bluesdog thursday, page-24

Caylus

You may want to check re the ECB announcement that they lent banks 442.2 billion euros ($620.3 million) at a rate of 1%, in its biggest effort to pump liquidity into the system since the credit crisis began.

Sorry didn't get back to you last night - had to call it a night.

I agree with most of what you have said about Gold btw.

To answer your question re: "The scariest possible time, and gold didnt go up as we expected. How does one explain that then?"

I really think you answered it yourself in your earlier posts about "paper" gold. IMO basically ('cause I'm mindful this isn't a Gold Thread) money flows were into the US and out of ALL paper/electronic markets on a massive scale - repaying debt and thus providing downward liquidity pressure (deflation) regardless. Panic and fear took hold as the market took stock of events as they unfolded - the "paper" gold market was no exception.

The paper gold market being traded on leverage subject to TA and heavy shorting by banks meant that gold went down. Very different from the physical market which represents the safe haven aspect much more and which has grown in volume and strength since.

Now as you say "paper gold" is increasingly being recognised as a default currency (aka Russia & China holdings and poss IMF SDR component), inflation hedge against all the money printing and as always viewed as a commodity in this market. Making this market much more "speculative" and volatile in nature.