gold chat, page-380

Andy,

I've just been watching a TV programme about money, it reminded me of the enthusiastic, over-optimistic goldbugs. On of the big problems leading up to the GFC apparently was that eager, big salary traders were so young that there was no collective memory of any crashes, not even the 1997 Asian currency crisis, a bit like hardly any one here will have a memory of the 1980 gold crash.

Part of the the programme also touched on LTCM. Like goldbugs, so confident were Scholes and Merton that they were right and nothing could go wrong, go wrong, go wrong, that they estimated the chances of failure at 1 over 10 to the power of 24. Of course it did, spectacularly, and a Fed rescue was necessary to avert a global crash.

Anyway it's Sunday and fast approaching beer o'clock so while you eagerly anticipate the 'moonshot', I'll leave you with this news from the goldbugs most trusted analyst, Jon Nadler.

'CFTC positioning data that runs through Aug. 14th showed that the gold market’s net-long position fell by another 4% to its lowest level since 2008 and that physical demand – as reflected in US Mint gold Eagle sales falling by 49% in July and having only amounted to 21,500 ounces this month. Indian gold imports are expected to fall by 50% from September to December as compared to last year’s similar period. In fact, this week’s advance in gold to a local record high price prompted Indian consumers to…sell their gold as dealers reported the scrap spigots once again turning to the “on” position after months of quiet.'