Here's another theory given on kitco...
Gold serves as either a barometer of FUTURE inflation or deflation....THAT has been historical role for ages.
Any rapid drop in gold (as occurred today) is NOT equity friendly....rather gold is SCREAMING that runaway deflation is taking place, gold is SCREAMING that another stock market crash is coming any moment.
Unless the gold price is reflated VERY QUICKLY, then the stock market will plunge once again, without bottom.
There is a saying, "Be careful what you wish for," and the LAST thing that gold detractors should desire is a fast drop in the gold price, that is the worst thing they would want to see. In fact, it was the dramatic drop in the gold price that occurred in August that forecast the first phase of the September DOW massacre.
if gold is not revalued very soon, then we enter systemic meltdown, nothing less. But it is difficult for such a gold revaluation to occur when you have a Treasury Secretary who is mostly concerned about protecting his major investment (Goldman Sachs stock, held in blind trust escrow), not to mention protecting the anti-gold hedge-book of his whore-masters at Goldman Sachs itself, and its various gold short Wall Street cronies, notably JP Morgan Chase.
I still consider the short sale ban enacted to "protect" financial stocks to be the most egregious evidence of corruption by the current Treasury Secretary. Ask yourself this salient question: in order to present any semblance of fairness, then why did the Treasury Secretary not enact laws that protected other economic sectors (e.g., retail, technology, resources, etc) from being targeted for short sales by the financial companies themselves? Why such a double standard?
Answer: because we have a Treasury Secretary whose primary focus is protecting his own personal stock holdings, and the hedgebook of his Wall Street whore-masters.
