider gold merely being held by customers in storage in one of those warehouses as fair game at any price.

I am not calculating this for the purposes of a default, as you may recall.  The open interest is only potential owners. The Comex is, after all, a largely paper market.  

If there is a physical default it will more likely happen overseas, and come cascading back to London and New York, and the exchanges go bids up, with none offered.

In a case like that they can force settle in cash for paper, maybe, but not for the real thing.

Let's hope the imbalances between price, demand, and supply do not grow to the level.