Should the price of gold ever shoot up from its current price by, say, another $1,000 in the coming weeks or months due to an unexpected “black swan” event, banking giant JP Morgan Chase would more than likely find itself underwater due to the massive gold derivative short positions it currently holds.
Dr. Stephen Leeb, one of the world’s top money managers, says that JP Morgan’s gold derivative short positions are so numerous and large that they likely exceed the entirety of the bank’s assets on hand – which is a very dangerous position in which to be.
“What I lose sleep over is how much exposure does a bank like JP Morgan have to the [gold] derivative market,” Leeb is quoted as saying, adding that it is an “open secret” in the gold market that JP Morgan is heavy in gold derivative short positions.