"let's get physical"

There seems to be circumstantial evidence that this month the gold exchanges are unable to honor their expiring contracts for which delivery notices have been issued in September. It has occurred in spite of a robust, even increasing, contango. Furthermore, circumstantial evidence exists that counterparties to these expiring contracts for future delivery - bullion banks, to be precise, the name of J.P.Morgan and Deutsche Bank being prominently mentioned - have offered bribe money up to 125 percent of the quoted spot price to holders of long contracts if they would take settlement in paper, on condition that the embarrassing affair will be kept secret. If true, these maneuvers are motivated by the desire to conceal the real gold basis, and to deny that gold is in or approaching backwardation. If the truth were widely known, then there would be a run on the bullion banks. The "let's get physical" movement would trigger a chain-reaction culminating in all offers to sell physical gold being permanently withdrawn around the globe. "Gold would not be for sale at any price", whether quoted in US or in Zimbabwe dollars - or, for that matter, in any irredeemable currency - the only kind of money people are allowed to have nowadays. The curtain would fall on the "Last Contango in Washington". The day of permanent gold backwardation would dawn. The chapter on a reactionary episode of history, irredeemable currency, allowing the Treasury and its central bank to create unlimited liabilities out of nothing which they have neither the means nor the intention to honor, but could use them for check-kiting purposes to mesmerize gullible people around the world, would be closed and become but a bad memory.

http://www.gold-eagle.com/gold_digest_08/fekete101809.html
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