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Production Numbers All Argue for Investment in Precious Metals
As legendary investor Jeremy Grantham notes, copper production is falling:
As I've previously noted, gold production has also been falling:
Reuters India noted on March 29th:
China's
gold demand is expected to double over the next decade due to
jewellery consumption and investment needs, the World Gold Council
(WGC) said in its first report on the world's fastest growing consumer
of the metal.***
If the central bank boosts gold
holdings to 2.2 percent of forex reserves, a peak level seen in 2002,
from the current 1.6 percent, China's total incremental demand would
rise by 400 tonnes at the current gold price, the WGC report said.
China's share of global gold demand doubled from 5 percent in 2002 to
11 percent in 2009, and the council predicted that China's domestic
gold mines could be exhausted within six years.
"The Chinese gold industry is simply not responding fast enough to bring in new supply," it said.
***
China is not the only country facing declining gold production.
The world's biggest gold producer - Barrick - says
that the relatively easy-to-reach gold supplies are gone, and so
supplies are getting more and more expensive to locate and extract:Aaron
Regent, president of the Canadian gold giant [Barrick], said that
global output has been falling by roughly 1m ounces a year since the
start of the decade. Total mine supply has dropped by 10pc as ore
quality erodes, implying that the roaring bull market of the last eight
years may have further to run.
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
"Production peaked around 2000 and it has been in decline ever since,
and we forecast that decline to continue. It is increasingly difficult
to find ore," he said.Mining-Technology.com stated in March 2008:
Global
gold production has been in steady decline since 2002. Production in
2007 was around 2,444t, down 1% on the previous year.
Analysts
note that virtually all of the low-lying fruit has now been picked with
respect to gold, meaning that companies will have to take on more
challenging and more expensive projects to meet supply. The extent to
which the current high price of gold can translate into profits remains
to be seen...
According to Bhavesh Morar, national leader of the
mining, energy and infrastructure group with Deloitte Australia,
frenzied exploration activity over the last few years has seen virtually
all of the easy harvest been picked with respect to gold...
The
high price of gold is however encouraging more adventurous projects, be
they more challenging financially, geologically, geopolitically or all
three. New projects for gold and other resources are mushrooming
throughout Africa, China, the Middle East and the former Soviet Union;
all areas where sovereign risk is potentially very high.Zeal Speculation and Investment wrote last July:
Miners
have the same geological landscape to work with today as those miners
thousands of years ago. The only difference is the low-hanging fruit
has already been picked. Gold producers must now search for and mine
their gold in locations that may not be very amenable to mining. Many
of today’s gold mines are located in parts of the world that would not
have even been considered in the past based on geography, geology,
and/or geopolitics.
And these factors among many are
attributable to an alarming trend we are seeing in global mined
production volume. According to data provided by the US Geological
Survey, global gold production is at a 12-year low. And provocatively this downward trend has accelerated during a period where the price of gold is skyrocketing.
You
would think that with the price of gold rising at such a torrid pace
gold miners would ramp up production in order to profit from this trend.
But as you can see in this chart this has not been the case, at all.
Not only has gold production not responded, but it has dropped at an
unsightly pace that has sent shockwaves throughout the gold trade.
As the red line illustrates gold’s secular bull began in 2001, finally
changing direction after a long and brutal bear market drove down
prices to ridiculous lows in the $200s. To match this bull the
blue-shaded area provides a picture of the corresponding global
production trend. And you’ll notice that in the first 3 years of gold’s
bull production was steady. This is not a surprise as you figure it
would take the producers a few years to ramp up supply. But instead of
supply increasing in response to growing demand and rising prices, it
took a turn to the downside. And what’s even more amazing is the
persistence of this downtrend. Since 2001 gold production is down a
staggering 9.3%! In 2008 there were 7.7m fewer ounces of gold produced than in 2001.Also in July, Whiskey and Gunpowder posted a chart on historical gold production, and argued for decreasing production:
Take a look at the chart below from Macquarie Research, depicting world gold production 1850-2008...
[Click here for full chart]
For
example, look at the very steep rise in gold output during the 1930s.
That was during the depths of the worldwide Great Depression.In
both the US/Canada (blue area), and the rest of the world (gray area),
people were digging more and more gold. The Soviets (purple area)
increased their gold output too, courtesy of Joseph Stalin and his
Gulag. Desperate times call for desperate measures, I suppose. Will that
sort of history repeat this time around?Or look at that
massive run-up in gold output from South Africa (green area) in the
1950s and 1960s. That was during a time when South Africa was
instituting its post-World War II system of apartheid. Labor was cheap
(sorrowfully cheap), and quite a lot of international investment poured
into South Africa without moral qualm. The South Africans dug deep and
just plain tore into those gold-bearing reef structures of the
Witwatersrand Basin.But notice how quickly the South African
gold output declined in the 1970s, as the mines got REALLY deep and the
rest of the world began to institute sanctions against South Africa
over its apartheid system.And then look at the Gold Price
run-up that followed in the late 1970s. It was a time of inflation,
mainly coming from the US Dollar. Yet world gold mine output was
dropping as well. Falling output, plus monetary inflation? The Gold
Price skyrocketed. Another bit of useful history, right?Now
let's focus on more recent history, since about 1990. There were large
increases in gold output from the US/Canada (blue), Australia (gold)
and Asia (China orange, non-China open bar). By 2000 or so – the world
production peak – Gold Prices were down toward $300 per ounce and
below.But as the chart shows, in the past 10 years, gold output
has shown a marked DECLINE in the major historic Gold Mining regions.
The prolific gold output from the US/Canada, Australia and South Africa
has followed downward trends. Sure, these regions still lift a lot of
ore and pour a lot of melt. But the production trend is DOWN.The
US/Canada, Australia and South Africa all have well-established and
(more or less) workable mining laws – despite the best efforts of many
current politicians and regulators to screw it all up. These
historically producing areas are politically stable. Overall, there's
good mining infrastructure, with road and rail networks, power systems,
refining plants, a vendor base, mining personnel and access to
capital.But that's not the case in many areas of the developing
parts of the world. Political stability? Security? Infrastructure?
Transport? Power? Refining? Vendors? Personnel? Capital? Everywhere is
different, of course. But overall, the entire process is much more
problematic. So there's a lot more risk. When you move away from the
traditional mining jurisdictions, the whole process of exploration,
development and mining is more expensive.Thus, the new gold
discoveries of the future are going to lack some (if not most, or
perhaps all) of the advantages of the developed mining world. That means
that the ore deposits of the future will have to offer much higher
profit margins, based on size and ore grade, to compensate for the
increased risks. Too bad Mother Nature (or Saint Barbara, who looks
after miners) doesn't work that way.It also means the timeline
to develop the mines of the future will likely be stretched over many
years while political, legal, bureaucratic, logistical and social issues
are ironed out.The key driver for the future of worldwide gold supply will be DECLINING output overall over time.
(If you think gold is in a bubble, see this and this.)
Gold production increased slightly in 2009:
(Click for better image.)
However, if you think gold is in a bubble, see this and this.
Silver production is rising somewhat. However, demand continues to outstrip supply. As Argmaur noted in April:
Even
American silver investment demand is at all-time highs. The US Mint
reported a 58% increase yr/yr in February and record silver Eagle
bullion sales in January, following a record year. Gold Eagle sales, on
the other hand, were not at record highs. Silver production is not
nearly keeping up with this surge in demand. According to the Silver
Institute, total global mining output was 735 M oz. in 2010 (far less
than USGS' [i.e. U.S. Geological Survey's] anticipated 783 M oz.), which
amounts to only 70% of total global demand. To make matters worse, the
world's leading silver producer, Peru, already reported a 7.3% decline
in its total silver output whilst China, the world's largest silver
exporter, will likely report a 40-50% decline in exports for 2010, even
though it increased total production.This huge mining
supply deficit is nothing new, but it is certainly putting pressure on
dwindling above-ground silver reserves, which have been nearly depleted
over the last 100 years due to heavy industrial use. Smart money knows
that the world's total above-ground silver reserves matter now more than
ever. Investors in the world's paper silver markets may one day demand
physical delivery and the minuscule 1 B oz. in estimated above-ground
reserves (compared to 2 B oz. in gold reserves) will not suffice.***
The
USGS estimates that silver's mine life is 5 years shorter than gold's
and predicts that silver will be the first extinct metal on earth.
Although we doubt that any metal could ever go extinct, it underscores
our point that silver is not as abundant as most investors believe and
it's about time to ditch the 16:1 ratio as a standard to determine
silver's price in relation to gold's.
China is the big driver. As Mineweb reports:
"For the first time, China's net imports of silver hit a record high
as they quadrupled in 2010 to 3,500 tonnes. Though many commodities have
been affected by softer Chinese and US economic data and worries about
Greece's debt, in China silver continues to be strong,'' said a
bullion analyst with a foreign brokerage house here.***
Analysts have also alluded to the fact that in 2005, China actually exported 3,000 tonnes of silver. In a matter of five years, an exporter of silver has become an avid importer.
***
Though China had gross exports of 1,575 tonnes of silver in 2009, down 58% from a year ago period, its gross imports jumped 15% to 5,159 tonnes in 2010.
"By December 2010, China had imported 303,362 kilogram in one month alone.
In comparison, the net monthly import was 90,476 kilogram in December
2009. This shows the massive jump in demand,'' said another analyst.Currently, industrial use accounts for 44% of worldwide silver consumption ...
In 2009, Palladium production was down from its peak:
Similarly, as the Metals Economic Group notes, platinum also fell in 2009:
World
mined platinum production decreased 1% in 2009 to less than 6.2 million
oz, following drops of 4% in 2008 and almost 5% in 2007.
But as the USGS reports, both palladium and platinum production rose slightly in 2010:
This might not be nearly enough to meet supply.
For example, Bloomberg pointed out in February:
Impala Platinum Holdings Ltd. said global palladium demand may outstrip supply by about 560,000 ounces this year.
As Mining Weekly reported in 2009:
ASX-
and Aim-listed Platinum Australia on Thursday said that demand for
platinum would outstrip supply between 2010 and 2016, as the production
from South Africa, which accounts for about 75% of the world's output,
remained flat.
And a report last month by Johnson Matthey also indicated strong platinum demand:
Shares
of Impala Platinum ..., one of the largest publicly traded platinum
miners, are soaring by 3% today after research firm Johnson Matthey
released a report that found global platinum demand surged 16% to 7.88
million ounces last year and that the demand from the automotive sector
and investors is likely to fuel robust demand for the precious metal in
the coming months.Platinum is a primary component of catalytic
converters in automobiles manufactured and sold in Europe while
palladium is used for the same thing in North America and China.
Industrial demand for platinum surged 48% to 1.69 million ounces last
year, the Johnson Matthey report said.
Notes: Don't forget rare earth metals. See this and this.
If China's economy really crashes, it could quickly reduce demand.
I am not an investment adviser and this should not be taken as investment advice.
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No worries about gold for the USA (if things get really bad, we'll just "appropriate" some gold?). December, 2010, Jim Rickards proposed, to Pentagon officials, to send a military SpecOp team to FED NYC in order to confiscate 6,000 tons of gold held there (all belonging to foreign governments).
starting at minute 09:00
"Jim Rickards - Economics and National Security - Part 6"
http://www.youtube.com/watch?v=bS-XLLuwuUQ
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.
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The Financial Road to Serfdom:
How Bankers are using the Debt Crisis to Roll Back the Progressive Era
By Michael Hudson
June 13 2011 "Information Clearing House"
..
http://www.informationclearinghouse.info/article28319.htm
.
.."This is what today’s financial warfare is about. At issue is the financial sector’s relationship to the “real” economy. From the latter’s perspective the proper role of credit – that is, debt – is to fund productive capital investment and spending, because it is out of the economic surplus that debts are paid. This requires a financial regulatory system and tax system to maximize growth. But that is precisely the fiscal policy that today’s financial sector is fighting against. It demands preferential tax-deductibility for interest to encourage debt financing rather than equity. It has disabled truth-in-lending laws and regulations to keeping interest rates and fees in line with costs of production. And it blocks governments from having central banks to freely finance their own operations and provide economies with money. And to cap matters it now demands that democratic society yield to centralized authoritarian financial rule." ..
..
"But the tables are now turning, from Icelandic voters to the large crowds gathering in Syntagma Square and elsewhere throughout Greece to oppose the terms on which Prime Minister Papandreou has been negotiating an EU bailout loan for the government – to bail out German and French banks. Now that nations are not raising money for war but to subsidize reckless predatory bankers, Jean-Claude Trichet of the ECB recently suggested taking financial policy out of the hands of democracy.
But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? …
At issue is sovereignty itself, when it comes to government responsibility for debts. And in this respect the war being waged against Greece by the European Central Bank (ECB) may best be seen as a dress rehearsal not only for the rest of Europe, but for what financial lobbyists would like to bring about in the United States."
..
While everybody knows i'm a gold bull from way back i think i need to point out that GW has conveniently left out stats for 2009 which showed a rise in world gold output.
The rising price has brought new production on line and it remains to be seen whether this keeps up for long.
http://minerals.usgs.gov/ds/2005/140/gold.pdf
Is this an old article GW?
Anyway i've been saying for a while this coming dip in gold and PM's may be the last big chance to buy low for a while.
There is no doubt russian and chinese central banks are buying which is putting a floor under prices.
PM production typically drops when prices rise.
Gold mining companies have rich ore and poor ore and everything in between. A shrewd manager will process the poorest ore that will pay, and leave the best stuff alone.
By doing this they maximize production and profit over the long term. If they use up all the good stuff when prices are high, then prices drop, they are screwed because they no longer have anything they can mine at a profit.
So, they tend to leave the best ore for a rainy day.
Eventually new mines are opened and production goes up again but this can take years.
Great summary. Here are a few other things to consider:
1) In 1980 the Soviets held 267 million ounces of gold in their reserves. It was all stolen and dumped on the markets depressing the price of gold for nearly two decades.
2) The price of diesel fuel sets a floor to the production price of gold. When oil goes up the cost of production goes up.
3) The old scheme of gold extraction by leaching with cyanide later dumped in rivers and polluting the environment doesn't work any more. Many mining operations are shutdown and the cost of bringing a pit up to standards can be huge.
I am a player in the PMs but I am also realistic. We are all expecting an economic implosion within the next 10 years, maybe sooner, due to amount of unsustainable debt out there. What is to prevent the nationalization of all mines by sovereign nations,merely for monetary self preservation if future currencies have a hard backing. Essentially China and Russia are not exporting, they both keep all PMs in country. If PMs become the basis for a currency again, then not only expropriation of mines but also confiscation from the sheeple is probable. The corrupt pols around the world have more power in their venal hands than they have ever had in history. So if gold hits $12000/oz, it's a double-edged sword. The Police State will know where PM owners are. Since Google is a NSA front, and Facebook is a boon to investigative authorities, I'm sure that any visits to PM sites have already been logged, as well as any posts made about PMs.
Yeah; I'm paranoid. Who wouldn't be now?
Same with firearms. They know where the registered ones are at. But they may have been sold or traded etc..
Well sir, yea I had some PM at one time, yes sir, but I traded it for blah blah what ever. I done sold it, thanks for asking though. I buried it and now I cannot find it. A sink hole formed.
I will not give it up.
Hoody you done good :) I've been reading everything I can find for the past 20 years on what's coming since Ross Perot/United We Stand America and the Concord Coalition were warning this would happen back in 1992. After many roller coaster rides in investments holding on with both hands to just keep what I've got, the best way to protect yourself if you're staying in the U.S. is to have equal parts of physical gold, silver, and cash. The cash is in case there's a planned short period of deflation to justify QE3 and there's a bank holiday and some nice dips to buy. Your gold coins will be your basic core wealth, and the silver ones used to barter with if it really gets bad. I've told several of my farmer friends what I thought would happen when the dollar becomes worthless and if they would take a silver eagle for livestock/crops and they all said yes. If you want to take survival to the next step as Casey Research recommends, then as part of Plan-B get some of your wealth outside of the U.S. where it can't be confiscated. I think physical where you are is the ultimate bird in the hand, but if want to put some in the bush, one of the most reliable bushes is James Turk's goldmoney.com and select the Hong Kong Viamat vault. If you want to take an extended "vacation" to a safe country, you will be able to be a tourist instead of a refugee.
Sorry for my OT advice to Hoody. Back On-T, I think George is absolutely correct about declining mining outputs. But short term, the metal and commodity exchanges have been infected by big investment banks and hedge funds that have NO legitimate reason to be there. I think I read recently that the UK Gov. was investigating that JP Morgan held 50% of all deliverable metal on the LBMA and at one time bought 90% of all the deliverable copper? Huh? Why are they in these markets when they don't mine or sell to refiners? Uh oh, my blood pressure is rising and I'm on the verge of going on another ZH rant in George's comment area. Love you George, keep up the great work :)
Chicken in Thailand
Boating accidents can lead to unhappiness...
Not at these prices.
These longterm moves don't take the entire Brady Bunch along with them.
There will be a severe 300-500 dollar drop in Gold at some point over the next 6 months. That's when you want to either add to your stash, or initiate a position.
But buy Physical, and make damn sure a magnet doesn't adhere to it.
Gold $8K and Silver $375.00 at some point in the next 5 years.
I agree with what you are saying. We could see silver and gold make you take a deep breath and a sigh soon, but I think for the long haul, like you say we will see higher prices.
I know at one point I was ready to buy, there was none. Dealers were out or they would not sell, and they were looking to buy.
I think we will see much more of that. I do love having the physical. I do feel more secure. This was my last thing to add to my preps.
Even if gold drops $5 to $8 bills or silver drops to $18, I will add, if it is available. Available i think will be key.
Like you say, in the long run it's headed higher.
Hoody Who
I don't understand why people say they haven't been able to find physical to buy. I can always get gold from Tulving or Colorado Gold. Last year when silver was on a tear, my local coin dealer was selling the silver of this guy who had bout 20,000 ounces at $8. He was selling at 25c above spot. Every paycheck I bought from $18 to $27. I have found the physical is out there if you look.
If the FED does not print.. there will be civil un-rest..
If the FED does Print.. Gold Goes Up!, UP!! and AWAY!!!
So either way.. as for the physical price of any metal or tangible.. I am like everyone with a Brain! Buy the Fucking Dipps Man!!
Some have said and it seems some what reasonable that pressure over all would move prices down for Everything! How much? and what is the price when you want to buy physical when everything goes down? maybe people dont want to part with physical when everything is swirling around the toilet bowl? I would guess the PM dealers are smart enough to know when to hold on to the only thing that will hold water in the event of some "Change We Can Believe In!".
Hello Everybody,
I am new to Zero Hedge as a poster, but I have been reading it off and on for several months. I really have enjoyed reading all your post.
I sit on my duff and watched silver run to nearly $50 spot. I did not have much money, but of course I was kicking myself when I started watching it at around $25 and did not buy it.
So after this watch to the run-up, it pulled back and I thought maybe this is my time. I bought at around $38.15 spot plus the $4 or $5 fee that APMEX and Gainesville Coins added.
I bought 120 oz of the Silver Eagles.
I went ahead and bought 1, 1oz Fifty Dollar Gold Eagle. Spot was $1581.00 and it had about $60 mark up fee.
So anyway I am a bit high now. My intention is to just sit on them of course. As I feel this economy like most of you is toast.
I am sure we will see much volatility as I have seen since watching it much closer.
If prices continue to pull back, I will certainly be adding more.
Not much else has value like silver & gold IMHO. Even if we end up back on a horse and buggy, I know the PM's will still work.
Hoody Who
@ Hoody Who,
Congratulations on getting physical precious metals.
Before long, you will likely want more... But as income comes, do not worry about the price (other than making sure you are not ripped off, but APMEX and Gainesville have very solid reputations).
One thing you notice as a buyer is how physical is much less volatile, even more so when you're buying the higher premium coins. Spot at 38 with a 2 dollar premium is no different from spot at 35 with a five dollar premium.
Good for you! I hope you buy a house with the gold coin and several women with your silver!
When you own a horse, you don't need to buy women.
Thank you Max!
Deflation is a great time to be a buyer of PM's, not really a bad time to hold PM's, but definitely a bad time to sell PM's. Definitely a bad time to be underwater in debt but no worries, the bernank will start dropping dollars from space on all of us soon enough, its the last play they have.
fascinating watching silver, and the fireworks will be exploding through the rest of the year. Who know what will happen...it could tank to $25 or so over the summer (but will you be able to actually get your hands on any at that price??), then even break $50 before the year is out...what a market! I'm just looking to load up on physical on the dips though, because I really don't know whats comming...
If you could manage to play that 25 to 50 run you'd be looking at $125K of profit for each contract. Nice work, if you can get it.
You can also lose your entire acct in a New York minute, but hey...
Contract? Tell me, what is that?
and why should you lose it in a NY Minute if you hold physical?
Also love your posts, GW, and appreciate the source data.
GW- love your work, brother. Please keep it up. Been All In the PM's since 2008, and I sleep great at night.
As high as the prices of gold and silver appear, they are not very profitable to mine. I own a few miners in hopes this will change some day. But I think the metals themselves are the way to play the results of decades of price suppression.
The biggest problem with PM production is that the management, which has only recently become convinced that the relatively high price of PMs is a permananent feature, have not been able to convince their financiers of the same.
Low PM prices for too many years convinced the industry to scale back production. Too many people are afraid of a return to the "normal behaviour" of 1980-2000 for the gold price to invest the money required for beginning/expanding gold production.
I can't count how many projects I have seen would be mines if only the gold price could go above $500 . . . then $700 . . . then $900 . . . then $1200 . . . and we are still waiting for the shovels in the ground.
It makes perfect sense to keep it in the ground for as long as prices keep going up. They will resume mining when prices stablize.
Their financiers, in the case of debt, are banksters and the banksters will push the producers to hedge. . . .and who does that work for? Thing is many of the producers who lived through that screw job as gold went for 250 or so to 1500 and had to buy their hedges back will not bite a second time.
The mining stocks have been hammered since November or so.
Some see the return of high interest rates, some think it is the early 80's, some see a decline of the West.
I don't see the 80's scenario playing out or a further flight to debt and fiat currency so I say gold is gold, still.
Well, I think it's because the miners are somehow 'supposed' to predict the metal price, and as it's a lot easier for the Feds to short mining stocks than physical metal, that's where they're concentrating their fire.
Paper silver flooding the market, paper silver going down a dollar and a half a day, paper silver making mucho moolah for a criminal ring of banksters with backing from our dearly beloved Federal Reserve.
What a fucking joke.
Paper silver may be $34 an ounce today, but consider this - there is every reason to believe it will be at $1500 an ounce "soon". Gold was $34.00 an ounce also within my lifetime.
People dismiss investing in physical silver as a poor man's game, because silver isn't "money" like gold, it's primarily an "industrial metal".
Uh huh. Well, silver is money, silver is simultaneously the best conductor of electricity and heat, and the best reflector of photons, known to man. Which is why at $34.00 an ounce it is the best possible investment you can make. In PHYSICAL. The Crimex leveraged paper futures fuckanut game is shit for the birds, and SLV seems like an empty candy wrapper on the floor to me. Stack physical and protect yourselves while multiplying your wealth, bitchez!
Yup, nother great bit jam packed, thanx G.W.
Monthly purchases will be welcomed during the dog dayz of summer.
"Silver rose over 3,646% from trough to peak in the last precious metals bull market; it’s up about 630% in our current run. A return matching the 1970s advance would push the price to $152."
Full: How Much More Demand Can Silver Handle?
Well, I think we're going to see some bizarre action in silver, as the paper begins to disconnect from the physical. Chris Martenson believes there will be a serious correction this summer as the market tanks and deleveraging kicks in. I'm just biding my time, waiting for a serious pullback so I can add to my physical.
btw, George, I love all your posts Forget the morons who think you focus too much on conspiracies - there are tons of them, and they're not theories, except to trolls and assholes....
Gold tanked horribly today. Doesn't bother me because I have physical and I just treat it as savings, but it's been interesting to watch.
Any suggestions as to the causes of today's drop?
A Brit, Andrew Maguire gave a very plausible explaination about how, why PM markets behave the way they do (blatant manipulation by the usual suspects), to CFTC (March, 2010). The day after the CFTC hearing, someone apparently tried to "silence" Maguire (?)
"Commodity Futures Trading Commission whistle-blower, Andrew Maguire, who testified at Thursday’s CFTC hearing on Metals Futures trading, was injured the next day, along with his wife. They were struck by a hit-and-run driver in the London area, ... The couple was admitted to a hospital overnight and released the next day.
...Maguire’s car was hit from a side road by another car that then tried to race away. As it did, it almost struck a pedestrian who tried to block it. It hit two other cars before police, using helicopters, chased it down."
http://mindbodypolitic.com/2010/03/27/cftc-whistle-blower-wife-injured-b...
http://www.youtube.com/watch?v=Sl2zi3khUFI&feature=related
http://bullionbullscanada.com/index.php?option=com_content&view=article&...
I think Bill's comments tonight on LeMetropole Cafe are spot on. If we get a decent pullback it might be the last opportunity to buy physical at these relatively affordable prices.
==================
At the crossroads.
To all; after 6 weeks of negative global equity markets the world's central banks are now posed with "decision time". In reality this is rapidly becoming a game of "chicken" where investors are liquidating assets and more or less demanding more "juice" from the punchbowl. The central banks need to be very careful here in their "bluffing" because should ANY link in the global financial daisy chain break it will not be repairable.
I watched the movie "Too big to fail" again this weekend and realized that this next "episode" can't be fixed. Not that I didn't already know this but the message was driven home that EVERYTHING available to TPTB was used back in 2008-2009 and no bullets remain. We were literally hours away from a complete cascading meltdown on a global basis back then that only reversed when sovereign governments put their balance sheets on the line. Since then they have remained "on the line" and been abused to the point of virtual insolvency. The point is, there is no longer any "White Knight" who can ride in and save the day again.
THIS is exactly why the central banks need to be very careful in this "game of chicken" with investors because it is now entirely all about confidence (as it has been for years). The difference now is that Hank Paulson's "bazooka" has already been fired and now sits hollow and empty. I have said all along (many disagree with me) that once the panic begins it will progress very rapidly and literally become an overnight event. I still believe this and the fact that central bank and Treasury "ammo" has already been spent reinforces my thinking. Yes I know, Yra Harris and others have cautioned that the central banks will get even more "creative" in waving their magic wands. I really believe that "the system" has gotten so large and relies so entirely on confidence that central banks and Treasuries will be dwarfed and overrun even with their use of 100 to 1 or more leverage.
I have this view because everything we have been told and spun are now obviously lies and the common man in the street knows it. He knows the economy is sucking wind and is now watching the last bastion of bullshit (the stock markets) begin to shrink. Panics are a very peculiar animal in that no one can ever pinpoint "when" they begin, all I can tell you is that the time is MORE THAN RIPE! Not only is the time ripe, TPTB have been publicly demonstrated to be full of hocus pocus and everyone knows it. Add to this that "THEY" (meaning sovereigns and their respective Treasuries) are now part of the problem!
As this thought process festers and spreads further, more scared capital will find its way into the metals and create bids so strong as to scare away any and all offers. In other words as this coming panic blooms there will be NO PLACE TO HIDE because NO ONE will be willing to part with their metal! As I have said all along, you must have your positions in place ahead of the music stopping because once it does you will "have what you have and that's all you'll have". Sovereign governments will huff and puff but investors will already know that are a big part of the problem and not the solution. This next episode will run its full course and not be aborted, this is THE BIG ONE!
Does Gold or the shares "go down" in this panic? Yes probably they do for a time. The problem is ...for how much time and once they turn, how much are they "marked up"? The other problem as I have written about before is what happens if they are "marked up" AFTER/DURING the markets are shutdown for "holiday" and then reopened? How do you regain your position? The answer is that you cannot which is why you must HOLD ON to anything and everything "precious" no matter what happens here. You must be strong in your knowledge of "how this ends", your financial future depends on it!
Regards,
Bill H.
@ Dog Slime,
Ben and O'bumer are tanking the market and commodities to create the necessity of raising the debt ceiling and do stealth Q3. That will last until 2012 elections. After that.... pray a lot and get a parachute as the cliff is near.
Parachute=gold, silver, food, ammo & passport.
That makes sense. I've already been thinking about getting some emergency rations in. Ammunition is out of the question because I am in the UK, but I will practice saying "go away!" in a stern voice :P
Any downwards movement in the gold price is unwelcome, of course ;-) but.. 'horribly'?
It dropped from $1532 to $1510... not really much as a percentage. And it's back at $1518 now.
Any downward movement is welcomed by me, just means its cheaper for me to buy physical. A total crash is a wet dream to me. PMs are the reality to fiat's fantasy. Eventually they will come back to smack the world in the face, if "They" manage to keep the fantasy going longer thats totally fine, more time for me to stack because we all know reality will catch up eventually. On a long enough timeline...
Supply down, demand up .... but CRIMEX manipulation in full effect. This makes it hard to trade for regular folks with day jobs. I'm waiting to see what happens with options expiration for June/July.
"Any suggestions as to the causes of today's drop?"
I used to be concerned about the daily ups and downs, but lately, I just can't be bothered any longer. When the market is manipulated this badly, it's like asking who's the best cheater? JP Morgue? Golden Sacks? The Fed? etc...