Possible default in December gold??

By the way, did you catch this article from Seeking Alpha last Friday?

http://seekingalpha.com/article/109...rices?source=front_page_most_popular_articles

There is no other leveraged commodity market where short sellers increase their positions, materially, as the price rises, and increase them even more when prices are exploding, except gold and silver. The reason traders don’t normally do that is that it exposes short sellers to unlimited liability and risk. Yet, in both March and July 2008, and on countless occasions over the past 21 years, vast numbers of new gold and silver short positions were temporarily opened up, with the position holders seemingly unconcerned about the fact that precious metals had just risen exponentially, and that there was a very real potential they would bankrupt themselves with unlimited upside potential. Normal traders would not expose themselves to such unlimited risks.

--- bla bla bla --- (real interesting, but I'll cut to the chase)

More important, however, than dwelling on the accuracy of conspiracy theories is the fact that huge international banking firms normally do not take metal deliveries from futures markets. They normally buy on the London spot market. The fact that they are demanding delivery from COMEX means one of two things. Either the London bullion exchanges have run out of gold, or these firms are finding it cheaper to buy gold as a “future” than as a spot exchange.

Smart traders at big firms may be buying on COMEX to sell into the spot market, for a profit. This pricing condition is known as “backwardation”. Backwardation is always the first sign that a huge price rise is about to happen. In the absence of backwardation, there is no rational explanation as to why HSBC, Bank of Nova Scotia (BNS), Goldman Sachs, and others are forcing COMEX to make large deliveries.

The fact that this backwardation is hidden from the public eye is not surprising. In spite of the ostensible existence of a so-called “London fix”, 96% of all OTC transactions are secret and unreported. The transactions happen solely between two parties, and are done opaquely, in complete darkness. The current London fix may well be just as fake as the bank interest rate reports that comprised LIBOR proved to be, just a few months ago.

It won’t matter much if you purchase gold at $750, $800, $850, $900 per ounce, or even much higher. All of these prices will be looking extraordinarily cheap in a few months. The price of our pretty yellow metal is about to explode, and it is probably going to soar, eventually, to levels that not even most gold bugs imagine. COMEX gold shorts will be playing the price a bit longer, in an attempt to shake out some remaining independent leveraged longs. Once that is finished, however, and it will be finished soon, the price will start to rise very quickly.
 
I'm very long gold, not because I think it goes to the moon any week now, but because I see it as a safe store of wealth.

Honestly, I think it will get to where the COMEX runs out of gold to meet delivery demand, but I don't think it will happen till spring, anyway. In the meantime, I think the inventories will be depleted a bit more each month.

The reason I see inventories dropping is due to low global production, high investor demand with treasuries paying no interest, and less central bank selling, and maybe even central bank buying. The more is borrowed and wasted on bailouts and artificial stimulus ploys, the higher the debt goes, and the greater the likelihood of some sort of default.
 
Quote from jsv416:

http://seekingalpha.com/article/110594-will-we-see-a-big-upward-move-in-gold?source=yahoo

another very interesting article on gold!! speculative play but definitely worth everybody's attention!!
More...

This article isn't worth the electrons that must pass through my screen it is made up of.

Ferguson asked: "I've heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed's reputation?"

Gramley replied: "I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now."

What did Gramley mean by "...the Fed's leverage"? That would suggest that the Fed not only owns "gold certificates" but also future contracts and options on futures. They might be big benefactors in a gold squeeze.
More...

When will the perennial gold bugs start realizing how they constantly set their arguments back by destroying all of their credibility by what they write? Ferguson is clearly referring leveraging of the assets on their balance sheet. Then the writer somehow creatively interprets that to mean "gold future contracts etc"...

So amateurish..

I am bullish gold and silver here for obvious structural reasons, but god these gold nuts are something else. Between stuff like this and their biblical quotes...
 
You must log in or register to reply here.
Back
Top