Firstly, I've learnt what I'm about to try to get across from James Sinclair writing on Puplava's FSO. I strongly recommend that you folk start visiting/reading that site daily.
The URL is http://www.financialsense.com/index.html
Okay - the problem with the price of gold rocketing is the huge short positions held by the big players like JPM.
The big players have risk control programmes running constantly to protect their positions. The problem is that above US$354, the risk control programmes require purchase of a unit of gold to cover every unit short!!!
There is not enough gold in all the central banks of the world to cover the total existing gold short position.
The bigger worry for the world (including you and me I guess) is that if the gold derivative market collapses, crashes and burns - the total derivative markets of the world are in danger of collapse. The last time I checked, these were worth 73 trillion $ US. There isn't that much money in the world!
So, central banks and all the powers that be will do everything they can to keep gold from going over $354/oz.
It's probably inevitable that they will fail. I have absolutely no idea of what will happen then.
This is just thrown in to help explain the battle about to be fought to try to keep gold from rocketing. Again, I urge you all to visit Financial Sense Online.
