De papieren goudmarkt (dd 10/07/1999, Engels)

Uitzonderlijk in het Engels op GOUDHUB: Een verhaal over de goudmarkt van het “Westen” uit de tijd waarin een ounce goud 300 dollar kostte.

10 juli 1999

Gold: Saving Real Money In A Time Of Transition

—— A gentleman leans over the fence and tells his neighbor that gold is going to rise in price from it’s current $300. As the person on the other side of the fence thinks differently, they both agree to a binding bet.

In three months, we will settle up with a payment of the change in the price of one hundred ounces of gold. Whatever it rises, the “bull” collects that amount. Likewise,whatever it falls, the “bear” collects from the bull. Each puts a $1500 payment guarantee into a common shoe box and gives it to another neighbor for safekeeping. ———

As an observer of the above, we have just witnessed the creation of a wager not unlike a comex futures contract.

On each side of the fence stands a long and a short, that together create an open interest of one contract. Neither has any intention of buying gold, nor do they expect physical gold to be a part of this bet.

Yet, at cocktail parties and on public internet forums, one claims to have “brought gold” and the other states that he “sold gold”.

To build a further understanding of this transaction: Both of these gentlemen, probably don’t have the $30,000+/- to buy or deliver 100 ounces of gold. Human nature being as it is, if they did have that much, they would most likely increase the bet to ten or twenty contracts.

Clearly, the intent of this paper market, is to bet on the price of gold as it is determined by the buying and selling of other physical traders. The western public should take these trades for the concept they truly represent. “”I (the long side) bet on the “price” of gold not because we need or want the physical metal.

Rather, my wager is that others will need real gold to protect themselves from bad monetary systems. In fulfilling that “need to own”, these others will drive up the dollar price and I will make money while working within the confines of our good monetary system.

The shorts make the opposite bet, in that they think the world monetary system will work itself out and induce “the others” to sell all their gold. That is, gold they brought in the first place, because they did not know that our money managers could repair the world financial system.

Yes, today Western longs and shorts are playing out these two views of the gold market. Yet, both sides are using paper gold bets to represent their beliefs. Truly, the major majority of this market does not buy or sell physical gold to represent their investment concepts. There are a few that buy coins and bullion, but, even in their large amounts, it is only a drop in the paper gold bucket.

This, my friends, is the very nature of western trading of gold.

The mindset is to treat it as a concept for making currency, not protecting existing wealth. The exact same mentality exists when one invests in the gold mining industry.

Even when these players see the faults in the dollar, and loudly proclaim it’s inflationary downfall, the largest part of their assets go into the business of producing real gold in exchange for more of the same paper currency. It is a means to build wealth through paper asset appreciation, using the very financial system the “concept” says will fail without physical gold.

There are many mental angles and philosophical side steps one can take when understanding the above. But, in this concept lies the very basis of the flaw in the current gold market.

A paper market, built upon world misconceptions of currency values and the historical reasons for owning gold. The present deployment of world assets into a paper system of valuations is liken to traveling a trail of no return.

History has shown that the assets accumulated in this way will never be transformed into “the things of life”! The paper wealth you currently own is no where near the real value your currency says it is.

With the above introduction, we have begun close to the end of this journey. In the upcoming chapter one, we return several miles to walk ground already well traveled. We will observe concepts on the right and the left, not discussed by other guides. The very sights that make such a trip, “worth wile”.

” You will see this trail thru the eyes of history and feel old ways as new Thoughts!” Another