The Austrian Theory of Gold Debunked: If Gold, Why Not Cows?
Alan Heap, an analyst at Citi Investment Research, recently broke with the dominant bullish view about gold by saying in a research paper, "Gold: Paper Problems," that prices will sink to $820 by June of 2014 and head lower long term to $700 an ounce.
“Alan Heap.. adds a bearish voice to a crowded debate over where the precious metal is headed. Billionaire investor James Rogers and perma-bear David Tice say gold will hit $2,500. James Turk, Author of GoldMoney, predicts $8,000, while author Mike Maloney is betting on $15,000”, The Street.com:
The biggest threat to rising gold prices is a substantial decrease in long positions in paper markets, Heap writes in his report.
"Positions held by money managers and broader non-commercial positions have fallen since November 2009 when the USD strengthened. Non-commercial net long positions are at 5x the average levels seen over the last 17 years." [1]
So is this another “brick in the wall” of the Austrian theory which was supposed to deliver us from the tyranny of fiat money?
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“Trained” as an artist (Leeds), then as a scientist (Cambridge); then spent fifteen years working in design/engineering and project management of technology “stuff”. Then got interested in “micro” markets, building supply/demand models to figure-out product sp…
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