This is why the headlines proclaiming to reveal China's true intentions, such as bearish views on gold, cannot be trusted. They are also tools intended to misdirect and aid their purchases without disrupting the exchanges or market price.
Jeese Livermoore described how little things have change in a hundred years.
If the World (newspaper) had not published that article - July Cotton Cornered by Jesse Livermoore - I never would have been able to dispose of my line without sacrificing the greater portion of my paper profits. Selling one hundred and forty thousand bales of July cotton without sending the price down was a trick beyond my powers. But the World story turned it for me very nicely. Why the World published it I cannot tell you.
The Chinese with trillions of dollars to hedge have learned the lesson of influencing the masses (herd) to manage price. This is why today’s headlines, often planned and coordinated, are so transparent to the trained eye.
Headline: When that happens, the game is over
So the Asians are exercising patience in converting all of these spot purchases to physical?
“If these guys converted all of their spot to physical, there would be a massive default today. No one in the US understands that, the Asians are laughing at these guys. It’s a way to unload billions and billions of dollars into the market. Looking at the futures market gives you a totally false impression of what is going on, this is going to totally blow up. Remember if you are China, your primary goal is to get out of trillions of dollars, that means purchasing hard assets such as gold and silver.”
How sustainable is that?
“It’s eventually going to blow because at some point these buyers will say, ‘I’m indexed, but I actually want to get all of this physical gold and silver now.’ When that happens, the game is over.”
Source: kingworldnews.com
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