Is there an equivalent to short selling for physical goods? Does the question even make sense?
If you though gold was overpriced (and there was no gold futures you could short) what would you do? Buy silver? I guess you invent a short by entering a contract to sell someone gold 6 months from now for a given price. But short of inventing a means to short-sell, what would you do?
" I guess you invent a short by entering a contract to sell someone gold 6 months from now for a given price." - i.e. a short futures^H^H^H^H forward contract (oops, futures are on exchanges and forwards not, I forgot that being exchange driven is part of what makes it a future vs. forward)
You could short it like you short a stock - find someone who owns some gold, and have a contract to borrow the gold now, and give it back to them in 6 months, while paying them a small fee while it's outstanding.
Yeah, with fungible items you can easily do it, but you don't because all of them have the natural transformation into pure paper.
For instance, you could borrow a gold ingot and run through the whole thing. But there's no point in that since the validity of the whole thing rests on your creditworthiness and how good that contract is. So you might as well never borrow the real ingot and just write in the rest of the clause of how you are entitled to delivery of the ingot. That way you can trade them.
For shorts to be viable you just need sufficient liquidity that you know you won't fail to deliver on your side of the thing. Which is why fungible goods are easiest.
If you though gold was overpriced (and there was no gold futures you could short) what would you do? Buy silver? I guess you invent a short by entering a contract to sell someone gold 6 months from now for a given price. But short of inventing a means to short-sell, what would you do?