The Banks Don't Have the Gold

If I'm a contract holder and I have read the fine print, and I have allocated gold, and I insist on physical delivery and I won�t take anything else and I come in with my pick-up truck and back up the truck and say give me my gold, the banks are going to be the ones that are embarrassed. Because it�s likely the government will be calling back its gold at the same time in this kind of super-spike high-stress atmosphere.

�And the banks are going to find they don�t have it. So the banks are going to be the ones that come up short. Because remember, it never left the vaults. If I�m the Fed, or I�m the Treasury, and I�ve leased my gold to you, and I call it back, and you can�t deliver to me, you can�t honor the contract, I�ll just terminate the contract, keep the gold, reconvert title to my name and send you a bill.

�Everybody�s going to default on everybody else. The banks will default on their obligations to their customers�and to the government. The people who had the paper gold, who thought they were protected, are going to find out they participated in part of the price increase � but not the whole thing. They�ll get a nice run-up, they�ll get a nice check, but in this environment, gold will continue to surge way beyond their contract price. They�ll get closed out at a lower level and miss the top.�

- Source, Jim Rickards via Money Morning:

http://www.moneymorning.com.au/20130717/with-gold-dont-miss-the-top.html