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Ambush at the COMEX Corral

- Darryl Robert Schoon - Survive the Crisis

I've been reading the various autopsies on what happened in the gold market last Friday and this Monday and have been struck by a number of things.

1) It seems to me that nobody is pointing the finger of blame at Mario Draghi, yet it appears to me that his statement about Cypriot gold is what triggered the sell-off. In short, what he said is that Cyprus would have to sell their gold reserves if they wanted more "help". The unspoken implication was that this requirement would be placed on any other Eurozone country needing a bail-out (read Spain, Italy, Portugal, Slovenia and perhaps France). That raised the spectre of thousands of tons coming onto the market in the very near future. Hard to blame anyone for wanting to get out with the possibility of forced sales of that magnitude on the horizon.

2) There has been a lot of talk about a massive naked shorting of the market coming from those who only advise that you buy, never that you sell. And they quite naturally complain bitterly about it. Let me just point out that it is perfectly legal to short the market, even if you do not have the underlying asset (hence naked).

3) There has been a great deal of detective work done trying to determine who the seller was. Why has there been no interest shown in who was buying? After all, there can be no selling without someone buying.

4) It seems rather incongruous to me that those who complain most bitterly about the market being rigged are the very same folks who only advise that you buy, never that you sell. Why on earth would you advise anyone but your enemies to participate on the wrong side of a rigged market?

5) There has been a near absence of commentary pointing out the obvious: gold is a commodity just like all the others. It goes up and it also goes down. There need not be some sinister plot behind its price movements. Indeed, there would be something sinister behind it only moving either up or down, for that would be unnatural.

6) It has been rather sad to see the feedback Dan Dontrose has received, being called an idiot and the like. All he was guilty of was making the right call on where price was headed. As for his comments on Peter Schiff, he was a good deal more gentle than I would have been. With that he merely pointed out that Schiff, with his endless calls to buy, was decisively wrong.

7) Far too many of those writing articles for our consumption on this site have bought into the utter nonsense that Austrian economics represents. It is time to realize that gold is just another commodity. Austrians have made it into a quasi-religion. Recent events have shown that if this was a battle between Austrians and Keynesians, the Austrians got slaughtered. It was not even a competitive fight. This revelation should be welcomed, for if we learn the lesson that it has taught, we will throw off the blinders that Austrianism forces us to wear and we will see gold for what it really is.

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