Tag Archive for: arbitrage

Gold and Silver Speculation

There is a stark difference between the states of the markets for the monetary metals. The number of open futures contracts in gold is low, while in silver it’s high. First, let’s look at the data and then we’ll discuss what it means. Here is the graph showing the open interest. The picture is clear […]

What is the Meaning of GLD Gold Outflows?

A quick glance at the data for ounces held by each Exchange Traded Fund (ETF) shows that right after the crash of 2008, ounces began to pour into GLD. Ignoring a little jitter, there was no significant outflow until 2013. GLD has lost over 20% of its metal so far this year, dropping from about […]

The Dollar is Going Up

Let’s take a look at a few graphs of the dollar, from Feb 1, 2013 through Friday May 17, 2013. Yes, I said graphs of the dollar. I’ve priced the dollar in gold first (of course), then silver, the euro, and even the yen. The pattern is obvious. The dollar is going up. I did […]

Why does the “Paper Gold” Price Track the Physical Gold Price? Postscript

This article is a follow-up to Part II.  I expound upon a point I touched on, and also address some questions raised by readers. First, let’s look at an update of the open interest numbers as of Feb 6.  Gold’s open interest actually declined further. Next, here is an update of the bases.  The gold […]

Why does the “Paper Gold” Price Track the Physical Gold Price? Part II

In Part I of this article, we looked at arbitrage between the physical metal market and the futures market.  We saw that there are arbitrageurs who straddle the spread between these markets, who don’t care about price but about the difference between two prices.  They seek to profit, not from a change to the gold price, […]

Why does the “Paper Gold” Price Track the Physical Gold Price? Part I

It’s curious, isn’t it?  So-called “paper gold” (a futures contract) has a price that is not only very close to physical gold, but it remains locked to it.  This is despite the fact that “paper gold” is reviled in the gold community. I am writing this on Sunday evening with little liquidity in the market, […]

The Trillion Dollar Coin

There has been much buzz in the past few days about a truly horrible idea.  Instead of having to negotiate with Congress to raise the debt ceiling so the Treasury Department can sell more bonds to pay for more spending, why not just mint a trillion-dollar platinum coin?  This coin would contain one ounce of […]

Summary of Keith Weiner’s Interview on Capital Account with Lauren Lyster – Debunking the Naked Short Position

Last Friday, I was interviewed on Capital Account with Lauren Lyster. We discussed one of the more popular conspiracy theories regarding gold price manipulation. The claim is that a banking cartel is surreptitiously suppressing the price of gold by selling contracts short “naked” (i.e. without having the metal to deliver) in the futures market. We […]

Permanent Gold Backwardation: The Crack Up Boom

Professor Antal Fekete has written several pieces discussing gold backwardation, and arguing that this is the red alert signal for the coming financial Armageddon, when the tower of unpayable debts collapses.  In this paper, I delve deeper into this topic.  My goal is to make this topic approachable by the layman and describe what I […]

Videos of my lecture “Irredeemable Currency vs. Gold”

I gave this talk at the Chicago Objectivist Society MiniCon Sep 4, 2011.  Here is the full set of 9 videos on youtube for my presentation plus Q&A at the end, posted on this site to archive the links. Irredeemable currency vs gold – 1_9 introduction.wmv Irredeemable currency vs gold – 2_9 the origin of […]