Gold – Projecting Fear Or Optimism?
Authored by Mark Rzepczynski via Disciplined Systematic Global Macro Views blog,
Gold is hard to understand as an investment.
- Sometimes it behaves like an inflation hedge but at other times it does not.
- Sometimes it responds to the real cost of funds, and sometime it does not.
- It can serve as a safe asset, yet it has sold-off in a crisis.
- It can be the uncorrelated asset of frustration, but a longer examination tells us about investment deep investor expectations.
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The author of this screed above is either a moron or he plays stupid.
All one needs to know is the FACT that gold (and silver) prices are manipulated and NOT ALLOWED to rise. When gold is called for delivery Comex sends “buyers” to London and only God knows what happens there. Guess, most of the buyers settle for spot price plus say 10 percent IN CASH. Gold is playing the role of judge on the state of financial market and this is why powers that be manipulate it ignoring all fundamental reasons that should lead to the rise of gold price. Dollar drops, gold swoons, dollar goes up, gold swoons even more, China, India buys ungodly amounts of gold on the open market, gold price goes down! The same applies to real interest rates, inflation and whole game of fundamental issues that should lead to rise of gold price but it does not. Everyone who watches Comex gold market knows that at expiry date in futures gold market calls are made for way more gold that is available for delivery. Comex has no gold yet it controls the price via unlimited paper futures contracts where the ratio of gold available vs futures contracts approaches ratio of 500:1.
Gold will not be allowed to rise in normal, steady way. Gold price will change several fold over the weekend from like $1200 to 10 000. Then exchanges will call “force majeure” and fuck up all gold paper investors. Real gold will disappear from any markets for weeks until price will entice some sellers, be it at 10 000, 50 000 or whatever but then we will have hyperinflation.
Allowing gold to rise today equals to death sentence for fiat currencies, foremost US dollar. This is why unlimited amount of paper money will be used to keep it low like during last two years. But knowing the real state of financial market smart people understand that status quo cannot be extended much longer and this is the last call before real gold train departs from the markets. After financial collapse there will be no gold for sale or it will be sold at the price way beyond the reach of 99.99 percent of the people.
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