Be Careful What You Wish For

Be Careful What You Wish For

The German central bank is withdrawing its gold on deposit at the Federal Reserve and bringing it back to Germany (It Begins: Bundesbank To Commence Repatriating Gold From New York Fed).  Most gold bugs are thinking about the gold “price” measured in dollars.  They think that this will likely cause the gold price to rise, and hence they will “profit”.

We have two pieces of advice for them:

1) They should be careful what they wish for (see When Gold Backwardation Becomes Permanent)

2) They should calculate the dollar price in gold terms and stop thinking of a falling dollar as a profit



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