The Discount Rate

A decline in the discount rate temporarily below .09% will touch off buying in GBN.V shares. Even with an interim correction in the gold price, a decline in three-month treasury rates, or the discount rate will force naked shorts to net settlements and equity swaps to bid to cover, whose leverage is based on the discount rate:

http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

http://finance.yahoo.com/bonds

It will be the same for Canadian traders naked shorting GBN.V shares, or holding equity swaps in lieu of the failure of GBN.V, though short term money rates have a lot further to decline here.

-F6