“It’s worth noting that the short interest in many gold-mining stocks continues to climb. Obviously, those who believe that deflation will carry the day and that gold needs to collapse in that environment are expressing their viewpoint.”
For those unaware Bill Fleckenstein has been writing his paid newsletter on all things financial since 1996, which is not exactly Richard Russell longevity but still highly laudable. “Hmmm”, Thought I, “Dat true?”, and after rootling around for a few minutes came up with this chart of the major high traded volume pure gold producers quoted in the USA.
Click to enlarge
Yep, it’s true. That chart shows 16.42m shares were added to the short side in these eight companies in the period October 2008 to December 2008. And by factoring in today’s closing prices that adds up a U$445m of short interest recently added to eight pure gold plays. Now this might not sound so much to you due to regular financial headlines that include the word ‘trillion’ but I can assure you, intrepid janissary of IKN, that even in this day and age half a billion dollars is a fair chunk of change. Especially in a relatively specialist sector such as gold mining stocks.
So add this to the recent drifting drop in the price of gold, season with recent headlines from the tinfoilhat brigade that those nasty horrible manipulators are at their Comex gold games again, then mix thoroughly and bake in a medium oven for 45 minutes.