Something’s gotta give
Gold is back above $900 this morning after word of the "coordinated rate cut" from the Fed, European Central Bank, Bank of England, et.al.
Of course, that's the COMEX price we're talking about. You want the real thing to hold in your hand, you'll have to pay more. And you'll be waiting weeks for delivery. If it's even available at any price.
You want a half-ounce American Eagle? A quarter-ounce? Like a Chicago Cubs fan, you'll have to wait till next year. You want the one-ounce variety? They're still being rationed to dealers. (Or as the U.S. Mint prefers to say, dealers have been put "on allocation.") One major dealer won't even try to sell you a one-ounce Eagle right now. Or a one-ounce Canadian Maple Leaf. Or a one-ounce Krugerrand. A note to customers on its website apologizes "for any delays in order fulfillment which are a result of production and delivery delays imposed by certain mints and by our suppliers."
There's no longer a disparity between the "paper price" and the "physical price" of gold. It's a yawning chasm. If gold is basically unavailable unless you buy a very small quantity at your neighborhood coin shop or a very large quantity in the form of bars, does a COMEX gold price just above $900 make any sense? One expert tells CNBC that something's gotta give… and when it does, the paper price could double in very short order.
Hmmm… Sounds like something we've been saying around here for a while now.
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Let’s hope that the Swiss Asia Capital expert is correct. The artifice known as the paper gold market needs to be shown for the fraud it is.
Comment on October 8, 2008 @ 12:22 pm
Corrupt to the core fiat currency masters of the world can only plug the dam with their fingers while the bulging river remains behind the dam wall. Once the raging torrent crashes over the dam top those below plugging the holes will be crushed and briskly swept away to hell, along with their fiat fraud paper.
Comment on October 9, 2008 @ 11:45 am
Fiat money is just a medium of exchange (you need a medium of exchange to trade apples for oranges). Pegging a medium of exchange to gold is only useful in preventing the fraudualent multiplication of the currency units available in the market (by a national central bank which can make the units). Other than that gold is just worthless shiny junk that has no nutritional value. Central banks (The creators of fiat currencies) hold onto gold, not because they think it’s worth anything intrinsically. But rather to prevent it from being a competitor as a medium of exchange. This way they can act as if they were alcemists that can create their own kind of gold when no one else can. Central bankers are the king’s digital alchemists. But their product is decaying. And smelling worse and worse as it rots!
Comment on October 9, 2008 @ 2:19 pm