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Faber On Gold Manipulation, The Fed's Gold and Importance Of Not Storing Gold In U.S.

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Gold finished 0.84% higher for the week and silver was 0.77% higher for the week. The disappointing jobs number Friday led to safe haven demand on concerns about the U.S. economy.



Marc Faber Interview This Morning (04/04/14) - Click Image To Watch

Bullishly for gold, U.S. Fed Chair Janet Yellen said this week that sluggish growth in labour markets mean accommodative policies will be needed for some time. Last month, she had said that the Fed may end bond buying this fall and raise borrowing costs six months after that.


While speculators continue to play games with the paper or digital price of gold at quarter, half year and year end, physical demand continues to be robust globally and especially in Asia. ANZ Banking Group said yesterday its gauge of demand in China increased last month. China, the world’s biggest buyer continues to import huge quantities of gold on a monthly basis and will likely have another record year of imports and total demand in 2014.


Gold in U.S. Dollars, 10 Year - (Thomson Reuters)

Middle Eastern demand remains firm too. Iraq’s central bank is diversifying into gold and also has plans to process 11 metric tons for public sale, and will import gold bars to sell to goldsmiths.

Video: Dr Marc Faber On The Manipulation Of Gold Prices, Bitcoin Risk,  Precious Metal Allocations and Safe Gold Storage In Singapore 

Today Dr Marc Faber gave insights into his strategies for protecting and growing wealth in 2014 and beyond. In the webinar, some of the topics covered with Dr Faber included:


  • Why he now believes that gold manipulation is a strong possibility

  • Technical risks of bitcoin and assets and money intermediated and dependent on technology?

  • Asian investment opportunities and why he likes Vietnam, Thailand, Hong Kong and Singapore

  • Western stagnation or collapse?

  • How to own precious metals?

  • Dollar cost average or lump sum?

  • Take profits/ rebalance or buy and hold for long term?

  • Allocations to precious metals?

  • Favoured asset allocation?

  • Other investment and business opportunities?

  • The yuan as global reserve currency?

  • Why small is beautiful when it comes to economies, nations and currencies
    Ireland, Spain, Italy, Greece and others should consider leaving the euro and returning to national currencies.


The interview was as informative as ever and Dr Faber took the time to answer some questions from participants. Key thoughts from Dr Faber:

On outlook for gold prices: “Gold price essentially should move higher, compared to all these factors I have mentioned, the price is relatively low at the current time.”

On gold manipulation: “I can believe it. Something is funny. If the U.S. cannot deliver the gold that Germany want to repatriate within one week, the question arises do they actually have the gold or not?”

On national currencies versus monetary unions: “I believe the best system in the world would be to have small countries and  avoid large sovereign states. If you look at which are the most prosperous countries - they are Singapore, Norway, Finland, Sweden, Switzerland, basically small sovereign states and democracy functions in a small society rather than a large society … I would recommend to any small country to leave the eurozone.”

On cryto currencies and bitcoin: “I don’t know the value of a bitcoin. I own gold because when the system breaks down, I want to have some cash. With a bitcoin, there is a scenario where the system breaks down and you have no internet access and then what is the value of your bitcoin?”

The interview can be watched here “Gold Bullion Stored In Singapore Is Safest - Marc Faber”

 

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Mon, 04/07/2014 - 11:29 | 4632401 Remington IV
Remington IV's picture

I bought gold in my Bitcoin account

Mon, 04/07/2014 - 06:54 | 4631646 Rikeska
Rikeska's picture

Singapore is so prosperous a new Toyota Corolla goes for $200,000.00 USD!

Mon, 04/07/2014 - 05:05 | 4631564 Latitude25
Latitude25's picture

Yeah put your gold in Singapore.  When you REALLY need it you'll find someone else already took it.  Same story as always.

Mon, 04/07/2014 - 06:10 | 4631618 El Hosel
El Hosel's picture

If you are bullish on gold and at the same time beleive you have to store it out of country to be safe, you might wan't to get bullish of something else... Like PUTS, they weigh much less and are easier to sell on short notice.

Mon, 04/07/2014 - 03:00 | 4631499 unirealist
unirealist's picture

"a panic out of all the other assets causing a complete financial collapse...

--Global Observer

A complete financial collapse would almost certainly cause a complete social collapse. I realize that the Federal gov't thinks it can keep running things after that happens, but color me highly skeptical.

It isn't the Feds who will be confiscating gold after the crash, it will be gangs and warlords. Those who have gold will have to hire bodyguards, and keep the warlords at bay with bribes.

I think "chaos" is too gentle a word for what's coming.

 

Mon, 04/07/2014 - 06:37 | 4631633 jughead
jughead's picture

government confiscation of gold would begin at some point before complete collapse...and indeed would be a sign that complete collapse is imminent.

Mon, 04/07/2014 - 02:29 | 4631478 Nehweh Gahnin
Nehweh Gahnin's picture

I'm with Iam_Silverman.  Marc Faber is channeling Eric Sprott here.  "Move your goooold.  Out of the coooountry.  To Siiiingapore."  FU.  Molon labe.

Mon, 04/07/2014 - 00:24 | 4631389 lasvegaspersona
lasvegaspersona's picture

It is simple. If you want paper gold, you can have all you want, they'll even make it periodically cheaper. If you want gold in large quantities (apparently a few tons is the limit)...it is simply not available. Be happy they have to keep the 'little guy market' going.

Mon, 04/07/2014 - 01:28 | 4631440 LoveInflationLo...
LoveInflationLoveVolatility's picture

I dont see a problem with that. Futures are trading at a massive 3% discount, all I need to do is hold paper on commosity exchanges for a 3% ROI every month WITHOUT LEVERAGE. Enuf to beat Warren Buffet's 29% ROI so far!!!

Sun, 04/06/2014 - 22:14 | 4631192 q99x2
q99x2's picture

We are all doomed.

Sun, 04/06/2014 - 20:09 | 4630908 Colonel Klink
Colonel Klink's picture

At the pace this is all going, Faber will be dead before he sees his prophecies come true.

Mon, 04/07/2014 - 11:29 | 4632399 Remington IV
Remington IV's picture

He's been dead for 20 years

Sun, 04/06/2014 - 21:07 | 4631052 Tinky
Tinky's picture

Care to make a side wager on that?

Mon, 04/07/2014 - 03:24 | 4631515 Colonel Klink
Colonel Klink's picture

Sure but he'll have to sign up for Obamacare so I know what condition he's in. ;o)

Sun, 04/06/2014 - 19:25 | 4630791 scattergun
scattergun's picture

So would owning gold and silver through owning CEF (Central Fund of Canada gold trust) work?

Sun, 04/06/2014 - 20:11 | 4630918 Unpopular Truth
Unpopular Truth's picture

They price spot any way they want for other people's gold.
It is way below my price. So I will continue buying physical.

Sun, 04/06/2014 - 20:09 | 4630906 Hobbleknee
Hobbleknee's picture

If you can't hold it in your hands, you don't own it.

Sun, 04/06/2014 - 18:27 | 4630635 Iam_Silverman
Iam_Silverman's picture

Well, if the rallying cry of the PM bug is "if you don't hold it - you don't own it", how does storing your PM's in a foreign bank help you again?

I also wonder if the new foreign bank reporting regulations set to go in effect this summer would include bullion held in storage?  If not, then that would be the loophole for laundering your loot.

Mon, 04/07/2014 - 07:23 | 4631663 August
August's picture

>>>I also wonder if the new foreign bank reporting regulations set to go in effect this summer would include bullion held in storage?

If you rent a safe deposit box, or similar, from an overseas bank or private vault, receive the key, and store your own PM, jewelry, smoked sausages or whatever in the box, it is NOT reportable. 

If you cause someone to open such a box for you, let someone else hold the box key for you, or instruct someone to place PM in your box and send you a record of what has been done on your behalf, you have established an "account relationship", and are runnning a fully reportable overseas financial account. 

The simple rule is:  if you hold a key your arrangement is probably not reportable; if you hold a receipt, it is reportable (and probably unwise as well).

Sun, 04/06/2014 - 21:07 | 4631049 Tinky
Tinky's picture

Are you really that obtuse, or have you not bothered to research the issue at all? People like Faber don't hold gold in foreign banks, they hold it in independent vaults. 

Sun, 04/06/2014 - 22:59 | 4631256 TuPhat
TuPhat's picture

Is an independent thief better than a bank vault thief?

Mon, 04/07/2014 - 02:32 | 4631479 MeelionDollerBogus
MeelionDollerBogus's picture

False dilemma. If you're the owner of the vault/safe then there's no thief.

Mon, 04/07/2014 - 10:41 | 4632158 Transformer
Transformer's picture

All it takes to get into any institutional vault is a court order.

Mon, 04/07/2014 - 12:18 | 4632581 MeelionDollerBogus
MeelionDollerBogus's picture

then use something else. I wrote safe/vault for a reason.

Sun, 04/06/2014 - 18:14 | 4630612 AdvancingTime
AdvancingTime's picture

The value of a currency drops when everyone starts to sell it and even the value of gold can drastically change if a government confiscates it and makes it illegal to buy, sell or even own can. What something is worth can be difficult to determine. And most of all tell me the value of a promise on paper or implied, remember if you own gold that is represented by a certificate, you own a piece of paper. The article below questions what makes up real value and how it can quickly change.

http://brucewilds.blogspot.com/2012/11/what-is-something-worth.html

Sun, 04/06/2014 - 22:01 | 4631171 TheReplacement
TheReplacement's picture

It's only worth what somebody is willing to pay for it.  - My dad.

Sun, 04/06/2014 - 21:11 | 4631041 Tinky
Tinky's picture

It's irritating enough that you insist on linking to your blog, but for future reference, the small subset of readers who may be inclined to click on your links will shrink even further as you degrade your own credibility with nonsense like this:

"...even the value of gold can drastically change if a government confiscates it and makes it illegal to buy, sell or even own..."

For the umpteenth time, the U.S. government will not attempt to confiscate gold, and for reasons that should be obvious even to those who don't author blogs.

 

Mon, 04/07/2014 - 10:18 | 4632046 elwind45
elwind45's picture

Since they didn't when it was 2k? You might be on to something like "why bother because it is reverting back to the mean anyways? National income should not be hoarded unless its the Treasury who in fact creates it? (After receiving direct funds or the go ahead from the FEDERAL RESERVE or both?)

Mon, 04/07/2014 - 08:14 | 4631749 Ace Ventura
Ace Ventura's picture

I'm not sure how you're drawing this absolute certain conclusion, particularly in light of the fact the US Gobbermint already HAS confiscated privately owned gold once before, and made it 'illegal' to own on penalty of fine/imprisonment.

I would be interested in your obvious reasons why they would not do so again. Admittedly, the metal is no longer backing the currency as it was in 1933, but does that really matter these days? Has the gobbermint not shown already that it doesn't feel the need to provide the people with any sort of 'justification' that makes legal and/or common sense...for anything it does....other than to invoke the "because fuck you, national security, that's why" reasoning?

I guess the thing we should all ask ourselves is: How much are we willing to trust the gobbermint?

I know my answer.

Mon, 04/07/2014 - 10:27 | 4632100 elwind45
elwind45's picture

Last time I looked every bill is a federal reserve note that was authorised by a private corparation not an original signatory of any gobmint documents binding it to said gobmint or its individual charges!

Mon, 04/07/2014 - 07:25 | 4631669 hoist the bs flag
hoist the bs flag's picture

I know right. I mean they didn't do that in 1933 under the guise of some patriotic law or anything like that. Even if that was not true they would never do it again.

Mon, 04/07/2014 - 02:44 | 4631490 MeelionDollerBogus
MeelionDollerBogus's picture

What obvious reasons? They confiscate contents of homes & even the house itself. Seems silly to say one particular thing that might be in the house, gold, won't be confiscated.

Mon, 04/07/2014 - 02:23 | 4631474 Global Observer
Global Observer's picture

For the umpteenth time, the U.S. government will not attempt to confiscate gold, and for reasons that should be obvious even to those who don't author blogs.

No, it is not obvious. There is a possible, and probable, scenario in which the US government can make private holding of hold illegal within the country. The scenario is as follows.

The BRICS launch a bank and currency exclusively for international trade. New currency after initial allocations to members, can be issued only for the purchase of gold by the bank at a fixed rate. All exports of the BRICS countries are available only for their domestic currencies or the new BRICS currency. Anyone running a trade deficit with the bloc will have to either attract investment from the BRICS countries or sell gold to the bank for the currency to pay for their excess imports from the bloc. In fact it may be worse than that, they may have to sell gold to finance all their imports, if they accept US$ for their exports, since the BRICS bloc has huge reserves of US$ and their exports to the bloc will not earn them any domestic BRICS currencies or the new international currency. Many EU countries which import energy from Russia and manufactured goods from China will have to repatriate the gold that the US Fed holds in custody for them. There are grounds for believing that the US Fed does not have in its possession the gold it is sopposed to be holding in trust for foreign central banks. If the Fed tries to purchase the gold in the open market, the price of gold will shoot through the ceiling and a panic out of all the other assets causing a complete financial collapse. So the Fed has the choice of repatriating the gold out of the US stocks, if they have any, or approach the government to give them the exclusive right to buy gold. So yes, there is a definite possibility that the US will outlaw private holding of gold not held as jewellery or as collector's items.

Mon, 04/07/2014 - 10:34 | 4632123 elwind45
elwind45's picture

A backdoor attempt to ban the Fed by making its holdings illegal because its really a private American citizen? And the huge reserves are in fact tethered to its money supply and are as free as any bank balance sheet will allow them to be!

Mon, 04/07/2014 - 08:51 | 4631803 Tinky
Tinky's picture

I appreciate your thoughtful response, but it is largely a straw man. I was clearly referring specifically to the assertion that gold might be confiscated, and it would be utterly ridiculous for the Government to steal privately held bullion in that manner. Should they go down that road, they would simply raise taxes to extreme levels.

 

Physical confiscation would be hellishly difficult, highly dangerous, and a PR nightmare. In every one of those respects, taxation would be the smarter, and far easier solution.

 

Mon, 04/07/2014 - 10:52 | 4632208 elwind45
elwind45's picture

In the run up to the bailouts a little known time in history an American President held press conferences from many different WH locations begging for funds to reinflate his economy? Said funds were advance and said crisis was minimalized? Except for the repayments? THE U.S.A. agreed to raise a sum of 10 trillion dollars in new revenues to repay MENA and other creditors who BAILED THE U.S.A. out! Since than the sum has been reduced to ZERO by aggressive military force of arms?

Sun, 04/06/2014 - 18:12 | 4630607 zipit
zipit's picture

RE: "I don’t know the value of a bitcoin. I own gold because when the system breaks down, I want to have some cash. With a bitcoin, there is a scenario where the system breaks down and you have no internet access and then what is the value of your bitcoin?”"

 

In that scenario, he better have some guns and ammo with that cash.

Mon, 04/07/2014 - 10:38 | 4632144 elwind45
elwind45's picture

a super massive 7 billion rounds doomsday SHITGUM

Sun, 04/06/2014 - 19:37 | 4630820 seek
seek's picture

"In that scenario, he better have some guns and ammo with that cash."

I think he's stated before he does, or at least agrees with that advice. And he's over the 35 year old limit for firearm ownership in Thailand by just a bit...

Sun, 04/06/2014 - 18:11 | 4630606 The Wisp
The Wisp's picture

I remember No Internet.. the kids roll their eyes when you say that..

 

Sun, 04/06/2014 - 18:22 | 4630626 Tao 4 the Show
Tao 4 the Show's picture

You are now a privileged member of "I Vecchi" club, or just a "Vecchio".

Sun, 04/06/2014 - 17:50 | 4630550 USA USA
USA USA's picture

Yawn!!!!

Sun, 04/06/2014 - 18:10 | 4630601 Tao 4 the Show
Tao 4 the Show's picture

Yeah, we all keep hoping for some new, key information, but the reality is that the system cannot and does not work that way.
If all information were known by all players instantly, there would be no arbitrage and the best one could hope for would be random luck. With the Internet, the bulk of information is very widely available, and this means that this available information is not worth too much. Guys like Faber can provide a little better analysis or and extra tidbit of information, but not much on the whole.
As more and more info is instantly distributed, the remaining key pieces of info go deeper underground. Instead of "you can't handle the truth", the catch phrase here is "you can't afford the truth". Only a privileged few get access to the hidden facts and the resulting free ticket to wealth.

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