COMMENT: Hello old friend. I really cannot believe how naive these goldbugs are about the real world. Russia’s buying of gold is not a bullish gesture for gold whilst it is merely because the Obama administration is trying to get the Russians to overthrow Putin. Shutting down Russians from commerce only sends them to buy gold as they are forced out of dollars. These clowns do not know their ass from a hole in the ground as you Yanks say. You had us buying gold in New York and shipping it to Japan and then reselling in London all to reduce the dollar trade deficits. You are the most brilliant strategic bloke I ever encountered. When we met back in Geneva, you taught the Arabs how to use gold forwards to earn interest without calling it interest. These goldbugs just do not have a hint about real movements of capital and no interest in learning. They just talk a lot of codswallop. No aggro mate. They will wake up knackered in a daze. Will see you at the WEC. I hear this is going to be the event of your career.
REPLY: Yes Russia’s central bank was the largest buyer of gold all because they are simply trying to get out of dollars. It has nothing to do with price expectations. Yes, I remember well using gold to reduce the trade deficit. It did not matter what you bought as long as it was something in the States. That was a good ploy to buy gold in USA and export to Japan reducing the US trade deficit to get the politicians to shut up. They have no clue how all their statistics work.
Ah Geneva. The good old days. That was my real wake-up call to how the world worked. It was one giant masquerade party back then. You never know who you were dealing with. Under Islamic Law, charging interest or Riba is forbidden so the way to earn interest was to buy gold and sell it forward to collect the carrying costs. This made the gold market DEEP adding to liquidity. Yet these people do not understand the markets and argue “paper” gold suppresses the market when in fact there are futures on every commodity, share indexes, and bonds. They act like it is only in gold. Without that “paper” gold, there is no market or liquidity.
Yes this is going to be an interesting WEC. We just got one set of video tapes of just about every conference I have done from 1985, all the Tokyo events, and even New Zealand and London. Boy was I really skinny back then. This will be a gobsmacked event as you say.
