Gold Arbitrage and Backwardation Part III (Gold as a Commodity)

Gold Arbitrage and Backwardation Part III (Gold as a Commodity)

“In Part I, we discussed the concept of arbitrage. We showed why defining it as a risk-free investment that earns more than the risk-free rate of interest is invalid. There is no such thing as a risk-free investment, and in any case economics must be focused on the acting man rather than theoretical constructs. We validated that arbitrage arises because the market is constantly offering incentives to the acting man in the form of spreads. Arbitrage is the act of straddling a spread. Arbitrage will tend to compress a spread. The spread will narrow, though not to zero because no one has any incentive to make it zero.”  By Keith Weiner 28 March 2014 http://news.goldseek.com Read More

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