Hi Richard,
Well, even if the gold supply is over 35,000 tons, according to banco$'s source on central bank "holdings", it still isn't all that much in comparison to the size of the global economy -- which I'm guessing is something like US$15 trillion annually. No wonder central banks everywhere resist a return to a full gold standard. Gold would likely need to rise in US$ terms by a factor of 100, or more!
In order to SAFELY control the gold supply on the short side, the gold float would have to have been purchased long, first. That way, the "holders" could short it with impunity -- in essence, trashing the very asset they've spent many billions on for a larger, though much more lucrative purpose.
Isn't this exactly what the central banks of the world ARE doing? They already control the gold long. They lend it out to "other entities". These "other entities" then aggressively short gold. This causes gold drop or, depending on one's point of view, the US$ to rise. Many, many, many more US$ rise compared to the relatively much, much, lower original US$ amount of gold that drops. "They" take a hit on gold in order to prop up, print, or enhance the value of a paper currency of an economy that enjoys a terrible balance of payments, an ever-increasing US$6 trillion national debt, and several trillion US$ in future unfunded pensions.
Meanwhile, all the marginal players whose currencies are not US$ are under SEVERE pressure vis-a-vis the US$! Only those countries with massive holdings of US$ or reserves that can be (and have been) converted to US$ are somewhat immune. But even these will, one-by-one, be affected under this scenario as their reserves are sold to defend their "native" currencies.
A few questions come to mind:
Is this analysis even remotely correct?
Is the $/gold equation being manipulated by banks or "someone" else?
If someone else, who, and what are their goals?
Was this planned by central banks, or a complete, disastrous accident?
If planned, are the ultimate effects foreseen?
How and when will all this come to a head?
How will the end-game play out?
Interesting times! |
