While the topic of rehypothecation and the shortage of physical gold is well covered here at Zero Hedge (and the ever-changing COMEX gold vaults’ inventories), it appears the concept of the exploding “leverage” or default risk of the COMEX has now hit the mainstream media. As BNN reports, veteran trader Tres Knippa, pointing to recent futures data, says “there may not be enough gold to go around if everyone with a futures contract insists on taking delivery of physical bullion.” As he goes on to explain to a disquieted anchor, “the underlying story here is that the people acquiring physical gold continue to do that. And that’s what is important,” noting large investors like hedge fund manager Kyle Bass are taking delivery of the gold they’re buying. Knippa’s parting advice, buy physical gold; avoid paper.

 

One of the problems…

That won’t end well…

And the excellent summary from a veteran trader:

 

Knippa warns that if 1 entity asks for delivery of a position-limit-size long in gold, it will absorb 81% of COMEX’s inventory… and if 2 entities were to do so… COMEX has a problem…

Physical Gold Shortage Goes Mainstream

As should be obvious to many, I’m quite serious about recreating today’s financial system. I’d like to introduce what some in the media have coined (no pun intended) Bitcoin 2.0 (which is actually just the true implementation of bitcoin), otherwise known as UtlraCoin. UltraCoin is the derivative layer that we’re writing on top of Bitcoin to enable Bitcoin holders, buyers and sellers to do some pretty amazing things.
Here’s the latest Max Keiser in which he and Stacey Herbert to a good job of explaining what I have in mind. Of course, I get to speak my mind in the second half of the show (~13:08 minute mark).
I am pushing very hard to have the Zero Trust Currency Contracts, the first implementation of UltraCoin, to go into open public beta by the end of next week. That means you will be able to short, leverage, go long and arbitrage BTC. The strategies I and my analysts and developers have come up with will blow… your… mind!

 

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