And no, nothing in this week’s market action changes the bullish big picture fundamentals for gold and silver. They remain far sounder stores of value than U.S. fiat dollars which are destined to depreciate.
If you think about markets, markets are basically places where people have beliefs, they turn them into behaviors, they produce market behavior, and then that market behavior comes back around and informs their beliefs.
So, advocates of "fundamental" and "technical" analysis, where are you on gold tonight? Can you offer any explanation? Or are you just hiding under the covers until this smash is forgotten?
I’m wondering if the entire Kabuki Theatre production is being staged to torpedo the price of gold derivatives and thereby help the bullion banks cover a large portion of their unallocated gold liabilities (gold derivatives) ahead of the implementation of the Net Stability Funding Ratio provision of Basel 3.
In a free market less controlled by derivatives, such silliness from the Fed might have sent monetary metals prices soaring. Instead somebody heavily sold gold futures in New York and prices crashed.
Over the past several months, we've written on multiple occasions about the issues and loopholes within the global unallocated gold market. This fractional reserve system risks collapse with every run on true physical metal, and recent events demand this update.
“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.”
