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Gold/Mining/Energy : Gold Price Monitor
GDXJ 94.04+0.6%4:00 PM EST
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To: Crimson Ghost who wrote (37269)7/17/1999 2:48:00 PM
From: Rarebird  Read Replies (2) of 116764
 
< The primary weapon in this war is cheap gold loans to short sellers....>

What is illegal about these loans? Again, Gold is a Currency. I can borrow Yen (if I so desire) at an even cheaper interest rate than Gold! The only reason people are borrowing Gold to begin with is that they can get a 2% interest rate instead of, say 7% from a bank. If gold rises more than 5%, then this differential makes gold less favorable to borrow than ordinary money. So, what's the beef against the gold loans? It is completely legal and represents one of its many transactions as Currency. This gold carry trade is not destined or rigged to always work out for the benefit of shortsellers. This gold carry trade can blow up right in the shortseller's face and he or she can lose a fortune. There are other market forces and economic factors which are making this trade successful. To blame the Gold Carry Trade for the low POG is not only to completely misunderstand the great inner nature of Gold as CURRENCY, but it gives a false impression that the Gold market is rigged when it is NOT! Given this view of Gold as being completely manipulated on behalf of short sellers, why should an uncommitted investor bother to take a long position in a Gold Mining Company? No doubt, the Shortsellers sure love GATA.
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