Reader Matt writes … 

 Hello Mish,

I love your blog. I read it every day. You are my non-conspiratorial viewpoint on the economy. Your work keeping an eye on and analysis of Greece lately has been very helpful to me in understanding the way of the world.

One thing I seem to recall with your previous posts is that in general you don't think gold is manipulated like all the conspiracy advocates say it is. I was recently reading this article that makes me question your viewpoint on that. Perhaps you could comment on this article.

Thanks for your time and for your blog. I appreciate it.

Matt

Supply and Demand in the Gold and Silver Futures Markets

Matt writes in regards to Supply and Demand in the Gold and Silver Futures Markets by Paul Craig Roberts and Dave Kranzler and in general about the theory of physical gold demand vs. paper gold. 

 This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets. The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.

My Reply

Any time you see articles promoting the difference between physical gold and paper gold you are most likely reading a pile of crap.

I have debunked such theories many times. In fact, one can easily prove such talk is complete nonsense. 

In spite of claims of shortages and price discrepancies, one can get physical gold near spot rather easily.