Thursday, April 03, 2008

Fishy business in the gold market

Contrarian Investor reports that gold is being loaned out at negative rates of interest, which he thinks is in order to help short the gold market. There's a manicured thumb on the scales, it seems.

4 comments:

John East said...

The correction was inevitable, but painful nonetheless. However, I’ve just discovered a great way to handle the psychology of this situation. I’ve pencilled in sub $870/oz as a good target to invest a bit more in gold shares and $770 to start getting out of gold altogether if it continues to crater. So rather than crying over the losses I’ve made in the last couple of weeks I’m now happily praying for it to fall a bit further.

SACKERSON said...

"Reculer pour mieux sauter."

Semaj Mahgih said...

Give us a little more on why they would want to short the gold market in the long term.

SACKERSON said...

Not the long term, just for now. Some say it's to maintain confidence, in order to prevent a run on the dollar, which has been so badly inflated that it's now worth 2% of its 1914 value. In the long run, say the gold bugs, the market can't be bucked - the central banks will run so low on gold reserves that they will be forced to re-buy and then the price of gold will zoom - they think. Others say that the currency will collapse and be replaced by a new one (perhaps the fabled "Amero") - and doubtless the game of theft by inflation will continue after the reset. Gold bugs will tell you that, in the long run, ALL fiat currencies trend towards zero value.