Eric Sprott: Is the West Dishoarding Its Sovereign Treasure?

Tyler Durden's picture

Submitted by Adam Taggart via Peak Prosperity,

We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things.


But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility which is the debasing of the currencies is the fact that real things will go up in value. This should be reflected in the price of gold and silver.

So expresses Eric Sprott, CEO and founder of Sprott Asset Management, and one of the most experienced and vocal advocates for owning precious metals.

The past decade has validated Eric's thesis, as gold has risen considerably against all world fiat currencies. But what vexes him is that in recent years, when currency debasement has accelerated to extreme levels, precious metals prices have been clearly suppressed, particularly versus the U.S. dollar.

As the topic of price manipulation is nothing new, Eric finds his focus increasingly drawn to where the precious metals are going at these bargain prices - who is accumulating and who is dishoarding:

I’ve done a lot of work on the flow of metals. I come up with a net change of 2,300 tons a year in new buying in gold when the supply of gold hasn’t even gone up in the last twelve years. And you keep wondering: Well, where’s all this gold coming from?

His findings support the growing meme that there is a massive bullion transfer from West to East. This should particularly concern those in the U.S., EU and Canada as his suspicion is that, increasingly, it's monetary gold that is being sold.

There are several key questions to ask here (not that the data publicly exists to answer them):

  • How much of our sovereign monetary bullion reserves have been sold to date?
  • How much will be sold in the future? (Are we willing to sell all of it? or is there a limit we refuse to let go of?)
  • What will happen to the price of gold & silver when central banks stop selling to another? (Answer: shoot the moon)
  • What will be the fate of those economies that dishorded their treasure? (Answer: lamentable)

When I see China buying 95 tons of gold in December and I read that India bought 100 tons in the month of January, when we all collectively know there’s only about 200 tons a month available –  you have to conclude that G6 Central Banks continue to sell their gold in a very non-transparent fashion.


One of the things we saw in December was that the U.S. Department of Commerce reported that U.S. exports of gold were $4 billion. We exported 2.5 million ounces of gold. And where it comes from, [only] God knows; the country only produces 8.8 million a nd most of that’s used internally. So I don’t know how you just come up with 2.5 million ounces that you’re able to export. So I believe that even though it’s described as non-monetary gold, my guess is that it is monetary gold.


There’s lots afoot here in central banking to try to keep it organized. And I think one of those things is to keep the price suppressed.


But the non-G6 nations have been huge buyers of gold, and I think the more anybody looks at the system from outside looking in, they realize they have to have gold and silver, notwithstanding the nonsense that goes on in COMEX and the LBMA (London Bullion Market Association).


When I got involved in the gold market, it was assumed that the central banks had something like 36,000 tons of gold. And there was a great study done by Frank Veneroso where he suggests 18,000 those tons didn’t even exist anymore.


The [global] central banks are sellers of 400 tons in an overt fashion. Now we see buying of over 500 tons. That, just in itself, is a 900-ton change in a 4000-ton market, if I’m including recyclables here. And yet there’s been no increase in supply.


So I have to assume that these central banks are running low, and the question in my mind is, do they just go down to zero and then give up?


Or do they look in the cupboards one day and say look, this is just not going to work because the intensity of buying by people, like China in particular, has just gone absolutely bonkers. And it looks like India, notwithstanding putting a surtax or excise tax on gold, the demand seems to be very firm. And as you mentioned, mint sales have been amazingly strong here.


So I think there’s enough element of the world who get it that the pressure’s going to continue to be on the price of gold going higher. And yes, there’s nothing we can do in terms of what’s going on in the COMEX and the LBMA, but we keep seeing more and more people asking for delivery, even in the COMEX. So I think that the day can’t be far off. We can’t predict when it’s going to be, but the natural stage should be that the price of gold is going up, and we’re in such a tremendous financial crisis that it hasn’t been allowed to manifest itself because they’re putting out fires all the time.

For precious metals holders licking their wounds from the carnage of the past several months [23], this podcast offers both new insights and sound reminders of the long-term reasons for owning gold and silver. Those on the sidellines considering entering into the precious metals, perhaps for the first time, should consider reading our guide to Buying Gold & Silver [24] after listening to this podcast. 

Click the play button below to listen to Chris' interview with Eric Sprott (34m:40s):

Click here to read the full transcript

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ratso's picture

Sprott has become a fiction writer.

ZerOhead's picture

Non-fiction horror writer...

James_Cole's picture

"The [global] central banks are sellers of 400 tons in an overt fashion. Now we see buying of over 500 tons. That, just in itself, is a 900-ton change in a 4000-ton market, if I’m including recyclables here. And yet there’s been no increase in supply."

'If' he's including recyclables lol. Yeah, why do that anyway? It's only about a third of the market??

This article is so absurd I don't know how Sprott can spout this nonsense with a straight face.

Badabing's picture


I've tried to imagine what would be the motive?

it just doesn't make sense, to give away the western gold!

I've always said when something doesn't make sense we don't know all the facts.

why would TPTB want to do a thing like give it away? Unless TPTB hold a large amount of gold, and when i say large i mean so large that if it was to be released to the gold market it would collapse.

in the thirtieth century the king of france witnessed a secrete stash of gold held by the Templars.

the treasure was of unamanigeable size and the king was so impressed that he wanted to join the Templars but was refused.

In retaliation he rounded up the leaders of the Templars and burned them at the stake on Friday the 13th. The templars treasure has not been heard of since then.

or Yamashita's gold another horde of gold captured from the pillaging of the Chinese by the Japanese during WW2 that if released into the market would make gold loose value.

I know that the dimond industry holds back on dimonds to support the price why cant it happen with gold. if this is true the east is being dupped!


strannick's picture

Gold price suppresion is one of the easiest, most supported economic notions to accept. Respond precisely to Sprotts logic or STFU. Interst rate suppression, HSBC drug laundering, more conspiracy? GLD and COMEX are farcical, and Bart Chilton and the CFTC are corrupt or clowns. This isnt news to someone capable of reasoning and who bothers to look at facts, read the literature from GATA ect.

akak's picture

Strannick, I think we just discovered what Jon Nadler has been doing with his time now that he has been shitcanned from Kitco. 

One has to wonder how many sockpuppets --- PUD? Badabing? A number of other gold-bashing newbies here? --- he has here, as the recent decline of anti-gold trolls has suddenly and mysteriously taken a large jump back upwards.

strannick's picture


I like him better as an embittered annonymous blogger in his bunny slippers and undershirt v. smuggly spouting disinfo w Danielle. I will miss his annual price forecasts. They were a great contrarian indicator. Maybe now he,s building his multi marketing empire, flogging Herbalife for Carl lchan

akak's picture

Strannick, don't be silly --- you and I both know that Jonny sleeps in the nude on sheets made from the tanned skins of "Radical Goldbug Extremists".

James_Cole's picture

Strannick: ""Gold price suppresion is one of the easiest, most supported economic notions to accept. Respond precisely to Sprotts logic or STFU."

Sprott's basic logic here: "When I see China buying 95 tons of gold in December and I read that India bought 100 tons in the month of January, when we all collectively know there’s only about 200 tons a month available –  you have to conclude that G6 Central Banks continue to sell their gold in a very non-transparent fashion."

I love his you "have to conclude" because of course there's no other possible explanation.

Basic claim suggest demand in two sectors means secret sales from central banks to make up for an apparent (Sprotts claim) lack of supply. How he gets to this logic is a big mystery, but if one looks at the numbers the OBVIOUS explanation is that lack of demand in certain sectors has been offset by demand elsewhere.

Look at the actual numbers and percentages and then come up with a rational argument why Central banks would be forced to secretly sell their gold reserves to make up for supply - Sprott suggests right down to zero lol.

Total Gold supply: 4453T

And yes, supply takes into consideration paper gold.

Central bank purchases: 534T

Total consumer demand in India was 262T, in China it was 214T.

Here's what you need to read:


Q4 was the strongest quarter for global jewellery demand since Q1 2011 as India, and to some extent the Middle Eastern markets, drove a recovery in the sector. The quarterly value of demand was 13% higher year-on-year at US$29.1bn.


A decline in annual investment was the result of a divergence between institutional and retail investor behaviour. A 17% drop in demand for bars and coins together with a 51% increase in ETFs and similar products created a 10% reduction in investment demand.

"Despite a strong fourth quarter for Indian investment, the full year picture shows a considerable reduction in the size of bar and coin demand in that market. As discussed above, the impact of a weaker first half dominated the year-on-year comparison in India. Despite healthy levels of gross demand for bars and coins, the combination of heightened profit-taking activity and de-stocking by bullion dealers during the first six months of the year had the largest impact on net full-year demand."

"In China, investment was little changed from 2011, although 265.5t represented a very healthy level of demand. Purchases related to Chinese New Year helped to elevate demand in the first and fourth quarters of the year, but investors were somewhat inhibited by the lack of a clear price signal during much of the year, given their preference to buy into a rising trend. For a discussion of gold demand in China during the year, see the Executive summary."

"In the US, fourth quarter demand picked up from the disappointing third quarter, buoyed by the concerns over the ‘fiscal cliff’ and the continuation of quantitative easing by the Federal Reserve. However, for the year as a whole demand of 53.4t was down 36% year-on-year, well below the elevated levels of the post-global financial crisis era.


"Annual demand for gold in the technology sector contracted by 5% in 2012 to 428.2t, a 5% decline from the 5-year average of 453.1t. In value terms, demand made marginal gains over 2011 to hit a new record of US$23bn, 48% above the 5-year average of US$15.5bn. Although there were some bright spots, the general picture for the year was one of persistent decline in tonnage with values maintained at steady levels."


"Central banks garnered a greater share of gold demand in 2012, accounting for 12% of the total compared with a 10% share in 2011. Total net purchases by central banks of 534.6t exceeded 2011’s already strong total and signalled a return to levels of buying last seen almost 50 years ago. The year saw a number of new joiners added to the list of institutions building their gold reserves; Brazil and Paraguay were two such names, both making significant purchases during the year."

"The annual total of 534.6t represented the greatest level of demand since 1964 as the net of central banks adding to their gold reserves was cast wider, reaching Brazil, Paraguay, Iraq and Venezuela."

"Russia adhered to its long term buying programme, adding around 75.0t to its reserve holdings throughout the year through the purchase of domestically produced gold. The country’s gold reserves, the seventh largest globally, now approaches 1,000t and slightly less than the 10% of total reserves."

"Latin America adopted a higher regional profile within the group of central banks adding to gold reserves. During 2012, Brazil and Paraguay made purchases of 34.0t and 7.5t respectively, adding to the net 19.0t bought by Mexico as part of the continued reserve-building witnessed in the region.

Iraq also joined the ranks of net purchasers of gold, adding 24.1t of gold to its reserves between August and November. Gold reserves are just shy of 30t, equal to an allocation of around 2.5%."


"The supply of gold in the fourth quarter was virtually unchanged relative to Q4 2011, just 2.5t lower at 1,133.2t. A year-on-year decline in recycling activity (notably a contraction in Indian recycling as the price dipped in December) cancelled out a moderate increase in mine supply."

"2012 saw a pause in the rising trend in mine production from the 2008 lows as production grew by just 0.4% to 2,847.7t (9% above the 5-year average of 2,614.0t). Additional production was generated by a number of new projects coming on stream, primarily in Q1, as well as by the ramping of production at a number of relatively new operations. However, the impact of planned production interruptions and unforeseen delays at a number of mines, together with widespread labour unrest in South Africa, was of an equal scale. The net result for annual production was a negligible increase as these opposing influences cancelled one another out.

Among the countries to record an increase in annual production were China and Russia, while South Africa and Indonesia saw the largest absolute declines."

strannick's picture

Death by  1000 cuts and paste.

'4453T supply takes into account paper gold'?

Please do explain how this supply takes into account paper gold, when paper gold implies infinite supply.

James_Cole's picture

I meant hedging on the supply side.

"Please do explain how this supply takes into account paper gold, when paper gold implies infinite supply."

ETF claims are there on the demand, the table is on pg19

Sean7k's picture

Chinese imports through August 2012 was 565T. Most yoy estimetes suggest over 900T for the year. 

You might want to get better information.

James_Cole's picture

WGC is the best resource, they peg China demand at 776T.

Read the WGC reports and then start complaining. I wanted to post the relevant tables here because its the easiest way to cover all the necessary info but I don't know how to post images.

It's not that hard to open the report and go to pg19 though, then explain how Sprott has a point.

Sean7k's picture

No, WGC is the establishment source and thus is compromised. You never take what your enemy gives you. 

James_Cole's picture

I question the logic of imm throwing out the WGC research while uncritically looking at Sprott. I guess Sprott is just a nice guy billionaire who speculates in pms and pm financial products with only the altruistic motive of helping his fellow man become rich?

Where's Sprott getting his numbers from??

Sean7k's picture

You're assuming numbers you have failed to verify or researched. At least Sprott does the research. 

James_Cole's picture

I meant "where does Sprott get his numbers from" rhetorically, he also gets his numbers from the WGC - I haven't come across many people who throw out WGC. On that link you sent me scroll down to Feb 14.

Race Car Driver's picture

> Where's Sprott getting his numbers from??


Chuck Norris.

bilbert's picture

Ummm............... Eric Sprott is one of the few people actively and PUBLICALLY, buying MASSIVE amounts of physical Gold and Silver for his funds.

Just for shits and giggles, how many HUNDREDS of millions of dollars of physical Gold or Silver have you purchased in the last three years??

Thought so...............



James_Cole's picture

"Ummm............... Eric Sprott is one of the few people actively and PUBLICALLY, buying MASSIVE amounts of physical Gold and Silver for his funds."

Yeah he runs ETFs - do you think that might make him a bit perma-bullish publically?? Particularly as all his funds are getting totally hammered.

As an investor you have the luxury of moving in and out of the market easily / frequently, for Sprott that style of investment is not his friend. With his funds seeing big declines his recourse seems to be coming up with outlandish secret plots and saying don't be fooled by the 'establishment' when guess what HE IS the establishment.

I'm not bearish on gold btw, I would just hedge & buy - sell seasonally. Putting faith in secret plots involving depletion of CB holdings down to zero by selling to the East... not the greatest foundation for an investment in gold.

^ nice work Sprott asset mangement! You guys are the best! / sarc

Step aside Loeb, behold the unbelieveable Sprott funds!

The kings of Bay Street! Soon the world!

Harlequin001's picture

When it comes to manipulation my view is that if it looks like a duck and it quacks like a duck then it probably is a duck. The onus is on you to show that it isn't.

Simple rule of thumb, if you produce more of something it's value becomes less. The CB's are printing money, you 'd have to be some kind of delusional nut to say other yet pm's have gone down.

I'd say it quacks like a duck. Over to you...

TwoShortPlanks's picture

This brings us to the question of what changes in the DCs might be made to permit such a transfer of wealth? Some people seem to believe that all that would be required is for the rich to change their lifestyle and consume only as much as the average human being. Then the wealth saved could be transferred to the poor, raising them to the average. But income is closely tied to productivity. As Nathan Keyfitz observed, "If, starting tomorrow, Americans were all to live like Indians, then their higher incomes would simply disappear. There would be nothing to transfer. How much is transferable depends on the extent to which Americans could consume like Indians while continuing to produce like Americans." Some way therefore must be found to free wealth and transfer it without breaking the close link between production and consumption.

John Holdren - Ecoscience: Population, Resources, Environment (pg 1408-1409)


Remember what I have posted on several occasions; China [and emerging economies] cannot simply 'Over-Take' the West since they need our consumption to fuel their production based prosperity. If we contract, so do they. Instead, they need to 'Leap Frog' over the West in a mass Wealth Transfer action...DEBT....DOLLAR COLLAPSE....GOLD.

The writing is on the wall, the bread crumbs are everywhere. If you've been on non-MSM (eg ZH) for any reasonable length of time, you will surely recognise that the multitude of events surrounding PMs over the past 5 years have not been exclusively manipulation, they have been positioning events.

***Gold is being POSITIONED for the Wealth Transfer***


This Wealth Transfer has been brought to you by the team at Agenda21. Thank you for your cooperation and remember to pick up a copy of 'Limits To Growth' at the Club Of Rome Bookshop Our newly updated plan to...well, you know...can be found here

TwoShortPlanks's picture

A simple broad view of what I believe is happening.

The west is indebted to the point where they cannot borrow anymore and consume at previously experienced rates. Western consumers have borrowed to afford xyz life style and standard of living. Eastern producers have sacrificed xyz life style and standard of living in favour of saving, which in turn supplied credit markets where western consumers attain their credit. People in the east save because of financial fear (minimal to no social security). This has long lasting – austerity is good - affects upon the human psyche. People in the west do not save because of no financial fear (maximum social security). This has long lasting – waste and consumption is ok - affects upon the human psyche.

When you remove the choppiness from the financial waters what you notice is that the tide is moving out; the global economy is contracting. This contraction was brought about from 30 years of excessive borrowing, accommodative monetary expansion, and subsequent periods of asset inflation…all of which amounts to nothing more than bringing forward future prosperity and standards of living which were meant to organically arise sometime in the future, not artificially stimulated into existence today.

Western consumers have attempted to pay-off debt but have now returned to credit (cards/equity) for day-to-day living, using wages to [attempt to] pay off credit debt. Consumer debt is again expanding.

The eastern consumer is a saver and although the west has theorized that eastern producers will soon become middle class eastern consumers, this has not eventuated…culturally, this won’t happen for a very long time and that fear based psyche won't

Western governments are increasing debt so as to support standards of living and pay debts. Taxation and trade surpluses have either dropped off if positive or, if negative, have become weighty. Governments use QE to monetise treasuries and this allows liquidity to continue to flow into markets. Low to zero interest rates reduce debt burden as they continue to leverage up. Leveraging up is necessary just to remain economically buoyant, let alone any increase in standard of living. I believe this is the financial version of peak oils' bumpy plateau; the longer they hold back inevitability the steeper the descent will be…until we all tumble. When you think about the positioning of China, Putins’ Russia and the BRICS, you can see that their planning takes this into consideration. For the east it’s all about buying-up resources while the west sits at the poker machine all night long.

Western and some eastern banks rely upon government deficit spending and monetization to support their own debt servicing. Recently, banks have not ‘marked to market’ assets as to do so would open up the financial cracks in the proverbial leaky dam. Global asset and stock markets are over-priced and over-bought, they do not reflect either the current reality or future outlook. This has been encouraged by governments.

Monetary debasement has been both coordinated and reactive.

There is no possible way of remarking the opaque over the counter derivative market, nor will there be any attempt to do so, regardless of bond values. True market values will only be obtained through a painful sell-off.

Regardless of comments, interest rates will be low or on hold long into the future. So long as the economic tide keeps moving out, retail will need to be supported. Rates will only return once the economic tide returns to healthy levels. Excluding a collapse and reset period, this could be 10-15 years away. Retail affects real estate, in turn real estate affects bank assets (debt), in turn bank assets affect bank solvency (see Europe).

The main stream media have been complicit in maintaining the status quo.

Although gold and silver have huge uplift pressures, they are being manipulated and suppressed so as not to put the spotlight onto the global economic recovery sham.

The west has been very slow to assess and counter Russia, China, India and other entities rapid accumulation and hoarding of gold and silver (primarily). This is both a protective and offensive measure.

The five years since the GFC has simply been the bouncing around and weight transfer, as the global economic train switches rails and heads into another direction. If we assume that the past 20-30 years of western standard of living has been steroid induced, then it is likely that the next 10-15 years will be austerity induced.

Since everything is relative, there is an alternative which nobody has explored. Instead of the west being austere, the east can be allowed to have its own period where standard of living has been steroid induced. This is the wealth transfer. If a wealth transfer shifts wealth and power across to the east, then current debts would be reduced dramatically, relatively speaking.

If the west has lost gold and the east has gained gold, then allowing economies of both east and west to hitch onto gold would allow that transfer to take place…assuming gold is repriced to an appropriate level ($130k/oz).

This is what the eastern gold buyers are attempting to do. They’re not hedging against currency devaluation, they positioning gold as a wealth transfer mechanism.

The question comes down to how much gold does the west really have…I’m guessing about 20% of what’s advertised.

If I'm right, the secret cold war will be allowed to go public.

Badabing's picture


i dont know If you are in denial or something, but I have been with ZH for 5 months less then you so call me a noob, fine

I was talking about a hypothetical scenario, you know “thinking” that’s all. I’m surprised because you seem to me as one that thinks also. I BTFD all the time, and if you think about what I wrote its not bashing because TPTB will never reveal there hand and the game will go on while the price goes up.    


akak's picture


You are correct, and I apologize --- I had made my comment (like most, or at least so many here) rather hastily and off the cuff, and should not have indicted you as either a newbie or an anti-gold troll.  I had intended to name James Cole instead, but in the heat of the moment I looked up the thread and accidentally mistook your handle for his.  Again, my apologies.

Badabing's picture

We will go on as allies my friend

Al Gorerhythm's picture

"I've tried to imagine what would be the motive?"

Send your money then move there for sanctury? 

tenpanhandle's picture

The motive is to provide for the continued purchase of gold with US dollars therefore giving the impression dollars are good as gold.  Once gold can't be purchased by dollars = instant end of the dollar.  Therefore gold must be provided the market in sufficient quantity to appease demand (whatever demand that isn't sopped up by the rags GLD and comex paper and other schemes).


The short answer is:  to keep the ponsi going.

fockewulf190's picture

What is it with gold and silver haters anyway?  Why does it piss you people off if I buy phyzz with my hard earned fiat instead of keeping it within a currency that is being devalued by billions  of dollars a day?  I belong to the mere 1% of western people who stack phyzz.  I´m only doing it because it seems to me to be one of the very few ways to save my own ass (and my family) against the sheer lunacy of printing trillions out of thin air, and living within a society that has wracked up debts so high, they can never be payed back.  I see that even now, we have near 0% interest rates, which not only discourage savings, it destroys savings by inflation.  I see our older, retired folks that can't live off their interest anymore, it doesn´t exist!   So now their forced to burn through whatever saved capital instead.  I see people who have pensions worrying that their funds are going to be forced to cut distributions of incresingly worthless dollars.  I see flash crashes on Wall Street, talk of muppets, outright scandals and manipulations galore, not to mention the 600+ trillon dollar derivatives timebomb underlaying the whole financial system to boot...yet I´m supposed to be the fool for stacking? With all this bullshit going on?  Go ahead and short GLD and SLV with your own cash.  Have fun in the stock market.  Enjoy your CNBS.  I´m long done with the ponzi game.

fourchan's picture

before the big heave up I expect gold to price down in paper dollars because you sell what you can in the end. this is where the gold bugs will be tested to the utmost. id recommend buying what percentage real pms is good for you and forget about them as if they were as worthless as paper dollars are now. there is only one direction the dollar and gold are going to eventually.

jballz's picture

Nice fairy tale gold bitch

Optimusprime's picture

Thirteenth century (turn of the fourteenth, actually.

kliguy38's picture

Rest assured that the goldsmiths NEVER gave up their bullion. They know full well the power of real money. The movement of gold from West to East during the last couple of years in particular is a tacit agreement constructed to maintain the dollar reserve status. This will eventually unwind in some fashion pre-determined for you NOT to KNOW. The control of money is the key and the reset of fiat reserve status will incorporate gold and GUESS which entity has NOT sent their gold EAST? Fractional reserve "gold" banking is nothing new to our masters.

_underscore's picture

My overall view too, kliguy38. The closing of the gold window by Nixon in 1971 was in my view a 'last throw of the dice' - the US/Western planners saw USSR & China  (and to a lesser extent Brazil, India) as the coming powers & 'pure' fiat currency unemcumbered by the discipline of a gold standard was the 1970s version of can kicking & allowed them 40-years 'grace' before they were overtaken.

gaoptimize's picture

Blythe has her Beijing bungalow and her Macau mansion picked out?

akarc's picture

"it just doesn't make sense, to give away the western gold!

I've always said when something doesn't make sense we don't know all the facts."

I've noted same on a couple of occasions. The gold/silver prices are not and have not not been making sense.  

I've read where gold goes up in both, severe deflaton and inflation, political and economic instabiliity. It has a fear factor and as such is a good communicator.  

The only explanation for the price action of the last 6 months is, nobody wants it. Yet we are assailed with reports of Central Banks increasing holdings, Countries repatriating, Increased demand from India and the Far east, U.S. mint suspending silver coins sales due to lack of supply.

Considering such it would seem (to this pea brain anyway)  that attempts to suppress the price of the metals should be meeting with failure. That the demand should overcome these attempts. That Government shell corporations would be trying to buy up all the miners they could. That mining and mergers and aquisitions should be on fire???  Unless the rules of supply and demand no longer apply?

Or as previous post wonders? Is there a massive supply we are not aware off?  How can anyone really know how much physical gold actually exists in the world?

And even if there were a massive unkown amount known only to a few, why would the central banks keep buying if it is not worth at least it's present value. 

I can wrap my head around the idea of worthless paper and manipulated paper markets that create value out of false statistics and thin air.  But I can't wrap my head around everyone buying a scarce commodity and the price continues to go down???

Unless it is one scary prediction of just how far currency is going to fall!

After all if all other values fall enough. Then gold at half the price would still be riches. There is such a thing as relativity isn't there???

Maybe I just ain't smart enough to get it. But the cognitive dissonance is starting to scare me. Maybe I just don't know how to think anymore. Or maybe whats coming is beyond my ability to comprehend.

Badabing's picture

“And even if there were a massive unknown amount known only to a few, why would the central banks keep buying if it is not worth at least it's present value.”

The way I interpret this statement “and I could be wrong so bare with me”, is you assume the central banks know about a massive unknown amount of gold only known by a few.

I believe for this hypothetical scenario to be true, the few people or the organization that has all that gold would:

1.    Make the rules

2.    Not be loyal to any central bank

3.    Not be loyal to any government

4.    Has total control of the price of gold in relationship to the world reserve currency

5.    Let the gold market exist with a finite amount of gold.

So if gold started to be scooped up at a bargain basement price like in 1999 @ $250 the price would have to be increased to slow it down and use it to equalize the dept between countries.

So to get back on track, Follow in the footsteps of giants buy phyz and sit tight.   

ptolemy_newit's picture

First a few years (4) of DEFLATION as the world trade wars destroy economies.  then only on the rebound willl Inflation be sevear!  alot of time to buy that gold back.


olto's picture

J C,

"This article is so absurd I don't know how Sprott can spout this nonsense with a straight face."

Yes, you do-----it is his BUSINE$$!!!

But, anyway, you put the question in such a manner----that it was easy to write the above, so thank you for the question that needs to be asked more often------------

James_Cole's picture

Yeah I get it's his business, but you'd think there'd be a limit to the nonsense. I've seen him and his cabal of stock boosters "Sprott management" at trade shows giving "talks" and lying is second nature for them. But usually it's along the lines of your girlfriend snoops your phone and finds txts to women you've mysteriously never mentioned before and you shrug it off as business acquaintances.

Lately it seems they've stepped up from semi-plausible bullshit to girlfriend catches you in bed naked with another woman and you say it's yoga practice. At some point you'd think the girlfriend would start to doubt your explanations!

To keep the metaphor going... Sprott's girlfriend here is maybe not the sharpest tool in the shed though, so maybe that helps. I do wonder if these guys take courses. My ability to lie in person is probably a 1/10, Sprott management is off the charts. I've seen them sell shit as shinola to 60 year olds without a hint of guilt.

tenpanhandle's picture

your ability to lie on ZH is 10/10.  Is that you Jeffery Christian?

akarc's picture

"I do wonder if these guys take courses."

Good salesmen take the same course good psychologists take. The goal is to keep you coming back for more.


new game's picture

worth repeating:fuck sprott and all these self annointed experts and might as well include the msm financial ass clowns that got der havard degrees-more self proclaimed experts and fuck the minions that follow them around like their the  pied piper. point:


that is why we are here, but sprott can spout his book and brag how market savey he is, just sick and tired of their book sales speech anf endless speculations. either you know or you don't!

lickspitler's picture

i agree , this stuff just gets the stack=a=lackers all hot and horny. they start oiling the guns and counting the ration packs.  it,s a two way market could go to $10 or $3500 or both.

if it goes through 1520 it will get shalacked . stackers will say great more stackin. but what if your wrong and you've missed something. hey maybe i'm wrong and it goes straight up from here. good luck all

fockewulf190's picture

I´ll go further and say neo-documentarist.  He, as well as many others, have done the research, gathered the facts, and voiced alarm...some for years already.  Harvey Organ, for one, is showing what is going on over at the COMEX on a daily basis for years now, and based on what he has observed, he has come to the conclusion that GLD and SLV are outright frauds.  His blog is worth the daily visit.

Of late, the bankers have been raiding gold and silver on an almost daily basis, yet despite the raids, OI, especially in silver, continues to rise. These actions just oozes desperation.

What Sprott says is far from new news, but the relevancy is more acute that ever before. 



Steaming_Wookie_Doo's picture

As far as why western powers would willingly sell their gold, I could venture that:

1. It's fake gold/some level of fraud involved

2. They intend to steal back everything

3. Someone has them so by the balls that their very existence is gone if they don't hand it over.


putaipan's picture

4. and this is added as a sincere question or subset 2.b.-.... TPTB are behind china's central banks just as much as everywhere else. i mean it's not like they are iran or the country formerly known as libya.

SilverRhino's picture

4.  They have additional gold supplies from somewhere else (or not counted in the global gold estimated inventory) 


What would totally fuck China and India is if they announce a nice gold backed currency, and the US then produces a nice 10km asteroid that happens to be gold / PGM bearing and drops the price.  (Not an impossibility either)