Extremely intelligent people do not ask stupid questions therefore this question demands an answer determined by assuming a logical thought pattern under circumstance presented based on the premise in finance today, “Never say Never.”
Dear most respected colleague,
That seems quite absurd. However, everything today in markets is absurd. There is a strong premium in the new physical gold markets in the East, which might give rise to such a strange rumor.
I am not sure its would make sense because there is powerful demand for physical in the East (India went to USD $3000). When you stop incoming supply which way internally does any item move? In India gold went to USD $3000 on a lesser event. In China, I would say blockage of gold imports and gold internally goes to USD $5000 there. In the paper market the gold disappears in price, but to what purpose other than one hell of of black market arbitrage. You would have a USD $4090 difference between western paper gold markets and eastern physical gold markets. No power on Earth would stop that arbitrage.
You have to have the physical to make delivery in the newly listed Eastern physical market gold. So inside China physical heads for $5000 is as crazy as that seems. Maybe Shri Modi is taking the position of head of the China central bank.
Comex paper gold is offered at $10 per ounce. Eastern listed physical $5000 bid, none offered. Net Jet business booms. Come warehouse empties, the paper gold market no longer functions.
Comex warehouse collapses in 90 days after Comex contracts unilaterally notated, like during the Hunt Crisis.
The price determination mechanic of gold shifts from paper to physical in 90 days. Massive confusion among gold and silver manufacturers of OTC derivatives. The only result of such an action would be to create one hell of a mess and a Market Reset of the currency system in 90 days with Russia and China in charge.
Then Trump would have the opportunity to move back to the gold standard of a sorts with the paper players having no market to manipulate. That is assuming that there is any gold fungible in the US Treasury holdings.
Message to Modi: Do No More Harm
December 4, 2016
India again posted world-beating growth numbers last week: Gross domestic product grew 7.3 percent in the quarter between July and September. But the question remains, so what? After all, none of this data covers the period after Nov. 8, the date Prime Minister Narendra Modi abruptly declared 86 percent of India’s currency would be withdrawn from circulation.
In the weeks since, the chaos accompanying “demonetization” hasn’t eased up noticeably. It seems likely the disruption to the economy, especially in cash-centric rural India, will hit growth sharply for at least a few quarters. It’s tough to say for how long and by how much; we are in uncharted territory here and guesses have varied widely. But many analysts agree with former Prime Minister Manmohan Singh, who’s predicting the new policy will knock 2 percentage points off that world-beating GDP growth rate.
It’s too late for Modi to backtrack now, not least because demonetization remains, in spite of all the chaos, relatively popular politically. But it’s crucial that the government not compound its mistakes going forward.