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<p>[QUOTE=&quot;John the Jute, post: 604021, member: 17740&quot;]Hi Farmer (nobody is &quot;just&quot; a farmer)</p><p>&nbsp;</p><p>You&#039;re quite right, of course, and many gold mines do the same sort of commercial shorting. They need money to dig or extend the mine; so--instead of borrowing the money from a bank--they sell some of the gold in the mine for future delivery in a few years.</p><p>&nbsp;</p><p>They may gain by doing this, they may lose, but even the wildest conspiracy theorist isn&#039;t worried by it. What raises the rumour level is the number of speculative shorts ... gold futures sold by people who have only borrowed gold ... or maybe even no gold at all.</p><p>&nbsp;</p><p>If you can get away with massive &quot;naked shorting&quot; you can create the impression in the market of a lot of gold available for sale ... and thus depress the real gold price. To get away with this you would need the assistance--or the incompetence--of those in authority. Therein lie the roots of many fine conspiracy theories! :bigeyes:</p><p>&nbsp;</p><p>One of the wildest is that the UK Prime Minister, Gordon Brown, is not a fool. Between 1999 and 2002, he sold 400 tonnes of the UK&#039;s gold reserves at an average price of $275 an ounce. Conventional wisdom is that this was a ghastly and expensive mistake. Conspiracy theory says a number of large financial institutions, which the Government could not allow to fail, had gambled and lost in gold derivatives, and needed to deliver large quantities (many tonnes) of physical gold. The cheapest and quietest way for the Government to bail them out was to sell them gold.</p><p>&nbsp;</p><p>Later,</p><p>&nbsp;</p><p>John[/QUOTE]</p><p><br /></p>

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