More about gold.
You never will hear me say this market is manipulated, but sometimes argumenst are tempting to change your mind.
A very convincing piece was written by a Canadian columnist, Rob Kirby.
He starts with a chart with the price of gold (POG) over the past year with some ‘milestones’.
You never will hear me say this market is manipulated, but sometimes argumenst are tempting to change your mind.
A very convincing piece was written by a Canadian columnist, Rob Kirby.
He starts with a chart with the price of gold (POG) over the past year with some ‘milestones’.
The milestones are all indicative of systemic financial collapse. Each time you think the price of gold should propel higher, the price is getting hammered.
How is it done?
By selling derivatives. Rob points to the Quarterly Derivative Fact Sheet published by the US Office of the Comptroller of the Currency. There one can read that JPM Chase has roughly 100 billion worth of gold derivatives on his books as per September 30, 2008.
But paper alone is not enough. Besides the futures market some odd things can be observed in the physical gold market. Look to the lease rates.
Leasing is preferred to outright sales because you can only outright sell something “once” – and it is gone. By leasing, the physical gold leaves the vault to be sold in the open market but Central Banks replace the missing physical gold with an I.O.U - for accounting purposes – and claim that they still posses the same amount of physical bullion! So, by leasing gold instead of “outright sales,” Central Banks can and do double count [cheat] – a la Enron – their gold stocks!
Now as long as the borrowed gold returns to the vaults, there is no problem. But this game can not go on. Because at a certain point in time the physical commodity would decouple (as the world dicovers this house of cards) from the paper market and the real stuff will start to trade with a premium.
This development is already underway for a couple of months.
Conferatur all the stories about the scarcity of golden coins…
Always denied by central banks, we observed the spike in lease rates in the second half of 2008.
Or there was less gold available or the central banks were less willing to lend out their bullion..
For the moment everything seems to be calmed down a little, but for how long?
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