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

To: ild who wrote (48086)	12/23/2005 3:20:20 PM
From: orkrious	Respond to of 110194

Chicago high-end retail weak Message 22000774

To: ild who wrote (48086)	12/23/2005 3:31:58 PM
From: ild	Read Replies (1) \| Respond to of 110194

GOLD - COMMODITY EXCHANGE INC. Code-088691 FUTURES ONLY POSITIONS AS OF 12/20/05 \| --------------------------------------------------------------\| NONREPORTABLE NON-COMMERCIAL \| COMMERCIAL \| TOTAL \| POSITIONS --------------------------\|-----------------\|-----------------\|----------------- LONG \| SHORT \|SPREADS \| LONG \| SHORT \| LONG \| SHORT \| LONG \| SHORT -------------------------------------------------------------------------------- (CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 324,429 COMMITMENTS 182,723 26,553 31,141 55,214 244,745 269,078 302,439 55,351 21,990 CHANGES FROM 12/13/05 (CHANGE IN OPEN INTEREST: -13,145) -7,208 -7,047 -1,208 -1,261 7,540 -9,677 -715 -3,468 -12,430 PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS 56.3 8.2 9.6 17.0 75.4 82.9 93.2 17.1 6.8 NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 240) 139 37 35 36 42 197 101

To: ild who wrote (48086)	12/23/2005 3:35:32 PM
From: Kailash	Read Replies (1) \| Respond to of 110194

Power law growth of inflation Sornette et al (2005) argue that hyperinflation is caused by a feedback loop of inflationary expectation that makes prices rise super-exponentially until they reach a singularity. arxiv.org "Hyperinflation regimes are of special interest as they emphasize in an almost pure way the mpact of collective behavior of people interacting through their expectations." They apply the model to Bolivia, Peru, Israel, Brazil, Nicarague, Hungary, and Germany (going backwards in time) and conclude "positive nonlinear feedback processes are important mechanisms for understanding financial processes". Sornette, who is a physicist by profession, has also written the book Why stockmarkets crash (Princeton, 2003). Applied to our discussion here, the question is whether the prices of real goods (Sachwerte) is undergoing a rise in anticipation of higher prices and devalued currencies, a feedback mechanism that in itself causes prices to rise. If that feedback -- based on expectations -- isn't dampened, we should get power-law type growth leading to a singular crash. Gold is a likely candidate for power-law growth and subsequent crash. The price of oil will in the end be limited by its utility, which is high but not infinite, while the value of gold is limited only by the imagination. Kailash

To: ild who wrote (48086)	12/23/2005 5:24:18 PM
From: aknahow	Read Replies (1) \| Respond to of 110194

No, I don't think mutual funds are pushing the GLD premium up. I think any and all buying of shares from those more eager to own than those willing to sell results in the premium creeping up. When it reaches a predetermined range, participant broker/dealers who can obtain new shares by delivering physical gold, do so. I believe they do so because they do short the stock as the premium increases knowing that borrowed shares can be covered by new shares obtained at zero premium thru the delivery of physical gold. The broker/dealer participants need not have any view on where the pog is going. They are in a position to earn money by capturing the premium. I also believe that, at present, deliveries of gold, having a value, amounting to around $50,000,000 are used to capture the premium. Since no view on the pog is needed the shorting and the covering probably occur almost at the same time. So everyone benefits. The GLD ETF run by Statestreet wants the stock to trade close to the value of 1/10 of an oz. of gold. Market participants achieve that just by making a small but on going profit by shorting and covering with new shares. The individual buyer of GLD shares benefits as the premium/discount ends up being a minimal amount. Now knowing what and how is being done, I am interested in learning if this knowledge can be of use and how to make use of it. At the present the fact that I "know" when physical gold will be delivered into GLD to the tune of around 3 tons is interesting, to me <g> but not of great use, or any use, in fact. <gg>