Former professional trader and hedge-fund manager Shah Gilani says the very complexity of the global financial system brought us to the brink of a total meltdown. Asset-backed securities such as structured collateralized debt obligations, credit default swaps and the horrific offspring of the two, credit default swaps on structured collateralized debt obligations, are the main culprits, says Shah:

In Far East trading on Monday, both gold and silver rose gently until later in their trading day. From there they began an equally gentle decline (dollar related?) that lasted all through London trading until the moment the Comex opened. Then it was lights out as the bullion banks pulled their bids and the floor price evaporated in a heartbeat.

Early on Monday morning, both gold and silver had smallish rallies going into the Hong Kong open, but that’s where it ended, as selling pressure took metal to their lows of the session until the New York traders showed up for work.