ECB Warns Gold Markets Are Risk To Financial Stability

After Decades Of London Gold And Silver Price Fixing By Creating Immediate Cash/Spot Claims For Non-Existent Metal

Price fixing schemes always fail. Always.

Price fixing gold and misstating inflation measures has led to a global debt and currency bubble operated by central banks for decades that is now starting to deflate.

It is thus interesting to see this headline today:

https://www.swissinfo.ch/eng/gold-markets-are-cited-by-ecb-as-a-risk-to-financial-stability/89344266

In a note to be released on May 21, 2025, ECB economists warn: “…“Demand for physical settlement, the dominance of large-scale traders and opaque transactions all combine to pose a wider threat if things go awry, four staff economists wrote in a note published on Monday that will feature in a bigger risk report scheduled for Wednesday. …

…Market participants could be subject to significant margin calls and/or have trouble sourcing and transporting appropriate physical gold for delivery in derivatives contracts, leaving themselves exposed to potentially large losses, …”

The Key Crisis Driver Is Demand For Physical Delivery For Gold And Silver

Historically, as gold prices ran higher in the 1970s driven by central bank loose monetary policy and resulting price inflation, interest rates also ran higher as bonds were sold and gold (and silver) were in turn bought to protect investors.

The Bank of England central bank’s solution was in 1987 to convert the world’s largest gold and silver market in London into a market that traded extremely leveraged promissory note claims for both cash (spot) gold and silver thereby artificially increasing the market supply of these metals, muting the gold/silver inflation warning signal to bond markets, and thus allowing central banks to blow the largest global debt bubble in history with continued loose monetary policy.

This London leverage scheme has led to staggering leverage in the London gold and silver market with an estimated 400M to 600M oz. of cash/spot gold claims and 5B to 8B oz. of cash/spot silver claims to be standing with only a small fraction of vaulted metal actually available to meet these London claims.

While this metal leverage will ultimately take down large bullion banks and metals traders, more importantly, the resolution of this London/Bank for International Settlements (BIS) precious metals price fixing scheme will send interest rates soaring in the world’s bond markets as the gold and silver inflation warning signal breaks free from decades of price suppression that hid the world’s central banks’ inflationary monetary policies.

Total global debt now stands at over $300 trillion.

The Bank of England’s Governor Andy Bailey says gold is not important.

Andy is wrong.

Best regards,

David Jensen