Supply And Demand In The Gold And Silver Futures Markets
This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement, is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold, as opposed to transactions in uncovered paper claims to bullion in the futures markets.
The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.
The law of supply and demand is the basis of economics. Yet the price of gold and silver in the Comex futures market, where paper contracts representing 100 troy ounces of gold or 5,000 ounces of silver are traded, is inconsistent with the actual supply and demand conditions in the physical market for bullion. For four years the price of bullion has been falling in the futures market despite rising demand for possession of the physical metal and supply constraints...
It is no surprise that a goldbug like yourself believes conspiracy advocates like Paul Craig Roberts claiming that falls in the price of gold are the result of a conspiracy. Roberts also preaches that 9/11 was a US conspiracy and that the U.S. government executed the Paris Charlie Hebdo terror attack.
Blogging anti US government conspiracy theories seems to be a lucrative business which attracts many gullible people.
Hardly a conspiracy, it's a known fact that gold derivatives exceed physical gold by 100:1 or greater. I have no doubt goldbugs everywhere are happy about this too. If even a small fraction of the world's paper savings tried to move into physical gold the effect would be devistating with a manner of government intervention. You do realize that all the gold in existance wouldn't even fill a 3 story house. Not much compared to the 50 Trillion odd in paper retirement savings.
If you disagree with these simple facts then it doesn't say much for your ability to grasp world financial markets. Your opinion on the relevance of the facts are of course another matter.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
That article/advertforsuckers identifies the reason for the "frantic" buying with this:
Quote:
“You’re talking about a group of people who have been burned before by governments overprinting currency. They’ve been through hyperinflation back in the 1920s,” said Van Simmons, a buyer and seller of gold coins who is president of David Hall Rare Coins.
The referred to hyper inflation ended in January 1924. So snake oil salesman Simmons is saying the "group of people" doing the "frantic" buying are doing it because they were "burned before" and went through that hyper inflation - pre 1924. They must be very old.
Supply And Demand In The Gold And Silver Futures Markets
This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement, is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold, as opposed to transactions in uncovered paper claims to bullion in the futures markets.
The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.
The law of supply and demand is the basis of economics. Yet the price of gold and silver in the Comex futures market, where paper contracts representing 100 troy ounces of gold or 5,000 ounces of silver are traded, is inconsistent with the actual supply and demand conditions in the physical market for bullion. For four years the price of bullion has been falling in the futures market despite rising demand for possession of the physical metal and supply constraints...
You have been sucked in by the articles opening premise, which is false. Most (all?) gold futures markets are not cash settled. All the gold futures contracts in the MAJOR markets (eg, CME, COMEX, CBOT - ie the major futures exchanges) are settled via PHYSICAL delivery after expiry. Unless if course you can show us all the cash settled gold futures markets out there?
That is not to say that all futures positions taken lead to expiry and thus delivery before being closed out, far from it - yes there is a lot of purely speculative trading in those markets But none-the-less the price in the futures markets absolutely reflect the "wholesale" price at which large quantities of physical gold are available at upon expiry of any contract entered into.
Simmons is saying the "group of people" doing the "frantic" buying are doing it because they were "burned before" and went through that hyper inflation - pre 1924. They must be very old.
Well that's his opinion, perhaps based on the collective psyche. Some things whole nations never forget, like our anzac tradition, everyone is aware of that and with the knowledge desires to avoid war. But its just his opinion on the phenomina, and either way the germans have been big buyers, even their cetral bank has been demanding it's gold back from the US government vaults. But it seems they don't have any gold in their vaults and have told the germans it will take a few years
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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