Gold Flash Crashed

We don't want to start saying the Chinese are maintaining confidence in the dollar so they can destroy it. Sure, stranger things have happened but this scenario is a bit too contrived. The other idea that the Chinese will someday sell all their gold for dollars and that will hurt the dollar --for me that's a bit convoluted too.

What's consistent is that the gov't of China is rigid and unthinking. They do lots of things that they think they're supposed to do even if they're dumb, like building bases all over the world, banning foreign investment, debasing their currency to fund a trade surplus. It's all stupid and wasteful but lots of people think that it's how things work.

Let me correct your Engrish - it’s:

Mechanic: Somebody set up us the bomb.

Translated to Cracker:
It appears that an unknown party has planted an explosive.

Good points ...seems like a “win, win, win” situation for them. Proping up the dollar helps them, gold prices remain artificially low so they can buy more cheaper, and in the end when/if things head south with paper currencies they have a huge pile of gold.

expat said: some say it's supply and demand

That's what led me on this current path of extreme bafflement. A few weeks ago, the demand for silver eagles was so great that their production had to be suspended for awhile. It costs more to mine and process silver in the US than it costs us to purchase it. And still the price of silver breaks through lower boundaries.

Follow though what I'm wondering. Remmeber back at the beginning of the recession, when the bank situation was spinning out of control? Those real high costs of gold and ads encouraging people to sell gold stuff for cash served to put money in the economy (and also to get gold out of the hands of the public).

Now, we've got a situation where the global banking situation could spin out of control. Something would have to keep the economy going, and I'd assume those who manipulate things are smarter than I am, so they have a plan. That's where the crazy-low price of silver comes in. Is it a way to have a hedge against a collapsed banking system? If enough average folks have some silver, the economy could survive on barter for awhile, in times of banking or some other crisis?

Does that make any sense?

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