I wonder if the officialdom will allow us, perfectly ordinary sorts, to devise and sell into the market a perpetual call option on a basket of currencies that increases the supply of ... oops, there is the key word ... "money" :0) and call the instrument "paper gold" ... yikes, and there is the secret to financial bliss, until nightmare.
there, we now understand what the Economist termed as "huge source of supply".
we must be thankful for all the stupidity that passes for wisdom, else we would have to work for a living :0)
as to the CBs selling less or buying more gold, i always pictured the process as part of the fabric and component of the design, as in ...
(a) deficit nations and individuals must sell gold
(b) surplus folks and states always take in gold
(c) when there are more deficits than there are surplus appetites for gold, gold price falls
(d) but the process is self-correcting, as eventually the deficit people and nations blow up, leading to a spike that spears through the monetary systems of the deficit neighborhoods
(e) monetary reset, and newly pauperized neighborhoods starts working for a living again, gold flows back - the very same gold that has been going back and forth, since the days of city states and the biblical times earlier still, perhaps even to the days just after adam and eve.
we all are participating in an endless loop, a drama, or history :0)
chugs, jay
p.s right now i have a huge appetite of demand for gold, but do not have enough supply of paper to pay for such gold ... bummer
should the CBs feel up to the task, want the thrill, can then take my IOU and hand over their gold, it will save them quite a bit of troubles with safe-keeping and ledger recording, and earn interest, in more paper, backed by the full faith and credit of ... there is the detail that spells danger ... me, and my secret best friend, my printing press, and my ultimate machine, a helicopter that drops paper
the CBS are actually not so stupid, certainly not as deficient as folks who saves cash |
