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Gold/Mining/Energy : Gold Price Monitor
GDXJ 109.23+3.7%Nov 28 4:00 PM EST
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To: Ken Benes who wrote (53712)6/6/2000 5:40:00 AM
From: William Harvey  Read Replies (1) of 116782
 
Ken,

I've read a good bit of the GATA Gold Derivative/Banking Crisis report and my understanding is that the amount of derivatives pose no threat to central bankers either. They're in the driver's seat and the speed at which they're driving says nothing about the momentum of the moving financial vehicle. The point the report is making is that, at this point, there are no posted speed limits and no speedometer either. Central bankers are the most protected people on the road, even protected from laws of Congress. It's a good read. gata.org

Conservativism works both ways. For years, it's made perfect sense to borrow gold at ridiculously low rates and sell it, using the proceeds to buy into the stock market. This is fine as long as the market goes up. I wonder how many have been lured by the thought of easy money into the April crash and now must extend their gold borrowings or even default. Investors doubt whether gold can sustain a rally but is not too surprising that the conservativism of lending gold is quickly replaced by the conservatism of buying gold. Judging by the sharp selloff in stocks, lots of conservative investors have been badly burned or wiped out by the gold carry. A rule of thumb is that one bad experience in the market loses ten customers.
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