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Gold Spikes As World Gold Council Says Gold Demand Surges 36% In Q2, Sees Ongoing Demand Out Of China And Europe

Tyler Durden's picture


Rumors of Gold's imminent death in a liquidation-driven collapse continue to be greatly exaggerated, and in fact the shiny metal continues to perform inversely to stocks, which take on ever more water, and is a confirmation that the market expects continued dollar destruction courtesy of the Marriner Eccles residents. And courtesy of the World Gold Council's just released Gold Demand Trends update, there is an explosion in demand for the precious metal which will likely not cease any time soon: in a nutshell, in Q2 demand for gold surged by 36% from 770 tonnes to 1,050 tonnes: a huge move, and one which solidifies the thesis for a fundamental rise in gold, aside from all the talk that gold is now just a backstop to Central Bank idiocy. Lastly, the WGC sees a huge demand coming out of Chinese consumers for gold in the future which will provide a constant bid floor: "Recent developments in China are likely to have positive longer-term implications for this increasingly important market. The PBoC, together with five other ministries/regulators published a proposal to improve the development of the domestic gold market, (“The Proposals for Promoting the Development of the Gold Market”). This further reinforces the WGC’s view that there is huge potential for gold ownership to increase among Chinese consumers, in a market with tight domestic supply, as discussed in our China Gold Report – Year of the Tiger, March 2010." And the firm's conclusion on demand trends: "As demonstrated earlier, gold’s relevance as a preserver of wealth is
enduring, even in conditions of relative economic optimism, since
historically gold has a capacity to provide investors with both
confidence and a sure and steady means of enhancing the consistency of
their returns."
So what was the bear case on gold again?

More from the WGC report:


The WGC expects demand for gold to remain strong during 2010. India and China will continue to provide the main thrust of demand growth, particularly for gold jewellery.

Economic uncertainties and the ongoing search for less volatile and more diversified investments such as gold, are likely to underpin demand for investment gold in the immediate future. In particular, European retail investors appear to be making an increasingly important contribution to investment demand, with lingering concerns over public debt levels and the Euro helping to drive demand.

The WGC believes support on the demand side of the gold market is expected in coming months. First, the gold price has experienced a pullback since the end of the second quarter due to short-term profit taking and a seasonally weak period for gold jewellery. Secondly, speculative positions have turned neutral and thirdly, the third quarter tends to be a seasonally strong period for gold jewellery.

Recent developments in China are likely to have positive longer-term implications for this increasingly important market. The PBoC, together with five other ministries/regulators published a proposal to improve the development of the domestic gold market, (“The Proposals for Promoting the  Development of the Gold Market”). This further reinforces the WGC’s view that there is huge potential for gold ownership to increase among Chinese consumers, in a market with tight domestic supply, as discussed in our China Gold Report – Year of the Tiger, March 2010.

On the supply side, supportive factors suggest that total mine supply is likely to trend higher, particularly as the scope for producer de-hedging continues to diminish.

Growth in gold demand during the second quarter (+36% YoY to 1,050 tonnes) largely reflected robust gold investment demand compared to the second quarter of 2009. The climate was more favourable for gold investment with strong growth in most countries. Investment demand surged in Q2 2010 due to uncertainty in the global economic recovery and the spill over of European sovereign debt concerns, as highlighted in our previous GDT. As a result, gold investment represented the majority of total gold demand during the quarter. Net retail investment and gold ETF demand increased by 29% and 414% respectively, compared with Q2 2009 levels.

Putting China aside, the WGC focuses on Europe as a key and material new end market:

The past couple of years have witnessed an extraordinary increase in retail demand for physical gold products. European demand for gold bars and coins in 2008 was close to 243 tonnes and in 2009 rose to 293 tonnes. In previous years tonnage demand across the whole continent often failed to rise above single figures, with average per annum demand for the five years to 2008 at less than 10 tonnes. It can be argued that, while many of these buyers undoubtedly turned to gold as a ‘flight to quality’, prompted by the credit crunch and its aftermath, their return to gold has proved resilient, even as a sense of optimism has started to pervade some sectors of the investor community.

During the second quarter of 2010, European retail investment for gold demand rose 115% quarter-onquarter to 84.8 tonnes. This is the highest level since Q4 2008 and Q1 2009, when the global financial crisis triggered fresh investment demand for gold as the asset of last resort.

European retail investment demand in 2009 represented 40% of global demand from this market segment, compared to just 7% two years earlier. These higher levels of demand have been sustained into the last quarter. In Q2 2010, Europe was still the source of 35% of the world’s demand for small gold bars and coins.

Historically, gold demand from Germany and Switzerland makes up the lion’s share of the European retail market, 79% in 2009 (83% in Q2 2010). It is worth noting that the country-level data represents the location of the transaction rather than the location of the investor. The Swiss tonnage figure, in particular, is likely to reflect some demand from investors in other countries.

The WGC believes this demand is attributable to the following key factors which will continue to drive gold retail investment demand in Europe:

• Ongoing uncertainties over public debt levels in the region and continued lack of confidence in financial markets.

• Regional economic conditions. With the exception of Germany, the region’s near term economic recovery is likely to struggle to reach historical growth rates. According to the IMF’s July 2010 World Economic Outlook report, weaker economic growth is still expected in the euro zone relative to other regions and countries such as India and China.1 Employment in Europe is also projected to fall in 2010.

• Potential inflationary impact of the European Central Bank’s (ECB) announcement of a US$1tn (€750bn) rescue package, compared to the first half of 2009. Anxieties regarding future inflation have been a significant motivating factor for German investors. Although hyperinflation is not on the  horizon, the country’s poor inflation history has nevertheless left investors wary.

• Strong gold price performance, sustained across most key currencies. The poor performance of the equity markets over the last decade has driven many private investors to look beyond traditional assets and gold’s strong performance has stimulated their interest.

• Increasing awareness of gold’s role in portfolio management due to its comparatively low volatility and its lack of correlation with other asset classes. In our analysis of gold and selected equity indices in Europe since 1999, gold has consistently moved independently from the factors that  have driven the main equity markets and reliably exhibited lower volatility.

The firm's summary projections:

The WGC believes the economic uncertainty in Europe is likely to remain given the very difficult balancing act facing governments as they try to navigate a path between austerity and growth. Attempts at retaining loose monetary policy and a certain level of stimulus while seeking to address high deficit levels through dramatic cuts in public spending will present severe challenges and an uncomfortable environment for many investors. The likelihood of higher unemployment rates could further dampen domestic consumer demand.

Against this backdrop, the combination of a healthy global outlook for gold demand and the development of easier and more cost effective channels to access gold in Europe, suggests that the recent growth may be part of a sustained trend. As demonstrated earlier, gold’s relevance as a preserver of wealth is enduring, even in conditions of relative economic optimism, since historically gold has a capacity to provide investors with both confidence and a sure and steady means of enhancing the consistency of their returns.

Full WGC report


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Wed, 08/25/2010 - 11:33 | 543025 ABCStore
ABCStore's picture

Unexpectedly, seasonally adjusted demand for gold is up...

Wed, 08/25/2010 - 12:03 | 543131 knukles
knukles's picture

And just as all the other excuses are being tooled from whole bullshit, Goldman is squeezing the puss out of JPM and HSBC's perpetually increasing and more outter of the money futures and options positions just parcecs in fronrt of the COMEX options settlement date.

Think JP and HSBC have gotten their calls to the Fed and Department of Treasure yet?

Goldilocks ain't part of that racket, eh?  So, free game, no?  Hell, more like free fire zone.


Wed, 08/25/2010 - 12:36 | 543220 ATG
ATG's picture

So what was the bear case on gold again?

Lopsided gold comments on ZH may be prima facie evidence we may see gold at 1050 first drop target:

How many here will admit to being bearish on stocks during March 2009 to April 2010?...

Wed, 08/25/2010 - 12:44 | 543251 bronzie
bronzie's picture

stocks are for suckers - goldbugs aren't suckers

Wed, 08/25/2010 - 14:17 | 543550 nope-1004
nope-1004's picture

Ya, neither were real estate investors, especially in Japan... an island with limited land, huge population base, bustling economy, on and on.

Logic makes no sense in this environment.

Just sayin'.



Wed, 08/25/2010 - 13:22 | 543375 Citxmech
Citxmech's picture

I can.  I was stacking then - and still am.

Wed, 08/25/2010 - 13:56 | 543492 tmosley
tmosley's picture

I was bearish until May of 2009 when I realized that QE was driving up the stock market.  At that point, I covered my shorts and got completely out of the market, and went all in gold and silver (though I already had good sized positions in both).  I sleep better now.  I'm a lot richer for it, too.

I wouldn't take comments on ZH as any sort of indicator.  You have no idea what kind of people are posting here.  It could be professionals, it could be students, it could be shoeshiners, or it could be industry insiders.  No way to know.  Go to Yahoo Finance boards if you are looking for contrarian data.  You can be fairly certain that there aren't a bunch of insiders hanging around there.

Thu, 08/26/2010 - 13:50 | 546182 Geoff-UK
Geoff-UK's picture

<raising hand to ATG's question>...but I'm still crapping my pants about the future, so I'm not kicking myself too hard for missing that run.

Wed, 08/25/2010 - 11:35 | 543035 Burnbright
Burnbright's picture

Gold haters converge in 3...2..1.

Wed, 08/25/2010 - 11:44 | 543066 Dr. Richard Head
Dr. Richard Head's picture

You can't eat it you know and uhhhhhhh......

Wed, 08/25/2010 - 11:47 | 543079 Dr. Richard Head
Dr. Richard Head's picture

It doesn't pay dividends either and ummmmm.........

Wed, 08/25/2010 - 11:54 | 543105 ColonelCooper
ColonelCooper's picture

You have to pay a 8% premium and ummmmm......

Wed, 08/25/2010 - 11:57 | 543113 Who else is fro...
Who else is from Prussia's picture

you have to pay storage fees and ummmmm......

Wed, 08/25/2010 - 12:01 | 543125 Hephasteus
Hephasteus's picture

Plus only greedy horders are into it and it's hard to steal from greedy horders. If they just put the money int he bank they can then BEG to be stolen from.

Wed, 08/25/2010 - 12:03 | 543130 spartan117
spartan117's picture

And dollars are more rare in a deflationary environment!

Wed, 08/25/2010 - 12:11 | 543148 Treeplanter
Treeplanter's picture

Gold is for suckers...

Wed, 08/25/2010 - 12:14 | 543164 Quintus
Quintus's picture

Yeah, and if you bought gold right at the very top of the market in the 80's you've lost money whereas if you'd bought stocks right at the very bottom of the market you'd have made a Gazillion dollars by now.

Wed, 08/25/2010 - 12:14 | 543163 teaddy bearish
teaddy bearish's picture

and it is heavy uhhhhhhm ....

Wed, 08/25/2010 - 12:36 | 543221 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It'll put holes in your pockets, derrr.............

Wed, 08/25/2010 - 13:21 | 543364 midtowng
midtowng's picture

It's only good if civilization collapses, and if that's the case then you should be buying shotguns and canned food instead because it will be a Mad Max-type world.

So when gold went dramatically up in value in Zimbabwe in 2007, in Argentina in 2001, in Russia in 1998 and 1993, people there should NOT have bought gold because civilization ended for all time.


Thu, 08/26/2010 - 02:20 | 545199 akak
akak's picture

 ".... you should be buying shotguns and canned food instead because it will be a Mad Max-type world."

And not just any canned food, but specifically, canned ham!  And don't forget to bury it in your backyard!




Wed, 08/25/2010 - 12:17 | 543177 flacon
flacon's picture

Oh and you have to pay capital gains tax on it.

Wed, 08/25/2010 - 12:22 | 543192 Hulk
Hulk's picture

Why should we have to pay capital gains on what is essentially a devaluing dollar?


Wed, 08/25/2010 - 12:34 | 543215 Hephasteus
Hephasteus's picture

It's the mathematical formula

Fuck you = I win

Wed, 08/25/2010 - 12:38 | 543227 MsCreant
MsCreant's picture

Oh, Oh, me next! They will COOOONFISTCATE it from meeee. Moooomeeee that Jackboot tookeses my GOOOOOLD.

Wed, 08/25/2010 - 12:42 | 543243 hedgeless_horseman
hedgeless_horseman's picture

Mined by slaves!!

Wed, 08/25/2010 - 12:49 | 543276's picture

Your gold isn't gold, it's tungsten, steel or lead.

Wed, 08/25/2010 - 15:31 | 543920 Frank Owen
Frank Owen's picture

The alchemists have nearly perfected turning lead into gold and then all your gold will be worthless...

Wed, 08/25/2010 - 17:40 | 544358 Hulk
Hulk's picture

Icelandic Volcano spewing rivers of gold....

Wed, 08/25/2010 - 20:13 | 544680 fiftybagger
fiftybagger's picture

Sir Alan Greenspan doesn't believe in it anymore

Thu, 08/26/2010 - 10:19 | 545656 Hephasteus
Hephasteus's picture

He's not really knighted. He just fell asleep at the castle and the queen grabbed the knighting sword to cut his apple up for when he woke up, and he was all like crying and so happy he was being knighted so they faked it.

Wed, 08/25/2010 - 13:01 | 543319 knukles
knukles's picture

Yeah yeah yeah yeah....
And there's no reason under the sun that we, the New Peasantry serving the New Versailles should ever ever need or even want any gold for ourselves.  After all, the Powers that Be, their Central Banks and Monetary Authorities have all the gold we'll ever need on deposit for Us in some of the most secure facilities in the World.

Why forever would we even think of it being valuable by any rational, considered or even illusory, foolish, demented, insane stretch of the imagination?

They have and always will take care of us out of their own most significant Godless Statist Altruistic Instincts.

Relax.  It's only a sort walk from your bunk to the propagandavision screen.


Wed, 08/25/2010 - 12:46 | 543252 Hulk
Hulk's picture

Fuck you twice = (I win)^2

Devalue our money and then tax us for creating a workaround

Unfuckingbelievable... I have had it with supporting loosers

Wed, 08/25/2010 - 12:53 | 543285 fiddler_on_the_roof
fiddler_on_the_roof's picture

That is the rules of the game being played. Our Forefathers were much smarter than as***les we have become - hence I am a Traditionalist. Money which devalues at x% against unit labour when deposited in bank is given (x-delta)% interest rate. So right there we will be loosing delta% every year. On top of that you pay tax for the (x-delta)% interest you receive. total con game.

Wed, 08/25/2010 - 16:22 | 544120 DosZap
DosZap's picture


Because you always PAY tax on income, no matter the source derived.

(Unless you are a Obama cabinet member,A Fed member, or  a Senator,Representative, or an IRS employee).Oh, wait, they just prosituted one of them.

Wed, 08/25/2010 - 17:44 | 544365 Hulk
Hulk's picture

I am planning to be the next treasury secretary.(Paulson saved roughly half a billion in taxes by becoming TS) Will be in charge of a half empty,pink piggy bank...

Wed, 08/25/2010 - 20:24 | 544707 ColonelCooper
ColonelCooper's picture

You may count on me to be your first vote for confirmation.  And don't worry; your piggy bank will be plenty full.  Too bad it will be full of little IOU's scribbled on cocktail napkins.

Wed, 08/25/2010 - 12:15 | 543167 caconhma
caconhma's picture

<you have to pay storage fees>

Why? Bury it in your backyard.

After all, it does not rust (another way to know you have the right stuff).

Wed, 08/25/2010 - 12:18 | 543179 Cyrano de Bivouac
Cyrano de Bivouac's picture

Burying in backyard is called midnight gardening.

Wed, 08/25/2010 - 11:57 | 543110 MarketTruth
MarketTruth's picture

And ummm... is gladly accepted as a form of exchange in MANY parts of the world as a universal currency (seriously, try it for yourself). In fact, you may indeed get additional discounts on goods/services when using gold as a form of payment.

Wed, 08/25/2010 - 12:03 | 543129 Who else is fro...
Who else is from Prussia's picture

Fact: During WWII pilots were given survival packs which contained gold to barter their way out of a situation after they bailed out of the aircraft, no FRNs

Fact: Currently military pilots survival packs contain gold to barter their way out of a situation after they bailed out of the aircraft, no FRNs.

Sooo the government / military industrial complex thinks gold is better than FRNs too.

Wed, 08/25/2010 - 12:12 | 543155 Treeplanter
Treeplanter's picture

Somebody better tell timmy the tax cheat.

Wed, 08/25/2010 - 12:58 | 543297 ATTILA THE WIMP

Exactly! Gold was even included in the survival kit for pilots in "Dr. Strangelove."

Wed, 08/25/2010 - 13:20 | 543362 swmnguy
swmnguy's picture

"Shoot, a fella could have a pretty good weekend in Vegas with all this stuff."

Wed, 08/25/2010 - 13:26 | 543386 Citxmech
Citxmech's picture

Best scene in the whole movie besides Slim Pickens riding the bomb...

Wed, 08/25/2010 - 14:23 | 543621 maff
maff's picture

It was originally "Dallas", later dubbed to "Vegas". Look at how his lips move when he says the line.

Wed, 08/25/2010 - 12:09 | 543143 ColonelCooper
ColonelCooper's picture

It would take a pretty good discount to get me to spend physical while my cash is still good. 

Wed, 08/25/2010 - 15:50 | 544006 trav7777
trav7777's picture

you could, um, just turn around and buy more physical with the cash you still have

Wed, 08/25/2010 - 17:04 | 544264 ColonelCooper
ColonelCooper's picture

That's the point.  Since I'm trying to accumulate physical, I'd have to replace it.  Better be a helluva discount to bother in the first place.

Wed, 08/25/2010 - 12:25 | 543124 fiddler_on_the_roof
fiddler_on_the_roof's picture

I understand the sarcasm here, know it is preaching to the converted, but wanted to point out that only for holdings that lose value, should we expect interest. Assetts like Gold, Real Estate, commodities which hold value over very long time in terms of unit labour, we need not expect interest rates unlike currency bonds or savings account which are denominated in currencies. Currencies don't hold value against unit labour hence to compensate, we need interest.


Wed, 08/25/2010 - 11:49 | 543083 DoChenRollingBearing
DoChenRollingBearing's picture

I look forward to having something positive to say to Johnny Bravo, and maybe even his boss JonNadler.

I'm telling you guys, gold makes you sleep better at night.

Anyone who already knows something about gold (that is, have passed Gold 101) should go visit FOFOA's blog:

Wed, 08/25/2010 - 12:15 | 543166 Treeplanter
Treeplanter's picture

I think we all miss Johnny.  I have a piece of an old gold filling I'd like to give him.  Get him started on his hoard.

Wed, 08/25/2010 - 12:53 | 543288's picture

Appropriate as discussing sound money with Bravo is like pulling teeth.

Wed, 08/25/2010 - 12:54 | 543292 Zero Debt
Zero Debt's picture

Also highly recommended reading would be Alan Greenspan's essay from 1966.

"Gold and economic freedom"

I like the last two paragraphs the most:

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Wed, 08/25/2010 - 16:25 | 544131 DosZap
DosZap's picture

That was B4 he fooked us least at ONE time he wasn't penile.

Wed, 08/25/2010 - 12:09 | 543141 Kaiser Sousa
Kaiser Sousa's picture

i got the physical and its n my possession, and ummmm...

Wed, 08/25/2010 - 12:42 | 543240 ATG
ATG's picture

Bought silver at $1 (silver dollars and CDE) and gold at $104 (Krugerrands, Mexican Gold 50 Peso coins, St Gaudens, ABX, Homestake, NEM).

Did not hate it. Did not fall blindly in love or sleep with it either, particularly now during debt default deflation.

Good luck guys...

Wed, 08/25/2010 - 12:55 | 543294's picture

Old timer. Way old timer.

Wed, 08/25/2010 - 16:28 | 544139 DosZap
DosZap's picture

Really, can you still walk, and talk, or do you use Dragon Speak 11?.

Hell, I''m old, but I do not remember Silver under $2.00..maybe I wasn't worried then.

Wed, 08/25/2010 - 17:35 | 544348's picture

He says he got silver dollars for a dollar, so that's most likely 1964 or earlier.

Wed, 08/25/2010 - 13:36 | 543418 thesapein
thesapein's picture

You never slept with your gold? Not once? We nubes can't resists our first time with my precious.

But, yeah, after a year, I hardly ever even look at 'em anymore. Honeymoon is over, and now we're staying married for the realities of life. It's kind of nice to know it will out live me, as well.

Wed, 08/25/2010 - 14:28 | 543639 bigdumbnugly
bigdumbnugly's picture

and therein lies a new angle for the gold bashers to bash it:

"you can't f*** it either."

Wed, 08/25/2010 - 14:34 | 543667 MsCreant
MsCreant's picture

You are wrong. Do not click this if you are easily offended (not you BDNU, I know you can handle it). All others move on. It is real, so I responded, but it is posted as a joke. Got it?

Wed, 08/25/2010 - 15:39 | 543939 Frank Owen
Frank Owen's picture

Living up to your name. I am surely not the only one wondering how you "stumbled" across that... don't reply! My imagination is filling the blanks in quite nicely. (edited)

Wed, 08/25/2010 - 16:32 | 544155 DosZap
DosZap's picture


(blushing) should let em' know they need to offer a Silver one......medically effacious.

Wed, 08/25/2010 - 18:27 | 544462 thesapein
thesapein's picture

Hah, funny how we come back to the same jokes, or maybe it's different posters, I can't remember, but sure do remember the self sterilizing silver strapper.

Wed, 08/25/2010 - 17:09 | 544282 ColonelCooper
ColonelCooper's picture

So,,, Gold is a girl thing.   Not much in it for me or Brutus.

Thu, 08/26/2010 - 11:56 | 545922 bigdumbnugly
bigdumbnugly's picture

ok MsC, now i need advice on how to block that particular website from my girlfriends' refined and tasteful eye.

Wed, 08/25/2010 - 18:00 | 544410 Testicular Cancer
Testicular Cancer's picture

That shiny yellow color clashes with everything I wear.

Wed, 08/25/2010 - 21:12 | 544795 StychoKiller
StychoKiller's picture

Black Hills gold is kinda coppery colored...

Wed, 08/25/2010 - 11:35 | 543037 scatterbrains
scatterbrains's picture

Can the fed officialy devalue the dollar and if say they can and they announce a 25% reduction does that mean the stock market will gap up 25%?


Wed, 08/25/2010 - 11:39 | 543051 Burnbright
Burnbright's picture

The Fed can not just reduce the value of the dollar by making an announcement that it is now worth 25% less, they would have to create 25% more money to effectively devalue the currency by 25%. And more than likely it would cause a rise of 25% in the stock market but their would be no way of knowing for sure because central planning always has unintended consequences, such as people taking that money and putting them in real assets rather than paper assets, or at least that is what I would do if I expected a 25% hair cut on all my dollar holdings. 

Wed, 08/25/2010 - 12:00 | 543120 Scisco
Scisco's picture

Would be funny if QE goes into PMs.

Wed, 08/25/2010 - 12:04 | 543133 fiddler_on_the_roof
fiddler_on_the_roof's picture

Good one. very very good possibility. The last QE went to china.

Wed, 08/25/2010 - 15:23 | 543895 DoctoRx
DoctoRx's picture


Think like a bankster:  what asset do you want a good part of your FRN-denominated "wealth" in?

Hint:  four letter word, starts with "g" and ends with "d".

Wed, 08/25/2010 - 16:34 | 544162 DosZap
DosZap's picture


You kiddin?,I have yet to see ONE dollar QE.

Wed, 08/25/2010 - 14:40 | 543691 Max UK
Max UK's picture

"Can the fed officialy devalue the dollar and if say they can and they announce a 25% reduction does that mean the stock market will gap up 25%?"

Hi Scatterbrain,
I can't answer your question, but look at this extraordinary posting by a contributor to a comments section in the UK Daily Telegraph today.
It suggests that the risk of a planned devaluation is greatest around Christmas time. I know that anonymous assertions on a blog have no validity, but its an interesting read.

Quote lucdog 5:48pm:
A highly reliable sage source from the gold banking world and international consulting is loaded with deep insight, vast experience, solid connections, ongoing relationships, privileged insider information, and diverse industries tied to banking. He tipped the Jackass off in early August 2008 as to the weekend of September 15th being one to mark in history as three great failures would occur. He gave one month advanced notice of a locus of failure in three places, with great urgency. My guesses of Lehman Brothers and Fannie Mae were correct, but a blank came on the third which turned out to be AIG. He has frequently shared a viewpoint on the inevitable USTreasury default in the coming years. He first enlightened me as to the USFed resignation pathway to default, after it was loaded to the gills in toxic irredeemable impaired assets that no banks wanted. As buyers of last resort, the USFed would choke to death. Rather than a citation of path to default, he shared a great risk of a major event.

He said, "The USGovt will devaluate the US$ by 50% overnight in the not too distant future. They need 11 days to do this. If they push it, they can do it in 6 days. So look for a long holiday weekend as an opportunity. The best time to do this is the Christmas / New Year time window. They tried to do it in 2005/2006, but the Chinese put a gun to their heads in Washington and they backed down. You can slice and dice it as you like, but the USDollar is dead and so is the Euro. The systemic change will be a cataclysmic and traumatic event for the West, since all it stands for will go into the toilet in a blink of an eye. The period immediately following the collapse will be filled with violence and total breakdown of law & order. Keep an eye on Greece. It is the guinea pig and incubator for what is coming to Western societies." He went on to mention some positive regenerative power left in the US people to reclaim their country and to restore its legal framework. Soberly, he warned it will be ugly, but loaded with great opportunity. So he sees a sudden massive USDollar devaluation with grand shock waves from vengeful reaction.


It has come to my attention that coordinated raids of the London Metals Exchange have taken place, all very legal, but done in a manner that its officials do not realize the scope of the organization. Several buyers acted in organized coordinated fashion. The raids took place in July and continue. The buyers went into the market with a massive volume compared to what can be considered normal. The buyers were ringed around the globe, in direct communication. In at least two instances agents within the inner sanctum of the London gold market worked in collusion with the buyers, the agents volunteering valuable information where certain quantities existed. This data enabled optimal positioning for the trades, where demand was made where supply laid. The buyer then cleaned all the physical out in one sweep, with pressure given by attorneys when necessary. The sellers obviously had misjudged the buyers financial resources and inside knowledge. A degree of military precision was demonstrated, along with seemingly unlimited financial resources. Hints of hidden unconditional political backing was mentioned, for applied pressure, although in vague terms. No trace of their activity was evident, as would be expected with numerous high volume demands for delivery. No insurance register spikes were permitted, as the buyers flew under the normal radar screens when lifting the gold bullion without protection. The raid, or legal surgical removal, might have been the largest ever. They took advantage of deep insider knowledge, even deeper pockets, and precise execution team to pull off the event. In doing so, the LBMA members inventories were nearly drained. The London officials scrambled to replenish their raided gold supply. Members of the exchange are in the process of having cut off their entire raw precious metal supply at the source. On the following week, the LBMA shut down all trade data.


The financial press reported data darkness, but omitted the story about global coordinated legal raids on gigantic gold supply at numerous supply sources. They undoubtedly did not know about the raid, or were ordered not to report it. That would have been damaging for the gold cartel.

In the aftermath, a note came from a well established trusted gold banker source. He hinted at knowing at least one or two participants in the coordinated raid. He said "The Boyz at the LBMA probably had digestion problems, and are putting their inventory books back in order after some of their member inventory was raided the other day. From what I hear, they did not see that one coming. A second wave should hit them not before long. They are absolutely defenseless. It is called feeding one's adversaries their own medicine while turning the tables on them." Incredibly, the group has managed to solicit the cooperation of two agents from inside the LBMA, exploiting a division inside. People within the LBMA are working to destroy the LBMA. My guess is that 15 to 20 parties worked closely together, with military precision and without telltale insurance contracts that would serve as warning flags internally.

Some direct questions were delivered to this source, who has 25 years of experience in the gold trading business. My question was: "Did the London dark data problem have anything to do with the Bank For Intl Settlement Gold Swap?" His answer was LIKELY YES. My question was: "Did the BIS have to bail out London in supplying them urgent gold inventory?" His answer was SURELY YES. My question finally: "Was the story permitted to be incorrect regarding the Portugal Central Bank as distraction?" His answer was COULD BE YES. Very intruiging!!
Two analogies make sense. One is of a big car whose engine lubrication is slowly drained. The temperature of the moving parts is rising, as the engine grinds, and a seizure comes. Another is a man with a bad case of chronic diarrhea, who cannot stop emitting the nether substance. He continues to lose his inner juices as effluent until he passes out. Eventually he dies from dehydration and electrolytic starvation. The gold market is living on borrowed time. The window will soon close for private citizens to purchase gold bullion in any form. Time is running out. Seizures and magnificent deceptive cover stories are to come. Let's see how much credibility the mainstream stories contain. The flimsy stories, in my view, will be shot full of holes, shot to hell. The Gold price will skyrocket when it becomes clear that the gold inventory is non-existent in the gold metal exchanges. The Powerz might evade legal responsibility by means of assorted lies and stories, but the end result will be absent gold supply in inventory. No supply, huge demand, and price rises without resistance.



Wed, 08/25/2010 - 15:06 | 543823 tmosley
tmosley's picture

Sorry, when did this raid happen?  I keep my ear pretty close to the ground on this subject, but I never heard anything about it.

Wed, 08/25/2010 - 15:35 | 543849 Max UK
Max UK's picture

<revised response>

I have quoted another blogger in full from the link provided; it rang some bells & he mentioned Golden Jackass, and I traced it to a link of an article of Feb this year, by Jim Willie.

Wed, 08/25/2010 - 16:19 | 544105 JLee2027
JLee2027's picture

Uh, no this article is two days old.

Wed, 08/25/2010 - 11:36 | 543039 gotgold
gotgold's picture

TD... you should know the bear case. It is clearly marked out, a rising wedgie.

Wed, 08/25/2010 - 11:45 | 543068 Voodoo-economist
Voodoo-economist's picture

i see a h&s :)

Wed, 08/25/2010 - 12:42 | 543241 RockyRacoon
RockyRacoon's picture

They have a shampoo for that condition.

Wed, 08/25/2010 - 11:36 | 543040 Theta_Burn
Theta_Burn's picture

And STILL the junior miners see no reprive...

Wed, 08/25/2010 - 11:39 | 543052 Hephasteus
Hephasteus's picture

They are completely captured by the banking system. It doesn't matter. Their banker bosses tell them how much they will get. They have no pricing power.

Wed, 08/25/2010 - 14:05 | 543515 ArrestBobRubin
ArrestBobRubin's picture

Theta, and all ZH friends, if I may: the best action in the PM Mining sector is not with the Majors, Mids, or Junior producers but most often among Exploration outfits. Some of whom may also be "Juniors". Sometimes the classifications can confuse, don't get caught up there. Here's what to look for if you want a high reward (and yes high risk) spoke in your wheel. Bet the guys who are sitting on promising land packages, have great, proven management, good financing and little to NO debt. Learn who they are, when their drilling core programs are scheduled, and when they expect to release the drill core results. Then observe how the pps may explode when good results hit the Street. You will want to have bought prior to that :-) These guys are known as "drill spec" opportunities.

At that point, use the "Mercenary Geologist" Mickey Fulp's "Power of 2" strategy- - when your pps doubles, sell half the position. Use that half to buy another well timed drill spec player, use it to buy physical metal, or put it into a rock solid major like GG, NEM or Franco Nevada to name a few. SLW (NOT SLV) is a must own too. You can either keep the original investment (if your player expects to announce more core results, is about to receive business critical enviro/other permits, or is about to begin full production), or lift and shift into another, better spec candidate.

I recommend folks keep an eye on the drill specs & miners now concentrating on exploring for silver and gold in the Yukon, and dollar cost average into a few. Canada may be the worlds most favorable place for miners and the Yukon is only now being explored in depth, with modern technology. Alexco Resource, Kaminak, Northern Tiger, Silverquest, and ATAC are perhaps the most promising plays at this point. Their early results have been way impressive and all should have a very bright future. There are many notable others, let them make some $$$ for you.

The bigger miners and most Juniors haven't been the best place for one's money for quite a while. That's now begun to change (Newmont, Barrick, Goldcorp, Agnico Eagle & others plus their big silver counterparts (SLW, PAAS, FNNVF, etc.) are all doing very well and will likely continue to as gold's price continues its inexorable rise from $250 to... whatever... and drags silver along with it...

However, if you're looking for potentially huge gains in an overall deathly market, learn the drill spec game and have some fun. Just carve out some $$$ to be used in this highly specialized and speculative space. Again, it is high risk/high reward, but like anything else, good quality info will be your key. Find the best info providers on drill spec miners, stay on top of the space, bet smart, and you'll win more often than the L word.

Don't do any of it for mania. NO ONE should bet the ranch, that is NOT how to use this strategy, that is only a recipe for bankruptcy.

Do it to diversify, to get actual RETURNS out of this "market", and to have some fun while you're at it. Can't ever lose sight of that...

Wed, 08/25/2010 - 16:40 | 544183 romanko
romanko's picture

Here are a couple of others I'd add to the list above:




Wed, 08/25/2010 - 11:38 | 543046 Thunder Dome
Thunder Dome's picture

Gold going to $800/oz.  Bernanke is on the case. 

Giving chinese solars a second look today.

Wed, 08/25/2010 - 11:38 | 543049 schoolsout
schoolsout's picture

that made me lol

Wed, 08/25/2010 - 13:29 | 543396 Citxmech
Citxmech's picture

I'd still be ahead - and it be just another purchasing opportunity.  So no worries.

BTW, There are way to many buyers out there for the price to fall by that much. 

Wed, 08/25/2010 - 15:26 | 543906 DoctoRx
DoctoRx's picture


Wed, 08/25/2010 - 11:38 | 543047 schoolsout
schoolsout's picture

JB and Robot have been missing lately...

Wed, 08/25/2010 - 11:47 | 543077 ColonelCooper
ColonelCooper's picture

JB got teased pretty hard the other night.  He took his Limited Edition Federal Reserve Play Set and went home to his mother for some Stuart Smalley-like affirmation of his talent.

Coincidentally, gold is on the rise.

Wed, 08/25/2010 - 11:56 | 543108 DoChenRollingBearing
DoChenRollingBearing's picture

Have to admit that Bravo is a fighter though.

Still, Colonel, your youtube video was a riot!

Who is Johnny Bravo?

Who is (and where is) Chumbawamba?

Where is dumpster?

Wed, 08/25/2010 - 11:59 | 543117 schoolsout
schoolsout's picture

Have any of y'all messed with

You can type out text and turn it into an animated video.  Create one with a staunch Zerohead vs. Johnny Bravo type...

Work won't let me visit the site

Wed, 08/25/2010 - 12:00 | 543119 ColonelCooper
ColonelCooper's picture

You know, I even stuck up for Bravo a couple of times.  Disagreed vehemently with him, but he was making a legitimate argument.  I just got sick of him popping into every conversation and turning it into a gold fight.  That's a troll, plain and simple. 

As misguided as I believe him to be, I wish more kids his age would make a fraction of the effort he does to learn and keep informed.  It's just too bad that the "arrogance of youth" is so overwhelming in his case.

Wed, 08/25/2010 - 12:07 | 543138 DoChenRollingBearing
DoChenRollingBearing's picture

Well, yeah, OK, but when I was in college I was kind of a dick as well.  I did not know much about the real world.  Now that I do know more, this whole direction that .gov, Obama and the banksters are taking us scares the living Shi'ite out of me.

Actually, I am glad I am not his age now.  My daughter is, and though she is out of school and is working, I spend much of my time working to see that she gets as much coming to her as possible, especially if TSHTF.

Wed, 08/25/2010 - 12:16 | 543174 ColonelCooper
ColonelCooper's picture

I will be the first to concede that I'm still a dick.

Wed, 08/25/2010 - 12:43 | 543246 MsCreant
MsCreant's picture

Then change your avatar to fit. Right now you are either:

1. An asshole

2. A pain in the ass.

Just sayin' Colon-el. ;-D

Wed, 08/25/2010 - 12:57 | 543298 Hephasteus
Hephasteus's picture

Download firefox. Download ad blocker plus.

Right click on the picture.

Scroll down to Adblock Plus: Bock picture

Scroll up to select the specific image of the avatar not global images. Click it and you will never see that avatar again.

Wed, 08/25/2010 - 13:13 | 543348 MsCreant
MsCreant's picture

Nah, I am trying to see if I can goad him into posting a penis as his avatar. Shhhhush, your interfering with my fun...We already have a pussy posting, a cock is fair game.

Wed, 08/25/2010 - 13:20 | 543358 ColonelCooper
ColonelCooper's picture

I didnt think you were truly pissed, but that pic was kinda effed up. Sorry I don't have a hard drive full of cock pics.



Wed, 08/25/2010 - 14:05 | 543536 MsCreant
MsCreant's picture

But you do have a hard drive full of hemorrhoid pics?

Wed, 08/25/2010 - 14:11 | 543568 Hephasteus
Hephasteus's picture

Doesn't everybody?

Oops. I've said too much.

Wed, 08/25/2010 - 14:17 | 543584 MsCreant
MsCreant's picture

That was so unfair of me.

Wed, 08/25/2010 - 14:18 | 543592 ColonelCooper
ColonelCooper's picture

LMAO!  I guess I walked right into that one.

Wed, 08/25/2010 - 14:38 | 543681 hamurobby
hamurobby's picture

OH! I thought that was lip stick...

Wed, 08/25/2010 - 15:59 | 544040 trav7777
trav7777's picture

I'm the nicest guy here.

Just look at the smiley.

Goled, bitchez!

Wed, 08/25/2010 - 16:24 | 544127 Frank Owen
Frank Owen's picture

"It's a mark that we have a tremendous investment in and is very closely identified with our company " - Wal-Mart.     haha

Wed, 08/25/2010 - 12:45 | 543253 RockyRacoon
RockyRacoon's picture

You look like a hemorrhoid to me. 

I like the "arrogance of youth" comment.  But in his case the vehemence was just too much to handle.

Wed, 08/25/2010 - 13:06 | 543336 ColonelCooper
ColonelCooper's picture

In the interest of community harmony, and being able to eat lunch while catching up on ZH, I changed my avatar.

I only put it up anyway 'cause velopunzelkathy was bitching about my naked Barney Frank being gross.

Wed, 08/25/2010 - 15:12 | 543851 tmosley
tmosley's picture

I didn't click, as I am at work, but the one from Fight Club would probably make a good choice.

Wed, 08/25/2010 - 17:13 | 544299 ColonelCooper
ColonelCooper's picture

Clever, but mine remains ABSOLUTE.

Wed, 08/25/2010 - 18:52 | 544514 MsCreant
MsCreant's picture

Well that settles it ladies and gentlemen: "We have a wiener." Thanks for getting rid of the other pictures. Both were distasteful, but I respect your right to freedom of expression.

Peace, had fun.

Wed, 08/25/2010 - 22:53 | 544965 RockyRacoon
RockyRacoon's picture

Might I suggest:

Wed, 08/25/2010 - 14:08 | 543548 doggings
doggings's picture

what was JB's TA based upside target before we bombed down to $900 again?

i think we took it out anyway didnt we? rising wedge my arse.


Wed, 08/25/2010 - 12:08 | 543140 tmosley
tmosley's picture

I personally wouldn't talk about him.  He is probably reading this now, and will take an excuse to make another appearance.  

Perhaps he took my advice and just left, since he wasn't getting anything out of being here.

Wed, 08/25/2010 - 12:13 | 543157 ColonelCooper
ColonelCooper's picture

but, but,,, I wanna play my youtube vid some more.

Wed, 08/25/2010 - 13:01 | 543318 spartan117
spartan117's picture

I think you should frontrun and play it in anticipation of his return.

Wed, 08/25/2010 - 13:00 | 543307 spartan117
spartan117's picture

No, he will return shortly as "Harry Nutz" or "Captain Obvious" or "Master Bates"... oh wait, scratch that last one.

He's just waiting for Tyler to approve his new handle.

Wed, 08/25/2010 - 21:32 | 544826 Frank Owen
Frank Owen's picture

I think he should go with "johnny mnemonic". He's just like the character in that movie except the disc keeps skipping so it's the same first 5 minutes over and over again and the low-techs just can't seem to get through to him.

Wed, 08/25/2010 - 12:59 | 543302 woolly mammoth
woolly mammoth's picture

Chumbawamba might be spending his time talking to various government agencys do to some of the things he was expressing. If I remember correctly MsCreant tried to warn him once. The Matrix has eyes. In the future being aware is going to become your most important survival tool. That's why I'm still here b9k9. Just trying to stay aware. 

Wed, 08/25/2010 - 12:10 | 543144 fuu
fuu's picture

Gotta get various URL's on the video you kept posting. That way he clicks it. See Rick Rolling for inspiration.

Wed, 08/25/2010 - 11:38 | 543048 Jason T
Jason T's picture

Brawl at the Federal Reserve about hyperinflation??

Wed, 08/25/2010 - 21:25 | 544821 StychoKiller
StychoKiller's picture

Gregg Allman:  "The best time to leave is just before the bullets fly!"

Wed, 08/25/2010 - 11:42 | 543059 Henry Chinaski
Henry Chinaski's picture

gold ETF demand increased by ... 414%

Again I ponder, GLD or gold; chicken or egg?

Wed, 08/25/2010 - 11:53 | 543099 DoChenRollingBearing
DoChenRollingBearing's picture

Henry, if your question means which you should buy, I would say buy the physical gold.  Don't even touch the ETFs.

Wed, 08/25/2010 - 12:13 | 543156 Burnbright
Burnbright's picture

Uh... pretty sure gold existed before there was an ETF for it. Honestly I don't get your analogy.

Wed, 08/25/2010 - 13:33 | 543409 Citxmech
Citxmech's picture

Holding physical is the only form of PMs that are not someone's "promise to pay."  That's PM's main advantage - don't get suckered by fractional reserve paper.

Wed, 08/25/2010 - 16:55 | 544232 DosZap
DosZap's picture

Yeah, plus you keep the PRICES DOWN buying that shit.

You want Insurance,peace of mind, or Fiat Bucks worth $.25 on the Dollah?, when the SHTF?.

Be an Amelican, get the real stuff, make COMEX, shit bricks.

Wed, 08/25/2010 - 22:01 | 544889 Dr. Sandi
Dr. Sandi's picture

Again I ponder, GLD or gold; chicken or egg?

Choose chicken OR egg. You can't eat gold and GLD eats YOU.

Wed, 08/25/2010 - 11:45 | 543067 What_Me_Worry
What_Me_Worry's picture

Yeah, but you can't wallpaper gold.

Wed, 08/25/2010 - 11:53 | 543101 Strom
Strom's picture

You can't burn gold either - what am I going to do to stay warm??


Also, can you imagine trying to push around a wheelbarrow full of gold?? It would be so heavy...FRNs are much more useful in this regard...

Wed, 08/25/2010 - 12:23 | 543193 Treeplanter
Treeplanter's picture

Strom, it be yo lucky day.  I can have delivered a whole cord of British Columbia split larch for just 4 of those useless gold oz coins that won't keep you warm.  Soon as I get the coins, the wood in on the truck.   It's a joy for me to help other folks.

Wed, 08/25/2010 - 12:59 | 543305's picture

How to identify different types of trees from quite a long way away.

Number 1: the larch.

Wed, 08/25/2010 - 12:46 | 543259 MsCreant
MsCreant's picture

That's one way to hide your gold from confiscation...

Wed, 08/25/2010 - 11:59 | 543118 MarketTruth
MarketTruth's picture

You can indeed wallpaper with gold. It is also perhaps the best heat reflector and many professional race teams use gold foil on body/chassis parts.

Wed, 08/25/2010 - 12:00 | 543123 snowball777
snowball777's picture

Good luck electroplating FRNs onto something.

Wed, 08/25/2010 - 12:05 | 543135 Hephasteus
Hephasteus's picture

I'll get a butoneer and outbid the war department for a rosy the riveter or two.

Wed, 08/25/2010 - 15:15 | 543861 tmosley
tmosley's picture

Paper mache is just as good.  Plus, you can eat the paste!

Wed, 08/25/2010 - 13:31 | 543399 Scout Itout
Scout Itout's picture


Wed, 08/25/2010 - 11:51 | 543092 papaswamp
papaswamp's picture

Silver ain't doing too shabby either.

Wed, 08/25/2010 - 12:37 | 543225 apberusdisvet
apberusdisvet's picture

The ratio might hit the the 40s before the end of the year.  Watch the daily ratio, up or down.  It's certinly telling us something.

Wed, 08/25/2010 - 15:40 | 543965 DoctoRx
DoctoRx's picture

FWIW Tho I am long lots of silver, I don't trust this recent sharp move up.  Too many people such as Hinde Capital uber-bullish.  And too many people selling the positive seasonality story.  That's what I suspect this news is "telling us":  short-covering and dumb money that should have been buying at lower prices very, very recently.  Long-term Ag chart still struggling . . . But I do think that one day Ag hits $100/ounce.  Don't have any idea when, though . . .

Wed, 08/25/2010 - 17:01 | 544257 DosZap
DosZap's picture

If it stay's up tommorrow, buy...............before close.

Wed, 08/25/2010 - 11:53 | 543100 septicshock
septicshock's picture

Maybe it's time to get bearish when everyone is so bullish... Hmmm, don't think so.... This is just the start of the real bullrun!

Wed, 08/25/2010 - 13:02 | 543316's picture

Oh God, not first Manassas again!

Do NOT follow this link or you will be banned from the site!