does CL have an economics forum

Salem OR

Description

well, I will look for one, but economics and politics are kinda sisters I spose. What do you think of the following hypothesis: Imagine a *very* large well-connected bank, that has the inside scoop on when the COMEX is going to default on physical deliveries of precious metals. That bank sells *tons* of futures contracts, thereby driving the price of the metals down sharply (like we've seen lately). That large bank has a green light from the government to smash the metals prices like that, because by doing so, lots of other smaller banks (that aren't in-the-know) that have impossibly large short positions are given the opportunity to cover their shorts (by purchasing the futures contracts offered by the large bank), thereby realizing large losses on the smaller banks' books, but not such large losses that those smaller banks cause cascading defaults. Okay, so now the large bank has a *HUGE* short position, the price of the metals is very low, and the COMEX defaults on delivery, thereby allowing the large bank to make tons of money by closing its *HUGE* short position at a low spot price (i.e., a lower price than the large bank sold the naked shorts at). Just brainstorming...