Hedging v Trading – What Really Makes the Low
The lack of understanding with respect to market development is astonishing. The gold promoters keep desperately trying to argue that demand is somehow rising for physical coins so somehow the prices are not real. At the bottom of markets it is NEVER fresh buying that makes the low – it is short-covering – END OF STORY.
As we move into lower prices, mining companies are FORCED to sell gold forward (Paper Gold) to try to make ends meet. Their short positions will increase going into the lows and without real hedging models, many will go bankrupt. They will lose a fortune and contribute to the short-cover rally that even took place back at the 1985 low. Back then, there was one gold promoter who was short at the low and lost everything in a matter of days. The founder of International Gold Bullion Exchange was sentenced to 10 years in prison for being short.with no sense of how to hedge. That is why we developed both speculative & hedging models with entirely different goals.
As commodities get killed, the smart companies are starting to wake up. I am off to Mumbai for an urgent meetings next week. Many are starting to realize you cannot trade on headlines or advice from banks who profit from the trade with their conflict of interest. Unbiased independence is the only way to survive.
France Paying Informants to Confiscate Wealth
French Customs officials were tipped off about alleged attempt to take painting belonging to member of banking dynasty to Switzerland. The Guardian reported that French customs officers boarded a yacht docked off the town of Calvi in northern Corsica. They precisely what they were looking for. It was a €25 million Picasso belonging to a Spanish banking tycoon that the Spanish Court said could not be sold overseas.
The Roman Emperor Maximinus I (235-238AD) declared that all wealth belonged to the state. Spies were rewarded for turning in anyone hiding assets. The IRS has also its Whistleblower – Informant Award program. History repeats because government are always the same – its just about them. Maximinus set in motion the destruction of the Roman economy. Once he began to hunt wealth, people hid it and the economy imploded. We are in the very same process and in the USA it is called FATCA.
But Europe is hunting assets everywhere and as we enter BIG BANG starting Sept 30/Oct 1st 2015.75 (365 * .75) , for the next 4 years things are going to go from bad to worse. Maybe our only hope is Donald Trump for he will at least be more prone to slow this trend than anyone else who is within the fold of the political class.
Governments are all broke and instead of realizing that they are destroying the world economy precises as Maximinus destroyed the Roman Economy, what hope do we have of stopping this destruction when we have greedy politicians with no sense of what they are doing. We have no future left if we continue to follow this path. It is illegal to mail even a $20 bill for a birthday gift. If you try to send money even to your family by wire or Western Union, they want to know where the money came from. A friend was recently divorced and his wife wanted to wire her half of the account to a different bank. The bank refused demanding to know why forcing them to bring to the bank their divorce papers. Your money is just no longer yours. It may be in your possession, but that is a reluctant circumstance they would like to remedy.
EU Downgraded to NEGATIVE by Standard & Poor’s
Standard & Poor’s has lowered the credit outlook for the EU as a whole toNEGATIVE. SPIEGEL Online has reported that among the reasons in addition to the new aid for Greece includes the investment plan by President Junckerwhich is to just spend more money. There is no comprehension that increased tax enforcement and raising taxes is not the way to help Europe recover.
IMF say Yuan not Ready for Prime Time
The IMF has taken the position that it should put off any move to add the yuan to its Special Drawing Rights currency basket until September 2016. This seems to be political rather than economic. Then again, the IMF is acting far beyond what it was intended to do and is part of the Troika in Europe without any elected status whatsoever.
Thank you for the Pictures
Thank you for sending copies of all the photos people took. They are greatly appreciated. I always like to retain the photos with people I pose with.
No comments:
Post a Comment