The Dawning Of Central Banker Fear With Realization Leased Gold Is Not Coming Back

Leasing Strategic Sovereign Assets Into A Fraudulent Leveraged Market Was Never A Good Idea

The current high and climbing lease rates for gold and silver is catching the eye of metal market observers.

As the London promissory note spot/cash gold and silver markets, leveraged to an extreme, move toward seizure central bankers are going to face a dawning of recognition then increasing anxiety about the return of their sovereign assets.

The critical path to market failure includes a realization by lessors of gold that, as gold (and silver prices) reset into higher orbits, market participants who have leased metal are not able to secure and return the leased metal due both to physical metal tightness as market leverage comes unwound but also - critically - lessee insolvency due to the liability of having to purchase metal for return to the lessor at far higher prices.

Just as aircraft can gently enter a ‘graveyard spiral’ or a ‘death spiral’ with everything seeming normal to the pilot at first but then quickly decaying into violent rotation downward, central bankers are going to gradually - then suddenly - recognize that much of the physical sovereign gold they have leased into the market for returns of pennies on the dollar will not be returned due to growing insolvency of those who have borrowed the metal.

The stop-gap metal leasing tool used to cover-over the fact that there is only a miniscule amount of available gold and silver in comparison the hundreds of millions of ounces of gold claims and billions of ounces of silver claims standing in the cash/spot market, will be withdrawn.

Best regards,

David Jensen