Politicians, Financial Regulators, Banking Officials and Gold.
The global financial system is in a bad state and it seems to be getting worse, says David Levenstein, so it is important to protect what wealth one does have.
Author: David LevensteinPosted: Tuesday , 11 Oct 2011
JOHANNESBURG -
Over the last few years we have seen some amazing developments occur in the global financial sector, none of which are good or encouraging. The sovereign debt debacle in the Eurozone threatens the very existence of the euro as well as many banks. And, it is no news that the US is technically bankrupt. But, what amazes me more than anything else is the action taken by so called financial regulators, politicians and leading banking officials around the world.
With regard to the recent sell-off in gold, I am absolutely certain that there is a great deal of truth to the commentaries that suggest that this sell-off was engineered by central banks and their agents the bullion banks, in an attempt to thwart the upward momentum in gold and thus take the spotlight away from the yellow metal.
In a blatant attempt to drive the price of gold down, some large sell orders came onto the futures market during the time when the market was least liquid. You have to ask the question, why would anyone sell at the most illiquid times? The seller was obviously determined to move the market in the direction they wanted and was not interested in the least in attempting to liquidate at the best possible price. Then, as the prices of equities, commodities and most currencies plunged, it appears that certain hedge funds that were taking a beating in their stock positions used the profits made in gold and silver to cover those losses. This added to the downward momentum. The cherry on the top of the cake was the action taken by the CME. They hiked the margin for gold by 21% and in a falling market! Yet, while the S&P plummeted, the CME reduced margins for this contract by 33%! And, interestingly, although the price of gold tumbled, very few buy orders for physical gold were actually filled at the lower prices... read more>>
