Welcome, Bodie, If you don't mind, may I chime in also.
1. There are a lot of "big guys" out there who have basically done the equivalent of shorting gold.
2. If the price goes up they will loose big time.
3. To keep the price down, they flood the market with gold whenever the price approaches $300.
4. If certain countries and the general public can be convinced that gold will become worthless, then the "big guys" will never have to cover.
1. Are these assumptions correct?
the "big guys" should be guessed at as possibly banks, borkerage houses, and a few in some central banks & an evil miner or two, though, all these days are "evil" to a greater or lesser degree.
2. How long do you think the market can be flooded, thus keeping the price artificially low? I'm always afraid to put an exact time on these things, but I'm guessing it will end prior to the end of the year(and end in a big way). You will note "they" are getting desperate and have little more to dump now that BOE has done it.
3. With the T-bill interest rate rising, won't that give gold competition? Why buy gold, when you can get a higher return with T-bills. I think the manipulators are betting the spread between gold and the US long bond thus as the long bond yield goes higher, the gold price must sink or they're caught short(note the action and announcements Friday). As to why buy gold? I don't give investment advice, but as for me, this has become a Holy War, with a Free Market
not simply higher gold as the result. I believe the "best" actions for the gold market might be short the bond, and buy gold, but don;t have the coin to pull it off.
4. And my last question, what would be a possible alternative to gold (not silver), if for instance the "big guys" have the ability to flood the market (with gold) keeping the price down for say the next two years, while inflation increases at a rate similar to today's rate? Currencies of some "safe little place" Iceland(?) & other commodities = Lead(?) copper(?) Again not advice, just guessing, I like gold & silver. Another way to play gold is to play the Rand. |
