constant smack downs for gold, page-5

Email received from a Canmadian gold bug friend:

" Check out fed balance sheet, as of October 9, 2008.
http://www.federalreserve.gov/releases/h41/Current/
Clearly shows that the Fed just purchased $11B in gold certificates between October 1 and October 8.
It went from 0 gold on the balance sheet to $11B in 1 week.
What's particularly interesting is when you scroll down further, you will see that
the "Gold Stock" is actually also called the "Gold Certificate Account", so not physical bullion.
This is significant because of the amount of gold certificates the bullion banks in New York have sold.

My theory is that the Fed is now buying gold certificates to prevent a default of paper gold, and to correct the divergence
between the paper market and the physical market.

The divergence is very apparent considering that this morning one could purchase gold on COMEX at $830,
and sell at BullionVault for $890 in New York. The only explanation for this is that if you buy on COMEX, you will face a
long delay on physical delivery and lots of uncertainty. Otherwise BullionVault would be buying at $830.
BullionVault's business model restricts them from selling gold they don't have physical possesion of.

I guess it's better for the Fed to let gold prices rise then to have panic with a default on paper certificates"