The LBMA Warns Us About Counterfeit Precious Metals - This Is Getting Quite Interesting

The London Bullion Market Association (LBMA) is warning us about counterfeit precious metals with this helpful recent article: The Silent Risk: Counterfeiting in Precious Metals .

The LBMA’s article contains nuggets such as this:

“Industry Devaluation Through Market Impact

The consequences of counterfeiting extend far beyond individual losses. At the market level, it introduces artificial supply, distorts pricing, and undermines investor confidence. News of counterfeit bullion in circulation can trigger panic selling, while undetected fakes suppress prices over time by inflating perceived inventory.”

Now if a precious metals market association were to endorse the creation and trading of 100s of millions of oz. of gold and billions of oz. of silver in the form of unallocated cash/spot contracts for immediate ownership and delivery of bullion, in the world’s largest precious metals market where only a small fraction of these ownership claims were backed by metal, could this not be seen as endorsing counterfeiting precious metals?

Would the artificial digital supply of claims on gold, silver, platinum and palladium bullion bars that do not exist introduce artificial supply and distort prices?

What would we call sellers of leveraged London cash or spot contracts for ownership of bullion bars that aren’t held by the seller and can’t be delivered should the contract purchasers request delivery?

Some might believe that the LBMA has one foot in the canoe and one foot on the dock.

Best regards,

David Jensen