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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (10472)	8/15/2008 9:16:21 PM
From: Slumdog	Read Replies (1) \| Respond to of 71454

>>keep your bull cap on. it ain't over.<< I'm a believer! How can you be so certain that they don't buy and sell?

To: Box-By-The-Riviera™ who wrote (10472)	8/15/2008 10:02:42 PM
From: Slumdog	Read Replies (1) \| Respond to of 71454

GLD has a future LTCM (Long Term Capital Management) debacle written all over it (though the prospectus terms clearly indemnify them from all liability) precisely because its value is completely dependent upon the rationally expected value to the spot price of bullion holding steady (and in a real code red emergency crisis they would [possibly] exactly inversely correlate, i.e. the etf price would approach zero [if there were no outstanding shorts -- and even if there were outstanding shorts a piece of paper tracking gold is a piece of paper tracking gold, better to sell it and buy some real gold] while the spot price of gold bullion would go through the roof as the etf price severely lagged [even better for the government short sellers]). Since you have a relatively few HUGE monopoly central banks holding most of the world's gold (and any private individuals acting the way they do would get 99+ year jail terms), it potentially puts the Hunt brothers attempted corner of the silver market to shame. There are some other non code red emergency scenarios whereby the etf price could differ from the spot price significantly. Wouldn't the Fed just love to branch out into selling short gold to hold currencies values up the way they manipulate bond markets. For what happens when the masses realize that a declining dollar does not mean a rising euro and all that other export import mumbo jumbo by looking at the prices of currencies in terms of gold? That's a possible major negative psychological shock that could seriously undermine confidence in fiat currency. blog.mises.org