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The Road to Bullion Default: Part I

Rather, the vast majority of this leverage exists in the previously mentioned derivatives casino; where the manipulative bullion banks have permanent, gigantic and ever-growing bets that bullion prices will decline. Much like the banksters have used their gigantic (multi- trillion dollar) bets in credit default swaps market to manipulate European debt markets -- and bankrupt Europe's governments -- the banksters have done much the same in bullion markets with their derivatives bets.

There is, however, one enormous difference between the 100% paper debt markets and bullion markets. The bullion markets require physical bullion to settle all trades where buyers insist on taking delivery and (as previously mentioned) the long-term consequence of under-pricing bullion is the collapse (to zero) of bullion inventories.

If large gold stockpiles mean that a formal default in bullion trading could likely be forestalled for a considerable period of time, what other default-like event could detonate the bankers' fraudulent paradigm of 100:1 leverage? In a word, "decoupling."

In Part II, I'll explain this concept in detail, and analyze the dynamics which could lead to this event.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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