I notice that the price ratios between the
time spans of differing gold lease rates have been
remarkably well behaved lately, almost as if they
were locked together in precise bands. I think
that this is interesting as hell, although I have
no idea what it means, if indeed it means
anything, which it probably doesn't, although I
will say that those guys setting up spreads (to
take advantage of volatility) in gold have gotten
financially killed, which I figure in turn
benefited the guys who are short all that gold, as
that is who I figure is on the other side of the
trade when you and I are trying to make a quick
buck with some fancy day-trading of options and
futures and, of course, the spreads, and they
manage to clean us out pretty regularly, the
lying, cheating, thieving bastards.
But
being naturally suspicious and cynical, I
obviously regard that
this
is just part of the plan on the part of 1: The
guys who are short gold, whose total short
position is in the range of billions and trillions
and quadrillions and zillions and gajillions of
dollars for all I know, and 2: central banks who
foolishly lent out the nation's gold, at diddly
interest rates, as their part of the scheme, and
now the Fed has essentially sold (although they
call it "leased") half of all our nation's gold,
which I seem to recall is the estimate of the Gold
Anti-Trust Action committee, who are probably best
qualified to know (other than the government or
Fed, who know for sure, but both of which refuse
to even talk about it!).
In fact, Bill
Murphy of GATA says, "The Gold Cartel is running
out of available central bank gold to meet surging
demand for physical gold. It is the opinion of the
GATA camp that the central banks only have half
the gold they say they have in their vaults - not
the commonly bandied about 30,000 tonne number,
but less than 15,000 tonnes."
He notes
that there were many powerful people with many
powerful friends who had many powerful reasons to
keep the price of gold down, such as how "the gold
price suppression scheme was the cornerstone of
Secretary Treasury Robert Rubin's 'strong dollar'
policy", and "Treasury Secretary Paulson, a key
member of the President's Working Group on
Financial Markets (popularly known as the Plunge
Protection Team)" who chillingly said, "The United
States will do what it takes to calm markets",
which they think will be demonstrated by the price
of gold not rising, because ordinarily it would be
shooting to the freaking moon in response to
economic conditions like today, and people would
be alarmed, and perhaps singing the latest hit
song by the Rocking Mogambo Quintet (RMQ) that has
the famous line, "Look at gold shoot to the moon!
The Mogambo was right! We're freaking doomed!"
Now, if you are like me, then you already
suspect that all of these people are crooks and
back-stabbing, traitorous thieves anyway, and all
I want is just to make a lot of money so that I
can move into a nice house in a gated community
that has armed guards, a nice golf course and
completely surrounded by sleazy strip clubs and
pizza parlors where you can get any kind of pizza
you ever heard of at discount prices.
Fortunately, everything except the cheaper
prices is entirely possible as a result of all of
this government meddling in the gold market (as
they are advised to do by former Fed chairman Paul
Volcker, who had to eliminate the 15% inflation of
the '70s and who thinks that gold soaring to
US$850 an ounce "looked bad" and undermined his
efforts to stop runaway inflation), and Mr Murphy
thinks that this means that "Fortunes have been
made and there are more fortunes to come", and
that may people think that gold prices "will go up
three to five times again from present levels."
And as to the notion that the Fed has sold
half of our nation's gold, I think that is being
generous as hell, as I see no reason why the Fed
would stop at only half, sort of like when I am
starving and I sit down with a whole delicious
pizza in front of me, and my wife thinks I am just
going to eat half and leave the other half for
her, and then she acts all surprised when I see no
reason to stop at half, either!
So,
assuming they still have some gold to sell into
the market to keep the price down, you may have an
opportunity to buy more gold cheaply for a while
longer yet! Whee!
And don't get me started
on how you can still buy silver so cheaply, as it
will elicit another, yet bigger, squeal of glee
from me along the lines of "Wheeeee!", wherein you
notice that I used a few extra letters to indicate
much higher amounts of glee, which only proves how
deadly serious I am!
Richard Daughty
is general partner and COO for Smith Consultant
Group, serving the financial and medical
communities, and the editor of The Mogambo Guru
economic newsletter - an avocational exercise to
heap disrespect on those who desperately deserve
it.
(Republished with permission from
The Daily
Reckoning .
Copyright 2008, The Daily Reckoning.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
