Most of us do not understand hypothecate so to hypothecate multiple times is confusing. Then again this practice explains why there ar so many banks in London. It as a very tangled web indeed.
Most real estate can not be rehypothecated. There are laws against it. A loan cannot be obtained multiple times on the same properties equity unless a linear system of debt obligation is established. It I difficult to explain being within the legal realm of the local banking community. It matters where the bank is located.
Gold, Silver, and crypto currencies are hypothecated all the time. An ounce of gold may be sold many times. A bank or exchange may sell the same asset again and again. This is rehypothecation. Hundreds or thousands of people may ‘own’ the same physical asset. In this way many different people may think they can take possession of the same asset.
In London, there are no limits to how often this can happen. Nothing restricts the process of rehypothecation. It is considered a part of the fractional reserve banking system. A bank is not required to hold the total amount of it’s obligations... only a small percentage will do.
The current ruckus over gold held by the Bank of England is a rehypothecation problem. The same is true for gold in Fort Knox. Many people believe they have ownership of the same asset. This is why audits are not allowed.
This practice seems fraudulent, but it is not illegal. A broker may sell the same share of stock many times. An exchange may sell the same bitcoin over and over. Bullion banks repeat this process with gold and silver.
Physical possession is important. It is only a matter of time until this fractional reserve system fails.
Here is today’s beauty.