“Like FTX, the LBMA bullion banks are running a fractional reserve scheme, only in this case the scheme has the blessing of the Bank of England and the UK Financial Conduct Authority (FCA). Like FTX/Alameda, the LBMA fractional reserve metals scheme is opaque and lacking in transparency.

But if a run on bullion banks occurred, where more paper gold holders wanted to convert their paper claims into real physical gold than the amount of physical available, then paper markets would become illiquid, triggering panic and a rush to sell. And, like in the case of FTX, when confidence goes, the whole house of cards goes Boom.

So why are the mainstream financial media, such as Bloomberg, not investigating the opaque fractional reserve system that is the London gold and silver markets, and calling for the LBMA to issue audited “Proof of Reserves’ as to what backs the gigantic daily paper gold and silver trading?

I think we all know the answer to that, and it also, you might be surprised to know, has a parallel with the FTX collapse.

On 21 November, major website Hedgeye highlighted how in July, Fraud exposer Marc Cohodes gave the entire FTX fraud story to Bloomberg Crypto in London, but Bloomberg failed to act on it.

“Consider this. Fraud exposer and veteran shortseller Marc Cohodes handed the entire SBF/FTX fraud story to Bloomberg Crypto in London in July. They passed on it. Let that sink it. Their reason? ‘They thought it was too hard, too complicated, and might interfere with gaining access to SBF going forward,’ Cohodes says.”

 

 

Now you can see why Bloomberg in London never investigates the fractional reserve London gold market, nor investigates the LBMA bullion banks operating this scheme. So when the unallocated, fractional reserve, synthetic, gold (and silver) credit system of the LBMA eventually fails, as it invariably will if a small subset of claim holders ask for delivery at the same time, don’t let Bloomberg (or Reuters) off the hook for not investigating when they plead that they didn’t know.”            https://www.bullionstar.com/blogs/ronan-manly/ftx-fiasco-highlights-the-ponzi-nature-of-modern-banking-and-the-london-gold-market/