I wonder what will happen when demands for physical delivery outstrip bars available and we have failure to deliver. Can the clearing house demand the settlement is made in cash equivalent if a party defaults? Can the clearing house take assets from a bullion bank if it is the defaulting party?
The London contracts are OTC party-to-party. Highly unlikely Justin that there is any provision for cash settlement. We are at extreme stress now IMO - thus we see the bullion bankers popping-up in Shanghai looking for 'cooperation'. When it unravels, it will go very quickly because of the leverage. We'll see more with time.
I wonder what will happen when demands for physical delivery outstrip bars available and we have failure to deliver. Can the clearing house demand the settlement is made in cash equivalent if a party defaults? Can the clearing house take assets from a bullion bank if it is the defaulting party?
The London contracts are OTC party-to-party. Highly unlikely Justin that there is any provision for cash settlement. We are at extreme stress now IMO - thus we see the bullion bankers popping-up in Shanghai looking for 'cooperation'. When it unravels, it will go very quickly because of the leverage. We'll see more with time.
I will get some photos of the Perth Mint when things go crazy, should be interesting.