Archive for November, 2014

Paper Gold

Posted: November 11, 2014 in Paper money
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paper gold

Like many, I have long suspected issues with the way any commodity is priced by the ‘Market’

What is more, I have also been sceptical about the size of the physical market verses the derivative or ‘paper’ market…it seems the basic problems with paper money are alive and well with many commodities too.

Consider this quote from the linked article;

“Because the derivative market is so large, paper gold makes physical gold’s market price.

This is a problem for nervous central banks because when prices are perverted in this way, it causes anomalies in the market.

The big one right now is how the gold price seems to be completely out of kilter with underlying demand.

For example, how on earth can China and others be importing such massive amounts of physical gold – and yet the gold price refuses to budge?

All sorts of theories have been posited. One is that major Western central banks have been providing physical supply to balance the books, by leasing gold into the market.

But here’s the rub: this gold may belong to other nations, which is causing anxiety for countries that rely on the Western depositories to store their gold”

This article by Money Week sheds some much needed light on this subject and also explains how some of the fundamanetal trading of gold is not currently being reflected in the price.

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Never before has the human race enjoyed such amazing capacity to create wealth and reduce poverty, yet never before has the gulf between rich and poor been so vast and inequality been so widespread…

Although it’s thirteen years old now, a brilliant account of the real beneficiaries of Globalisation and its covert nature. Topics covered include the sweatshop factories in the developing world, the lack of oversight of these conditions by the global brands that commission them and the planned take-over of Indonesia by business interests in order to exploit its vast natural resources with the aid of the Suharto regime. The role of institutions such as the World Bank and the IMF are explored to suggest the underlying power structure at work in the world today

The New Rulers of the World