It's admitted to the CFTC: London gold market is a Ponzi scheme
Thats fine, how do you short what you don't have. What sort of ponzi scheme is that. Fine short all you want. Just put what your shorting in physical deposited at the comex. A simply and easily fix, no more paper shorting.
It is illegal to short a stock or commoditiy that you do not own!!! Naked shorting is what you refer to you, legally have three days to come up with the underlying entity or you "fail to deliver" this is already the law it is just ignored.The gold market has been easy to manipulate because so few people take delivery, thats what makes a ponzi scheme work and exactly what JPM HSBC etc count on until eventually every one shows up to collect - ask Madoff investors what happens then!
Thats why the etf's were "invented" to keep the paper gold market growing they take your dollars give you an IOU (you own no physical) and it keeps that investment money away from the physical market