tag:blogger.com,1999:blog-8507267003129255315.post563102593752979096..comments2024-02-05T01:08:25.857-08:00Comments on Krazy Economy: Self-Fulfilling Fantasies: US Treasury BondsC.W.http://www.blogger.com/profile/16478139107745117649noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8507267003129255315.post-6924909589939996352011-08-14T16:17:45.975-07:002011-08-14T16:17:45.975-07:00Jack, thank you for your question. I take it in t...Jack, thank you for your question. I take it in terms of volume and dollar amount, not the total owned. The Swiss economy in 2009 had imposts and exports of production goods totaling about $327B. Then there are services, investments, banking, and speculating activities which all require demand for Swiss Francs. If I use a conservative number of $400B for that year and divide by 250, roughly the number of business days in a year, we come up with a figure of $16B a day. For the gold market to average that volume, using a price of $1500, it would need over a million ounces a day, on average. Now, I am not including in what I am calling the gold market the gold that is used in jewelry or in production. I am talking solely about financial or currency use, i.e., those people who regard gold as a store of value or at least as a protection from government activity. Now if you look at the trading volume of the London bullion market, it would appear that these numbers are similar, the demand for the Swiss Franc and the demand for gold. But there is a difference. Much of the current activity in London is from traders who buy and sell, often several times a day. They are in fact trading the claim to the same bullion over and over again which is also true of at least some of the buyers and sellers of Swiss Francs. But still, the majority of buyers and sellers of Swiss Francs are people who are using the Francs in business. The equivalent in the gold market would be people who are purchasing gold to hold and not to speculate. That portion of the gold market is smaller, and smaller than the Swiss Franc market. If the volume of dollar demand for gold to hold took up a larger percentage of the London Bullion Exchange activity, the price would soar.C.W.https://www.blogger.com/profile/16478139107745117649noreply@blogger.comtag:blogger.com,1999:blog-8507267003129255315.post-71091544183245645372011-08-14T13:42:33.836-07:002011-08-14T13:42:33.836-07:00How can you tell that the gold market is smaller t...How can you tell that the gold market is smaller than the Yen or Swiss Franc market. This is surprising to me, but I don't know exactly what this means. Is it the dollar amount traded on a daily basis?Anonymoushttps://www.blogger.com/profile/12113696919293480657noreply@blogger.com