2 days into delivery, Comex inventory already 38% depleted...

http://meltdown2011.wordpress.com/20...

Remember this from just over a month ago, October 21st:

Amanda Lang: Now the problem, of course, for investors is that the paper market is the one you’ve got to play and, for the most part, it affects the price. How will that be resolved?

John Embry: What will have to happen is the people that are on the long side of the paper market in, say, on Comex, are going to have to call for delivery. When they call for delivery and there isn’t enough gold available to meet that call, the game changes. That is probably going to be the event that changes the perception. There’s a suggestion that something may happen around the time of the maturity of the December contract.

Amanda Lang: Would you expect them to do that out of fear? In other words, they’d literally want to take delivery so that they have gold in their vaults?

John Embry: I would think that would be the best reason to do it for the simple reason that I want physical gold today. I mean that is the one thing you can trust. Paper gold, who knows? You may have a force majeure in the sense that people in the end will settle for paper and you won’t have the gold protection you think you have. You’ll get your money’s worth, but you’ll have paper. So that to me is the reason why I think somebody’s going to say, wait a minute, I want the gold. [Ed. Note: Force Majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of nature (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract.]

Amanda Lang: In that transaction people ask for delivery. Will that trade crush a lot of people? Are there a lot of people who are short this market?

John Embry: Yes, without question. For the people who are short this market, there will be a force majeure and they will have to settle in paper because they can’t meet the requirements of gold. That is going to be the seminal event that defines this whole situation.

http://watch.bnn.ca/tuesday/#clip104603
http://www.theaureport.com/pub/na/1797