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

To: Hawkmoon who wrote (101675)	2/26/2009 3:11:34 PM
From: benwood	7 Recommendations Read Replies (1) \| Respond to of 110194

Madoff taught me that gold lent out by the Treasury, sold or not, may or may not ever come back.

To: Hawkmoon who wrote (101675)	2/26/2009 5:07:33 PM
From: GST	2 Recommendations Respond to of 110194

<eventually those who lease the gold, presumably to resell it to some other sucker, have to return it to the Fed/Treasury> That is unless they go broke -- and of course we all know that that can't happen, cough, cough. Anyway, if it looked like some players had leased way too much gold for their own good, and if large scale defaults seemed likely, the magic answer would be -- you guessed it -- lease more gold to sell and hopefully drive down the price. Ya, that would fix the problem. So, if the gold is leased, sold, and not delivered -- and if real gold prices soar as actual sales of real gold that actually exists and changes hands shoots up and defies the downward pressure from the sale of leased gold, then you have a moonshot in the value of real gold that actually changes hands. In that case the leased gold that has been 'sold' turns out to be a completely worthless fraud. The danger in leasing gold is that it could cause the price of gold to skyrocket amidst massive defaults and institutional failure. It might lead people to say the unthinkable -- show me the money -- and by that I mean show me the gold.