Hi Daytr
The simplest basic example is if you go and buy PMs from a bullion merchant you can buy allocated gold or un-allocated gold.
Allocated gold can then be held by them until you want to pick it up
So the un-allocated and the unpicked up gold is held in trust by the merchant
The problem here is that you cannot physically prove that the gold is actually there and actually exists and the reports that keep coming out are that they sell the same gold numerous times because there are no checks and balances
Look at Germany trying to get it's gold back from the USA. There have been reports for years that the USA Vault is empty, certainly the USA government has said in effect to Germany, Rack Off
The PMs market is a very secretive trade and accurate figures are impossible to obtain
the prices are set by a board and have very little to do with actual supply and demand
There are reports that the silver trade has sold 100 times the amount of silver in circulation
Obviously these people have not had their silver delivered, they have received an I.O.U. and if there is any run or dramatic price increase that silver will NEVER be delivered I do not have the original story or source for this information but it is on the web Last year (2013) total mine production for silver was 819 million ounces, yet demand was 1.1 billion ounces. The total shortfall was 262 million ounces for 2013
The figures simply do not add up, how can you sell something you don't have
