Socio-Economics History Blog

Socio-Economics & History Commentary

Paper Gold Leverage Over 500/1 in Order to Protect Dollar and Trillions in Derivatives

  • Paper Gold Leverage Over 500/1 in Order to Protect Dollar and Trillions in Derivatives
    by http://www.thedailyeconomist.com/
    For those who either invest, trade, or save in precious metals, the past month has not been kind to the value of their holdings.  And in fact, sentiment against gold and silver ownership because of the volatile price swings has really been forged over the course of about six years going back to 2011 when each were crushed by manipulation when they were sitting at their all-time highs.

    But to understand the gold market one must understand how its price is tied not to the physical metal itself, but to paper derivatives traded daily on the Comex.  And more importantly, why both the futures market and the regulators allow the bullion banks to sell contracts in which they do not have the actual gold to backstop these trades.

    In essence it comes down to two simple and desperate needs… the first is to protect the dollar, and the second is to protect the trillions of dollars worth of derivatives held by the banks which would result in the complete implosion of the Western banking system.

    As you can see in the 10-year chart of the dollar below, in 2011 the reserve currency was on the brink of collapsing as it fell below 73 and the last maginot line of support.

    read more.

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May 8, 2017 - Posted by | Economics | , , , , , , , , , , , , , , , ,

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