Here at Screwtape Files, we had a great
discussion last week about whether the gold price would go below the three year trend line, and accordingly whether a sell-off would occur based on TA principles*. I’ve been watching the rise over the last few days with great interest to see whether the price will be ‘managed’ back up – a leading theory is that a high(er) price is needed to coax physical out of the market.
I find interesting the number of gold-friendly articles which have popped up recently. Like
this one on Zero Hedge, or possibly
this peice from the Spellman report. Now whether or not a gold standard is possible or not is irrelevant**, I'm more interested that the whole ‘gold standard’ idea seems to have had a recent ‘flush’ into the public consciousness. I wonder if one is not a consequence of the other – in other words if part of the gold price management is to do with media manipulation. Unfortunately, I don’t have any hard research on that idea, nor do I have the millions of dollars necessary to fund a study on it. That upsets me (the fact I don’t have a million dollars), but I do have a few anecdotal items which I want to present.
Let's first talk about brand power. A few years ago our local supermarket recently started selling their own mobile SIM card - I remember being really surprised that they had launched their own carrier and for a little while I was awestruck by the power of their monopoly (which here in the antipodes includes not just grocery items but also key markets like petrol, hardware stores, etc). It wasn't until my internet service provider started offering their own mobile SIM cards that the penny finally dropped and a bit of investigation revealed that these 'brands' will piggy-back on the infrastructure of one of the major providers (for example iinet uses Optus), normally offering slightly different price packages. Bottom line it's the same service in different wrapping paper, but it's beneficial and convenient for all parties involved because it reduces overall cost and allows economies of scale while still retaining brand identity and (I presume) maximizing market share.
