The gold conspiracy

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I will immediately disappoint all conspiracy addicts by saying “There ain’t no gold conspiracy.” No one is keeping the paper (futures) price down while the physical market is up.

I am soooo tired of reading these silly conspiracy ideas about everything. Who started this way of thinking, anyway?

If anyone seriously thinks that the securities like GLD, SLV, and futures contracts are being depressed unduly, they should be loading up on them!
You can buy bullion at bullionvault last I looked and at any number of other mints and places like Perth Mint or Royal Canadian.

I know my saying so won’t stop this. In fact, my conspiracy e-mails will now go up as everyone attempts to prove to me that I’m wrong. Sorry, I’ll just delete any of them without my usual courteous reply.

There is some economic content here. Coin dealers have had stockouts of coins because of a rush to buy coins in the last few weeks. Some who deal on e-bay and are not established dealers raised their prices to ration the short supply. But the established dealers took orders at market prices and told people there would be delivery delays.

A grocer running low does not suddenly jack up prices because that alienates customers who have a long-term relationship with that grocer. He gives a raincheck. There is more than one way to clear a market.

The coin market is not the same as the bullion market, but they cannot disconnect for very long. The gold coin mints use bullion to make the coins.

No one and no government is big enough to influence any large speculative market like gold. The Treasury of the U.S. makes no effort to manipulate the price of gold. The Fed reports its holdings regularly.

1:01 pm on October 13, 2008
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