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Bloomberg: Gold Fix Study Shows Decade Of Bank Manipulation
That the major banks have been dinking the gold market should come as no news to anyone with any powers of observation. Cripes, if you or I had the ability to move the market in our favor we would not hesitate. I prefer the term manipulation to conspiracy for that very reason.
Where it really becomes obvious is when the paper and street price diverge. There have been several times where the price for physical bullion greatly exceeded that of the spot paper price. There's always a premium of 5-10% for gold and silver. Right now a gold eagle is 5% over spot whereas a silver eagle is 21%. old silver dollars are 50% and 90% US silver is 14%.
It's really Econ 101 demand/supply curves where there is an artificial price imposed on something. Price controls will always result in a supply shortage or a black market premium being imposed. When Nixon fixed the price of gasoline, supplies disappeared because they couldn't impose a premium. With bullion, they impose a premium on physical sales (or they have supply shortages) and as the paper price get's more and more out of line with reality, the premium rises.
Geez, that's why we've been in a bloody liquidity trap for what, 5 - 6 years? The price of money (i.e. the interest rate as set by the FED), has been kept artificially low and therefore, the banks have chosen not to lend.
"You want a mortgage at 3-4%? Sorry, we don't have any money. Now if you want to pay 6%, well, maybe we can find a little something. mmmmmm . . . "
Comments
Hope you're doing well.
That the major banks have been dinking the gold market should come as no news to anyone with any powers of observation. Cripes, if you or I had the ability to move the market in our favor we would not hesitate. I prefer the term manipulation to conspiracy for that very reason.
Where it really becomes obvious is when the paper and street price diverge. There have been several times where the price for physical bullion greatly exceeded that of the spot paper price. There's always a premium of 5-10% for gold and silver. Right now a gold eagle is 5% over spot whereas a silver eagle is 21%. old silver dollars are 50% and 90% US silver is 14%.
It's really Econ 101 demand/supply curves where there is an artificial price imposed on something. Price controls will always result in a supply shortage or a black market premium being imposed. When Nixon fixed the price of gasoline, supplies disappeared because they couldn't impose a premium. With bullion, they impose a premium on physical sales (or they have supply shortages) and as the paper price get's more and more out of line with reality, the premium rises.
Geez, that's why we've been in a bloody liquidity trap for what, 5 - 6 years? The price of money (i.e. the interest rate as set by the FED), has been kept artificially low and therefore, the banks have chosen not to lend.
"You want a mortgage at 3-4%? Sorry, we don't have any money. Now if you want to pay 6%, well, maybe we can find a little something. mmmmmm . . . "
And so it goes,
peace,
stay warm,
rono