"A bit of respect" goes both ways.
What sort of respect was Bernanke showing the Senate, the American people and every gold investor in the following:
"I do want to pick on our chairman of the Federal Reserve just a little more because he reached a new high in disinformation and a new low in stupidity in front of the Senate Thursday.
He said and I quote "Nobody understands gold prices, and I don't really pretend to understand them either". Really? Nobody? But wait, why would you even answer any questions or even speak about Gold? It, according to you "is not money" and Lord knows since you are "the chairman" who would know the definition of "money" better than you?
Regardless (irregardless is not a word) of what Ben Bernocchio says or wants people to think, we are (and have been for more than 3 months) witnessing a bank run. This "bank run" is not on any one single bank, it is on the system itself. Inventories being drawn down, custodians refusing to deliver and even sovereigns making claim to their Gold shows that a choice has been made. The negative curve (backwardation) is proof positive that investors are voting with their feet and saying "I want my Gold, real Gold, and I want it now...I will not accept any substitutes".
As we have said all along, the paper markets have written receipts for more than 100 ounces for every one real ounce that is available to deliver. How do you suppose this is going to work out? I guess the best way to explain this is by asking a question or two. What do you suppose will happen to the value of 1 real ounce of Gold when it is learned that "supply" was overstated by more than 100 to 1? Or another way, what will happen to the price of Gold when it is discovered that Gold is 100+ times more scarce than it was commonly believed?
You see, what was "supply" really wasn't even though it temporarily acted that way (on price) but it will now be flipped into demand, real demand for real Gold...no substitutions. Not only will those who are contractually short need to cover and compete with natural demand, those who "thought" they had the bases covered will become buyers to buy what they "thought" they already had. This will work not only like a high horsepower motor, you can add the turbo charger (short covering) and a NOS shot of another couple hundred horsepower when "owners" find out that they are only holding an empty paper bag."
From "The Gold bank run is on....' (courtesy Bill Holter/Miles Franklin) at http://harveyorgan.blogspot.com.au/
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