Monday, January 31, 2011
On July 4th, 1974, Louise Auchincloss Boyer's dead body was found beneath the window of her 10th floor apartment. Three days prior, a newspaper published a story in which legal counsel for the American Gold Association accused the Rockefellers of looting Fort Knox of most or all of its gold. The anonymous source of the story had been Mrs. Boyer, executive assistant to Nelson Rockefeller.
Thursday, January 27, 2011
The swap rate is the difference between the forward price and spot price. The inverse of the swap rate is sometimes called basis. Spot price is sometimes called the cash price. When the swap rate is less than the cost of carry, then a market may turn from contango to backwardation. Cost of carry is basically the cost of holding a position. A market may begin to experience backwardation when no arbitrage can be made from delivery due to supply shortages or risk of a delivery failure. Contango occurs when the forward price is higher than the spot price, i.e., when the forward price is at a premium. Backwardation occurs when the forward price is lower than the spot price, i.e., when the forward price is at a discount. When there is a supply shortage, delivery arbitrage disappears because no supply is available.
Wednesday, January 26, 2011
Tuesday, January 25, 2011
Monday, January 24, 2011
Gold is an excellent conductor of heat, electricity, and value.
Wealth can easily flow through gold–––and without tarnish or corrosion.
Output is comparable to input.
Debt-money is an insulator.
Wealth can flow through it–––but only with effort and loss.
Output is less than input.
Wealth preservation versus wealth destruction.
Insulators have valid and necessary functions as much as conductors do, but should one's lifetime of labor be measured by currency units borrowed into existence?