Shouldn't you be able to short it? If you have a good in-game and out-game reputation, would you be able to borrow gold, convert to cash, and then convert cash to gold when your debt comes due?
Yes, but for anyone with any professional skills at all, that kind of arbitrage just isn't a good time investment compared to real work. I did the math once. WoW doesn't really permit economies of scale on this sort of thing -- there are no free markets, so you have to go through uniformly shady RMT ("Real Money Trading") brokers who will be quick to freeze you out if they sense you're making a mass profit over their channels.
Do they freeze you out if you're making money for them, too? Let's say I am consistently good at predicting one-month 20% declines in the value of WoW gold. And I invest, say, $100 in gold on a 5% commission, and cash out with that same 5% commission. If I'm making them money (often), why would they give me a reason to switch to a different broker? Is $100 now really better than $10/month?
When your counterparty in a transaction is a $100b business, they have an interest in keeping their end of the bargain. When your counterparty is a 14 year old pimply-faced kid, he has no incentive not to pay.
It would only work with a centralized bank that insured against credit default risk.
