Gyroscopic Investing

What,if any, thoughts do my fellow posters have on gold leasing by the central banks, and, its potential impact on the performance of the permanent portfolio?

I have thought of this as I think of the weather; interesting to talk about, but beyond my sphere of influence beyond wardrobe and activity selection.

Being the only reply to your own thread is probably the social equivalent of taking your mom to the prom. Still, this topic intrigues me because I read of some investors that do not trust GLD, or IAU, and speak of market manipulation. The concept of gold leasing struck me as mysterious. I can see renting a house, or a car, but gold?

I came across this thread via google:

https://www.kitcomm.com/showthread.php?t=41818

Poster EReal said:

"Central banks lease gold & silver to "bullion banks" at a very low interest rate who then sell it, take the money and invest it in (usually) treasuries or some other low risk vehicle at a higher rate of interest. Generally the bullion banks do not ever buy back the gold and return it to the banks, rather the lease is rolled over year after year. It is estimated that between 5000 - 15000 tons of gold is currently leased out. Most leasing is done in europe, more so than in America."

and Venturer added:

"The really cool part is the Central Banks can show the Gold on their books because it's only 'leased' and not sold. Even though it was sold eight years ago and is in a vault in China. So they might not have an ounce of physical Gold in their [sic]possesion but they can report that they have 400 tonnes.
The only way this works out is if there is an unlimited amount of Gold."

It is a complicated world.

Browne always advised trying to hold gold with as few pieces of paper between you and the asset as possible to avoid this kind of funny business of gold leasing/lending.

As for gold market manipulation. This claim has been around for ages and I just don't think anyone or anything is really able to control the markets. Browne talked about this very topic in this show:

https://web.archive.org/web/20160324133 ... -04-10.mp3

There isn't a central bank or ETF on the planet that could control the price of gold if the markets decided to go against them.

craigr wrote: There isn't a central bank or ETF on the planet that could control the price of gold if the markets decided to go against them.

As far as a central bank goes, aren't they solely capable of manipulating the fiat currency associated with them, so far as deciding the value of something goes?

6 iron, check out gata.org    here you will get info from the premier authority working to expose gold manipulation.

as to the practical effect, if gold is in fact being held down, means we can get it at a "subsidized" price