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To: Oeconomicus who wrote (131913)	9/26/2001 11:45:44 AM
From: GST	Read Replies (1) \| Respond to of 164684

Bob: Gold has been in a secular "supply bubble" -- or a "short bubble" if you prefer. The thing about gold is, due to the way it is traded, you can borrow gold that does not exist and sell it -- sometimes referred to as "paper gold". The gold being sold by the central banks helps take pressure off these short sales at times when people actually expect some of this gold to show up on the market - and of course the central banks such as the one in England, have been a source of gold to short. The problem is that the supply of real gold is dwarfed by the promises to pay in gold made by the shorts. The central banks already sold the gold and these official sales simply provide a way to deliver some of it. They get to sell it twice :) Doing this helps to keep he facade of ample supply in place -- want gold? Lets print some more :) But sooner or later the bubble will burst -- the supply bubble.