Howard's End: The Squeeze On Gold

One of the biggest financial scandal stories, on the level of Enron, is about to break.

Central banks are said to have lent their gold for about 1% per annum - the cheapest borrowed money on earth. They have not reported these loans as sales meaning their official gold reserves remain constant. But the leased gold is gone.

It has been borrowed by large trading companies called bullion banks. They borrowed at 1%, sold the gold, took the money they earned by selling the gold and invested it at 5% or more.

It was sweet multi-billion dollar deal. But now they are in a squeeze.
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All that glitters is not gold; Bullion Banks

Critics charge that a `gold cartel' of public officials and major bullion banks has suppressed the price of gold, possibly setting key banks up for an Enron-like tumble.
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both thanks to Ethel the Blog