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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Box-By-The-Riviera™ who wrote (10511)3/20/2004 8:53:56 PM
From: Archie Meeties  Read Replies (1) of 110194
 
While there's no doubt that fund interest in metals developed in 03 and continues now, I think the increase in speculation by itself doesn't account for the rise in price. If it did, then sellers of real metal could sell to real buyers of metal at a widening discount to the paper markets, and over time the markets would realign because of arbitrage opportunities. IOW, speculative pricing can't be sustained long term without cooperation, indeed, the facilitation of real markets.

OK, if there is a major meltdown, will stock funds raise cash by crossing fund lines and sell leveraged commodity positions? Maybe, but that's a seperate issue.
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