extract from dlux post-gold

  1. 1,218 Posts.
    A move in Gold bullion past the $400 level will turn heads, change views, alter policy, and scare many people. It is written in stone. Prepare for it. Exploit it. Many dismiss the possibility of a damaging short squeeze inflicted upon the criminal Gold Cartel, who surreptitiously sold off our national gold treasure for their personal profit. If that is not treason, I do not know what is. In the summer of 2002, a "line in the sand" was drawn at $330 gold. By autumn, that line was surpassed and redrawn at $370. Now it appears to be redrawn once more at $400. The cartel is transparent in its reaction to the assault on the Gold price. They appear to rachet their highly leveraged options, futures contracts, and spreads at incrementally higher levels, as a desperate defense of a naked short gold position which exceeds two years worth of world gold production. In this manner, they deliver unto themselves a Chinese water torture. They suffer continued smaller painful blows, instead of a massive short squeeze and meltdown. At the same time, gold miners have steadily reduced their forward sales hedge books. Observers to this tragedy should not lose sight of the fact that the USGovt is probably bailing them out quietly. The Dept of Treasury is likely gradually purchasing the Gold Cartel's hedge book. Official actions and bullion banker actions are effectively ensuring the gold bull will run for a long time.

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