from Zero Hedge:
We already highlighted the return of gold lease rates to subzero yesterday, during the dramatic spike in gold following Gartman’s latest sell recommendation. Now, it is time for the banks to also begin admitting that, as SocGen has just pointed out, the gold “physical squeeze returns.”
Why is this relevant? First, we present SocGen’s explanation of how in a world of ever greater quality asset scarcity, gold remains at the pinnacle (or bottom of Exter’s pyramid), central banks have had to forge agreements among themselves to constant lease and re-lease the gold in circulation to each other, to have backstops for when demand is so high that the actual underlying physical is simply not enough:
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