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WHO OWNS WHAT?
While prices of precious metals continue to fluctuate and may continue to do so for some time, we may on the other hand be very close to an unprecedented event that final answers the question of "WHO OWNS WHAT"?
Our financial system is a deck of cards waiting for a trigger event, and I suggest there are THREE that could change the whole picture in a heart beat.
1) The Jan 1st Basel 3 provision making GOLD a Tier 1 asset for banks with a rise from 4% to 6% requirement for RESERVES. What this means in practical terms is that GOLD instead of being only credited towards "RESERVES" at 50% of market value, (love that word since most bank reserves are in actuality LIABILITIES), under the new rules, GOLD will count as 100% backing for loans. Central bankers may be corrupt, but they are not stupid in the sense of being unaware of what is happening. Gold is by this ruling being acknowledged as a prime monetary asset increasing its desirability. With RESERVE requirements increasing by one third, the chances are that in the current climate of "quantitative easing" the surging purchases of GOLD by Central Banks around the world, will be further enhanced as Treasury Bills and other financial instruments like Bonds become even more suspect. With GOLD in favour as an asset, it can only increase DEMAND and therefore push up prices.
2) The second potential "Black Swan" is default on a series of derivatives which famous investor Warren Buffet has very aptly described as "weapons of mass financial destruction" as any default could easily cascade into a series of falling dominoes that could devastate the whole inter-linked banking and economic system.
3) This one is rapidly coming to the forefront. There have been questions for some time about whether any actual gold still exists in Fort Knox, hence Congressman Ron Paul's bill to audit the FED and the supposed U.S. Treasury holdings of GOLD. GATA as an organization has done a great job of ferreting out the TRUTH about leasing of gold and the possibility that as many as 100 people may hold claims to every oz. of gold in existence. The possibility has been raised that many of the claims of sovereign gold holdings may have been leased out to bullion banks and SOLD into the market while the suppliers still show it on their books as an asset that may not be recoverable. The latest addition to this "question" originated after Hugo Chavez of Venezuela decided to repatriate the countries gold stored in various jurisdictions, which under Breton Woods was a common practice to facilitate world trade. Many countries "stored" gold with their primary trading partners so that any trade differences could be settled by a ledger entry and moving gold held within warehouses being moved from one countries pile to that of another.
The latest wrinkle is that the vaunted gold holdings of Germany may well also have "disappeared" in the secret gold swaps and leasing activities of the bullion banks, so perhaps this is the ultimate "Black Swan" finding out that a huge percentage of the supposed gold holdings of various major nations no longer exists, or at least is not in their possession and may be unrecoverable from the nations that are supposedly "storing" their gold, but instead LEASED it out to earn some interest income. This reality has already impacted numerous individuals. Private investors may discover to their chagrin that the unallocated gold they only hold a receipt for, does not actually exist, (was never bought by the institution they contracted with) leaving them as an unsecured creditor of the bullion dealer or bank. Reports have already surfaced of individuals "standing for delivery" and having to wait weeks or even months to get delivery, (meaning the institution involved had to go out into the open market to BUY the contracted gold or silver. A few instances like this (while illegal) and deserving prosecution, may not be an immediate problem, but what happens when the "rush for the exits begins" and the mania to get out of falling fiat currencies begins in earnest? Will people who had the foresight to invest in precious metals as "insurance" against a collapse of the fractional reserve fiat currency system of the past 40 years be satisfied to accept the "paper assets" they were trying to avoid? I highly doubt it, so the only other possibility I can see is that there will be a "SHORTAGE" of available bullion that will cause massive bankruptcies and total chaos in the markets that could take decades to sort out.
The best way to follow this developing story is to to read/listen to every King World News interview, which you can subscribe too from the following URL which has the latest chapter of this developing story the controlled mass media has no interest in covering. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/31_Is_This_The_Black_Swan_That_Will_Make_Gold_Skyrocket.html