Approaches to Capping Gold’s Price Rise.
None Are Viable Remedies.
Sell physical (not viable): No one owns enough to matter.
Sell short Comex paper (not viable): Unlimited shorts in precious metals (and precious metals only) are overlooked by regulators in the U.S. (although illegal). But the physical, which is priced off this, will be drained by the East, as countries like China and Russia take advantage of the abnormal pricing.
Raise interest rates (not viable): Makes alternative interest rate based investments competitive with gold. However, hurts economic (consumer) recovery, hurts government (Federal/State/Municpal) funding of existing and future debt, hurts corporate debt funding, etc.
Buy Dollars (not viable): Hurts our trade balance, and hence economic activity, as U.S. corporations become priced out of international markets.
Promote World Peace (not viable): Will hurt America ’s defense contractors like Boeing, McDonnell, Grumann, etc. which make up a massive portion of GDP.
Encourage equity speculation (not viable): Although a nice diversion for investment dollars, it creates an unsustainable bubble, which when burst, brings on a near depressionary environment that must be resolved with excess monetary stimulation.
Conclusion: Gold will prevail, despite all efforts of subterfuge. Will volatility be encountered? Of course. But none of the remedies are lasting, whereas gold’s inherent qualities are! |
