Naked shorts have to be covered in three days. If not they show up on the failed to deliver list. After 13 days on the failed of deliver list they must be covered.

One consequnece of fail to deliver is the seller broker wont get paid untill the share is delivered.

Fails to deliver in treshhold securities must be closed in 13 days. Rule 203 (b) (3) requires any participant of a registered clearing agency ("participant") to take action on all failures to deliver that exist in such securities ten days after the normal settlement date, i.e., 13 consecutive settlement days. Specifically, the participant is required to close out the fail to deliver position by purchasing securities of like kind and quantity.

Treshhold securities are defined as: any equity security of an issuer that is registered under Section 12, or that is required to file reports pursuant to Section 15(d) of the Exchange Act where, for five consecutive settlement days: there are aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security; that the level of fails is equal to at least one-half of one percent of the issuer's total shares outstanding; and the security is included on a list published by an SRO.

So the answer to your question is:no supply of shares to buy or to borrow, thats what stops a short from shorting indefinetely.