The wizards of NYMEX once again must know something that the rest of the world’s gold market does not.
Posted by Adam King on August 24, 2011
Buy now, while wishful thinking runs rampant at NYMEX.
August 24, 2011 – The wizards of NYMEX once again must know something that the rest of the world’s gold market does not. That would explain why on Tuesday the London fixing dropped a mere dollar and a half but when traders here took over gold took a $60 hit. And it would explain why the price bumped happily along on the global markets overnight only to start nose diving at today’s opening bell. A quick inventory seems to be in order.
Europe, to the best of my knowledge, has not experienced a miraculous turnaround. S&P has not apologized for making a mistake and restored our credit rating. We are no closer to “solvency and the increasing government debt burden will deteriorate the US sovereign debt crisis,” said China’s Dagong Global Credit Rating agency as it downgraded our rating and gave us a negative outlook. And Japan’s own extended period of zero-interest policy won them another downgrade from Moody’s.
Our economy is still in the toilet and states and municipalities are crumbling across the nation. But for some reason that enormous problem, which greatly compounds our sovereign debt crisis, fails to gather much attention. Sure the states were intended to take care of their own problems, but our founders could not possibly have foreseen this country being so stupidly reckless that there could be even the minutest possibility of a cascade failure of the states. But here we are.
When the dominoes start tumbling what are we going to do? Sell California back to Mexico? Kick New Jersey out of the Union? Turn Illinois into another great lake? Maybe sell the whole shebang to China – they might get it in bankruptcy court anyway.
The worst thing we can do is slam the door on our own people. When the infrastructure fails in one state a lot of really ticked off refugees will find their way into other states, a burden most of them will be unable to bear. Social structure will rapidly unravel.
I simply cannot fathom what the traders have seen to make them believe investor fears will soon subside, but I thank them for this superb buying opportunity.
Wait a minute, is that a foghorn I hear? Could it possibly be that the QE3 is steaming into port?
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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