wikileaks flash: us gold rigging - china knows, page-20

Pja,

the fractional reserve nature of gold has existed for centuries if not thousands of yrs. It's not something new. If you want to trade gold, hold it for a short time unallocated is OK (Nick Barisheff reckons the leverage is about 8 to 1). If you want to own the bars you buy allocated instead and pay the storage fees.

But again, this isn't something new and it's hardly a conspiracy. If you want to take possession of your gold outside the banking system you can do it. People are doing so in fact.

The point I'm making is that this system appears to be working. If China needs to import 1000 tonnes it can do so but the price will have to rise enough for holders of the 100,000+ tonnes available elsewhere to sell some of it.

As I've been saying, shortages aren't being reported anywhere as far as I can see. It's not just the Indians/Chinese but the Swiss, Europeans and Americans buying in record amounts from their mints. Rising prices are doing their job bringing gold to market.

Rowingboat