[quote=stockstradr]Here’s a question you gotta ask yourself:
What MAJOR players are conspiring to pull gold prices DOWN, dropping prices $60/ounce even against the documented increased demand – seen both in the run on physical gold orders AND also the gold ETF is reporting far more inflows than outflows????
Must be some big players (foreign reserve banks) dumping physical gold. Only other element I’m aware of is India’s demand said to have dropped off 70% in last few months.[/quote]
Mark Mahaffey, co-manager of Hinde Capital, pointed out that the sale of one ounce gold coins – known as golden eagles – in the US had been halted and reports earlier this month said that South Africa had run out of gold krugerands after a Swiss buyer bought 5000 coins.
Mahaffey said that the US had banned owning gold in 1933 and that if the current crisis is worsened by a rush for gold, governments might act.
He said: “The worst thing for any kind of central banking crisis is everyone buying the oldest currency in the world. Buying gold is a clear sign that investors don’t have confidence in the financial system.”
He said that the problem at the moment was that too many people had too much debt and that central banks hoping to address this could devalue everything else in the system.
The fear for anyone who is in credit is that the financial system could become geared towards negating debt which, in turn, would destroy the value of their assets. One way of bypassing this threat is to buy gold.
However a general shift to gold would undermine the power of central banks and their influence on the economy.