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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (39628)	8/26/1999 12:43:00 PM
From: long-gone	Respond to of 116866

This may have been posted: Gold Price Sinks Due To Sheer Weight of Paper. August 21st, 1999 Professor von Braun The Rocket School of Economics. There is no question that the ?paper gold? market is considerably larger than the actual physical gold market. Estimates we have seen range from a minimum of 90 to 1 to in excess of 100 to 1 paper ounce contracts being written for every single ounce of gold that changes hands. This is mind boggling. The paper gold market is not in the slightest bit concerned about such things as supply and demand numbers and anybody who is relying on these numbers and such comments as increased demand for physical metal to make investment decisions, fails to see the significance of what?s going on here. We clearly have an aberration here that is unique. No true futures market could operate this way for too long since there is not enough gold around to cover the positions that have accrued. In a sense, there is now two markets within one and considerable confusion will result if this is not understood. The usage of gold has changed in the sense that now its the bullion banks that write the paper contracts (using other entities reserves), as opposed to a central bank printing paper currencies that have some form of gold backing. (cont) fiendbear.com