collectively own the lions share of what’s out there. The record is
pretty clear however, most of the majors have sold gold over the past
few decades. Today they have even more reason to hate it. It makes them
look bad. This chart shows that both the Euro and the dollar are losing
the race against gold as a store of wealth.
That the Euro is hitting all time lows against gold is an old story. But
the move has gone parabolic of late, including a 3% pasting today
A very high percentage of Europeans own some gold. Much more than
Americans. Younger people who don't own gold have parents that do. They
are more aware of gold as an asset class and something to turn to when
there is trouble. Therefore the collapse of the Euro against gold is
much more relevant then the fall in the EURUSD. EURGOLD is probably the
best barometer of how desperate Europeans see their collective financial
future. This does not bode well for consumer or business confidence.
The US Fed is adding to the misery of the EU Central bankers. They are
part of the problem, not part of the solution. They are contributing to
the appreciation of gold at a time when the Euro is weak versus the
dollar. This creates the exponential price action in EURGOLD.
Many things are influencing gold of late. Inflation in China, nuts
shooting cannons, a melt down of Europe’s financial picture and of
course the biggest of all is the Fed and its effort to create inflation
as a policy goal. What does this story from the WSJ do for gold?
It’s a good bet that Ben Bernanke and his talking heads will get their way. Actual inflation, and even worse, expectations of inflation
will rise. Gold will rise against the dollar as a result. It’s an
equally good bet that the Euro is headed lower against the Buck. So the
measuring stick that Europeans look at is going to get even more
stretched. I wonder if those European central bankers (and a few
political leaders) are hating Ben for adding to their woes.
I have no idea what you are talking about -- every shop that I know that sells bullion has been doing a very brisk trade indeed. And that's true for both France and Germany. Germans, in particular, have been buying Gold like there is no tomorrow.
For your information, I was in Paris not two weeks ago and every other investment magazine cover was about buying Gold ASAP. The French have always loved their "Napoleons" and, while they may have been eclipsed for a while, they are back with a vengeance.
So, sorry: Europeans know very well something big is going to explode in their faces, and they are taking the rational course: buy precious metals.
The only Europeans who own some gold that I know, are people I have given it too!!
I sit in an office with 40 or so people, and only one guy (an indian) has bought gold these last 18 months.
Seriously, nobody has gold.
I happened to stumble across the movie Casablanca the other evening;
"Ingrid Bergman (Ilsa): A franc for your thoughts. Humphrey Bogart (Rick): In America they'd bring only a penny, and, huh, I guess that's about all they're worth."
The europeans have known for much longer than us what fiat is.
Mr. Bernanke has obtained Jean-Claude Trichet's Ouija board and will be conducting séances to channel the spirits of Mr. Keynes and Mr. Hayek; hoping their participation in some "what if" EUR and USD scenarios will help pin down the gold pricing puzzle.
"Mr. Bernanke has obtained Jean-Claude Trichet's Ouija board..."
Obtained, no doubt, by merely printing enough to purchase said ouija board ;-)
What a world we would live in, if time/work were not compensated with payment in good money for services rendered...why, there would be no reason to work at all, everyone could just be given a little home electric printing press...LOL.
"The Federal Reserve, under orders from Congress, plans today to identify recipients of $3.3 trillion in emergency aid the central bank provided as it fought the worst financial crisis since the Great Depression.
The Fed intends to post the data on its website at midday in Washington to comply with a provision in July’s Dodd-Frank law overhauling financial regulation. The information spans six loan programs as well as currency swaps with other central banks, purchases of mortgage-backed securities and the rescues of Bear Stearns Cos. and American International Group Inc.
The disclosures may heighten political scrutiny of the central bank already at its most intense in three decades. The Fed’s Nov. 3 decision to add $600 billion of monetary stimulus has met with backlash from top Republicans in Congress, who said in a Nov. 17 letter to Chairman Ben S. Bernanke that the action risks inflation and asset-price bubbles."
http://www.bloomberg.com/news/2010-12-01/fed-will-name-recipients-of-3-3-trillion-in-emergency-aid-during-crisis.html
When they put that vulture in the Fed's seal, they forgot to add the supine and bleeding body of the American people below it, as well as the ripped chunk of flesh in the vulture's mouth.
word, brother.
good to see you around.
The Central Bankers hate Gold because.... it competes with their fiat currencies! By suppressing gold, they are trying to boost the illusion that fiat can be a store of value.
It only works for so long. The day people see the Emperor without clothes is going to be ugly.
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Nice visuals.