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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (26890)	1/24/1999 1:34:00 AM
From: Investor-ex!	Read Replies (2) \| Respond to of 116814

RH, My theory is that if gold is not being manipulated, it's at least very likely being "managed". A few years back, it apparently became generally well-known that the head of our esteemed central bank placed great store in a certain indicator to warn whether inflation was in the air. That indicator is the dollar price of gold. I would like to believe that our own central bank is not monkeying with gold's price. Who knows? But it would not surprise me that, in an effort to "permit" short-term US interest rates to drift lower or at least keep them stable, a concerted effort to artificially limit the price of gold in dollar terms had been undertaken by others. A number of trading strategies could then be much more safely undertaken if this feat were to be initiated and maintained, including the gold-carry trade, purchasing US treasuries, general loan expansion, and shorting anything inflation-sensitive. In short, anything that falls into the category of the disinflation, low/stable interest rate bet. In atomic physics, there is a concept known as the "Heisenberg Uncertainty Principle". In its simplest terms, it states that, by attempting to measure a given phenomenon, we frequently cannot help but distort the very measurements we seek. By analogy in the Greenspan-gold context, this implies that, by letting it be known that he prefers to use gold to signal inflation, Greenspan has (inadvertently?) ruined gold as a reliable inflation indicator. Ruined because the reliable signals it may have at one time produced have become subject to manual override by other, well-capitalized, not-disinterested third parties. Or maybe not.