Collapse of the Fractional Gold System
When the chips are down, look to Jim Sinclair:
My Dear Extended Family,
I suspect that what has just occurred is a near collapse of the fractional gold system. The keys are the many years to re-deliver gold to Germany from New York and AMRO's suspension of its gold program.
No one can deny that paper gold is being manipulated lower while physical gold is in high demand. Investors are not selling tonight but in the less liquid times the same perps are again using high volume offering scare tactics.
What is occurring tonight is the central planner's answer to the faltering fractional gold system. This will result in higher long term gold prices, not lower.
Like every can kick that has been executed, this is an attempt to camouflage the occurrence which would end the paper gold market. If you have no margin, you have no problem.