A simple truth behind the gold shock
Much and interesting things happened in last few weeks. Apple fell below $400. But more interesting was the so called “gold shock”. Much info was shared since then. The paper gold super selling, the blocked platform for trading physical gold, the stop-loss targeting, the automated computer trade, the increased demand for physical gold and prolonged terms for supply…
But I would like to focus on one and may be most important fact – the reality that the one who can sell 400 tons of non-existing gold in a day, can also at any time buy the same quantity. I.e. when trading with paper, you can invoke any type of market activity and reach the corresponding results.
In my story “Jews” I predicted a separation to 2 markets of gold – the paper and physical gold. It is obvious that this scenario is going on. No one can sell 400 tons of real gold in a day. No one simply has so much gold ready for sale. But almost every mid-size player can emit and sell fictional gold. But this will mean that the market price is a price of a fictional, and not of a real product.
We are close to the end of current paper money economy that allows such manipulations. Very soon it will be not possible to sell something you do not own. 99% of derivatives will disappear, along with the illusion that feeds them – the illusion of one and the same money being owned by hundreds of people simultaneously.
The paper money is not a bad thing. This money is a great invention of the humankind. But the misuse of this system and literally raping it by stupid politicians will inevitably ruin it. In fact there is no instance in human history a paper money system not to end in an uncontrollable inflation. Today’s system is waiting its turn. You will be happy to have real physical assets then. Including gold...
April 24th 2013