We know! The incompetent commie has been infesting this board for years since the USAgold board had the good sense to terminate his blustering, blundering, bolshevik BS.
Others have also mentioned that it was paper trades, quite a ways back, but always good to get the straight truth from Howe.
"That producer hedge book reductions have had little if any impact on total gold derivatives reported by the BIS suggests, as does the absolute data itself, that producer hedging never accounted for much more than the very visible tip of a gold derivatives iceberg consisting in major part of transactions related to the gold carry trade, which never could have grown to the size implied by the BIS data without the active support of the G-10 central banks....
Why would they rickie. The gold hedges were a relatively known amount at around 2500 tonnes of the CBs leased leased gold.. Howe suspects there are about 15,000 tonnes of gold leased out. Ergo the gold hedges amounted to around 16% of Howe-Venerosos estimate of leased gold. Howes dismissal of the impact on the outstanding derivative position by 16% of the CBs leased gold position raises the question as to whether the leased gold forms the actual platform on which the gold derivative business was built. Removing 16% of the base beneath the gold derivatives must have a commensurate effect on the total of gold derivatives outstanding. Howe owes us an explanation for the discrepency he has exposed in his own calculations doesn't he? I mean he went right to the source and then claimed removing 16% of the leased gold had little or no impact on the gold derivatives outstanding. hmmm I'm not looking at the source documents(howes actual essay or the BIS documents) and so I'm just pointing out an evidently large hole in Howes logic. Howe could argue that the central banks took responsibility for the derivatives guarantee. But he didn't as he dismisses the producer hedging angle as having a substantive impact on the derivatives at all....hmmm w'HERES HOWIE
Ah Ha dehedged gold was sold back into the market place and the cash proceed were used to support the derivative mountain... Well that is an explanation. Maybe I'll try to sort through Howes confusion in the morning and maybe I won't huh? lol