Why would someone lease gold and what will all of this mean to the average person?
Not sure. I don’t know that much about all the trading and positioning.
People who have enough money to trade on the Comex?
That’s out of MY network, fer sure!
;-)
Central Banks and Bullion Banks lease gold to make a return on it while retaining title.
They lease each bar at about 1% profit. The lessee takes the lent Gold, sells it and buys bonds at 4%. The lessee then arranges with the central bank to rollover the loan from year to year so that the Gold doesn’t have to come back right away.
Each bar is lent out or hypothecated between 40 and 100 times. Everything’s fine until the moment someone in the chain wants to take physical delivery of their gold, or a central bank (like Germany) wants its own Gold back.
China does something similar (and even more half-assed) with Copper. It’s all to do with brandishing multiply-hypothecated real assets as a source of free money.
These systems are somewhat similar to the fractional reserve system for fiat currencies, except that something with real stored value is being moved around.
These are Ponzi schemes. They will end badly.