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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (2512)	11/22/2003 4:57:41 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 110194

from Richard Russell: something big this way comes !!!!! I spoke after the close today with a longtime friend of mine. He's been a trader on the floor in New York for about a decade. This guy is a very straight shooter as well as a personal friend; I can always trust him to give me the straight scoop on what's happening and what the chatter is, as opposed to some trader friends who will talk their book no matter how long you've known them. This guy says something VERY big is happening behind the scenes in the gold market right now and tension on the floor is higher than he's ever seen it. He believes there is now a systematic, behind-the-scenes effort by multiple buyers to take delivery of as much gold as possible. I asked him what was wrong with that, and he replied that there IS no gold out there in size at any level right now. There's no physical offered in size at any reasonable level, and he said it has never been more of a paper market than now. I then asked him two questions: Who are the buyers, and has there been Fed intervention? He thinks that the buyers are too large to simply be short or intermediate-term speculators, and says the chatter is that the buying is coming out of Asia. In terms of the Fed, he said that almost all traders on the floor including him believe the Fed has been periodically intervening to cap the rallies in gold....but then he said something that was somewhat shocking. He thinks the Fed has actually been trying to BUY gold. He thinks the periodic attempts to cap the rallies (which he says happened yesterday, by the way) have two purposes: to not allow gold to spook the bond market and the dollar, AND to give the Fed a chance to buy gold lower from speculators when the rallies fail. Apparently, there is some speculation among in-the-know traders that at some point next year, the Fed may be forced by the dollar and bond markets to float the idea of an eventual return to at least a PARTIAL dollar/gold link. Some of this chatter comes from the fact that earlier this year, Greenspan made a speech that started off mentioning how the gold standard had led to stable prices over a long period of time. In any event, that's the scoop. There was a lot of tension in my friend's voice, and he repeatedly said that something "very big" is happening in market right now. The last thing he said was that he thinks $500 gold within the next 6 months is "a done deal."<<