tag:blogger.com,1999:blog-6089228851855763774.post7750653582257551289..comments2024-03-29T07:10:06.022+08:00Comments on Gold Chat: Gold is a pure Epsilon/Narrative assetBron Sucheckihttp://www.blogger.com/profile/00530576934994289879noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6089228851855763774.post-75010289148774955712013-07-18T07:08:17.691+08:002013-07-18T07:08:17.691+08:00My current view on negative GOFO is that it is ref...My current view on negative GOFO is that it is reflecting the shift by specs to the short side, so as more shorting happens you need to ultimately lease gold, which drives up the lease rate (thus GOFO goes down). I think liquidation by specs out of long positions has also restricted supply of gold to lease (as the gold has been sold to those unable or unwilling to lease their gold out). <br /><br />I have also seen comments that increased physical demand has resulted in more metal being tied up in the value chain, so that results in more demand for leasing (or inventory to hedge). Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-11063719081203733442013-07-13T16:16:21.804+08:002013-07-13T16:16:21.804+08:00Well Bron! Seems that you have been suckered.
Eve...Well Bron! Seems that you have been suckered. <br />Ever heard of Aesops fable - the man, the boy and the donkey<br />All just vested interest market chat.<br />At least I still have the (useful) donkey.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-9769027905859639732013-07-10T08:39:53.820+08:002013-07-10T08:39:53.820+08:00Hey Bron
Haven't visited your site for a whil...Hey Bron<br /><br />Haven't visited your site for a while but just read your May 31 post.<br /><br />Have you seen any changes since then, particularly in light of the recently publicized 'backwardation' & negative GOFO?<br /><br />I'm skeptical about reading much into this spread in futures markets but any discount on unallocated v physical strikes me as a different story.Justinnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-85073345250056725972013-07-08T08:56:51.472+08:002013-07-08T08:56:51.472+08:00Thanks for those links. The GMO paper raises and i...Thanks for those links. The GMO paper raises and interesting idea - has much of the bull market been a western fear but emerging markets love trade?Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-20678379017237536102013-07-07T05:53:25.856+08:002013-07-07T05:53:25.856+08:00...and before we get too far down the Gold-Price-a......and before we get too far down the Gold-Price-as-Narrative path, (I can identify nine), for we are really looking at various hypotheses usually offered as theses that correlate to the price movements in gold, here is the daddy of all correlation-to-financial-market theses: Butter Production In Bangladesh, updated (!):<br /><br />http://www.forbes.com/sites/davidleinweber/2012/07/24/stupid-data-miner-tricks-quants-fooling-themselves-the-economic-indicator-in-your-pants/<br /><br />Take it for what it's worth.S Rochehttps://www.blogger.com/profile/18070519576321568415noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-9308512408992500102013-07-07T05:32:17.800+08:002013-07-07T05:32:17.800+08:00Here is a worthwhile alternate narrative for gold ...Here is a worthwhile alternate narrative for gold from Grantham (GMO)that posits that the US centric view is presently wrong, and always was wrong:<br /><br />https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIAs8wlv%2fbfj2VVyryvI2XYb6on3to6ZUEG%2bop1M7ainSHY2Fli%2bgOFdGKOukKZ6MwvCgjyc1AQECM4co%2fKso7pTcVAwiOvFKlNaKCeadAwwDQ%3d%3d<br /><br />Emerging market demand largely drives precious metals...both ways! <br /><br />Worth a read to add to the many narratives.S Rochehttps://www.blogger.com/profile/18070519576321568415noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-19273353791983023032013-07-05T16:55:42.854+08:002013-07-05T16:55:42.854+08:00Good points. My aim with this post is just for peo...Good points. My aim with this post is just for people to realise there are Narratives, that is the first step. Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-79348145973660507572013-07-05T14:53:39.498+08:002013-07-05T14:53:39.498+08:00Bron,
You linked to an interesting read, "Ho...Bron,<br /><br />You linked to an interesting read, "How Gold Lost its Lustre", with a curious mistake. <br /><br />The statement 'gold is money' is as true today as when JP Morgan made his similar but always mis-quoted statement in 1912, which is now no longer true: "Money is gold". Gold, to some, is a form of money today, so yes 'gold is (still) money'. Money today, has other forms, which may indeed "all be credit", (which itself is a tortured paraphrase of one of Morgan's answers to Congress), so "Money is (no longer) Gold".<br /><br />http://www.bullionbaron.com/2012/11/jp-morgan-on-gold-and-credit-what-did.html<br /><br />In an unintended way this confirms the writer's point regarding the narrative of gold. In my own words, people just make shit up. Or as William Goldman more memorably said it "Nobody Knows Anything", referencing Hollywood's inability to know in advance if a film will be a flop or a hit, is much the same as gold commentators inability to ascribe the reasons for gold price movements...before, and no doubt surprisingly to some, after the fact. Essentially, price makes news and most people search under the lamplight for convenience sake.<br /><br />Yet, the writer argues as if he has quoted Morgan correctly, that money is no longer gold, and goes on to ascribe gold's recent price decline to Central Bankers, specifically Ben Bernanke as the current Common Knowledge. This may be, but I think a lot of gold's price support comes from the doubt over Central Bankers Omnipotence and therefore this Common Knowledge narrative, if it is that, will go the way of the last.<br /><br />Whether that is because the price of gold goes up due to Carney and Draghi (Central Bankers) on July 4th, and Abe for the last few months, or whether the leverage in gold derivatives and the unwinding of the collateral chain due to deflation takes over as the new narrative, remains to be seen.<br /><br />My own view has evolved to the point that I am very wary of narratives, even of ones so interestingly presented as the one you linked to.S Rochehttps://www.blogger.com/profile/18070519576321568415noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-58786226460362922762013-07-05T09:26:40.374+08:002013-07-05T09:26:40.374+08:00I relate to what you have said through a simple ma...I relate to what you have said through a simple market wisdom that I have come to see is true. That is "The market can stay irrational longer than you can stay solvent".<br /><br />It's not that the truth doesn't matter, because in the end it does, it's that the time it takes to matter can be on a timeline that is greater than we can survive.<br />MickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-43336877310590292812013-07-05T09:14:25.974+08:002013-07-05T09:14:25.974+08:00you're just being prudent, but that does mean ...you're just being prudent, but that does mean keeping an eye on us :) - trust but verify<br /><br />Offline comment from a reader who disagrees with "Narratives tend to die with a whimper, not a bang" who believes the Central Bank/Fed narrative will die with a Bang as aptly detailed by Rogoff and Reinhart.<br /><br />I would agree with that.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-68340107923982306442013-07-05T05:22:09.844+08:002013-07-05T05:22:09.844+08:00Keep not making a dent. Straight talk from a mint ...Keep not making a dent. Straight talk from a mint staffer is worth a thousand coin spruikers.Philnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-31564415412071176002013-07-05T00:46:18.045+08:002013-07-05T00:46:18.045+08:00Many thanks for the link to Epsilon Theory which l...Many thanks for the link to Epsilon Theory which looks most interesting - particularly the Just so story about Gold.<br /><br />I had never heard of the epsilon component of return before. I've just bought a pile of your certificates so I'm keen to discover whether I've been clever or foolish.rob's unclehttps://www.blogger.com/profile/03001074396029714388noreply@blogger.com