Thursday, September 15, 2011

($GLD, $USD) It is cheaper to borrow gold than dollars (the gold lease rate is in essence the cost of shorting gold.  The FT reports that the 1-month lease rate fell to a record of almost -0.5%).  This does not seem to be a reflection of the intrinsic value of either one, but rather another expression of the stress of the banking system and the pressure to secure dollar funding.-M.Chandler

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