Gold and Silver lease rates went negative on Friday
Hi Tony, yes that is some very good information. I've always scratched my head about the whole leasing Gold thing.
Some people compare it to options, or other types of hypothecation.
I see huge problems with this paradigm. If the lessee takes delivery, what does the lessor have to do to get it back in a fight? We are talking about an ASSET here, not just pixels on a computer screen. The Value of the leased Gold does not "expire". It's a tier one Asset with no counterparty risk. Who makes the rules?
When push comes to shove, who is going to have more legal firepower? The lease holder or the Gold holder? What if the Gold holder claims he "Lost" the Gold? This isn't like repossessing a car, Gold can be hidden in very creative ways, believe me I've heard some interesting stories.