Tuesday, March 22, 2011

Gaddafi's Gold

Muammar Abu Minyar al-Gaddafi (not to be confused with Charlie Sheen, shown in the photo above) has 12 billion in gold stashed away in his central bank and will be spending it shortly to pay his loyal followers (who are loyal to his gold, not to him).  What will this do to the world price for gold?

In the news this morning, they note that Gadaffi has about 12 billion dollars worth of gold in his vaults.  He smartly bought gold in the 1980's when it was cheap.  Now he is spending that money to pay his "loyal" soldiers and followers, to crush the rebellion in Libya.

Query:  What happens to the price of Gold on the world market, when Gadaffi starts dumping a lot of it, in order to buy hard currency?

You do the math.  This could be the trigger that bursts the gold bubble....