"How can banksters sell gold that does not exist? How can they...

"How can banksters sell gold that does not exist? How can they sell gold that they do not own?"

Welcome to the wonderful and mysterious world of Futures
and Derivatives.

Futures have been around in commodity trading since time immemorial.

Here in OZ we have been trading greasy wool futures and beef futures, in US have been trading frozen orange juice and pork bellies, just to mention couple.

Japanned rice traders used forward contracts and also invented candle stick charting TA to analyze it a bit.

Apparently in the ancient Egypt the farmers used to barter their crop forward and that was even before they invented money.
Their would promise their future barley crop to the beer makers and in return would receive food and other goodies in the meantime, because the beer makers were selling beer all year round - cash flow business without cash - now is that not weird?

If locust came or crop failed, farmers would give their kids, wifes and even themselves as slaves to the opposite party, no such thing as bankruptcy.

Why more contract than physical? Well, for one you never know exactly how much you will produce. It is always a guesstimate.
Two, more contract for the non-existing goodies add depth to the market it is easier for the real producer to pledge his physical and do his buget now, and in theory larger the market breadth, less chance of a corner.

There you have it in the nut shell.