Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (597)	8/25/2001 9:08:21 AM
From: Roebear	Read Replies (2) \| Respond to of 36161

George S Cole, I would tend to agree with you, if you are referencing the large short position in physical gold represented by leasing/forward sales etc., the 8000-16000 tons that we hear represented by GATA folks, then it would seem there must be a payday coming whenever these positions must be covered. What will force the covering of these shorts will not be a short term event, IMO, as they have the resources or derivatives to handle shocks over a short time frame. Examples would be the Iraqui invasion of Kuwait and the LTCM blowout. However, a slow strain on their derivatives system and resources provided by a gradual increase in gold price, which if then impacted by a shock event, may provide the moxie to send the shorts to different venues. What I see as the factor providing juice to a gradual gold price increase is the real time real life fact that there is too much personal and corporate debt and too much of it is untenable. We have had a boom of epic proportions, a party to end all parties, a Woodstock on Wall Street, but the party punchbowl was laced with some bad LSD, Large Sized Debt! Deflation is a cure for LSD poisoning, but it is a most painful detox that both creditor and debtor wish to avoid at all costs. Liquidity is the palliative that is being currently administered to the Woodstock on Wall Street party goers, but in the end, if they wish to avoid the deflation detox, and that potential bad trip for the LSD party, a bit of holisitc medicine, called inflation, will have to be used. Denial is not a river in Egypt, it is the Large Sized Debt Wall Street Woodstockers saying there is no inflation, there is no bad debt, no liquidity problems, party on! And THAT will be the Golden Kryptonite for the gold shorts. Best Regards, Roebear