http://www.financialsense.com/fsu/editorials/deepcaster/2010/0409.html

...At the CFTC hearings, there was some astounding testimony from Jeffrey Christian, founder of the CPM Group, a precious metals consulting firm. Mr. Christian, formerly of Goldman Sachs, actually admitted that the LBMA trades more than one hundred times the amount of gold that it actually has on hand to back up the trades! In short, most of those who think that they are buying physical gold on the LBMA are actually buying paper. The LBMA is counting on the fact that most of the buyers will not want to take physical delivery of their gold. If and when they do, then cash settlements are offered instead, exactly as reported by newsletter writer Jim Willie several months ago.

Mr. Christian's testimony has serious implications. It means that the LBMA is actually short many times the amount of gold it has on hand. If enough buyers insisted on taking delivery, then the LBMA would clearly be in default. In fact, given that the LBMA has been pressuring buyers to take cash plus 25% rather than physical delivery, it can be said that the LBMA has already been in default on its promises to deliver physical gold to buyers…

A Postscript:

On March 25, 2010, Bill Murphy made public the information about the metals market manipulation which London metals trader Andrew Maguire had provided to the CFTC. On March 26, the very next day, Mr. Maguire and his wife were injured when their car was struck by a hit-and-run driver in the London area. According to information obtained by GATA, Maguire's car "...was struck by a car careening out of a side road. When a pedestrian who witnessed the crash tried to block the other driver's escape, the other driver accelerated at the pedestrian, causing him to jump out of the way to avoid being hit. The other driver's car then struck two other cars in escaping. But the other driver was caught by police after a chase in which police helicopters were summoned."

Mr. Maguire and his wife spent the night in a hospital and are expected to make a full recovery. For now, we will assume that the incident was merely an accident.

I did an internet search to see whether or not any of the mainstream "news" organizations had reported on the market rigging information which Andrew Maguire provided to the CFTC. CNBC? Fox Business? Bloomberg? Not one of them did.”...