Empty gold vaults

We were having dinner with friends last night and talking about the gold markets when I mentioned two, and he mentioned two, and logic suggested four.  He told me about the reported Bank of England’s gold leasing:

Based on recent figures from the Bank of England, it appears as though
the Bank of England has directed the leasing of about 1,300 tonnes of
central bank gold from their vaults in a four month period from March
through June. 

Or at least that is the surmise, given the inventory level at the end of
February and the stated inventory on the Bank of England website at the
end of June.  Macleod thinks that this was done in support of the gold
price smackdown.

One has to wonder how that bullion will eventually be returned to its
rightful owners, given that it apparently has been taken from the vault
and delivered to the refineries en route to the East, or may even be
sitting in some vault somewhere with a high stack of paper claims set
against it.

Leased to whom?  Well, it would appear to be fairly obvious in light of this announcement last week:

The Economic Coordination Committee of the Cabinet, headed by Finance Minister Ishaq Dar, took the decision to ban the import of the yellow metal for one month with immediate effect.

During a meeting with Dar in Karachi last week, the Exchange Companies Association of Pakistan (ECAP) had claimed that smuggling of gold to India was causing rupee devaluation, as the importers were mopping up dollars from the market to meet the needs of the Indian buyers. After the Indian government’s decision to discourage gold import by imposing 8% duties, the buyers had shifted to Pakistan where the commodity was allowed to be imported duty free since 2001.

Our conclusion is that because the Indian and Pakistani government attempts to limit the physical gold demand has failed, the Bank of England, and possibly the Federal Reserve as well, are sending their gold East in order to prevent the price from rising and blowing up banks like J.P. Morgan that are holding massive short positions against the price of gold.

The Ponzi pyramid is quaking and this is the sort of thing that could easily cause it to collapse.