are us banks shorting ozzie goldies - (boa), page-46

Rowingboat

Thank you for your views.

I have been aware that smart money was selling out, but only relatively recently as a result of notices released on the ASX in relation to share sales by Sprott and Baker Steel.

I did mention the other day that I thought smart money had been exiting our goldies. Clearly these funds managers have a far better insight into the operation of our goldies than me. They have direct access to the CEOs, and employ a lot of analysts who understand the market far better than me. I would not want to be betting against these players, because in the "end of days" when gold has gone parabolic (should that happen) they will already have exited the market. They are into so many companies and have such large holdings that there is no way they will try to squeeze the last profitable drop out of the market. These players need to time their exit carefully and will leave enough on the table to encourage the newbies to buy their holdings feeling that there is further significant upside.

David Galland was suggesting that one should sell out (or selldown) of goldies ahead of the ending of QE2 because they could become weaker for a time. Perhaps this is part of the reason some smart money has been exiting goldies. The article is here:

http://www.financialsense.com/contributors/david-galland/major-policy-shift-ahead

In addition we have the factors you and I have both mentioned, higher input costs coupled with rising AUD that has recently been outpacing the rise in the USD POG. Furthermore there is always the fear that China could have a hard landing which would impact negatively on asset prices and their propensity to speculate that is driving the a lot of the investment demand for gold (and hence the USD POG).

Maybe there is some relief on the AUD POG front. On the other hand it could be some sort of topping (as may be happening in silver) so that the USD POG retraces a bit. Fortunately for godbugs there are so many negatives in the financial markets (eg Europe's debt problems, banking insolvency, significant worldwide inflation, continued govt deficits), that the POG could remain elevated.

Yes, I am pretty confused. There are too many variables for me to process and seeing the BOA share notices got my head spinning a bit more late at night. I am not a banking expert and do not have any insight into their reasons for trading in speculative gold and other commodity shares except that they may be acting for other parties or trying to derive some extra income. That may sound innocent enough, except that they have far greater market power and information to make this the simple operation of the free markets.

Unless the US does something fairly drastic about its ballooning deficits (10% pa) then, given that Australia is likely to run lower deficits and find a ready market for its commodities, the rate of money creation in the US will be far greater than here and the exchange rate will be 2.000 as forecast by Martin Armstrong by around 2015/16 and POG USD5000.

Anyway, conspiracies are fun. I think the US banking system is a massive conspiracy on the majority of US taxpayers with the intention to enslave them. At least that is becoming the clear outcome.

loki