[TAXMASTER]

Rocky,

The electronic markets are manipulated. The metals are kept low for a reason. If you look at the dollar index, it went up again today. What a crock. That is why there is a gold/silver shortage, because supply and demand do not calculate in the price. This is why dealers charge a surcharge on the spot price.

a brief example is as follows:

on the futures market, somebody wants to buy a futures contract on gold. You need about $7500 to buy a contract to buy 100 ounces of gold. Market value $90,000). When you buy it the price that gold is at that point determines what you bought it for. in other words if the price was $900 then you bought $90,000 worth of gold. if the price goes up $50 an ounce then you can sell your contract and get your $7500 back plus the profit of $5,000 (100 ounces X $50 per ounce) Of course if the price goes down, its the reverse.

now lets assume that most people buy only on speculation and do not intend to take delivery. That means they sell and cash out before the contract comes due. So when you buy a contract you do not buy the actual gold, you buy a promise to buy gold at a specified date. The gold is kept in cental banks and they are not audited on the actual amount that they have in their vaults. The bank then leases the gold to a speculater that then sells this gold on the market. If there is more supply than demand then the price goes down. they flood the market with this paper gold which drives the price down. after the price drops so much that it scares out most of the investors, these same speculaters then buy a contract to replace the contract that they sold at the higher price and in essence give the gold back to the bank and keep the profits.

this my friends is a simple but effective way to describe how it is done. no gold or silver changes hands, its all on paper. this will unfold at some time in the future and that is why george greene and others say to own the actual metal itself instead of a future contract or an ETF.

Namaste'