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Massive Raw Gold Shortage In China - Supply And Demand Crunch Looms

Tyler Durden's picture




 

From GoldCore

First, watch this video:

Gold and silver are lower again today with short term momentum traders taking advantage of recent weakness and capping of the gold price at record nominal highs. Options expiry often sees gold and silver prices fall but recover sharply within days of expiry and this is likely to be the pattern again after yesterday's expiration.

GoldCore

Market participants continue to underestimate the many risks and challenges facing the tentative economic recovery in hugely debt-laden western economies.

Absolutely nothing has changed with regard to the fundamentals of the gold market. The gold bears' most recent prediction of an end to the gold bull market was the non-evidence based, simplistic assertion that the increase in investment demand seen in 2010 and recent years was not sustainable. They asserted that falling investment demand would see liquidations in the bullion market and falling prices.

They are being proved wrong once again. Indeed, safe haven demand looks set to continue and may accelerate due to increased geopolitical instability in oil-producing regions, the effects of the Japanese crisis on the yen and the global economy and the unresolved European sovereign debt crisis.

 

GoldCore

The scale of the Japanese nuclear crisis has been downplayed from the beginning but the terrible reality of the extent of nuclear contamination of land and sea is gradually coming to light. Nuclear radiation has now been detected across Asia in China, the Koreas and as far away as the Philippines and Vietnam.

Asian households have been buying gold and silver bullion (primarily as a hedge against inflation) in record amounts in recent months and the natural and nuclear disaster in Japan will likely contribute to continuing safe haven demand.

Gold in Chinese Renminbi (per Gram) - Shanghai Gold Exchange – SHGD GoldCore
Gold in Chinese Renminbi (per Gram) - Shanghai Gold Exchange – SHGD

Japanese premiums for gold bars remain at 3-year highs as Japan has seen safe haven demand for gold surge in the wake of their crisis. Japan looks set to become a net importer from a net exporter of gold. Indeed, Japanese demand on concerns about their bond market (see news) and currency debasement is another catalyst for gold to reach much higher prices in the coming months and years.

Asian demand is especially strong in the increasingly important China. The Chinese strong cultural affinity and love affair with gold (primarily due to a distrust of Chinese paper money) shows no signs of abating. Indeed, it may be accelerating as was seen in the recent figures from the Shanghai Gold Exchange and customs in China and now reports (including from CNTV – the national TV station of the People's Republic of China) of shortages of raw gold or unrefined gold.

China, now the largest producer of gold in the world is seeing its gold mines struggle to cater for surging Chinese demand.

The raw gold trade has been growing by up to 30% per annum and demand has leapt in recent months leading to a developing raw gold shortage in China. The industry in China expects only 27,000 tonnes of raw gold can be delivered this year. That is way below the estimated demand of 50,000 tonnes.

A potential supply shortage of 23,000 tonnes of gold is a large amount of gold in the small gold bullion market which is tiny versus equity, bond and derivative markets. It is infinitesimal when compared to the $4,000 billion a day traded in currency markets.

Indeed, this figure is difficult to fathom given that total above ground gold supply is only some 160,000 tonnes.

Some 'experts' have been calling gold a speculative bubble without establishing the facts since 2007. By discouraging the public from owning gold and discouraging even a small allocation or diversification, they have put their readers and the wider public at risk of further financial loss. A little knowledge is a dangerous thing and uninformed and biased advice will continue to lead to the public becoming impoverished financially.

News

(Bloomberg) -- Goldman Says 'Good Time' for Producers to Begin Gold Hedging
Goldman Sachs Group Inc. said it is a "good time" for gold producers to begin "scaled-up" hedging of forward production, particularly for next year and beyond. Gold prices will increase this year and peak in 2012, the bank said today in an e-mailed report.

(Barrons) -- Analysts See Reasons For Gold, Silver To Head Higher This Week
Bob Chapman, editor of the International Forecaster newsletter, is asserting that silver and gold prices are dropping today largely because options are expiring on gold and silver futures contracts.

"That can make the prices go down. If there are a lot of long options and they go below those prices, the banks don't have to pay-off," he said in an interview. "You can almost plan on the attack each month as gold and options contracts come up."

He doesn't see any other major reasons behind the fall-off by spot gold and silver prices on Monday. The SPDR Gold ETF (GLD) is down 0.5% and the iShares Silver Trust ETF (SLV) has slumped some 0.3% so far.

But pressure is also likely coming from potential delays in the restart of auto production in Japan and by some hints of tighter monetary policy, says MF Global's Tom Pawlicki in a note to clients today.

"We still lean positive in gold, but we're unsure about the potential downside given the hawkish comments from Fed's (Charles) Plosser on Friday," he wrote.

The Philadelphia Fed president gave a bullish sermon in New York at the end of last week. "If this forecast is broadly accurate, then monetary policy will have to reverse course in the not-too-distant future and begin to remove the massive amount of accommodation it has supplied to the economy," Plosser said.

But analyst Pawlicki believes gold and silver could move higher later in the week as a rush of new economic data is released, ramping up to Thursday's PMI and Friday's non-farm payrolls and ISM survey.

"The numbers will capture data for March, which may begin to reflect the adverse effects from the March 11th earthquake in Japan," he added. "Potential support will also come from uncertainty tied to European debt and to the Middle East."

(CNBC) -- Silver Is Way Undervalued Compared With Gold
Mother nature, one could say, is the ultimate asset allocator over a long enough time span. Going by that notion, silver is very undervalued versus gold.

Silver is about 16 times as plentiful in the earth's crust as gold, according to John Stephenson, author of the "The Little Book of Commodity Investing."

Yet, the price of gold per ounce currently trades at about 38 times that of silver.

According to the basic laws of supply and demand, especially given that the two metals are quite similar, the price gap between the two metals should be much smaller.

"It basically has the same physical characteristics of gold as a store of value and it also has an industrial kicker," said Stephenson, a portfolio manager for FirstAsset Management in Canada. "For my money, the trade of the decade will be in silver. Gold was the best investment over the last decade, but in the future, silver will be the go-to investment for investors looking to ride out the current storms in the global economy."

Gold has jumped about five-fold in the last decade as investors flocked to the metal. They went there first for safety from two bear markets, but then for an inflation hedge as the Federal Reserve lowered interest rates to zero.

Historically, gold sells for about 30 times the price of silver. Since gold is currently selling at about 38 times, silver is undervalued by about 27 percent and should be closer to $47 an ounce instead of $37.

Of course, gold will always be the more precious metal, not only because of its relative scarcity but because of its cultural significance around the globe.

Indeed, all the focus has been on gold over the last decade. The gold spot market is ten times bigger than the silver market and the SPDR Gold Trust ETF [GLD 138.54 -0.72 (-0.52%) ] has $55 billion in assets, compared to just $13 billion for the iShares Silver Trust [SLV 36.19 -0.20 (-0.55%)] .

"In a world where the amount of paper fiat currency is staggering and increasing as governments from U.S. to Europe keep printing, it may be time to start looking at the poor's man's gold," said Stephenson, who pointed out that while gold has exceeded its record price during the 1980s, silver is still way off the $68 per ounce level it reached during that time.


(Bloomberg) -- Commodity Gains May Exceed Forecast on Japan, Goldman Says
Commodities may rise more than estimated in the coming year because of tensions in the Middle East and Japan's earthquake and subsequent nuclear disaster, Goldman Sachs Group Inc. said.

While the bank still predicts a 14.3 percent gain for the S&P GSCI Enhanced Commodity Index in the period, risk to the forecast is "substantially skewed to the upside," analysts including London-based Jeffrey Currie said in a report today. Energy is at "increasing risk" of outperforming industrial metals, and gold and agriculture have "further upside risk," they said.

"Unfolding events in the Middle East/North Africa and Japan have dramatically reshaped the risk profile across commodities," the analysts said. "In particular, ongoing physical disruptions to Libyan oil supply and increased Japanese hydrocarbon demand to compensate for nuclear outages have begun to further tighten global oil balances."

The S&P GSCI index has added 11 percent this year after gaining 12 percent in 2010. Cotton is up 37 percent this year, Brent crude oil has advanced 21 percent, silver is up 18 percent and tin has increased 16 percent.

Growth Concern
Goldman Sachs in February cut its forecast for 12-month returns on the S&P GSCI index from 18.6 percent as unrest in the Middle East and North Africa raised concern that global growth might slow.

Energy will return 15 percent in 12 months, while industrial metals may return 21 percent and precious metals will appreciate 13 percent, today's report shows. Gold will increase this year and peak in 2012, the bank said.

Goldman Sachs said it's "closely" watching developments in copper demand given the disaster in Japan and turbulence in the Middle East and North Africa. Rising energy prices may curb global growth and prompt monetary tightening, which would erode demand for industrial metals, the bank said.

Events in Japan "will likely soften metals balances given the hit to Japanese manufacturing capacity and the broader negative impact on global industry stemming from Japan's importance as a global parts supplier," Goldman Sachs said.

While a return of Chinese buyers and higher energy prices will probably support metals for now, "further upside is likely limited from current levels," the analysts said.

 

 

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Tue, 03/29/2011 - 08:33 | 1112134 Rektors
Rektors's picture

First time post...

Tue, 03/29/2011 - 10:42 | 1112665 Tapeworm
Tapeworm's picture

They are only a thousand times too high in their quatities mentioned.

kilo not tonne

Tue, 03/29/2011 - 11:17 | 1112819 cowdiddly
cowdiddly's picture

Thats what caught my eye too. I don't think total world production is that much (I think  TWP issomewhere between 2400-4000 tons).That would definately make FT Knox supposed 8000 tons pitiful) If only it was that plentiful. The reporters have been missing a lot of decimal places lately.

Tue, 03/29/2011 - 11:58 | 1113013 Harlequin001
Harlequin001's picture

So what's gold really worth then?

Any ideas...

Tue, 03/29/2011 - 12:42 | 1113111 cowdiddly
cowdiddly's picture

In this market I have no idea. I do know that South Africas break even production cost is about $750 an ounce and are part of the gold suppression by the central banks. With that said I could call a bottom of about 800( PMs are not like paper and will always be worth something) bucks although there are some lower cost producers. At these prices gold could correct hard but I just do not see it with worldwide demand what it is. The only thing these idiots are doing by controling the price is allowing other countries like Iran, Russia, The Netherlands and China to add reserves on the cheap. If it ever breaks free of central bank control look out the sky is the limit but this is one of the most controlled market on the planet so its not real likely. They want you to put your money in their scam Ponzi system of stocks,bonds, banks and deposits so they can keep inflating and using your money for Corporate and Central bank benefit.. Buying gold is like a Giant Fuck YOU. They hate it because you are storing your weath and production in a form they cannot use.  Because its an alternative form of money It keeps the sorry assed central bankstas and politicians in check. Just listen to CNBC trot out and talk about a gold crash every time it goes down 1%. A least China has the decency to tell there population to buy gold, but their motives are not pure. They are desperately wanting to replace the worlds reserve currency with their own and are trying to break the western worlds grip. All our politicians seem to want to do is help them with the endeavor.

Tue, 03/29/2011 - 14:23 | 1113600 Harlequin001
Harlequin001's picture

cowdiddly I agree, but my question was what is it really worth, not what is its price...

If we can gauge what it's worth then we can gauge when to sell, regardless of its current or intermediate price.

I don't plan to sell until gold is back in money, though I believe that when the money printing is finally over it will be multiples of its current price, for reasons I state below...

But I hear what you're saying...

Tue, 03/29/2011 - 08:37 | 1112137 Oh regional Indian
Oh regional Indian's picture

The gold Bull run is almost over. it will go the way of the dis-eased sun.

Midas's curse. I don't believe the China stories anymore.

Set-up for a fall.

ORI

http://aadivaahan.wordpress.com/2011/03/28/for-dis-believers/

Tue, 03/29/2011 - 08:38 | 1112147 Ray1968
Ray1968's picture

I'm a mega-bull with the PM's but I'm really nervous when everyone is calling for huge gains in the metals. Just nervous. I wish they'd change the channel back to iPads and Netflix.

Tue, 03/29/2011 - 08:48 | 1112171 umop episdn
umop episdn's picture

Don't worry. All 'fiat' currencies die, and the present ones will be no exception. The PM bull market will end when PM's are used as money.

Gold may have the headlines, but Silver has the numbers!

Tue, 03/29/2011 - 10:37 | 1112658 clymer
clymer's picture

There can be no such thing as a gold bubble. It is the arbiter of currency. It is money. Reverse your thinking - the bubble is in fiat. This should be obvious by now.

Tue, 03/29/2011 - 13:07 | 1113194 Harlequin001
Harlequin001's picture

It's a big one but I just couldn't help myself, as the actress said to the bishop...

'Fractional reserve money systems do not necessarily manifest themselves as a consequence of fiat based financial systems. When you save your money on deposit at the bank and the bank loans it out as a 25 year mortgage there is no way the bank can grant you instant access to your money simply because it doesn’t have the cash, only the security. Excessive withdrawals of deposits historically have always resulted in the forced sale of assets at fire sale prices to raise the cash needed to pay the withdrawals i.e. a classic bank run.

To counter this banks make an assessment of likely withdrawals over any given period and keep this sum on hand as reserves. If this assessment was say 10% of deposits then this would be the reserve requirement. This is a fractional reserve system and it exists with any business which promises long term investment with access to capital. The problem with a fractional reserve system under a gold standard is liquidity because the bank does have sufficient assets to cover the withdrawals but it can’t necessarily liquidate them quickly at fair market rates. The problem here is liquidity; it is entirely different under a gold standard than a fiat system.

For the purposes of this discussion we'll assume that 1oz of gold can be bought for $10.

Under a gold standard banks must collect money from savers which they can then lend for greater interest. With a reserve requirement of 10% as an example, for every $10 of deposits the bank can make loans of $9 whereas under a fiat system the bank can make loans of up to $90 and still comply with its reserve requirements.

You can see the problem. As soon as the bank makes a loan of $90 and that check is paid in to a receiving bank, the receiving bank will immediately demand payment of the check from the issuing bank so that it can itself make payments on its own account. The issuing bank in this case however has only $10 on deposit with which to make payment and is immediately insolvent. Time for TARP, QE2, 3, 4, 5, 6 and onward to ultimate failure...

Under a gold standard banks need to maintain accurate valuations of these assets on their books for their own well being in case they need to be liquidated. There is a constant and ongoing process of price discovery. Under a fiat system in which we have central banks capable of creating any quantity of new money, excessive withdrawals no longer require a forced sale or even a sale at all since these securities can now be used as collateral at any agreed price with a central bank that can simply create any quantity of money with which to buy it.

The result can only be a system which encourages excessively high valuations of securities classed as ‘held to maturity’ at prices intentionally designed by government to be fake. A government has no choice if it is to protect and promote its banking system. That’s what ‘mark to model’ pricing is; a governments' gift to its banking system to enable it to remain solvent so that it can ultimately sell it more debt.

Any system without real price discovery can only result in these securities being held at increasingly fraudulent and unrealistically high valuations by banks for years under the glaring gaze of regulators who are supposed to prevent it. That’s what subprime was. That’s how they make their bonuses.

What’s worse is that using our example, the receiving bank now has $90 of deposits on its books and can now make loans of up to $810 yet still comply with reserve requirements. It too will become insolvent when the checks are ultimately presented for payment requiring another bailout of this bank too.

Even Mb, the so called measure of the monetary base is not now indicative of the real value of real money because using our model, $90 of what is effectively bank deposits which are effectively counted as money, and everything bought with it still has a value of only 1 gold ounce.

This is what drives property prices higher through the increasing availability of bank credit. The problem is that we still only have $10 of savings in the form of deposits to fund it. It doesn’t matter what you call it or how frequently governments’ bailout the banking system, the problem must inevitably arise again and again as the bailouts become larger (and by multiples) and more frequent as a direct consequence of mathematics, not magic, bad luck or mismanagement. The gold price is not going down.

It is a mathematical fact that the first time banks incur losses or withdrawals someone needs (using our example) to find $800 for every $10 in deposits. That is a truly staggering quantity of currency required to be produced to keep the system of bank credit going. It should give you some idea of the extent of the inevitable contraction in credit and the losses that are yet to be incurred on residential and commercial property markets that rely on this system for funding.

We'd like to be clear. When we say $10 we mean $10 in real money. That (in this example) is 1 oz of gold priced at $10, not the massive quantities of cash currently being printed. This is the relationship of bank credit to real money. All the assets bought with our $800 of bank credit are actually worth only $10 in real money despite the valuations placed on them by banks.

As we've said before, when you need more real money because you can't sell your assets for what you say they are worth they are not worth what you say they are. This is the reality of a liquidity crunch. These assets are not worth what the banks say they are in terms of currency, never mind real money.

Whilst Bernanke et al might try to minimise these losses to the banks by printing and devaluing money they cannot alter their real value which is 1 oz of gold at whatever price in currency; they can only succeed in lowering the value of cash in terms of real money which is a problem for the masses who receive payment for their labour in cash.

Even if Bernanke et al were to print 5 times as much money so as to increase the perceived value of our $800 of bank credit to $50 in cash that $50 is still only worth 1 oz of gold. That’s what a gold standard is, the revaluation of everything in real money, not the explosive quantities of cash currently being printed.

It is the revaluation of assets in the real money which underpins the cash, and for 5,000 years that real money has been gold.

This is the reason why we say that the supply of cash absolutely MUST increase and that every option MUST be exhausted by government before bond markets are allowed to default. It is the reason why the discount window at the Fed exists in the first place, why its dealings remain a closely guarded secret and why we now need a taxpayer funded guarantee of bank deposits just to keep the system going. It is the reason why neither TARP, QE2, QE3, 4, 5 or even 26 can possibly resolve it and we say that there is zero possibility of any sustainable economic recovery being built atop it. Simple maths dictates that it just isn’t possible. '

It is not gold that is in a bubble...

Tue, 03/29/2011 - 23:37 | 1115694 StychoKiller
StychoKiller's picture

Government is constantly trying to find a way to have unlimited creation of currency (Euros, FRNs [Federal Reserve Notes]) and credit without inflation, unlimited spending and deficits without economic ruin, unlimited national debt
without repayment, and unlimited growth of power and plunder (regulation and taxation) without revolt.

They can no more halve things and get the sensual good, by itself, than we can get an inside that shall have no outside, or a light without a shadow.

No one will see the logic of what you've posted as long as their paycheck(s) depend on NOT seeing it.

Tue, 03/29/2011 - 09:48 | 1112399 DeadFred
DeadFred's picture

Cheer up there are just as many calling the double top.  Don't know which way this goes but I lose if it doesn't go up big.  It will be educational to see.  Was expecting a rise between Mar expiry and the end-of-month but I see I completely forgot about quarterlies.  The good part about ignorance is if you collect enough of it you get back to coin flipping odds which is better than being a sheep following the voice of the shearer. lol

Tue, 03/29/2011 - 15:12 | 1113801 trav7777
trav7777's picture

this is like the 3rd or 4th double top?  Some were calling the "triple top" the last time.

The way I figure if the chinese want to buy, who's gonna sell?  The paper markets aren't actually backed by equivalent ounces and the chinese are buying the physical.

If the demand is there, the demand is there.  Doesn't seem like demand has crashed when price plunged lately.

Tue, 03/29/2011 - 08:41 | 1112151 Harlequin001
Harlequin001's picture

'It is infinitesimal when compared to the $4,000 billion a day traded in currency markets.

So a re-balance of paper markets to something of value has a long (reverse infinitesimal) way to go then.

I'm buying...

Tue, 03/29/2011 - 08:44 | 1112163 redstuffer
redstuffer's picture

      That's what makes the market so interesting. You should short the gold trade and reap the benefits of perfect market timing.

Tue, 03/29/2011 - 11:56 | 1113003 Harlequin001
Harlequin001's picture

redstuffer that's good until someone defaults on your position, which is the ultimate end game for this market. How long it takes I have no idea in a manipulated market but when all went mildly pear shaped in August 2007 we were happy that we were holding physical at that time.

Without Goldmans $13 billion TARP bailout, (or was it $30B) there would certainly have been uproar in derivatives positions. Better safe than sorry I say, I can fore go the intermittent gains because I'm contented with the long term appreciation...

Tue, 03/29/2011 - 08:54 | 1112188 eigenvalue
eigenvalue's picture

I'm in Shanghai at the moment. I can tell you that the story is 100% correct. Some dealers even tell me that I have to wait for 3 months to have my gold bars delivered. However, silver bars seem quite available here.

Tue, 03/29/2011 - 13:51 | 1113460 h3m1ngw4y
h3m1ngw4y's picture

did you really watch the video? its not about shortage we all agree on that its about the 50k tonnes which seem out of tune

Tue, 03/29/2011 - 09:05 | 1112227 Withdrawn Sanction
Withdrawn Sanction's picture

Midas's curse. I don't believe the China stories anymore.

You may be right, ORI.  Even to a PM bull, this story smells fishy.  For example, I was always under the impression silver (moon metal) was the preferred PM in China both historically and culturally.  I could be wrong, but that was my impression.

Tue, 03/29/2011 - 09:44 | 1112379 Oh regional Indian
Oh regional Indian's picture

Exactly Withdrawn. India was the traditional gold-bedazzled nation. Sol worshipping. China had a lunar calendar, lunar cycles, lunar worshipping.

Plus, in dark times, the moon shines bright while the sun is hidden.

I do believe we are entering the night here, figuratively.

ORI

Tue, 03/29/2011 - 12:26 | 1113149 DosZap
DosZap's picture

What WAS, is no longer.

The Chi Coms are begging their people to buy both.

The people who cannot afford gold, are buying silver.

Same in India,bukoos.

China wants at least a 10% Reserve(publically), their current holdings are a long way off the published figure.

Only GOD knows how much they have already over and above it.

Tue, 03/29/2011 - 09:26 | 1112310 Old. No. 7
Old. No. 7's picture

Sure Dude. What do you call a Chinaman with $900k American?

Gold Buyer

Tue, 03/29/2011 - 09:32 | 1112325 High Plains Drifter
High Plains Drifter's picture

on just a side note. i saw this a couple of days ago. any comment by you on this? i was amazed when i read it...wow!!!

http://tinyurl.com/6yq97bx

so i guess gandhi was catching and not pitching?

Tue, 03/29/2011 - 09:48 | 1112406 Oh regional Indian
Oh regional Indian's picture

Indeed HPD, I posted abotu just yesterday, soon as I saw the story.

Ganshi was just another inflated icon, a useful tool for the british.

His demi-god status is entirely un-warrented, not because he swung both ways or not at all. He was just an enabler for divide and conquer, is all. A patsy.

ORI

Tue, 03/29/2011 - 11:13 | 1112816 rune420
rune420's picture

China is still outsmarting the west. They see the structural flaws in the fiat system and are simply trying to take control over as many raw materials and grow as much infrastructure as they can while the game is still on. If that includes building "ghost towns" to keep their industry active then so be it.

Tue, 03/29/2011 - 11:35 | 1112869 ZapBranigan
ZapBranigan's picture

Wow, ORI, it seems you never tire of always being wrong.  Glutton for punishment?

Tue, 03/29/2011 - 11:25 | 1112877 ZapBranigan
ZapBranigan's picture

Don't listen to ORI, if anything, use him as a contrarian indicator.  Track his posts, he's made tons of 'predictions' (including dates) all of which have failed miserably.  When he has been called-out on them in the past, he tries to blame someone else.  He's a douche-sack and he just likes to make controversial statements on ZH to push his website.  Disregard him completely.

Tue, 03/29/2011 - 23:40 | 1115708 StychoKiller
StychoKiller's picture

"It's hard to make predictions, especially about the future."  -- Yogi Berra

Tue, 03/29/2011 - 08:37 | 1112138 Spalding_Smailes
Spalding_Smailes's picture


Can we get an update on why Gold is in the dumpster with all the black swans overhead. Turd must be pulling his hair out ....

It should be over $1,500 with Japan printing, EU issues, Stealth • QE 7, Muammar Muhammad al-Gaddafi, Plutonium samples, Debt ceiling issues, Shortages, Fannie Mae, Housing market, Ben Bernack can't raise rates, Hamas • Israel issues, Bank of England gold lease issues, Jobs outlook, Portugal ........ And the new China gold shortages ......

Tue, 03/29/2011 - 08:39 | 1112143 cossack55
cossack55's picture

You forgot Elenin.

Tue, 03/29/2011 - 08:43 | 1112161 Spalding_Smailes
Spalding_Smailes's picture

It's funny listening to gold sellers speak about shortages or the doomer outlook from the gold websites ....

Tue, 03/29/2011 - 12:46 | 1113215 JonNadler
JonNadler's picture

you're right smelly, we got plenty of gold to sell here at Kitco. We are not selling it though, we're waiting for it to go back to 200

Tue, 03/29/2011 - 12:46 | 1113217 JonNadler
JonNadler's picture

you're right smelly, we got plenty of gold to sell here at Kitco. We are not selling it though, we're waiting for it to go back to 200

Tue, 03/29/2011 - 08:43 | 1112154 Harlequin001
Harlequin001's picture

It's called derivatives...

Tue, 03/29/2011 - 08:49 | 1112167 Spalding_Smailes
Spalding_Smailes's picture

Then why this stupid call from a blog • gold pro ........ ? Hes been trading futures / options for years he knows about the derivatives he cry's about them after every bad call , over and over and over like a broken 45 '

 

............... So, here's my promise to you. Gold will trade at $1600 on or before 6/10/11. If I'm wrong, I'm shutting down this blog and going away, never to be heard from again as I will have proven myself to be of little value. If I'm right...well, let's just say it would be perfectly appropriate for you to hit the "Feed The Turd" button every day for the rest of your life. " ............................

Tue, 03/29/2011 - 08:52 | 1112180 Harlequin001
Harlequin001's picture

and what does that have to do with me Spalding?

Tue, 03/29/2011 - 08:53 | 1112186 Spalding_Smailes
Spalding_Smailes's picture

Just answered your questions. The derivative issues have been around, used for years ....

Tue, 03/29/2011 - 09:01 | 1112213 Harlequin001
Harlequin001's picture

I refer you to my response to a recent article on interest rates and gold.

'This idea that gold prices are linked to interest rates is complete and utter bollocks. The gold price was rising in 1971 because the US had already been printing too many dollars, even under a gold standard. Most CB 's at the time were sending their export dollars back to the Fed almost immediately apart from the French, who had been stockpiling for some time.

When De Gaulle attempted to exchange his stockpile of dollars for gold Nixon shut the window. At that time the world was effectively saying' show us your gold backing' which had Nixon got he would have shown because as we all know, no politician can resist a political edge if its free, and doing so would most certainly have calmed the worlds fears about inadequate gold backing of dollars.

We can only deduce from this that the US didn't have sufficient gold to back its dollars, and that's as far back as 1971...

It matters not that interest rates rose upto 1980, the only reason the gold price collapsed subsequently was because of the introduction of the Washington Agreement which effectively released every CB from the need to convert foreign currency (read export dollars) to gold. Now they convert export dollars to a US T Bill or Euro bond etc so there is no demand for gold or sale of dollars. It was this collapse in demand from CB's which led to a collapse in gold prices as they became net sellers instead of buyers.

It was entirely a short term manipulation which is now over.

The Asian currency pegs created an artificial strong dollar economy in which wages didn't increase as they should which in turn resulted in credit based asset bubbles as the US Govt tried to make Americans wealthy through asset appreciation instead of net earnings. The only consequence was that Americans eventually 'spent up' using too much of a static take home pay to service mortgages and credit card debt. At that point the dollar began to fall because Greenspan/Bernanke knew that the only way they could replay the same game was for Americans to earn more money and take on more debt. That means lower dollars and higher inflation in a world geared up for inflexible exchange rates and exports to an economy gone bang. Lowering interest rates has got nothing to do with rising gold. If it did we would all have some and clearly we don't.

The gold price is rising because more people are concerned about the value of their money. We will soon see an environment where interest rates are rising in conjunction with the rising gold price.

The fact is that gold prices dictate interest rates, not the converse, because when gold is in money I don't need to invest or save it in banks. I can choose to do nothing, which means that the banks have to tempt me with yield to get me to give it up. I am everyone, I am Joe Public the world over.

Interest rates are entirely false. The introduction of the Washington Agreement should be recorded in history as the greatest manipulation of financial and commodity markets ever by anyone and anything. That manipulation must now be taken out, which means higher rates, higher gold, lower housing, less credit and higher food.

An absolute disaster by any means that was  entirely avoidable, thanks Greenspan & Bernanke et al for nothing. We would have been and will be better off without you.

'Watch for signs that the second great gold bull market in history is about to begin.'

Hmmm.. Well done Lear Capital, you're about 10 years late with that one...'

Strikes me Spalding that you haven't answered much at all...

Tue, 03/29/2011 - 09:38 | 1112360 High Plains Drifter
High Plains Drifter's picture

Hasn't he got some furniture to deliver or some books to read or something? 

Tue, 03/29/2011 - 10:08 | 1112500 GoinFawr
GoinFawr's picture

Truths get in SS' hostile little face Harlequin; he's got no time for them.

Tue, 03/29/2011 - 10:28 | 1112591 Harlequin001
Harlequin001's picture

I was kinda hoping to engage in some intelligent debate, but there you go...

as go all paper bulls...

back to the inane one liners, if you can call them that...

Tue, 03/29/2011 - 08:57 | 1112208 tmosley
tmosley's picture

Do you cry yourself to sleep at night because no-one likes you?  Is that why you feel the need to attack people who ARE liked?

Also, can you tell the difference between March and June?  Is your inability to read or think critically the reason you are a delivery driver?

Tue, 03/29/2011 - 09:16 | 1112234 Spalding_Smailes
Spalding_Smailes's picture

How bout this gold pimp ....

 

If turds call is good I'll never post again, if hes wrong you leave with him, he also said he would stop posting on ZH if he was wrong.... ?

 

Got ballz ?

 

PIN DROP

Tue, 03/29/2011 - 09:44 | 1112387 Temporis
Temporis's picture

How about you just shut the fuck up... period.

 

Tue, 03/29/2011 - 09:51 | 1112412 Spalding_Smailes
Spalding_Smailes's picture

Nope. 

Must battle the doomer sect .... Can't let the misinformation get out of hand, if Turd didn't spam ZH for months with his blog links ( searching for fiat returns ) I would never post about his hypocrisy, but since he did, it's open season on his snake oil ....

Tue, 03/29/2011 - 13:03 | 1113279 JonNadler
JonNadler's picture

Thanks for not posting about my hypocrisy smelly

Tue, 03/29/2011 - 13:03 | 1113280 JonNadler
JonNadler's picture

Thanks for not posting about my hypocrisy smelly

Tue, 03/29/2011 - 14:34 | 1113648 tmosley
tmosley's picture

Nope, I've already made my commitment to leave.  If physical silver is ever available for less than $20 an ounce ex shipping, then I will leave.  At least, until it is selling for, say $100/oz.

I don't know that gold will hit Turd's target.  He made the call, not me.  I do know that silver will go much higher.  I don't know how high, or when, but that is my bet.

Tue, 03/29/2011 - 08:45 | 1112168 Robot Traders Mom
Robot Traders Mom's picture

What is gold up in the last year? The last 10 years?

How exactly is it in the dumpster?

Tue, 03/29/2011 - 08:50 | 1112181 Spalding_Smailes
Spalding_Smailes's picture


When buying, Miller also likes to strike quickly and he expects the same when he's selling. "I don't haggle much over the price," he admits. "I don't beat the owner up over one of the stove elements or something when I'm trying to buy a property. I'm trying to sell a condominium right now that will make me a $200,000 gain in 11 months and this buyer is dinking me around 'cause he thinks the roof might have to be replaced in a couple years. So he's gonna lose a fair deal there in the Village. Do you think I'm gonna replace the roof? If we were in a depressed market, maybe, but [I'm thinking] 'next!'"

-"Un-Real Estate" by Jake Nichols, on Planet Jackson Hole.

Mozilo reached out to borrowers as part of a "little experiment" to understand the reasoning behind making only minimum payments on so-called pay-option loans, a practice that boosts the total amount due, the 67-year-old CEO told investors Wednesday in New York.


"What we're finding out is that they're pretty smart," Mozilo said. "It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions."

"CEO Makes Call on Pay-Option Loans: It's Risky", from Bloomberg News.

Tue, 03/29/2011 - 08:59 | 1112202 Harlequin001
Harlequin001's picture

'Assuming that we are 100 in number and we each have a house valued at $1 then the entire housing market would be valued at $100 in total on a mark to market basis, but if I were to now borrow $20 and start buying houses for $2 each, then other homeowners will anticipate that the resale value of their own homes had risen to $2 because that would be the current market rate. That's what "mark to market" is, right?

Financial markets would perceive a fair and realisable value on a “mark to market” basis to be 100 houses at $2 each, a $200 market. The problem is that the total investment in our housing market remains at only $120. So where did the other $80 come from?

The fact is that property speculators just perceived 80 non existent dollars from somewhere which don't appear on the balance sheet of any bank, anywhere, yet. Now this might not seem important but if you are subject to a wealth tax or property taxes or a local rates system which relies on a market based property value then you can see an obvious problem; you have no control over your tax liabilities, however, we digress...

The problem is that an independent valuation from an industry professional declaring a market value of $2 is normally sufficient for the borrower to be considered a prime borrower with collateral and we can now go and obtain a credit rating, be it prime, sub-prime, AAA, BB-, they come in all different flavours.

The problems arise when speculators try to spend their 80 dollars on something of value because as soon as I stop buying houses the collateral disappears and the homeowners who took loans against the magically increased equity in their homes are left with the debt and just like the banks, no collateral.

The real problem is that with interest rates at just 1%, and a forced sale valuation as high as 60% LTV, it takes 40 good loans to offset the loss from just one default. The simple truth is that house prices can only continue to rise for as long as new buyers continue to enter the market or interest rates can be lowered to encourage existing homeowners to move up market, a very finite alternative which ends when interest rates hit zero, or thereabouts.

The reality is that if we are to put a roof over the heads of our children then we have little choice but to become embroiled in this system. It's easy to become intoxicated with perpetually rising property prices, after all anyone can make fortunes speculating in these markets when the future of the economy and the tax revenues which are derived from it rely so heavily on continually rising prices. The problem is that it all ends when interest rates hit zero, because at that point everyone wants toknow "where in this accounting fiction is the real money? '

Well, where is it, because it looks like governments various are now desperately scrambling to invent it...

Tue, 03/29/2011 - 09:00 | 1112212 Spalding_Smailes
Spalding_Smailes's picture

So many sheeple always buying at the top of any asset bubble, happens every time .....

Tue, 03/29/2011 - 09:07 | 1112233 Harlequin001
Harlequin001's picture

so many questions remaining unanswered, happens all the time...

Tue, 03/29/2011 - 10:16 | 1112539 GoinFawr
GoinFawr's picture

SS doesn't rebut, he just repeats.

Tue, 03/29/2011 - 12:53 | 1113241 Harlequin001
Harlequin001's picture

and apparently moves onto another page and says the same thing again...

I think he's just winding everybody up.

Tue, 03/29/2011 - 15:00 | 1113755 JonNadler
JonNadler's picture

So many sheeple always buying at the top of any asset bubble, happens every time .....

Tue, 03/29/2011 - 15:06 | 1113778 Harlequin001
Harlequin001's picture

so nothing to say then...

Tue, 03/29/2011 - 15:47 | 1113949 DoChenRollingBearing
DoChenRollingBearing's picture

Baaah, baaah, baaah!

JonNadler!  How come your avatar isn´t upside down?

Tue, 03/29/2011 - 10:52 | 1112718 MrBoompi
MrBoompi's picture

When you "mark to market" when prices are going up it's like manna from heaven, but when prices are going down things can become dangerously barren on the balance sheet.

Capitalism is supposed to work in both directions. But in the US we profit on the upside and either hide our losses through accounting gimmicks or ask for a bailout on the downside. This ain't capitalism.

Tue, 03/29/2011 - 08:58 | 1112210 Robot Traders Mom
Robot Traders Mom's picture

So you are comparing sub-prime borrowers at the height of the housing rush to the millionaire next door who has been buying gold for the last 20 or 30 years?

Two different types of people dude. You still haven't answered my question. How is gold doing over the last year or 10 years and how is it in the gutter?

Tue, 03/29/2011 - 09:02 | 1112221 Spalding_Smailes
Spalding_Smailes's picture

I know about 3 or 4  millionaire they don't own gold like 90% of the people ....

Most in the gold trade are chasing profits like every other bubble, they slam fiat ect so prices keep rising, gold pimps if you will ....

 

Tue, 03/29/2011 - 09:10 | 1112252 Robot Traders Mom
Robot Traders Mom's picture

I doubt they would even tell you. My old lady doesn't know shit about my gold and silver stash I started a few years ago. People that actually own physical don't tell people about it-even their best friends and family. People that own GLD and SLV tell the world. Big difference.

I agree with you though that many people are chasing returns, albeit in the ETF's I mentioned. I seriously hope they get flushed out, along with every other 'speculator.' I want physical buyers leading the rally so we have true price discovery.

 

Tue, 03/29/2011 - 09:19 | 1112274 Spalding_Smailes
Spalding_Smailes's picture

Without the paper pushers over the last 15 years gold would be in the 800's .....

Tue, 03/29/2011 - 09:22 | 1112297 Robot Traders Mom
Robot Traders Mom's picture

Without the cartel manipulation over the last 15 years gold would be in the 8000's.....

Even using your logic, that still puts it up 400%. Much better than the S&P...

Tue, 03/29/2011 - 09:29 | 1112318 Spalding_Smailes
Spalding_Smailes's picture

No, if they only traded physical the gold market would be waaaaaaaaaaaaaaaaaay smaller. The bullion banks, miners, big traders and smaller traders like turd game options chasing fiat profit ..... 

And notice you use fiat to buy miners or etf's and get payed out in fiat....

So most of the anti fiat shills are two faced bitchez ........ Hypocrites .....

Tue, 03/29/2011 - 10:13 | 1112503 DosZap
DosZap's picture

If they outlawed Paper Gold, the way smaller market would have prices off the scale.

The Paper Mkt is what is keeping a lid on the price rises, a normal one.

The dollar would be toast if the paper trades were not manipulated.

There is a huge world mkt NOW, and they,unlike us do not hold paper drawing no interest.And prefer to hold real money, real money.

Now holding our paper even if it DREW interest, would be a bad gamble.

Tue, 03/29/2011 - 15:54 | 1113971 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1400

If there were no paper gold, the ONLY way to own gold would be physical, and price of gold would be much higher.

...

DosZap!  I was wandering around on YouTube yesterday looking at big guns, and I saw on one your avatar.  I had been wondering what that was...

Tue, 03/29/2011 - 17:50 | 1114580 Lord Koos
Lord Koos's picture

Why bother to explain supply and demand of a precious, finite commodity to this troll.

Tue, 03/29/2011 - 10:11 | 1112509 Ricky Bobby
Ricky Bobby's picture

Slave, Tyrant, or free man - These are your choices. spalding_smells is a good little slave serving his masters well.

Tue, 03/29/2011 - 10:24 | 1112580 GoinFawr
GoinFawr's picture

Hey Sbalding: if you note the disadvantages of eating shit, but then someone comes along and forces you at the business end of a gun to take a bite of a shit sandwich, does that make you a hypocrite?

You might not be a hypocrite (you seem to truly enjoy the shit you're fed) but you sure are stupid; I'll give you that.

 

Tue, 03/29/2011 - 10:26 | 1112588 SilverRhino
SilverRhino's picture

Disagree,  I have PM's and have told people about them and what a good opportunity is if only to keep people I perceive as friends from losing their a$$ long term.   So far, one has taken me up on it.  

People with physical will talk about metals but they will never talk AMOUNTS. 

Tue, 03/29/2011 - 15:55 | 1113977 DoChenRollingBearing
DoChenRollingBearing's picture

My story is similar.  Only two people I know have any reasonable amount of gold and silver.

Tue, 03/29/2011 - 09:03 | 1112220 tmosley
tmosley's picture

Read up on utility and get back to us.

Here's a hint--houses show an extreme drop off in utility above 1.  Gold, on the other hand, has infinite utility.

Tue, 03/29/2011 - 09:02 | 1112222 Manthong
Manthong's picture

Paper covers rock.. er, mineral.

Enjoy the suppressed market and accumulate until something blows the paper away.

Tue, 03/29/2011 - 10:32 | 1112633 GoinFawr
GoinFawr's picture

silver scissors?

Tue, 03/29/2011 - 12:33 | 1113170 DosZap
DosZap's picture

Spalding,.

I cannot believe you even ASKED that question here, with all the info available on the manipulation.

Slvr goes over $38.xx, Gold breaks all time record, and WHAM, we get new limits same day.And it crashes the run, chance??, not one in hell.

How obvious does it have to be.

 

Tue, 03/29/2011 - 08:36 | 1112139 cossack55
cossack55's picture

How much does 23,000 tonnes of raw gold equal in refined gold?

Tue, 03/29/2011 - 08:37 | 1112140 hugovanderbubble
hugovanderbubble's picture

Imagine all the Yuans collateralized with Physical Gold and silver....muhahaha ---- Impossible so...rocket ¡

Tue, 03/29/2011 - 08:38 | 1112141 jesse livermoore
jesse livermoore's picture

buy and hold baby

Tue, 03/29/2011 - 08:37 | 1112144 TexDenim
TexDenim's picture

There is a gold shortage in China because they wisely sold it all to idiots in the West.

Tue, 03/29/2011 - 08:51 | 1112173 jesse livermoore
jesse livermoore's picture

can you please define exactly who all the idiots buying are???   Nobody in my family, nobody I work with ...i know nobody that owns any gold... or that is planning on buying gold...or even knows the spot price of gold... If it is so over bought people wouldn't people be bragging  how great it is to own gold over lattes at starbucks...  So once again who is buying the gold?

Tue, 03/29/2011 - 09:08 | 1112246 Harlequin001
Harlequin001's picture

I am... if it makes you feel better.

Hopefully, your central bank will be buying some your behalf...

Lest the government needs to steal it on your behalf.

Tue, 03/29/2011 - 09:49 | 1112400 DosZap
DosZap's picture

jesse,'Of course is spot on.

There is no bubble, you have to have J6P piling into physical PM's before their can be a bubble, what we have is a manipulated (to the downside market), that would be at $1600.00 rignt now, and Slvr would already have hit $50.00 easily.

Until the average Joes start the war cry, there will be no TOP.

Tue, 03/29/2011 - 12:03 | 1113039 Scarlo
Scarlo's picture

I posted some silver bullion for sale on Facebook the other day and of the 250 people that I'm connected to, only two people commented, and found it funny and asked why in the world I have silver bullion. It's a youngish crowd, early 30's, but still...

Tue, 03/29/2011 - 12:46 | 1113210 DosZap
DosZap's picture

The group your speaking to are the MSM zombies.

At their age they are starting families, and believe all they see on MM TV.

BTW, bad move posting that on Facebook.there as bad (nearly) as Google on info gathering.

Tue, 03/29/2011 - 14:14 | 1113569 Harlequin001
Harlequin001's picture

but it highlights the problem you have of disposing of large lumps of precious metals...

It's the reason why gold needs to be in money.

How are you going to dispose of your Pm's by the way, and the question is open to everyone...

Tue, 03/29/2011 - 14:32 | 1113638 DosZap
DosZap's picture

Harl,

There WILL always be buyers for PM's.

Tue, 03/29/2011 - 15:07 | 1113781 Harlequin001
Harlequin001's picture

yes, but at what margin?

Tue, 03/29/2011 - 15:58 | 1113989 DoChenRollingBearing
DoChenRollingBearing's picture

A coin shop is a good place to start when looking at selling PMs as well.

Tue, 03/29/2011 - 14:31 | 1113628 pirea
pirea's picture

The average Joe, skipped this train.

At this level of price for gold, Joe is left behind.

Wed, 03/30/2011 - 00:08 | 1115818 StychoKiller
StychoKiller's picture

As long as Cash4Gold and their ilk are in business, there is NO bubble in the Gold market!

Tue, 03/29/2011 - 12:31 | 1113164 zerozulu
zerozulu's picture

When your family, friends, your work buddy will start buying GOLD, that will be the time for me to sell.

Tue, 03/29/2011 - 14:28 | 1113620 pirea
pirea's picture

Must be the east indians from Canada. And they are many.

I don't know of one having RRSP or other paper assets than houses, land and gold.

And keep in mind, they do not have schools, (the old guys).

They naturally distrust the system.

Tue, 03/29/2011 - 09:01 | 1112214 Robot Traders Mom
Robot Traders Mom's picture

I am really sorry you can't afford gold. You should buy a pound of copper with your allowance and start small.

Tue, 03/29/2011 - 09:08 | 1112238 Harlequin001
Harlequin001's picture

I've got a truck load of paper you can have...

Tue, 03/29/2011 - 09:08 | 1112245 jesse livermoore
jesse livermoore's picture

I guess you are one of the idiots buying gold unloaded from those "smart" chinese.    you didn't pick up on the sarcasm.   i already have my gold.

Tue, 03/29/2011 - 09:16 | 1112262 Robot Traders Mom
Robot Traders Mom's picture

I should have replied @ Tex Denim. I wasn't referring to you.

Tue, 03/29/2011 - 08:39 | 1112149 aVian
aVian's picture

I like fiat money because its says on the note "this note is legal tender for all debts, public and private"  I can sleep better knowing just this

Tue, 03/29/2011 - 11:40 | 1112626 GoinFawr
GoinFawr's picture

Like most notes, you have to read between the lines...ignorance can be a powerful anodyne, no doubt.

Tue, 03/29/2011 - 08:42 | 1112158 JLee2027
JLee2027's picture

The annual world producion is 2500 tonnes. US Gold reserves are 8,100 tonnes.

http://www.goldsheetlinks.com/production2.htm

http://en.wikipedia.org/wiki/Gold_reserve

 

How can the shortage for one country be 23,000 tonnes?

Tue, 03/29/2011 - 08:54 | 1112197 jesse livermoore
jesse livermoore's picture

If you believe there is 8,00 tonnes of gold in fort knox.. i got a bridge i would like to sell you

Tue, 03/29/2011 - 09:09 | 1112248 JLee2027
JLee2027's picture

You missed my point Jesse. 

But here is the Feb Gold report. I guess that's all made up too.

http://www.fms.treas.gov/gold/current.html

Tue, 03/29/2011 - 09:16 | 1112265 Long-John-Silver
Long-John-Silver's picture

There is 8,000 tons of Gold plated tungsten bars in Ft. Knox.

Tue, 03/29/2011 - 09:48 | 1112398 JLee2027
JLee2027's picture

Can you prove that?

Come on guys, it's all rumor nonsense until proven.

Tue, 03/29/2011 - 11:34 | 1112910 GoinFawr
GoinFawr's picture

'struth JLee, 'Innocent until proven guilty' and all that cal. But on that note: would you rather own the physical metals or SLV/GLD?

Tue, 03/29/2011 - 12:37 | 1113183 JLee2027
JLee2027's picture

SLV is an obvious fraud...never had it. Fort Knox DID have it, proven. No change...yet.

So what do you think there bubba?  Anyone else with lame brain questions to ask me?

Tue, 03/29/2011 - 12:47 | 1113224 DosZap
DosZap's picture

Fort Knox DID have it, proven. No change...yet.

 

Wrong, go back and look at the chart provided, it's in FOUR locations, not one.

Wed, 03/30/2011 - 16:16 | 1118652 GoinFawr
GoinFawr's picture

eooooooowwww. Junked you for your 'proof' double standard.

Tue, 03/29/2011 - 10:45 | 1112682 decon
decon's picture

I was wondering the same thing with annual gold production around 2,500 tons.  The discrepency makes this article questionable.

Tue, 03/29/2011 - 11:42 | 1112943 BigJim
BigJim's picture

Yes, well spotted, the figures in the article make no sense at all.

I'm long gold (and silver) but this article really doesn't do ZH any favours, credibility-wise.

Tue, 03/29/2011 - 08:44 | 1112162 Serfs Up
Serfs Up's picture

The "tonnes" has to be an error.  

Perhaps they meant "pounds?"

There's no way for Chinese yearly demand to be 15% of the total world known supply of gold including all investment, monetary and jewelry forms.  At this rate, in eight years they own it all!

So that can't be right.

Still, that was a nice stack of kilo and biggie bars the guy had on the counter.

Tue, 03/29/2011 - 09:36 | 1112347 perchprism
perchprism's picture

 

They were talking about unrefined gold, so it must be like on a par with rich gold ore, or something.

Tue, 03/29/2011 - 11:34 | 1112915 mick_richfield
mick_richfield's picture

I think Chinese retail gold demand was like 200 tons last year, vs. 300 tons in India.

But it is increasing rapidly -- China may surpass India this year in gold demand.

 

 

Tue, 03/29/2011 - 08:53 | 1112189 fragrantdingleberry
fragrantdingleberry's picture

If every Chinaman bought one oz. of AU, well, I just wouldn't know what to do.

Tue, 03/29/2011 - 08:55 | 1112190 LoneStarHog
LoneStarHog's picture

RAW...RAW...RAW...Not REFINED...RAW...RAW...RAW...!!!!!

Tue, 03/29/2011 - 09:06 | 1112230 tmosley
tmosley's picture

Those bars looked pretty refined to me.  

Tue, 03/29/2011 - 09:08 | 1112236 LoneStarHog
LoneStarHog's picture

The bars are at the CONSUMER level...The story is at the MINING/PROCESSING level, which are needed to SUPPLY the CONSUMER level.

Tue, 03/29/2011 - 14:41 | 1113672 tmosley
tmosley's picture

Which is very confusing.  I have no idea what they are actually talking about here.  

Citing a weight for ore doesn't really make sense without also citing the gold content of said ore.

Oh well.  I'm not selling my silver.

Tue, 03/29/2011 - 16:01 | 1114012 DoChenRollingBearing
DoChenRollingBearing's picture

Me either.  Nor my gold.

Tue, 03/29/2011 - 10:30 | 1112611 Serfs Up
Serfs Up's picture

Like that explains anything asswipe.

But let's cede to your obvious expertise, please tell us WTF you think "raw" gold is?

Do you think it's ore from the mine at 0.001% purity?  Is it nuggets from the ground at 35% - 85% purity?  Is it the first rinse cyanide run from a tailings  wash?  

For refiners raw gold usually means d'ore bars which are the first pass smelting output that are between 92% and 98% purity.

So two things are true; my original calculations stand and your comments waste time (but the bold and ALL CAPS kinda gave that away).

Tue, 03/29/2011 - 12:57 | 1113254 DosZap
DosZap's picture

Raw gold;

 Raw gold is the generic term for gold nuggets, gold dust and pocket gold.

Tue, 03/29/2011 - 08:54 | 1112195 apberusdisvet
apberusdisvet's picture

Gold has to crash for the elites so they can buy it at lower prices.  That's why the MSM is full of disinformation.  Even if the 23000 tonnes is a misprint, the demand in Asia is definitely overwhelming current supply (and China is the largest gold producer worldwide).

Traders, obviously, will be hurt on corrections.  For those of us long term "estate" holders, corrections will be just another buying opportunity.

Tue, 03/29/2011 - 09:07 | 1112240 Quinvarius
Quinvarius's picture

1400 is crashed.  You think the estimates between 5k and 50k are some kind of hype?  They are the results of basic math.

Tue, 03/29/2011 - 09:19 | 1112267 Harlequin001
Harlequin001's picture

The gold price probably will crash before it takes off, but you won't be able to buy it when it does.

The gold price is dictated by the paper gold markets so common sense dictates that the first default will cause a crash in the paper price whilst everyone scrambles for physical.

We will then develop a proper gold price based on physical...

'For those of us long term "estate" holders, corrections will be just another buying opportunity'

Yawn, literally a yawn, because you're still going to own the same amount of gold.

Who cares...

Tue, 03/29/2011 - 16:03 | 1114021 DoChenRollingBearing
DoChenRollingBearing's picture

You sound like a FOFOA reader.  If not, check out his blog:

fofoa.blogspot.com

Tue, 03/29/2011 - 08:55 | 1112198 monopoly
monopoly's picture

GM. Don't know why you guys look at the day to day price of gold. The price fluctuates. There are traders every day in the metal. Means nothing long term.

I trade around my core but never touch core. When Obama resigns, The Bernank is indicted and Geithner is fired. Then maybe, I will think about selling my gold.

Tue, 03/29/2011 - 09:43 | 1112380 jimijon
jimijon's picture

That is my theory.

I will sell my PM when banksters actually go to jail or in the beginning of 2013 when I will convert my PMs into land. Assuming the world is still intact then.

Meanwhile I just buy ever single month. I figure my timing indicators are as good as anyones. Though I am starting to feel that some puts might be in order to take advantage of a coming correction

Tue, 03/29/2011 - 09:58 | 1112439 Infinite QE
Infinite QE's picture

You raise the ultimate question. When to sell. The only reason to sell in this age of infinite fiat is when an alternative of wealth preservation arises. Perhaps a gold-backed currency out of Asia, perhaps a Pan-Asian gold currency. Productive farmland? Otherwise, as you say, best to trade the cycles of the paper trade and leave a core in tact. 

I am in China every two months and have seen the gold demand personally. One needs to keep in mind that on the best-selling book list there,still, is the book series Currency Wars, in Chinese only unfortunately, wherein the author lays out the history of fiat money. They are much more educated on wealth creation and preservation than the inbred, fluoride-head Americans such as Spalding, etc. who think that debt is money. 

"Gold is money. All else is debt." JP Morgan

Cheers!

Tue, 03/29/2011 - 08:57 | 1112207 Republican Lackey
Republican Lackey's picture

Tyler is worse than the Japanese gov't. Coming up with a new reason du jour of why the market is going to buy gold to support his gold position. 

Tue, 03/29/2011 - 10:12 | 1112513 Spalding_Smailes
Spalding_Smailes's picture

Golf clap, fist bump  ..... 

The crash will be epic when the middle east protest stop, QE ends and corporate profits keep getting better .......... 

Tue, 03/29/2011 - 10:29 | 1112625 Infinite QE
Infinite QE's picture

You don't actually believe this rubbish, do you? There will be no crash, QE will never end. Think and look around. 

Tue, 03/29/2011 - 18:02 | 1114626 Lord Koos
Lord Koos's picture

You're an idiot.  Gold was already way up before QE1, before Middle East revolutions, and even before the crash: http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Tue, 03/29/2011 - 09:01 | 1112218 sudzee
sudzee's picture

A few producers of silver are now marketing their own brand thus capturing premiums and reducing the supply to comex. I think we will soon see gold producers marketing their own brand of bulllion thus capturing the rising premiums and reducing supply to the manipulators. This business model will result in result in higher profits than leasing production into the future.  

Tue, 03/29/2011 - 09:20 | 1112288 NidStyles
NidStyles's picture

It'll translate to a far more stable price as well.

Tue, 03/29/2011 - 18:02 | 1114632 Lord Koos
Lord Koos's picture

That would be great, like a farmers market for PMs.

Tue, 03/29/2011 - 09:05 | 1112229 Quinvarius
Quinvarius's picture

If GS is saying hedge, it is time to load up.

Tue, 03/29/2011 - 09:17 | 1112270 qmhedging
qmhedging's picture

I wait for the rice and wheat bulls

Tue, 03/29/2011 - 09:17 | 1112273 911 4S
911 4S's picture

I ordered a monster box of silver Jan 18th from Northwest territory mint with a delivery date of March 14th. Got a email on the 14th saying due to high demand delivery would be delayed a month

Tue, 03/29/2011 - 09:34 | 1112338 Magnum
Magnum's picture

NWTM is a sketchy outfit that is notorious for late delivery, and is by no means a good market indicator.  Not sure why people buy from them given that the internet is full of complaints about their ethics and repeated late deliveries.  Must be good prices.  

Tue, 03/29/2011 - 10:12 | 1112526 Bastiat
Bastiat's picture

Hard to beat Tulving on price if you're buying volume and I've never heard a complaint about delivery.

Tue, 03/29/2011 - 14:44 | 1113688 DosZap
DosZap's picture

Tulving is a good to go, IF your wealthy, most people cannot buy( or don't) want to lock in  20oz at a time.

It screws up your DC  Averaging.Plus, the cost is rather high on the wanted items,in those min quanities.

I beat his prices,or at least equal them on 1oz, or 10.

And my Dealer is local, is large, and the best kept secret on the web(plan on keeping it that way).

When others are out, or waiting I get overnight delivery after wire transfer.

Tue, 03/29/2011 - 14:46 | 1113692 DosZap
DosZap's picture

Tulving is a good to go, IF your wealthy, most people cannot buy( or don't) want to lock in  20oz at a time.

It screws up your DC  Averaging.Plus, the cost is rather high on the wanted items,in those min quanities.

I beat his prices,or at least equal them on 1oz, or 10.

And my Dealer is local, is large, and the best kept secret on the web(plan on keeping it that way).

When others are out, or waiting I get overnight delivery after wire transfer.

Tue, 03/29/2011 - 09:21 | 1112286 Absinthe Minded
Absinthe Minded's picture

Why must all you gold bears hang around here and stir the pot? It's quite sad that you don't have an intelligent group of your peers aligned with your views at another blog that you could converse with constructively. It's okay to disagree, but all this lame back and forth when you hijack a thread makes it like watching an Obama speech. Blah, blah, blah.

Tue, 03/29/2011 - 13:24 | 1113347 Temporalist
Temporalist's picture

They come here because no Champions of Gold go to their websites to waste time playing with the kids that ride the short bus.

 

Stop feeding these trolls; it's sad watching them drool on themselves.

Tue, 03/29/2011 - 09:27 | 1112290 Absinthe Minded
Absinthe Minded's picture

Frickin' junk Ipad, Jobs you suck!

Tue, 03/29/2011 - 09:33 | 1112328 eddiebe
eddiebe's picture

'The industry in China expects only 27,000 tonnes of raw gold can be delivered this year. That is way below the estimated demand of 50,000 tonnes.'

 Tyler, are you sure of these figures?

Tue, 03/29/2011 - 12:44 | 1113202 zerozulu
zerozulu's picture

Mr Jang in the clip said," he buy 20 kilo gold every month." So the scale he used is Kilo and I think in translation it become Tonnes. that might be 27,000 kilos which is 27 metric tonnes.

Tue, 03/29/2011 - 09:57 | 1112366 TwoShortPlanks
TwoShortPlanks's picture

What a sorry-ass bunch of fucking cry-babies, curl-up in a ball and die will ya! Reading some of these childish whimpers about Gold and Silver loosing some didgits along the way are making me sick as all fuck...back to basics we go...while the paper debts accumulate, while the printing press's turn-out tomorrows toilet paper, while CB's are bailing like mother fuckers, while we're burning 85M B of Oil a day because we lost the use of our legs, and while people around the world are shooting each other over tomorrows toilet paper, everyone should be buying PMs hand over fist.

When the music stops because the Dukebox takes thousand dollar notes only, don't start fucking crying on-line because you got scared or distracted by the little ups and downs a year or two ago...stick to common sense.

Mates of mine come back from business trips to China; they say those fuckers know they've won. Confidence in China is amped. They're buying anything they can hold in their hands because the dumb white fucker likes toilet paper. Old Chinese saying: Make your first fortune in Gold.

This shit couldn't get any more fucking simple, even for a trading dumb fuck like me. PMs aren't about buying dips and selling highs, right now PMs are about buying dips only. Pay-day comes when countries that lend realise that countries that borrow are a lost cause. When creditor countries start trading in their own currencies, and when debtor countries can't keep consuming.

Please don't make me post the 'BTFD' video, for fuck sake!

Actually, fuck-it, I take it all back...go ahead, sell your shit...make it cheaper for me!

Tue, 03/29/2011 - 10:05 | 1112474 Absinthe Minded
Absinthe Minded's picture

Most intelligent thing I've read all day. Who can see this ending well for any fiat currency?

Please junk, and then piss off.

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