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<p>[QUOTE=&quot;NorthKorea, post: 1296598, member: 29643&quot;]You can&#039;t transact precious metals without the physical commodity necessary to fulfill the demand. That was the entire point of HR 4173.</p><p><br /></p><p>If you&#039;re going to say 200 ounces satisfied 300 ounces of consumption demand, you&#039;re also saying that 0 ounces satisfied 100 ounces of selling demand. The net balance is still 200 ounces/shares, regardless of how you personally choose to look at it.</p><p><br /></p><p>This isn&#039;t an issue of viewpoint. This is the ledger breakdown:</p><p><br /></p><p>Initial Transaction:</p><p>Debit SLV 200 ounces</p><p>Credit Person A 100 ounces</p><p>Credit Person B 100 ounces</p><p><br /></p><p>Margin Lending Transaction:</p><p>Debit Person B 100 ounces</p><p>Credit Person C 100 ounces</p><p>Credit Person B cash equivalent loan of 100 ounces</p><p>Debit Person C cash equivalent loan against 100 ounces</p><p><br /></p><p>Short Transaction:</p><p>Debit Person C 100 ounces</p><p>Credit Person D 100 ounces</p><p><br /></p><p>Net Transaction:</p><p><br /></p><p>Debit SLV 200 ounces</p><p>Credit Person A 100 ounces</p><p>Credit Person B Margin loan equivalency of 100 ounces</p><p>Debit Person C Margin loan equivalency of 100 ounces</p><p>Credit Person D 100 ounces</p><p><br /></p><p>It&#039;s not that 200 ounces supplied 300 ounces of demand. I don&#039;t know how else to explain this. It doesn&#039;t matter if Person B interprets their holding as 100 ounces or not, the reality is that they don&#039;t hold 100 ounces. They hold terms to receive 100 ounces once they repay their loan. If no one loans the 100 shares, the short never can occur. It&#039;s really that simple. You can respond, but at this point, I&#039;m dropping the issue. I don&#039;t know of any other ways that I can explain this to be clear. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie8" alt=":D" unselectable="on" unselectable="on" />[/QUOTE]</p><p><br /></p>

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