Economics Commentaries + Gold Shortage

[indigopete]

Hello Folks

I've always been interested in economics and economic theory since I learned just a little bit during my study days.

We seem to live in very interesting times as far as economics goes. Central banks and large commercial banks (like JPM, Goldman, City etc) are now so huge that they are able to reverse the usual rules of economic theory.

2 very stark examples:

[1] - the real economy is barely growing and in many places shrinking, while equities (the 'Stock' market) which represent the monetary 'value' of that very same economy are sky rocketing

[2] - the gold price is falling (has fallen) while gold demand is soaring and supply is plummeting

This is a bizarre situation but one which has been building for years. The reason the stock market is soaring is because investors are simply being pushed into it by low interest rates and massive money printing (a pincer movement - one pushes the other pulls).

The reason gold is falling is because it's official price is abstracted away from the supply-demand mechanism by something called "Exchange Traded Funds". This is a buffer zone between the actual metal and the money that trades it whereby people can phone up a broker, buy some gold, and never actually see it - they just get a peice of paper called a "future" that gives them a "call" on a certain proportion of a fixed amount of gold. The person holding the "futures contract" has no idea how many other people have a call on the same gold. (Kind of re-inventing the banking system).

Now, what's apparently happening is that people are cashing in their futures contracts and wanting the real thing and this is having the reverse effect on the price - it's making the price go down even though demand for the real thing is going up !

So lets recap:

***** demand for the 'false thing' is going down
***** demand for the real thing is going up
***** price goes down

Although this is a major problem for the economy, it's a very encouraging development for folks like Avalon subscribers who are interested in the reality behind the facade of everyday life.

It is another 'thermometer' that indicates people are sick of falsehoods and want to get back in touch with reality. Albeit symbolic in this case, it's part of a universal trend I think.

To close, here's a fascinating article from Zerohedge this evening - the worlds greatest economics blog. If we only had say, Zerohedge, Avalon forum and Davdicke.com available to us, we wouldn't be that badly informed !

http://www.zerohedge.com/news/2013-07-19/jpm-eligible-gold-plummets-66-one-day-total-gold-fresh-all-time-low

Pete

[Lifebringer]

Can't afford a funeral, darn sure can't afford stocks.
Not outta my league, just untapped from the matrix, and never fell for the selling of one's soul or getting caught up on chance.

I need change, not chance.
If I wanted chance, I'd play a lottery. I don't trust them with anything, just collecting what is mine, that I paid into, however small an amount. If they had their way, Safety Net would be dead, buried in the 2008 crash.
let 'em float their own phony money among themselves. Anyone that hasn't learned their lesson by now, after the last 12 years, needs their heads examined.

They are waiting to do it again. Steal more trillions, and float the interest.

But I think that will be their "fatal mistake." The arrogance of another Cheney infiltrating the people's house, is just as fatal for the Republican state of Wisconsin, if they let them run their state in the house. That one, is as batch*t as Bachmann.

Wall street gonna ream them like a vibrator. They'll get caught, but if you're in it, you go down in the swamp, with the rest of 'em.

[indigopete]

I need change, not chance.

- according to the majority of Americans, Mr Obama can deliver 'change' :) (In particular, change that you can 'believe in; - so even better)
- regarding chance, it isn't a game of chance. It's a game of "who's allowed to print money and who's has to earn it"