QEP just paid $35.6k per acre for Permian acreage in Martin and Andrews counties. Do they not understand valuation either, or maybe you know the oil and gas business better than they do?
It may be in the warehouse but it's not eligible to be used for delivery on contracts. I didn't think it was a problem either, but now I'm not so sure. I was looking for intelligent conversation on this topic, but I'll have to find it elsewhere.
COMEX has around 22 tons of gold going into December and after the longs take delivery, they'll have almost nothing. They'll literally be leveraged 500 or 1000:1. What happens in February when they have to deliver and there's no gold? Do they declare a default? Do they go bankrupt? Are they effectively short every gold contract they've sold? If someone with knowledge of the situation can explain it to me, I'd appreciate it very much. Thank you.
Exactly right. COMEX is not a physical market anymore. It is a paper/digital market promising to pay in cash at settlement. No more physical gold will be exchanged between longs/shorts, and guess what? The market is just fine with that. It doesn't care. NOBODY WANTS GOLD; THEY JUST WANT TO SPECULATE ON PRICE MOVES AND BE PAID IN CASH!
The December gold contract goes off the board in days and the price is gold is still below $1250. If the COMEX really were on the verge of defaulting, don't you gold bug geniuses think the price would have anticipated that event? There will be no default.
Bugs, don't get it: what the governments did to bitcoin, they're about to do to gold if it peaks its nose out from under the rubble. Get ready for your gold to become illegal. I had a Krugerrand I couldn't sell for a decade. It can and will happen.
Okay, so the Fed expanded its balance sheet 1 trillion dollars in the past year and gold fell over 30%. So now that the Fed is preparing to stop growing its balance sheet and eventually reduce it, what is the bull case? Come on, gold bugs, enlighten me with your genius.
Do you understand that the market is not worried about it? If it were a real problem, the price of gold would be much higher. They know that the COMEX will find the gold it needs or do a cash settlement. AND THEY DON'T CARE BECAUSE EITHER WAY THEY MAKE THEIR MONEY!
The ratio of traded gold to COMEX gold is more like 60:1. But I agree with you: all the default talk is nonsense. The market knows everything that happens at the COMEX and everywhere else affecting gold and the price keeps going down. Nobody who matters is concerned about this because there's nothing to it. It's just another misguided goldbug investment thesis.