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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

 


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Sun, 02/24/2013 - 18:23 | Link to Comment Shell Game
Shell Game's picture

"tell me what you and the 20% are going to wake up to"

 

With any luck to a world not under the control of the plutocrats.  To me, that is the only hope for our children's future, thus the only thing that matters.  

Sun, 02/24/2013 - 18:58 | Link to Comment howenlink
howenlink's picture

I'm going to wake up to my chickens, rabbits, and vegetable garden.  Then I'm going to wake my kids and make breakfast.

Sun, 02/24/2013 - 22:10 | Link to Comment gaoptimize
gaoptimize's picture

"Il faut cultiver notre jardin" - Voltaire's Candide. I planted 6 apple trees today.

Sun, 02/24/2013 - 22:22 | Link to Comment msmith9962
msmith9962's picture

I started my first hugelkultur bed.

Sun, 02/24/2013 - 17:22 | Link to Comment fijisailor
fijisailor's picture

I can clearly see you have a victim complex.  Have you ever been in control of your own life?

Sun, 02/24/2013 - 17:36 | Link to Comment OutLookingIn
OutLookingIn's picture

Novus ordo seclorum

Capitis diminutio maxima

Sun, 02/24/2013 - 17:37 | Link to Comment PUD
PUD's picture

Shit happens friend. i neither welcome or fear it and i don't care who's to blame. If I get cancer and die I won't blame the disease and i won't feel the victim either. You are under a grave misaprehension thinking that you will emerge triumphant because of your meticulous planning and pile of shiny coins.

Sun, 02/24/2013 - 17:59 | Link to Comment css1971
css1971's picture

you will emerge triumphant because of your meticulous planning

Funny. That seems to happen quite regularly. Of course some plan better than others but y'know the boy scouts motto.

Sun, 02/24/2013 - 18:05 | Link to Comment akak
akak's picture

No, PUD has just proven that all planning and preparation is futile, because an asteroid might extinguish all life on earth tomorrow.  His logic cannot be denied.

Sun, 02/24/2013 - 18:13 | Link to Comment PUD
PUD's picture

Planning for a hurricane, blizzard, loss of power etc makes prudent sense. Planning with some idea that if civilization collapses you'll emerge fully intact and ready to take advantage is delusional.

Admit it, all of you "gold bugs' are engaged in nothing but the very same speculation for your own gain that every derivative, option, stock, bond, commodity wall st type that you hate is engaged in. 

The only difference is your fantazamagoric delusion that gold has magical properties that make it immune.

You are no different than the rest of the rabble you curse. you would love a dollar collapse, you would love any disaster that propels your shiny metal higher.

Babble all you want but just be honest will you?

Sun, 02/24/2013 - 18:18 | Link to Comment akak
akak's picture

In case you haven't yet noticed, YOU are the only one here harping about, and even suggesting the likelihood of, the complete and total collapse of civilization.

"False dichotomy" --- look it up.

Sun, 02/24/2013 - 18:24 | Link to Comment PUD
PUD's picture

Oh, you're right...it will just be a mini collapse, a micro devaluation, a tiny central bank insolvency...just the right goldilocks amount of doom to drive gold to 10,000 fiat bucks...got ya! I stand corrected

Sun, 02/24/2013 - 18:27 | Link to Comment akak
akak's picture

Since you seem intent on repeating the same nonsense, allow me to repeat myself as well.

"False dichotomy" --- look it up.

Sun, 02/24/2013 - 17:44 | Link to Comment caimen garou
caimen garou's picture

I see paul krugman changed his zh name, fool!

Sun, 02/24/2013 - 17:55 | Link to Comment rayduh4life
rayduh4life's picture

Yep, pretty much my sentiments as well.

Sun, 02/24/2013 - 17:57 | Link to Comment PUD
PUD's picture

5 enlightened souls to 34 lords of the flies...about the right proportion of enlightened americans to dumbed down sheep

Sun, 02/24/2013 - 18:00 | Link to Comment Lordflin
Lordflin's picture

Not so hard on Pud... sheep are sweet creatures really. I know, I own a flock of them.

Sun, 02/24/2013 - 18:02 | Link to Comment PUD
PUD's picture

Why don't you use your words and articulate how your master plan unfolds? How you will rise above the starving masses to rein supreme with your little bag of shiny coins. Seriously, I'd like for any of you to think this through and detail you vision of the end game and how you're going to prosper while civilization crumbles...waiting

Sun, 02/24/2013 - 19:19 | Link to Comment tenpanhandle
tenpanhandle's picture

let us play with our shiny coins and STFU!

Sun, 02/24/2013 - 19:29 | Link to Comment Likstane
Likstane's picture

Here's an idea.  Get yourself 3 of those little silver discs and hold them.  Clack them against each other and listen to the noise they make.  Take them to the shower with you.  Hold them while you take a dump.   Place them on the table next to you when you eat.  Put them in your pocket.  Rub them.  Make them shine.  Give one to your woman and have her carry it in her panties for awhile.  Take it back from her; hold it against your face.  Take a piece of paper and cover them; take your pencil and make a copy of them; isn't it beautiful?  Lick them-experience the metallic taste.  Put a small scratch in one just to see it.  Speak to them; isn't it nice to have some little silver friends?  I think you will soon be convinced of the wonderful comfort that comes with the shiny little tokens. 

Even if this technique doesn't convince you of the warmth and power of these magnificent little storages of value, you can still take them back to the coin shop and return them for those dirty rectangular IOU's generated by a corrupt representative of a worldwide Jewish banking cartel. 

Sun, 02/24/2013 - 20:23 | Link to Comment Crabshacker
Crabshacker's picture

HEY HEY, don't forget to wash your coins after ya poop!!

Sun, 02/24/2013 - 22:48 | Link to Comment Likstane
Likstane's picture

Yeah, good call...maybe I should have put shower after pooping. 

Mon, 02/25/2013 - 00:53 | Link to Comment akak
akak's picture

You're supposed to poop in the toilet, not in the shower.

 

;-)

Sun, 02/24/2013 - 19:31 | Link to Comment Dieselclam
Dieselclam's picture

Pud, I'll throw you your bone. In fact, from my perspective, you're an optimist when it comes to future living comditions. But while you wave the prophetic "I told you so" flag ahead of time, these PM speculators are preparing for eventualities they can sense but not see. You have simply given up. They want to live life to the fullest possible extent for as long as they can despite the situations, whereas you already have an exit plan for when things are intolerable for you. Ok. To each his own. Yeah, they are all "greedy preppers. Count me in with them because quitting in the starting blocks before the starter's gun fires is about as heart warming as premature ejaculation.

Sun, 02/24/2013 - 21:47 | Link to Comment 20834A
20834A's picture

PUD, First let me say your vision of things is very dark and full of despair. If the 'end of the world as we know it' (TOETAWAKI) happens to such an extreme degree as you anticipate, I hope you find your quick and painless end. But as for me, I have to face even that extreme with some degree of stolid fortitude. I'm assuming you're not positing the end of the human race? If not, then there WILL be survivors who are left to rebuild. Maybe my 'planning' will not see me and mine through, or just maybe it will. But doing nothing ensures failure and death to my grandchildren, to whom I owe my protection.

Easy times in history always end. Indeed, human history is a long timeline of grind rather than glory. You think it can't be borne, but it can, and has been, and is. What your really saying is that YOU can't bear it. So be it. But look at the Amish/Mennonites. They are doing without most of the modern conveniences right now, and they're doing fine. With skills, agricultural assets, community, and an improvising mindset, and (yes) some gold coins to rebuild markets, the human race will carry on without you.

Sun, 02/24/2013 - 18:23 | Link to Comment agent default
agent default's picture

"I think you all watch too many fantasy video games."

I think you live in one.

Sun, 02/24/2013 - 19:25 | Link to Comment optimator
optimator's picture

So, where do you put your savings to keep them safe and growing?  Folks with gold may not be able to do anything with it, but their heirs will be very rich in future, just like those that hung onto it when FDR wanted to take it for $30 an oz.

Sun, 02/24/2013 - 19:58 | Link to Comment boooyaaaah
boooyaaaah's picture

I am where you are, if FDR made owning gold illegal why wouldn't OBEWON

The Rebubs may protest and negotiate that 2 onces are legal

But still who is going to buy your 2 ounces

The only chance we have is re establishing the constitution

 

Sun, 02/24/2013 - 20:29 | Link to Comment ipud
ipud's picture

70!

Sun, 02/24/2013 - 17:03 | Link to Comment Big Corked Boots
Big Corked Boots's picture

I have to believe that of the tonnage of Au being moved, that some of that metal is leased. And I have to believe that the lessee assumes the deal is permanent, i.e. there ain't no way China and India will ever give that gold back. China will keep it at the point of a gun and India will just paper the hell out of everyone who comes looking. 

I also have to believe that there are some good people remaining at central banks, who see the movement of metal, and are at a minimum going to blow the whistle and maybe just prevent this looting. Not everyone at the Fed is evil...

Well, I can hope. I'm gradually becoming my own central bank. Fuck 'em all.

Mon, 02/25/2013 - 05:33 | Link to Comment AE911Truth
AE911Truth's picture

Mr. Boots,

It could be that the gold flowing East is gold previously leased from the East.

http://www.scribd.com/Free_Nations/documents

http://www.scribd.com/doc/73793248/11-Civ-8500-Keenan-Complaint

Sun, 02/24/2013 - 17:04 | Link to Comment Racer
Racer's picture

The price of gold in sterling hasn't changed that much unfortunately for anyone wanting a better price to buy

Sun, 02/24/2013 - 18:03 | Link to Comment akak
akak's picture

I didn't realize that the price of gold in sterling silver was a meaningful metric for anyone.

 

Oh, you mean the price of gold in UK pounds, right?

Sun, 02/24/2013 - 18:26 | Link to Comment WmMcK
WmMcK's picture

The GSR is a very meaningful metric (for me, at least).

Sun, 02/24/2013 - 17:10 | Link to Comment sudzee
sudzee's picture

The local refiners are seeing about a 30% drop in Gold scrap and silver is down to a trickle. Buy prices on gold are up to 98.5% and 95% respectivly. Canadian mint is or has melted 200,000 $5 & 10 gold coin minted in years 1912-14.
Supply crunch time is upon us.

Sun, 02/24/2013 - 17:10 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

Sheesh, you people make it sound like we can't trust our Central Banks and politicians, or something.

Sun, 02/24/2013 - 17:12 | Link to Comment savagegoose
savagegoose's picture

Does anyone recall why UK sold down the gold price?  its because they needed to deliver gold they had of someones. and geting that stack cheap is the best way. seems to me we have a repeat of browns bottom, but this time for germanys gold request.

Sun, 02/24/2013 - 17:22 | Link to Comment malikai
malikai's picture

Brown wanted to get famous.

Sun, 02/24/2013 - 17:24 | Link to Comment ekm
ekm's picture

Based on my observations, I think QE is dead. I'm expecting the Fed in march to signal the end of it.

There's nothing left to buy and own, nothing real or productive is left to trade. Stocks, commodities, houses are currently all owned by Gov+ CBs + Primary dealers/major world banks and placed in storage. Directly or indirectly the govs already own everything, no need to print more money.

Legally this is equal to expropriation, and a reminder to everybody, expropriation is legal in the western world.
http://en.wikipedi...wiki/Expropriation

I DECLARE: QE IS DEAD

We are left with two options:
Option 1 - one or two primary dealers/major world bank get pulverized (one or two of deutsche bank, merryll lynch, rbs or all 3)
Option 2 - wall street closes shop

I think option 1 is about to happen, extremely soon, extremely fast.

Sun, 02/24/2013 - 17:43 | Link to Comment Meremortal
Meremortal's picture

Sorry, you are mistaken.

Sun, 02/24/2013 - 19:21 | Link to Comment ekm
ekm's picture

We'll see

Sun, 02/24/2013 - 19:23 | Link to Comment tenpanhandle
tenpanhandle's picture

Whew, thanks for that well fleshed out counter arguement.  I was scared for a moment there.

Sun, 02/24/2013 - 19:38 | Link to Comment ekm
ekm's picture

LOL

Sun, 02/24/2013 - 18:37 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Actually, I worry about Option #3:  The NWO crowd can afford to lease the top brains & gear to play out tons of scenarios, i.e. how to play and stay in charge.  I suspect that we'll get neo-Feudalism, with The Usual Suspects (still) in charge, but now w/o the Constitution or Bill of Rights in their way. 

If we can 'prep', so can they.  Only better and in larger groups -- with more food, water, energy, tools, consumables, G+A and local-fiat based on PM.  Why do you think the Big Fish do not want the little fish to have big teeth (too much G+A)?  So Big Fish can eat little fish.  Welcome to the 1700-1800's.

You sure you want the current system to collapse?  Just asking, to provoke some Cognitive Dissonance and (hopefully!) some good discussion that does more than rehash old positions or lines.

Sun, 02/24/2013 - 19:20 | Link to Comment ekm
ekm's picture

It is inevitable. Collapse is inevitable.

 

Anybody who preaches that Wall Street owns the government, must use their logic and think: How does wall street make money?

 

Answer: Trading income.

 

At S&P1500 nobody can afford to gamble. At S&P 400, everybody will gamble, hence good for wall street.

 

My forecast is S&P at 400 within 2014. If this continues a little bit longer, I may be tempted to reduce my forecast to S&P 150.

Sun, 02/24/2013 - 19:23 | Link to Comment ekm
ekm's picture

Option 3 is possible also. I lived in communism so I know option 3 is death.

Sun, 02/24/2013 - 20:43 | Link to Comment jackinrichmond
jackinrichmond's picture

i agree with jim sinclair - they will never, ever be able to stop QE

Sun, 02/24/2013 - 22:06 | Link to Comment Room 101
Room 101's picture

No, they won't stop QE voluntarily. But at a certain point there will be no other choice. 

Sun, 02/24/2013 - 22:27 | Link to Comment Room 101
Room 101's picture

You might end up being right. At a certain point, even the Fed will move off stuck on stupid. We might not live so long as to see it, but I think it will eventually happen. No organization seems to ever ever voluntarily gives up it's existence, and even the Fed has to realize that it's treading on thin ice.    

As for the implications of that, only time will tell.  I see your scenario 1 as being far more likely than scenario 2 for the same basic reason:  no organization seems to ever voluntarily gives up it's existence.

Edit: fuck you, bernanke. 

Sun, 02/24/2013 - 23:04 | Link to Comment ekm
ekm's picture

The beauty of open ended QE is that it can be stopped at any time. There's no scheduling.

Sun, 02/24/2013 - 17:18 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Martensen and Sprott seem frustrated that they cannot get accurate info on the "bottom-line" amount of gold holdings.

Whether it's gold or oil or the # of nukes in Israel, information is power and they're not sharing it.

Sun, 02/24/2013 - 17:20 | Link to Comment eddiebe
eddiebe's picture

Blah blah blah blah.
We've heard it all before ad nauseum. Still the saying goes: Show me the money. And: money talks.

Until it is firmly established that Gold is money and fiat is fiat, all the jawbowning is just so much more bullshit.

Sun, 02/24/2013 - 19:25 | Link to Comment tenpanhandle
tenpanhandle's picture

Sprott does put his money where his mouth is.

Sun, 02/24/2013 - 17:25 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Martensen and Sprott seem concerned that the COMEX and the CFTC will break the "rules" to thwart this "market".  No need for concern.  Just relax and know they will.

Sun, 02/24/2013 - 17:31 | Link to Comment Lordflin
Lordflin's picture

China and Russia horde the gold and silver, US hordes the military... anyone wonder where this is going?

Sun, 02/24/2013 - 17:39 | Link to Comment Meremortal
Meremortal's picture

 Give me a good military and acquiring and/or keeping gold won't be a problem.

Sun, 02/24/2013 - 17:41 | Link to Comment Meremortal
Meremortal's picture

Give me gold and I'll need a military to protect it anyway.

 

Sun, 02/24/2013 - 17:33 | Link to Comment Herdee
Herdee's picture

Sprott Gold: PHY.U , Sprott Silver: PHS.U , Sprott Plat.& Pall.: PPT.U (Toronto),Americans can easily buy and store with Sprott in Canada(friendly,good neighbors to the north).Minimal effort,good website.Whatever you do,don't store your bullion inside of and/or with(in any form)an American banking institution.Your gold as we know can be confiscated by the Federal Reserve and/or the U.S. Federal Government.(no I'm not kidding,it's happened before!)

 

Sun, 02/24/2013 - 17:56 | Link to Comment Acidtest Dummy
Acidtest Dummy's picture

When fraud is the rule, possesion is the law. Nothing is easier to store than Au, nothing. Why hire counter-party risk? If confiscation is coming the big piles will be confiscated first. If you don't hold it you don't own it (and if it is too much for you to carry, you don't deserve it.)

PROSECUTE THE WAR CRIMINALS!

Sun, 02/24/2013 - 18:50 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Well, Canada is part of the British Commonwealth, and the 'Crown' (The 'City', not the Queen is the 'Crown') does own lots of Crown Land in Canada, with which to back up its fiat, should they so choose.  Even if the UK goes bankrupt, the City/Crown does not!  Food for thought.

And if those people who claim that The City is owned by the R family are right, and that they are the dominant shareholder of the Fed, then the POTUS & Co will not and cannot touch Canada.  IF the R-theory regarding The City and The Fed is correct.  More food for thought.

Sun, 02/24/2013 - 17:36 | Link to Comment disabledvet
disabledvet's picture

I thought we didn't have any to begin with...

Sun, 02/24/2013 - 17:36 | Link to Comment Meremortal
Meremortal's picture

"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."

 

 

By that logic, real estate and oil/gas should benefit too. And that's happening. Collectibles and used articles like musical instruments are still down. Maybe time to invest there...

Sun, 02/24/2013 - 17:37 | Link to Comment q99x2
q99x2's picture

Fuck ya the bansters are moving the US gold reserves.

I call for the States to file suit against the US Federal Gov't to sue for damages and a full independent accounting of the States collective gold which is held by the Feds.

If its missing send the banksters to hell.

Sun, 02/24/2013 - 17:45 | Link to Comment Meremortal
Meremortal's picture

I'm sure the States will get right on that for you.

Sun, 02/24/2013 - 20:32 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

q99x2

Have you picked up your goverment issue drone recieving signal transmitter yet?

If not it is in the mail.

Sun, 02/24/2013 - 17:51 | Link to Comment savagegoose
savagegoose's picture

I suggest that  obama   sends out  cyanide pills, for EVERYONE.  as part of the next stimulus package.

Sun, 02/24/2013 - 17:56 | Link to Comment tony bonn
tony bonn's picture

the public figures bandied about as gold imports for china and india are ludicrously and naively low....every drop in gold price is a raiding opportunity for the chicoms....the tonnage of gold transferred east should be measured in the thousands and tens of thousands of tons.....

see jim willie for greater details.

Sun, 02/24/2013 - 17:58 | Link to Comment Absalon
Absalon's picture

Why is the writer talking about Canada?  Canada sold almost all its gold reserves transparently a long time ago.

Sun, 02/24/2013 - 18:23 | Link to Comment The Heart
The Heart's picture

THIS!...is the opposite of dishonoring.

http://www.youtube.com/watch?v=lSJdxm-xljs

We the heart of America want to express great thanks and gratitude for this man that stands up to speak his truth like this. We have prayed hard and long waited for good men, and women to stand tall in the Light of Truth against the beast that seeks to kill us all off.

THIS...is a world-wide issue and people must wake up to see who the real enemies are.

Give ya a hint, they call money, god.

 

Sun, 02/24/2013 - 18:58 | Link to Comment TNTARG
TNTARG's picture

Beautiful. I loved that principle "live and let live". I'll stand with you for it to be granted to every person on this Planet.

Sun, 02/24/2013 - 21:59 | Link to Comment The Heart
The Heart's picture

Totally misread this title earlier today...lol...dishoarding...Doh!

Sun, 02/24/2013 - 18:11 | Link to Comment Meatballs
Meatballs's picture

Just love that reference in the first para to Central Bankers having hearts. Lost me right there.

Sun, 02/24/2013 - 18:17 | Link to Comment Stuck on Zero
Stuck on Zero's picture

We're not just losing soverign PMs.  We're losing technology, factories, jobs, and all forms of value to the mercantilists.  Soon we'll be losing our food, fuel and women!

 

Sun, 02/24/2013 - 18:19 | Link to Comment No Euros please...
No Euros please we're British's picture

Don't know what the fuss is about, there's plenty of paper gold and silver and the paper miners can ramp up production at any time. The Russians and Chinese will look pretty stupid when they find out how much paper the Fed have stored away in Fort Knox and they only have lumps of yellow metal that scratches your arse when you wipe it.

Sun, 02/24/2013 - 18:20 | Link to Comment JimmyCDN
JimmyCDN's picture

For Canada, the damage has already been done in the Mulroney years:

 

http://canadianawareness.org/2012/11/the-story-of-canadas-gold/

 

Sun, 02/24/2013 - 18:29 | Link to Comment q99x2
q99x2's picture

It is reasonable to think that the bankster's printing is foolish and will end in catastrophy. It is reasonable to think that gold is being sold from US Reserves. It is reasonable to think the price of gold and silver will increase when the physical supply has reached it's limits.

My point is that the banksters that are manipulating prices and selling US Gold Reserves are the same ones behind killing 450,000 children for no reasonable reason and that if you think they are going to allow non-banksters to profit from an increase in the price of gold and silver then you are not being reasonable. They will kill millions of Americans before they let that happen. That's the way they work. They are banksters.

Sun, 02/24/2013 - 18:34 | Link to Comment falak pema
falak pema's picture

TBTF Banks had to know what I had done :Madoff to FBN: Maintain Scrutiny on Banks and Feeder Funds | Fox Business

Damning Madoff testmony in email to Fox.

Sun, 02/24/2013 - 18:40 | Link to Comment Monedas
Monedas's picture

If it cost the US Mint 2 cents to make a zinc penny and 10 cents to make a nickle .... how much does it cost them to make an ASE ? These are $500 toilet seat, $150 hammer people .... come on .... government shiny coins are HEAVILY subsidized .... premiums are limited because of competition .... buy the fuck out of them !  It's a no brainer ! Think of the extra handling involved producing .99999 (five nine) coins .... ????

Sun, 02/24/2013 - 22:26 | Link to Comment Room 101
Room 101's picture

Not much.  Except for the value of the metal content, there isn't much difference in striking an ASE than striking a pot metal commemorative.  

Edit: Fuck you very much, bernanke.

Sun, 02/24/2013 - 18:50 | Link to Comment Peter Pan
Peter Pan's picture

I might have been inclined to accept a 10% decline in the price of gold in the last 12 months had the dollar also fallen by that percentage.

Given that the dollar has not fallen by 10% and given the worsening situation in the real economy, you realise it is all a load of crap given that the Dow Jones keeps going up without any justification other than what they are feeding it with behind the scenes.

Sun, 02/24/2013 - 18:51 | Link to Comment are we there yet
are we there yet's picture

Tagart is right, but ZH'ers already knew Gold is shifting to China, India. There is not a single asset that congress has access to that in the past it has not depleted or ponzied out secretly if they can. The fierce secrecy over not auditing the FED is for an obvious reason.

Sun, 02/24/2013 - 19:07 | Link to Comment ebworthen
ebworthen's picture

So this means I'm a Patriot because as a U.S. Citizen I am buying Gold and Silver, correct?

Sun, 02/24/2013 - 19:43 | Link to Comment Yen Cross
Yen Cross's picture

  The "west" has squandered all it's intellectual property, human capital, and sovereign wealth.  The west is in it's last "death throws", and in denial. That fucktard Bernanke could be standing over the bottomless pit to hell, and still looking for a bottle of green ink!

Sun, 02/24/2013 - 19:48 | Link to Comment rawsienna
rawsienna's picture

I am about to do some work on my house that will cost me about 42k.   Was just thinking would my contractor take 3 of my 10 ounce gold bars as payment in lieu of cash?  Think he will take it?  Despite my continued preference to hold a decent amount of physical gold - I do think all central banks are fucked up -- I am not so sure he would (despite the value being well over 45k).  Two years ago, I bought an apartment in FLorida for my aunt (70 years old and broke) in a nice community for 52k -  3.5 10 ounce bars of gold for a 1200 sg foot apartment with a pool. Something is wrong - makes me nervous.  

Sun, 02/24/2013 - 20:01 | Link to Comment tempo
tempo's picture

50 years ago, 6% of the population dependented on some form of government assistance, now its 35%. How high can it go??

Sun, 02/24/2013 - 20:09 | Link to Comment Yen Cross
Yen Cross's picture

  35%? ^  Almost 50mm people alone are on the Government dole. Then you can add  student loans, healthcare, and other forms of assistance to that 50mm. (I'm excluding Medicare and S.S. and defunct unfundable pensions, fraud, ect..)

 Roughly 330mm people live in the United States. I would say conservatively that number is over 50%. I'm not some dipshit "bean counter" though.

Sun, 02/24/2013 - 20:03 | Link to Comment flyonmywall
flyonmywall's picture

I doubt Sprott's numbers. More likely, central banks are basically pushing paper around, just like everybody else. No real banker right now is stupid enough to actually sell real gold, unless they think they can replace it down the line at a much cheaper price.

And there you have the crux of the argument for gold price suppression. The question is, who is ultimately right, the ones acquiring the real asset, or the ones supressing the price of the real asset thinking they can get it cheaper later?

If you look at the relative size of the paper market, the answer is clear. If you look at the overall performance of gold over the past 10 years, the answer is less clear. Welcome to muddy waters !

 

 

Sun, 02/24/2013 - 20:59 | Link to Comment Clint Liquor
Clint Liquor's picture

"No real banker right now is stupid enough to actually sell real gold"

 

You give them far too much credit, in fact;

The only thing you can be positive of is that Central Planners will be arrogant and stupid. It's part of the job description.

Sun, 02/24/2013 - 20:05 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Replace the word "irrisponsible " with criminal and the word
"suppressed" with central manipulation,and you got yourself an article.
Ps...fuck you benny.

Sun, 02/24/2013 - 20:12 | Link to Comment devo
devo's picture

His best point is that they're suppressing gold to keep the inflation perception low. Spot on. The anti-gold campaign is in full force--people should ask themselves why.

Sun, 02/24/2013 - 21:03 | Link to Comment HellFish
HellFish's picture

If there was ever a need for an ignore button PUD sets the standard.

Sun, 02/24/2013 - 21:19 | Link to Comment bigkahuna
bigkahuna's picture

People trying to interpret this stuff? Here is a perspective from a guy who asks the question: what do I do with this?

Stock up on beans, bullets and brass. Network. Buy the gold if you think you you are well enough provisioned and secure enough to make it.

Sun, 02/24/2013 - 21:26 | Link to Comment helping_friendl...
helping_friendly_book's picture

Reminbi bitchz!

Sun, 02/24/2013 - 21:30 | Link to Comment dolph9
dolph9's picture

The West thinks it's far too advanced for that barbarous relic.

After all when you have unlimited debt money, you can wage endless wars and keep feeding the blacks and patting yourselves on the back for how powerful and noble you are.

Sun, 02/24/2013 - 22:04 | Link to Comment chindit13
chindit13's picture

Logic built upon a possibly false assumption is not logic; it is merely a convoluted confirmation bias.

The view that gold will always have special value because it has always had special value is a belief, even a tautology, not an absolute.  No matter the length of its record, it is subject to change.  Is it possible the West has outgrown gold, while the East maintains the superstition?

As one who tries to take CogDis’ advice and forever questions assumptions, a few things struck me about humanity’s supposed belief in gold.  The first is that it is quite possible that the value of gold in 1999-2000 was the lowest price the metal ever had in the history of the human species.  Though it is difficult to determine with certainty, one simple example suggests something not gold positive was going on.  Consider back in the early 1920s.  If one wished to buy one of Henry Ford’s cars, it might have “cost” thirty ounces of gold.  In 1999, if one wished to buy the average model from the company he founded, it would have cost 60-70 ounces of gold.

Was that an aberration, a long cyclic low, or an indication that humanity is outgrowing the belief that an otherwise useless shiny metal has some special value?  I don’t know, but neither does anyone else, Eric Sprott included.

The second thing that got me thinking was a visit to a farm in southern India that supposedly has been producing for five thousand years.  I considered a hypothetical case:  Two men, 5000 years ago, one who acquired the farm, the other who acquired the equivalent purchase price in gold.  Over the next 5000 years, the farm produced food that people ate.  It produced food that the owners sold, enabling them to acquire other necessities or desires with the proceeds.  The farm employed people who earned a living that enabled them to buy necessities and desires.  The gold just sat there.  It is likely the farm threw off major multiples of its purchase price in “earnings”, and it is likely even the residual value of the farm exceeds the residual value of the gold, forgetting the five thousand years of production and employment.

Today an investor has far more asset choices than at any time in human history.  In the past, only the “elite” had a wide range of asset choices, and even their choices paled in comparison to what is available today.  People without choices, or those who exhausted all other possibilities, chose gold.  Today, the historical 99% has choices previously unimagined, such as being able to buy a piece of an ongoing concern---or tens of thousands of them in equity markets worldwide---that throws off dividends and allows for capital gains as the underlying business captures retained earnings.  These entities also employ human beings, which has a multiplier effect in incentivizing society.  The 99% can also loan money to the same entities or even its government.  Ownership of real estate, too, has never been easier for the 99%, who historically may not even have owned the land on which they farmed.  Add to this the  ”toys” that modern society produces, and anyone, whether a 1%er or a 99%er, has choices that simply did not exist during the long period when gold held some special value.  

Gold just sits.  It doesn’t grow, it doesn’t throw off dividends or earnings, and it doesn’t employ anyone. It requires an ongoing belief to hold its value, as previous believers pass away.  Belief in the value of food and shelter is unlikely to ever become an anachronism, it is inherent and integral to survival.  It is not an acquired taste.  The belief in a shiny metal, however, requires socialization, just as it does for fiat.  Both have worked historically, and despite the predictions of its demise, there are more fiat in use in the world today than ever, some 180 different examples being used day in and day out by seven billion people. Even when fiat failed---especially in its most famous recent instance in Weimar---it was merely replaced by another fiat.  That is belief, and it seems humanity can be made to believe most anything, no matter how foolish it might seem.  That gold is not infinite merely places the belief in it nearby fiat on a spectrum of absolute to faith.

Very large scale holders of gold might have considered these same things; in fact, many did.  The much-hated Warren Buffett wrote a famous company letter where he compared alternative assets to the entire world’s stock of gold (though gold was $180 per ounce higher when he wrote his letter), and considered a hypothetical investor faced with a choice of owning all the world’s gold or its equivalent value in productive assets.  If one figures Buffett’s own wealth, he personally has a choice of buying ongoing concerns that employ people and throw off wealth (like Heinz), or a ten foot cube of gold.  Which would give him more personal satisfaction in his declining years?

One thing is certain over the last decade.  While gold has increased in value, the 1% has been on a buying spree of other assets unprecedented since the days of serfdom.  Sure, many of the 1% loaded up on gold in 1999-2005, though more likely as a trade, since it seems they are selling now---and loading up on land and buildings and natural resources and pieces of companies.  Asset ownership is shifting toward, not away from, the elite.  Investment funds that buy foreclosures or farmland are just the latest examples of this trend.  Even in a Great Reset, somebody is going to make a profit producing goods and services and it would be worth sharing in that profitability if one could do it.

So who is buying gold today?  Retail, for one.  China and India for another, including the Central Banks of those lands.  Are these groups the world’s “smart money”?  India may well have always been the world’s largest holder of gold, even back 5000 years ago when that southern India farm went into production.  What has it done for them?  The land has been invaded and colonized repeatedly throughout its history.  It suffered horrific ethnic tensions that saw it split into three separate modern nations, and it may well further split in the future.  More of its citizens today own gold than have access to modern sanitation.  The entire nation, whose modern population exceeds 1.2 billion, has been largely absent from the march of human innovation and discovery for hundreds of years (as has China).  It doesn’t seem as if its gold held any magical properties that did a lick of good for it.

If one was to doff a tin foil cap for a minute, it is possible that the great bull run in gold since 1999 is merely The Great Distribution?  Did the elite generational holders of the metal just devise the greatest pump and dump in the history of the world?  Has the real "manipulation" been to the upside, and the big "paper" sales are really hedging generational physical holdings?  The mind shudders to think.  As they say about poker, if you don’t know who the chump at the table is….

Years ago, about the time he predicted $1650 per ounce, Jim Sinclair said that one will know the bull run is over when Central Banks start buying.  China and India?

All of the above is just a thought experiment, and the belief in gold may survive and grow.  That's a bet, though, so it is fair to call it what it is.  It’s right to challenge our biases and assumptions, right CogDis?

Sun, 02/24/2013 - 23:31 | Link to Comment devo
devo's picture

Right, it doesn't produce income, but if you believe income producing assets are overvalued and will collapse while currencies simultaneously lose value, you hold gold and wait for repricing. If you're wrong you're screwed. Also, some people hold it as insurance. Not every asset produces income--that's not the benchmark for a good asset.

Sun, 02/24/2013 - 23:34 | Link to Comment akak
akak's picture

You are exactly correct, Devo, and the "it just sits there" argument against gold is as idiotic as declaring that lifeboats and fire extinguishers are useless because 99+% of the time they "just sit there" as well --- that is, until they are desperately needed.  The illogic behind such arguments is self-evident, yet they continue to be made (not saying that you are necessarily doing so, Chindit, as I can clearly see that you are merely restating such arguments above in the presumed role of Devil's advocate).

I dare say that more than 90% of those who currently advocate on behalf of owning gold in this forum, or who actually own gold today, did not own much if any gold 20 or 25 years ago, and that would not have been an irrational action on there part at the time, nor does it make them a hypocrite now or then, simply because a looming financial and monetary collapse, and the utterly insane levels of indebtedness of most governments, did not exist 20 or 25 years ago either.

Sun, 02/24/2013 - 23:50 | Link to Comment devo
devo's picture

I think people who say "it just sits there" are paraphrasing Warren Buffet, who has everything to gain from having people in other assets. Most people have dollars 'just sitting' in their bank accounts, so why not convert them to something intrinsic that can't be inflated away, as the dollar continues on the path to purchasing nothing? To have rainy day/nest egg money in dollars is terrifying. The anti gold shills can never give a good answer to that. Buffet did admit he'd rather own gold than dollars, though. That implies Warren has a lot of gold.

Sun, 02/24/2013 - 23:52 | Link to Comment chindit13
chindit13's picture

For four years I have been flitted between the inflation/deflation camps, never settling, but trying to span the chasm with hedges.  If I really thought the end of fiat was nigh, I'd load up with debt (at current low rates) and accumulate as many pieces of arable land, manufacturing facilities, needed natural resources, and fixed structures as I could, and as fiat tumbled I'd catch the falling knife and repay all the borrowing in the cheapening fiat.  I wouldn't bother with gold, as I could get that, if I wanted it, in trade for the productive assets I would have acquired.

Isn't this exactly what the elite are doing now?

Sun, 02/24/2013 - 23:59 | Link to Comment akak
akak's picture

The "end of fiat" does not even have to be nigh in order for your scenario to work rather well for those able to engage in it, either.  Too bad it is difficult going on impossible for the average Joe to borrow any significant amount of money at fixed rates nowadays; it's almost as if their banks suspect that those rates are artificially low today, and destined to rise noticeably in the years ahead.

Mon, 02/25/2013 - 00:31 | Link to Comment devo
devo's picture

Inflation not deflation.

They want to wipe out U.S. debt, medicare, etc with hyperinflation rather than tough political choices or honest default, but in a slow and organized way. Politicians use hyperinflation as a political tool from time to time, knowing they can go on a temporary gold standard when shit hits the fan. This is one of those times. Deflation does nobody good (except the poor and savers, of which we have few) so it won't happen until it does (likely in the aftermath of a hyperinflation). I can't believe people still believe in deflation. It ain't happening. Just realize who wins (poor) and who loses (rich) in a deflation and you have your answer. If the stock market collapses 50% they'll just print 200bil a month.

There are pockets of deflation (houses) and we should have deflation, but we don't. Maybe that's what is confusing you.

Mon, 02/25/2013 - 01:37 | Link to Comment delacroix
delacroix's picture

plenty of manufacturing facilities for sale in detroit, on the cheap. there was a time when if you said GM or sears would go bankrupt. people would think you were crazy. there was a time not too long ago, when monetizing the national debt, would have been met with, "they wouldn't do that". we are in the twilight zone now. things may stabilize, but there's lots of rot that needs to be seperated from the salvageable.

Sun, 02/24/2013 - 23:45 | Link to Comment chindit13
chindit13's picture

Let's suppose Sprott is sprott-on, and the West really does dishoard all its "treasure" to the East.  Suppose further the East demands payment for exports in gold or a gold-backed currency.  What would the West do?  Maybe something really bizarre, like rebuild its own manufacturing base.  Surely the Western elite would never want to do something like that, would they?  All those terrible employment issues...who needs that aggravation?  Also, if one needs resources, there's a whole lot of resources in fiat-loving countries such as Canada and Australia, not to mention the US, and certain feudal monarchies that happen to sit atop oil might like to remain in good graces with those nations sporting powerful militaries.

Mon, 02/25/2013 - 01:01 | Link to Comment devo
devo's picture

Confiscate gold and nationalize mining companies.

Sun, 02/24/2013 - 21:49 | Link to Comment dark pools of soros
dark pools of soros's picture

" (Are we willing to sell all of it?) "

 

hell yeah, we'll sell 10x all of it!!

 

 

Sun, 02/24/2013 - 22:15 | Link to Comment Poofter Priest
Poofter Priest's picture

Ya know....I've been hearing the talk of 'stupid, criminal, end game, collapse...' etc. for years now.

What I have wondered and keep asking with no measured thoughtful response is....'what if all this is not being done out of short sighted stupidity or greed'?

What could some of the other possible agendas or goal be?

And I would hope to hear of something other than the 'NWO/enslavement' paridigm.

Not to say this isn't true or untrue, but come on, we should be holding up and discussing other possibilities.

If for no other reason than for interesting perspective. But also perhaps to more accurately guess what our individual moves might be.

Any thoughts?

Sun, 02/24/2013 - 22:49 | Link to Comment Room 101
Room 101's picture

'what if all this is not being done out of short sighted stupidity or greed'?

It probably isn't being done entirely out of stupidity and greed.  I'm not much of a conspiracy theorist. While I do think that a lot of our markets are manipulated to varying degrees, I don't see it as being a complete control scenario with the evil banksters wringing their hands in glee. 

Here is a possible explanation: Keynesian economics works.  For awhile.  The question is for how long? I guess we're gonna find out.

Here is another possible explanation: TPTB don't much care about gold. I mean if you control it all anyway, why would you give a shit about gold as opposed to oil or technology or anything else?

My personal view is that the simplest explanations are usually the correct ones. Here is my simplistic view: the things that are of value to the east (gold) are being traded for the things that the west values (toys and tech). And by and large most are pretty happy with the trade.  The spice flows not so much because of a wicked conspiracy but because those on both side of the transaction want it to flow. 

And fuck you bernanke.      

Sun, 02/24/2013 - 22:42 | Link to Comment thewayitis
thewayitis's picture

Well lets not forget when China backs their currency with GOLD......And countries are buying less and less US Treasurys right. We're buying more of more of US Treasuries. In a sense: Eating our own SHIT.  Arrrg

Gold Bitches

Mon, 02/25/2013 - 01:05 | Link to Comment headless blogger
headless blogger's picture

All these guys know what they're talking about, including Sprott; it's their business to be well informed for their clientele.

But they are over-looking the manipulative powers the controller groups have over everything; which obviously includes gold/silver.

At this point it's probably better for people to store food and non-perishable items; have a get-a-way plan, know where abandoned cabins are and how to get there; fishing equipment, etc.

Mon, 02/25/2013 - 01:43 | Link to Comment delacroix
delacroix's picture

maybe they'll figure out a way to pull an MF global on sprott. where's that silver stored?

Mon, 02/25/2013 - 01:58 | Link to Comment AE911Truth
AE911Truth's picture

Dear Mr. Sprott,

Do the following two links help explain where all the gold is comming from, where all the gold is going to, and why?

http://www.scribd.com/Free_Nations/documents

http://www.scribd.com/doc/73793248/11-Civ-8500-Keenan-Complaint

Mon, 02/25/2013 - 03:17 | Link to Comment resurger
resurger's picture

Stack em'

Mon, 02/25/2013 - 09:40 | Link to Comment proLiberty
proLiberty's picture

Hanke on Hyperinflation, Monetary Policy, and Debt
Steve Hanke

Steve Hanke of Johns Hopkins and the Cato Institute talks with EconTalk host
Russ Roberts about hyperinflation and the U.S. fiscal situation. Hanke
argues that despite the seemingly aggressive policies of the Federal Reserve
over the last four years, there is currently little or no risk of serious
inflation in the United States. His argument is that broad measures of the
money supply lag well below their trend level. While high-powered reserves
have indeed expanded dramatically, they have not increased sufficiently to
offset reductions in bank money, in part because of requirements imposed by
Basel III. So, the overall money supply, broadly defined, has fallen. Hanke
does argue that the current fiscal path of the United States poses a serious
threat to economic stability. The conversation closes with a discussion of
hyperinflation in Iran--its causes and what might eventually happen as a result.

>From the transcript::

..
Russ: So, we're going to talk about Iran in a few minutes, but before we do
that, let's talk about the United States. Which--we are not having
hyperinflation; but we do have a fiscal problem. We do have--we are spending
a relatively large amount, relative to what we take in. We are spending a
trillion more than we take in, a little over a trillion. We've done it for
four years in a row. We did it before that in a significant amount as well.
And people keep buying our bonds. And so it seems okay. But one of the
institutions that's buying those bonds is the Federal Reserve. I've read
that a very large portion of U.S. Treasuries are being purchased by the
Federal Reserve. Can you explain that?

Guest: Since they started the so-called Quantitative Easing. I think roughly
since the Lehman collapse in September of 2008; I think it's about 75% of
the total is being purchased by the Fed.

Russ: So, can you explain to me what that means and what it portends for the
future.

Guest: Well, let's just start with Lehman's collapse in September 2008.
That's a convenient date. Since that point in time, the Federal Reserve's
balance sheet has increased roughly by three and a half times. So that means
they are buying a lot of these bonds. And that's where they go, on the asset
side of the balance sheet. Now that means that high-powered money, or what I
call state money--the amount of money produced by the state--has more or
less tripled. It's exploded. And this has many people concerned; and they
get excited and say we are going to have hyperinflation tomorrow. That's a
hyperinflation nexus. The Fed's buying all these bonds; their balance sheet
is exploding; high powered money is increased very rapidly. And people
conclude that it's going to be like Yugoslavia, or the Weimar Republic, or
something like that. Now, it has meant that state money has increased from
about 6.5% of the total money supply, when you measure the money supply
properly with a broad measure, like M3--so we went from state money being at
about 6.5% at the time Lehman collapsed, until now it's about 15%. So,
you've more than doubled the size of state money. But the problem is: I said
15%; now state money is 15% of the total amount of the money supply--meaning
that state money is peanuts. What really is important is bank money--and
bank money is created by the commercial banking system and shadow banking
system, and that's what really counts. So, in a way we have had the
following scenario develop after Lehman: We've had ultra-loose monetary
policy with regard to state money and the Federal Reserve. But with the
financial regulation, that it was legislated with Dodd-Frank, and also with
what is called the Basel capital requirements, and specifically Basel III,
which is being imposed on banks--to increase the capital-asset ratios of the
banks. These two things--financial regulation and Basel--have in effect
imposed ultra-tight monetary policy on the banking system and bank money.
So, as a result of the two, we've had the total amount of the money supply
actually being very anemic, not growing very much at all. And in fact, if
you look at a trend line since 2009 and look at the endpoint today of the
trend line as you are going left to right, that point is about 7.5% higher
than the actual level of the money supply that we have. So, you could argue
that relative to trend we've got a deficiency of about 7.5% in broad money.
And the reason why is that the dominating feature has been the reregulation
of banks and the tight monetary policy imposed on bank money. Which accounts
for 85% of the total amount of money in the economy. Russ: So, that's
consistent with Scott Sumner's view, who argues that monetary policy has
been very tight, rather than loose. Everyone looks at the so-called
aggressive policy of the Fed. But my question then is: You are saying that
banks have been highly regulated and you can also argue that the economic
system is not very optimistic right now; it's kind of uncertain. But banks
have huge excess reserves. So, you are saying they are constrained. But it
appears they are very unconstrained. ...

...So, here's what we've had since Lehman. Loans to commercial enterprises
have gone down in the United States. Mortgages have gone down in the United
States. Interbank lending has essentially disappeared--which is almost the
lifeblood of the banking system, the interbank....

...
Russ: So, with the benefit of hindsight, what should he have done? Given
that he's let M3 or M4, these broad measures of liquidity in the economy
shrink? That's had a real impact on the economy; it's slowed the recovery;
it's made it anemic. What could he or should he have done? A lot of people
have faulted him for being way too aggressive. You are saying he wasn't
aggressive enough. How could he have implemented a policy to make up for the
shrinkage in bank money?

Guest: Well, he could have come out against the Dodd-Frank financial
legislation. That would have been maybe a politically dangerous thing to do,
going head to head with Congress. But the other thing he could have done--

Russ: And you mention--

Guest: He could have put a freeze on Basel. Basel has a direct input into
the capital requirements of the banks. But you see that, the reason the
Americans love Basel III is that the European banks that the American banks
are competing with in the international market, they are relatively
undercapitalized compared to the American banks. So, basically, by imposing
Basel III, you are mandating--you have a government banks that says that the
European banks have to shrink faster than the American ones.

.....

Link to interview, MP3 podcast and transcript:
http://www.econtalk.org/archives/2012/10/hanke_on_hyperi.html

Also mentioned: Prof. William A. Barnett's Divisa M4:
http://www.centerforfinancialstability.org/WBarnett.php

Advances in Monetary and Financial Measurement

Divisia Monetary Data for the United States:
rigorously founded in economic aggregation and index-number theory.
http://www.centerforfinancialstability.org/amfm_data.php

Mentioned in this article:

Malfeasant Central Bankers, Again
By Steve H. Hanke
http://www.cato.org/publications/commentary/malfeasant-central-bankers-a...

Mon, 02/25/2013 - 09:43 | Link to Comment proLiberty
proLiberty's picture

CFS DIVISIA MONETARY DATA FOR THE UNITED STATES 

January 2013

Link: http://www.centerforfinancialstability.org/amfm/Divisia_Jan13.pdf

 

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