Two years after opening, the Hong Kong Mercantile Exchange (HKMEX) is to cease trading on Monday and close out all open positions. Clearly physical gold will not be delivered and the the question to ask is will the LBMA or COMEX be shortly behind it.
When the Rothchild’s HKMEx was launched in 2011, much of the metals community assumed that the COMEX & LBMA, were they not to outright default, would fade into irrelevance with the advent of the new Asian metals exchange.
Two years to the day after the exchange’s launch however, in perhaps the most glaring evidence of physical gold & silver shortage to date, the HKMEx has announced it will voluntarily cease trading, and all open positions will be closed out and financially (cash) settled on Monday 5/20!
We suspect that come Monday morning, more than one Chinese investor who believed he owned a gold position (and learns that in fact he held paper) will immediately attempt to source and take delivery of physical metal. As the Shanghai Gold Exchange appears to have stopped delivering gold as well, we suspect that the LBMA may be in for a bit of a physical run.
The first domino appears to have fallen in the ponzi fractional gold system.
Source: Silver Doctors