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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (6286)	5/12/2006 2:27:00 AM
From: Taikun	Read Replies (2) \| Respond to of 217657

Fekete makes me think twice about how much paper silver and gold I should hold: Ted Butler thinks that the recent sharp rally in gold was due to the de-hedging activities of Barrick. It was the largest hedger by far when hedging was fashionable, it is the largest de-hedger by far now since fashions have changed. However, Butler is putting the cart before the horse. According to a regression analysis calculating the impact of de-hedging on the price, prepared by Mitsui Global Precious Metals and Virtual Metals, released by Mineweb, 1 million ounces worth of de-hedging boosts the gold price by a paltry $5.50. What then is driving the gold price? I suggest it to you that it is the gold basis, the shrinking of which is not mitigated by mean reversal. What to expect now? Sooner or later exchange officials will declare “liquidation only” policy. Thereafter the longs can close out their profitable positions only through cash settlement. The shorts are absolved of their obligation to deliver as contracted. At that moment all offers to sell cash gold will be withdrawn around the globe. Gold is not for sale at any price. Producers of essential commodities such as grains and crude oil will refuse to accept payment in dollars and will demand gold in exchange for their product. The same goes for providers of essential services such as doctors and lawyers. Scales will fall off their eyes and they will decline to give up real goods and real services in exchange for irredeemable promises to pay. The dollar, and all other paper currencies along with it, will go the way of the assignat and mandat. news.goldseek.com