GregStockmaster
Short

Why gold may fall back down to below 400/oz USD

COMEX:GC1!   Gold Futures
Gold is still a bubble. Bubbles that rise over 600% in 10 years don't deflate by simply going down 50%. Most bubbles of this nature deflate back to close to their original value. In this chart, I explain a lot of the fundamental factors that drove gold price higher, China's role in gold , and why a Chinese hard landing (if it occurs) will cause a new great deflation, which will see gold fall back to it's values in the early to mid 2000's.

Trading idea? As a long-tail hedge, you can play for an enormous tail-risk return by purchasing OTM leap puts on the ETF $GLD . January 15th 2021 puts with a strike price of $90 provide a 70x payout on the value of the original put option if $GLD falls down to $40 per share. This is a reasonable expectation if this plays out in the way described here. This is my big-short. Obviously it requires things to line up to occur, but I feel like the possibility here is very real, and nobody is expecting this to happen despite the fundamental basis that aligns quite well with the technical view of Gold . If it happens, it will surely be called a black swan in hindsight, but I feel this is more a gray rhino. It's not hard to see if you simply look at what is happening / what happened.

Much thanks to Jeff Synder for information on the eurodollar system that helps put all of this in perspective: http://www.alhambrapartners.com/commenta...

For some great analysis on China, I encourage people to read https://deep-throat-ipo.blogspot.com/ which provides excellent, if sometimes scary analysis on what is happening in the east.

And as always, take your own risks. This isn't necessarily a play on what is most likely to happen. It's a play of "heads I lose a little, tails, I win a truckload". Please do not dump your savings into something like this.
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