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China Hasn't "Seen This Gold Rush In 20 Years"

Tyler Durden's picture





 

As we noted last week, all around the world the demand for physical precious metals has soared in the days following paper gold's price collapse. As the FT reports, from Shanghai and Hong Kong to India, one dealer noted, "Older members who have been in the business for 50 years haven’t seen such a thing." The feverish buying has left many of Hong Kong's banks, jewelers, and even its gold exchange without enough gold to meet demand. Record volumes on Shanghai's exchange, lines outside Beijing jewelry stores, and the proximity of Hindu festivals drove "Indian physical demand and premiums," higher as the worlds two largest gold buying nations prompted one exchange CEO to note that we hadn't, "seen this kind of gold rush in over 20 years." It would seem the concerted effort to collapse paper prices in London and New York has provided the rest of the world a multi-decade buying opportunity.

 

Via The FT,

Asia is witnessing one of the strongest waves of physical gold buying in 30 years, with bargain hunters using the drop in prices to secure jewellery and gold bars.

 

The feverish buying has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand. In Shanghai, the gold exchange saw volumes – often seen as a proxy for demand – rising to a record on Monday, while queues formed outside some jewellery shops in Beijing.

 

...

 

Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold products.

 

“In terms of volume, I haven’t seen this gold rush for over 20 years,” he told the Financial Times on Monday, adding that the exchange only had around twenty 1kg bars, and 100 five-tael bars left in its inventory. “Older members who have been in the business for 50 years haven’t seen such a thing.”

 

...

 

Trading volume on the Shanghai gold exchange jumped to a record high on Monday, reaching 43 metric tonnes, according to data compiled by Bloomberg. The previous record, set on April 19, was just 30.4 metric tonnes.

 

...

 

[In India, traders] reported stronger-than-usual buying as bargain hunters feared that prices had bottomed and would start rising once again.

 

The proximity of some Hindu festivals, usually trigger points for gold demand, further exacerbated buying. “Indian physical demand and premiums rose,” Suki Cooper, metals analyst at Barclays in London, said in a note to clients on Monday.

 


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Mon, 04/22/2013 - 11:21 | Link to Comment nope-1004
nope-1004's picture

Banks can't print physical.  Take delivery and bury these crooks.

 

Mon, 04/22/2013 - 11:23 | Link to Comment dryam
dryam's picture

"Tradition"

Mon, 04/22/2013 - 11:25 | Link to Comment NewThor
NewThor's picture

Tyler I got a messge for you.

Double dusted.

 

http://youtu.be/WiQAZlBU2bQ

Mon, 04/22/2013 - 11:29 | Link to Comment Divided States ...
Divided States of America's picture

This may be the 'bank run' on the fiat monetary system that the central bankers are worried about.

Mon, 04/22/2013 - 11:33 | Link to Comment FL_Conservative
FL_Conservative's picture

Why do you think Bernanke has a "scheduling conflict" for Jackson Hole?   He's having a hard time finding a clean pair of tidy white-ies to wear.

Mon, 04/22/2013 - 11:35 | Link to Comment Temporalist
Temporalist's picture

My first thought was that he doesn't want to answer any questions so there are no "market" "reactions" vis a vis his mouth. 

Mon, 04/22/2013 - 11:39 | Link to Comment Pladizow
Pladizow's picture

Fleckenstein & Martenson: http://www.youtube.com/watch?v=TgBl8k5aTYE

Mon, 04/22/2013 - 12:03 | Link to Comment Jack Napier
Jack Napier's picture

Hmm, no BitCoin shortage? Go figure. Hard money has its advantages.

Mon, 04/22/2013 - 12:07 | Link to Comment NewThor
NewThor's picture

WHOA.

Settle down, down arrow brigade. Sometimes I think you guys have been punched one too many times in the head.

Let me ask you this, if Comet ISON is 1.5 times the size of Earth, 

how much is GOLD going to help?

 

Mon, 04/22/2013 - 12:18 | Link to Comment Dr. No
Dr. No's picture

Of course the answer is none.  But why do you need to drag out some end-of-the-world senario to downplay gold?  Pretty pathetic actually.

Mon, 04/22/2013 - 12:23 | Link to Comment NewThor
NewThor's picture

DOWN PLAY GOLD?

Are you paranoid much?

I am trying to get on BloombergTV with this story,

and I would mention that all gold and silver comes from

exploded stars, not a printing press.

This is pretty disappointing Zerohedge.

You guys get all lathered up about two 19 year old bombers,

but I put 4 excellent videos together,

and hope people will get the connection

that a SOLAR SYSTEM EVENT

seems to be the ONLY thing that explains

why every single government is printing at warp speed.

But, it's like all you want to hear is GOLD IS GOD.

I'm a hug fan of Gold and Silver and anti-paper, GLD and Bernanke too,

but you guys really got to take your heads out of your asses

and take your tunnel vision blinders off.

Mon, 04/22/2013 - 12:28 | Link to Comment NewThor
NewThor's picture

Looks like it's my day to fight in the ring at fight club,

Good, let's see what I can do? Who wants to go first? Or shall it be all at once?

Do you know how many death threats I've gotten for my Comet Ison videos?

Why don't you try and answer that question while you hide behind the 

anonimity of the down arrow? 

I am your brother. I bring you truth. And all you want is a fuckin' fluffer for gold

or your investments. 

Follow the Truth no matter where it leads you.

BITCHEZ

Mon, 04/22/2013 - 12:57 | Link to Comment Rubicon
Rubicon's picture

What on earth are you talking about?

Mon, 04/22/2013 - 13:30 | Link to Comment NewThor
NewThor's picture

Google: Comet Ison WTF NASA Part 4 : Double Dusted

Mon, 04/22/2013 - 13:07 | Link to Comment n8dawg84
n8dawg84's picture

New Thor,

Where can I find your videos about the comet?  Thanks

Mon, 04/22/2013 - 13:24 | Link to Comment NewThor
NewThor's picture

www.youtube.com/thornews

There are 4 Comet Ison videos.

And, in the one I finished last night,

I put out a call to action to Tyler Durden of Zerohedge.

So, please people, stand down on your vitrol.

dammit.

I'm not some fucking Gold hater and distractor,

I've been on this site for a while,

and through my anti-bernanke/geithner

I DO BELIEVE IVE GOTTEN MORE THAN MY FAIR SHARE of high level visits.

That's why I don't post on here as much, OR make videos about economics.

The economy is too fuckin' fragile.

I don't want some type of Spanish Inquisition treason charge

for explaining to the masses how derivatives are the biggest scam

in the history of mankind.

I don't know why everyone is so fuckin' butt hurt about looking at the Heavens,

or even thinking about our Solar System.

I've been tracking and correcting NASA on it's minimal double peaked solar maximum

and it's 'false' comet ison conclusions. 

So if you don't want to support me, or take the 8:23 to watch my badass video

fine. 

...but while you're all fuckin' circle jerking each other off about Gold and Silver,

I'm over here trying to stay alive while talking the truth.

You're making me think Goldbugs have less brotherhood than thieves. 

I STILL LOVE ALL YOU BITCHEZ, bitchez.

T

PS. Tyler. Ain't no one gonna give a shit about Comet Ison until the Cool Kid in class (YOU) does an article on it.

PSS. SPACE is BIG BUSINESS. WHERE THE FUCK DO YOU THINK GOLD AND SILVER COME FROM???

 

 

Mon, 04/22/2013 - 13:38 | Link to Comment NewThor
NewThor's picture

Come on, step up to the plate, scappers.

Why don't you put some words behind the down arrows?

We all know that paper GLD will go up like a flame soon,

and physical will go parabolic.

How much constant confirmation do you need, son?

Why don't you step in the ring for a moment?

Let's test your intellect out, bitchez.

Mon, 04/22/2013 - 15:35 | Link to Comment WillyGroper
WillyGroper's picture

Thas right. Ask man on the moon mayor Newt.

Mon, 04/22/2013 - 13:39 | Link to Comment Pope Clement
Pope Clement's picture

Shut the fuck up Donny you're out of your element - Your fight is not here with ZHers but with the NASA douches and mainstream astronomers who have led you astray with their outdated gravatational models on the nature of the universe and have you bloviating such nonsense that Au and Ag came to earth in the dust from exploding stars. Calm down, the comic book like concepts of academic astronomy such as black holes, dark matter, big bang etc. are passe, you've got some catching up to do. But I will grant you that catastrophic solar system events are quite the game changer such as those of circa 6,000 ago which nearly ended humanity and gave rise to the stories of the old gods and to civilization too.... but that's a whole nother subject whose memories of fire and brimstone are still very much with us, peace brother

http://www.youtube.com/watch?feature=player_embedded&v=sbBZZyL7EJY

www.thunderbolts.info 

 

Mon, 04/22/2013 - 12:57 | Link to Comment Dr. No
Dr. No's picture

I am not denying there is a astroid event comming.  Why else would Obama promote NASA activities around such things?  But, no matter how much prep or bloomberg airtime you get, it doesnt change the fact we will be splattered like a june bug on a windshield.  Until then, I will continue to live.

Mon, 04/22/2013 - 13:28 | Link to Comment NewThor
NewThor's picture

A) I am going to try to use my heart, mind and spirit to move any incoming asteroids/planets into an orbit that doesn't harm Earth. (Just like in the Matrix)

B)If that doesn't work, let's Comet Ison was going to dust the Earth and make it unbreathable for a few years (Hence all of the underground bunkers), well, would you want to be part of the team that hid the truth from people up until the end, or would you want people to know the Truth and have more time to get right with their maker?

C) All actions and thoughs echo into infinity. Don't believe me? Ok. After this life, I will show up in another life, punch you in the face and say 'Told you so.' (then i'll help you up and buy you a beer. no hard feelings bro.)

For the record, I don't know what Comet c/2012 s1 Ison will do.

I do know that Nasa says that Ison will be the biggest brightest Comet of all time, seen during the day for months like a second Sun, AND it's nucleus and make up are like an average comet.

THAT DOESNT MAKE ANY FUCKIN SENSE, bitchez

 

Mon, 04/22/2013 - 13:35 | Link to Comment akak
akak's picture

You make Jim Willie sound shy and conservative.

I think you are seriously unhinged.

Mon, 04/22/2013 - 13:46 | Link to Comment Dr. No
Dr. No's picture

It makes sense to me.  In order to get a headline in this day in age, you need a whopper.  Therefore, NASA said "biggest, brightest, ever, no joke" so they could get some playtime between kardashians and various popstar tweets.  NASA is looking to get some funding and these kind of events help out if they can get the public's attention.  Without funding, a bureaucrat will wither on the vine.

Mon, 04/22/2013 - 14:17 | Link to Comment EINSILVERGUY
EINSILVERGUY's picture

Dude,

Are you for real or dusting on something other than star stuff?  Get a grip

 

Mon, 04/22/2013 - 11:35 | Link to Comment Rustysilver
Rustysilver's picture

FL_Conservative,

 

NO, he is standing in line to buy gold like the rest of us.

Mon, 04/22/2013 - 11:48 | Link to Comment Ignatius
Ignatius's picture

Only 17?

Mon, 04/22/2013 - 11:47 | Link to Comment Zero Debt
Zero Debt's picture

Nothing like a good ol fashioned traditional bank run.

Mon, 04/22/2013 - 11:47 | Link to Comment azzhatter
azzhatter's picture

I buy silver at apmex. Hardly anything available this morning, all out of stock

Mon, 04/22/2013 - 11:58 | Link to Comment goldfreak
goldfreak's picture

it's true most bars and rounds aren't available

Provident is mostly delayed ans so is Gainsville

Mon, 04/22/2013 - 12:08 | Link to Comment SemperFord
SemperFord's picture

I also like Apmex because I can avoid taxes and they ship quickly but no silver since last week.

Mon, 04/22/2013 - 12:57 | Link to Comment gaoptimize
gaoptimize's picture

I have a suspicion the the 100oz JM bar I ordered on Tuesday will not be shipped before the end of April as stated in the email I was sent by APMEX when they received my payment.

Mon, 04/22/2013 - 12:43 | Link to Comment Captain Benny
Captain Benny's picture

I stopped all business dealings with APMEX because they use JPM as their clearing banker.  Think about the information JPM has collected on PM owners world-wide... do you like being on that list?  Do you like supporting the cartel by encouraging people to bank with them?

Disgusting.

Mon, 04/22/2013 - 13:12 | Link to Comment gaoptimize
gaoptimize's picture

I'm concerned about this issue, so I called APMEX about it.  The customer service representative says they use the Bank of Oklahoma, a division of BOK, which my research indicates is not related to JPM.  Please clarify your comment.

Mon, 04/22/2013 - 12:29 | Link to Comment WhiteNight123129
WhiteNight123129's picture

It is nice to see that while Governments try to throw their own people at each other throats, the people of the world unite against their governments and their irredeemable currencies. People of the world unite!

 

THAT BEING SAID GOLD WILL FALL FIRST WHEN WE HAVE THE ILLUSION OF BACK TO NORMAL!!!

THAT MEANS WE ARE AT THE EARLY STAGE OF THE CHRONIC STAGFLATION!!!

THE MASSES OF INVESTING WILL BELIEVE IT IS A REGULAR CREDIT EXPANSION, WHILE IT IS THE BEGINNING OF THE BASE MONEY MOVING IN THE ECONOMIC WITH LONG TERM CHRONIC STAGFLATION IMPLICATIONS!!!

WATCH OUT FOR THAT FELLOW GOLD BUGS!!!

Mon, 04/22/2013 - 13:03 | Link to Comment RafterManFMJ
RafterManFMJ's picture

OW! OW! OW! My ears! My poor, deafened ears!

Mon, 04/22/2013 - 13:28 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Oops, Sorry about that,

I am just warning that when people sitting on idle cash have confidence again we will have a last hourrah on stocks. They will spend their deposits in stocks and goods and services.

It will be very wicked because inflation will still be low and people will confuse this period with a ~back to normal~ while it is base money starting its decade long leak in the economy with at the end of the process a new level of prices.

This will be characterized by universal bashing of Gold, universal belief in central banks and cheers on stock markets and a relatively low level of inflation and the long bond starting to go down in price.

In fact it will be the beginning of a chronic long march of higher inflation and higher interest rates (yet lagging inflation, i.e. still negative in real terms) and contracting PE and a long rise in Gold price.

I expect the Gold price to be at 1,100 or even 1,000 at that point. So keep your spirit up when you see that.

 

THe next expansion will not be due to credit expansion but the dam of base money starting to move in the real economy....

 

 

Mon, 04/22/2013 - 22:38 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

THAT flies in the face of stolen deposit accounts & high inflation requiring those with cash left over to make minimum payments on credit cards to keep using them to buy food & gas. Retail’s burnt, burnt out, done.

Mon, 04/22/2013 - 11:22 | Link to Comment Temporalist
Temporalist's picture

Gold On Sale! 

Mon, 04/22/2013 - 11:26 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Yes, if I can FIND some, I will buy more!

Mon, 04/22/2013 - 11:27 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

GoldCore has silver eagles, krugerrands, maples, bars.

Mon, 04/22/2013 - 11:48 | Link to Comment AllThatGlitters
AllThatGlitters's picture

It seems that the situation between gold and silver is very different.

We are all aware that many dealers are out of (or holding back?) inventory and that Eagle Premiums at many are way, way up, even when back-ordering.

However, gold premiums haven't really budged.  Can buy Gold Bars for just $21 over spot still.  I've been watching this, and it hasn't moved:

http://www.pmbull.com/gold-price/

There are a variety of 1 ounce bars for cheap premiums too.  Are gold premiums going to start rising?

Mon, 04/22/2013 - 12:04 | Link to Comment OutLookingIn
OutLookingIn's picture

Basic Fact:

Not enough to go around.

Plenty of paper - if you want it.

Just, that physical is scarce. Unless you entice it out of hiding with large premuiums.

Eventually this won't work. Bad money (fiat) drives good money (gold) into hiding.

People would much rather 'spend' their fiat before they touch their gold and silver.

Mon, 04/22/2013 - 11:45 | Link to Comment AllThatGlitters
AllThatGlitters's picture

Acting on conviction is the only way to go DoChen!

Mon, 04/22/2013 - 11:49 | Link to Comment Shell Game
Shell Game's picture

+1

Dear junkers - admit you hate a sovereign individual's choice to protect their wealth because it is literally a BOLD claim on sovereign wealth.  It is wealth that is not yours, it is not the State's, it is a product of individual effort and an individual act of defiance.  

Mon, 04/22/2013 - 11:50 | Link to Comment XitSam
XitSam's picture

People whine about APMEX but they have gold. This is not the time to be complaining about price. Same for ammo. Food is next. Get you some now.

Mon, 04/22/2013 - 12:04 | Link to Comment azzhatter
azzhatter's picture

I like Apmex. A little high priced but excellent service

Mon, 04/22/2013 - 12:24 | Link to Comment Urban Redneck
Urban Redneck's picture

They have to pass on the legitimate cost to build and maintain a real-time inventory infrastructure, it's not a charity operation, and there is a value both in time saved by not waiting for an air breather and certainty of execution, but some people put a premium on price or hand-holding, and when your at or near the top of the heap (at least in terms of volume) both the customers and the competition will swing you and rightly so, otherwise- you fall out of shape. (that and the fact that the name crapmex just rolls off the keyboard...)

Mon, 04/22/2013 - 11:23 | Link to Comment 101 years and c...
101 years and counting's picture

Still a bubble.  All these people will be shooting themselves when gold drops under $1000.

Mon, 04/22/2013 - 11:25 | Link to Comment swissaustrian
swissaustrian's picture

The mining industry will collapse sub 1200 first.

Mon, 04/22/2013 - 11:28 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

That is my understanding as well.  From what I hear, some mines have already shut down, at least for now.

And if gold gets near $1000, India (IMO) would likely step in and buy big, in 2009 they made their big purchase at $1040.

Mon, 04/22/2013 - 11:28 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Landslydz, bitchez!

Mon, 04/22/2013 - 11:40 | Link to Comment Ignatius
Ignatius's picture

If this was a manipulated action -- and it has all the indications that it was -- then where was the market research by the FED, BBs, etc., that indicated that buying would be the response?  Isn't this business school 101?  Which begs the question: what is their goal?

Regardless, BTFD

Mon, 04/22/2013 - 12:39 | Link to Comment Urban Redneck
Urban Redneck's picture

What would be the focus of the FED's research?  Who does the Fed fear most?  Who does the Fed think would be buying (and net how much) in response?

I don't know shit- but I'm pretty sure Ben isn't scared of me or the net volume of physical metal that me and my non-professional friends might add or remove from the market based on price swings.  Shaking out Paulson shareholders would be whole different level of paper stock and flow that has the benefit of reducing systemic risk due to leverage & title hypothecation, and if the physical metal nominally held by UTX could be shaken loose from Kyle Bass's cold dead hands (or at least kept in NYC)- that would just be golden...

Even without introducing bias to the statistics- there is a ton of "research" they could produce which would justify their assumed actions if they fail to comprehensively address risks to their strategy in the analysis.

 

Mon, 04/22/2013 - 13:04 | Link to Comment Ignatius
Ignatius's picture

Good thoughts and questions.

"...but I'm pretty sure Ben isn't scared of me or the net volume of physical metal that me and my non-professional friends might add or remove from the market..."

It's what you, me and the Chinese, etc. add in aggregate, I suppose.

I think the physical market is gonna call the bluff.

 

Mon, 04/22/2013 - 11:42 | Link to Comment Paper CRUSHer
Paper CRUSHer's picture

Indeed,Barrick has already put its Auzzie mines up for sale.

Mon, 04/22/2013 - 11:40 | Link to Comment Dr. Engali
Dr. Engali's picture

Do you se everybody and their brother trying to buy gold or are they selling their gold to the "we buy gold " shops? When chasers..er I meant to say investors start to move out of paper and into gold then we will form a bubble.

Mon, 04/22/2013 - 12:05 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Doc, some of these assholes will never get it.

Mon, 04/22/2013 - 13:02 | Link to Comment akak
akak's picture

Oh, I think most of them get it --- they are just malicious and lying anti-gold, anti-individualism bastards.

Mon, 04/22/2013 - 11:28 | Link to Comment Manthong
Manthong's picture

I don't think it will be themselves.

Mon, 04/22/2013 - 11:30 | Link to Comment otto skorzeny
otto skorzeny's picture

ZHers have a problem understanding deflation.

Mon, 04/22/2013 - 11:37 | Link to Comment LawsofPhysics
LawsofPhysics's picture

The "flation" debate is a distraction by TPTB.  What's the fiat "price" of all the things you need to survive again moron?  Compare that to the prices 5, 10, 15, or twenty years ago moron.  I guess this is all okay if you don't expect to live that long.  Suit yourself.

Mon, 04/22/2013 - 12:11 | Link to Comment HoofHearted
HoofHearted's picture

We understand what you're getting at, otto. We get "velocity of money." And we understand that specter is why gold is so cheap now. If the velocity of money were anywhere like what it was in 2007 or so, gold would already be $5000 per ounce.

When you look around the poker table and can't figure out who's the patsy, maybe it's otto.

Mon, 04/22/2013 - 11:43 | Link to Comment Abraxas
Abraxas's picture

You're right, Otto. I admit I don't get it. I mean, how can we have deflation for any prolonged period of time if we double our monetary base every several years. Perhaps we have too much money chasing too much goods, until we run out of either money or the goods. How can we run out of money if we can print it and how can we run out of goods when we overproduce and less and less people want them?

At certain point of time (I know not when) the velocity will pick up and you will not hear about deflation until the end of the war.

Mon, 04/22/2013 - 11:43 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Deflation in things that are not critical to survival or producing an actual physical product of value, inflation/scarcity in those that are.  The underlying issue of available energy is still not being addressed either.  So long as massive amounts of that printed money is going to interest payments, there will be no increase in velocity.  Wages also matter, gee, what have they been doing?  Sure as hell hasn't been going up, so again, no fucking increase in velocity.  This is the death of fiat and destruction of faith and confidence,  very different from the 70's etc.  Get your tribe in order.

Mon, 04/22/2013 - 11:52 | Link to Comment Abraxas
Abraxas's picture

So, scarcity in food, water and energy and abundance in recreational massage therapists, political science degrees and iPhones?

Mon, 04/22/2013 - 12:01 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"recreational massage therapists" -  I wish, maybe then they would lower their rates, but your optimism is appreciated.

Mon, 04/22/2013 - 12:46 | Link to Comment Captain Benny
Captain Benny's picture

As long as they give me a little inflation down below the belt, I'm fine with it.

 

Mon, 04/22/2013 - 12:17 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Otto, Gold is not about the price level but the real interest rates. Get educated, read Fullarton.

Also if we had a fixed monetary regime we could talk about deflation.

Check this chart, where is the deflation since 1933?

https://commons.wikimedia.org/wiki/File:US_Historical_Inflation_Ancient.svg

Where is the green stuff?

THere are two means of payment, money and credit.

Money is irredeemable, can not fail and is the ultimate form of payment. In the current system it si your Federal reserve notes.

Spending = Spending with money + spending with credit.

We fight credit contraction with monetary expansion, net net no inflation. Once credit stop contracting and people move their deposit into the economy we have inflation.

As for multiplier, as Dalio said, it is bogus.

Why? The modern monetary theory confuses a currency deposit with money. Ask the Cypriots if a bank deposit is money, had they taken the money out (euro ECB notes) no failure.

Currency can be issued against credit (that is a credit expansion) that is what the MMT look for, or it can be issued against base money (reserve at the central banks or when you deposit cash on your account).

Currency issued against credit is contracting (the proof is that M1 increases slower than M0), but currency issued against base money expands to offset that.

The inflation the MMT which believe in perpetual increase in credit that they do not understand is the following:

Go to the bank, redeem your currency deposit against money (Federal reserve notes). Spend all of it?

What happens? No credit creation and the multiplier IS TOTALLY BOGUS, yet inflation.

That is the typical thing that happens since the Spanish brought double cargo Gold from Spain. Milton Friedman is right inflation is monetary phenomenon, credit will stop contracting at some point and the dam of base money right now playing with financial assets leaks in the other side that is the real economy.

Economies grows like post world war II England, nasty chronic stagflation.

As for deflation, it would only exist if we were on a Gold standard, again check the chart.

Price rise can come from credit (overexcitement of credit like in 2007), it is transitory and always result in credit deflation. But at that point we do money inflation and the two offset each other for while until credit stops contracting and base money enters circulation.

Price fall can come from credit (credit deflation if at the same time base money is flat -- i.e. Gold standard).

Price fall can come from money too (very rare, it happened post 1867 in teh US and after 1873 demonetization of Silver). The base money grows slower than productivity, price fall but it has nothing to do with credit contraction.

As for Japan, it is not deflation (no massive bankruptcies and no massive price plunge like XIX century), it is a debt overhang.

 

Mon, 04/22/2013 - 22:39 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

no, we have a hard time seeing what isn’t there – deflation is reduction of the money supply, contraction of credit, over-supply of needed goods / inventory. No such event. Please prove your case.

Mon, 04/22/2013 - 22:40 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

No – the chance of gold under 1000 is less than 1 in a million. If that happens most of us will dump everything to buy more gold. Gold will easily top 3000$ in 18 months. Easily.

Tue, 04/23/2013 - 01:01 | Link to Comment e-recep
e-recep's picture

no one with an ample gold stack shoots himself. there is not one example.

Mon, 04/22/2013 - 11:23 | Link to Comment swissaustrian
swissaustrian's picture

Stronger than 2008?

Mon, 04/22/2013 - 11:25 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

I'm buying, even though I can't eat it.

Mon, 04/22/2013 - 11:30 | Link to Comment Croesus
Croesus's picture

I'm buying as much Gold as I can eat.

And trust me, if people knew how much Gold I can eat, they'd stop saying that it can't be done.

Mon, 04/22/2013 - 11:46 | Link to Comment TrumpXVI
TrumpXVI's picture

It's inert.

You can eat almost all you want.

 

Mon, 04/22/2013 - 12:00 | Link to Comment espirit
espirit's picture

And if one puts on a few pounds internally, you can still swim, run, and jump over barriers to free countries.

Mon, 04/22/2013 - 12:01 | Link to Comment Frank N. Beans
Frank N. Beans's picture

still gold when it comes out the other end

maybe not as shiny

Mon, 04/22/2013 - 12:09 | Link to Comment Croesus
Croesus's picture

@ Frank N. Beans:

Nonsense! Gold polishes right up! I've been gorging myself on Gold lately.

I can't go swimming anymore, since I just sink to the bottom.

PS: Gold tastes good with Ketchup, but if you really want flavor, I recommend a Szechuan Chili Garlic Sauce!

Mon, 04/22/2013 - 11:30 | Link to Comment Confundido
Confundido's picture

I can't eat USD bills either...too much ink in them.

Mon, 04/22/2013 - 11:24 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Good.  The next load of soybeans to China will only be delivered in exchange for physical gold.  Bring it!

Mon, 04/22/2013 - 11:33 | Link to Comment agent default
agent default's picture

Do you realize what this will mean for the Fed and the rest of the central banks?

Mon, 04/22/2013 - 11:37 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Their death (Okay, now I am being an optimist).

Mon, 04/22/2013 - 11:49 | Link to Comment eclectic syncretist
eclectic syncretist's picture

I'm gonna go out on a limb here and openly speculate that what the president called the meeting with bank heads for on the Thursday before the gold smash was to tell them that they would not be getting another round of bailouts if a Lehman type event occurs anytime in the near future.

At least, that would certainly explain a lot of the market action that has occured since the meeting.

Mon, 04/22/2013 - 12:00 | Link to Comment robertocarlos
robertocarlos's picture

And the bankers told him he was surely President for life.

Mon, 04/22/2013 - 11:26 | Link to Comment OutLookingIn
OutLookingIn's picture

Something is afoot Watson!

 

Mon, 04/22/2013 - 11:28 | Link to Comment FieldingMellish
FieldingMellish's picture

New Chinese proverb: Sell houses, buy gold.

Mon, 04/22/2013 - 11:57 | Link to Comment robertocarlos
robertocarlos's picture

At $250 trillion the last person to sell their house eats a rotten (thousand year old) egg.

Mon, 04/22/2013 - 11:30 | Link to Comment PUD
PUD's picture

The Zortman-Landusky gold mine is a case study of the environmental risks of cyanide heap-leach gold miningand the impacts that these operations can have on communities, water and cultural resources. The Zortman-Landusky mine illustrates how modern mine operations continue to impact landscapes and leave behind massive environmental problems and liabilities. The mine experienced many problems, such as cyanide spills, and surface and groundwater contamination from acid mine drainage. This was one of the first massive cyanide heap-leach operations to open, as well as one of the first to close, leaving behind significant pollution and cleanup problems

The mercury used by small-scale operations not only poisons the workers and their families, but is also dispersed directly into rivers, irreversibly contaminating the local fisheries and environment. Over time, dispersed mercury circulates globally, concentrating in polar regions and in the food chain. The planetary loading of this toxic element has reached a critical stage, impacting all of us. The linkage between gold mining and mercury is a deadly one that is irrevocably impacting our children's health, our precious marine resources, and the air we breathe.

Mon, 04/22/2013 - 11:32 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Is that your whole BitCoin thesis?  Gold is dirty?

Mon, 04/22/2013 - 11:36 | Link to Comment PUD
PUD's picture

Not bitcoins per se but a system of money suited for the modern age...something like bitcoins is doable and desireable

Mon, 04/22/2013 - 11:40 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Nothing changes and no system will be suitable unless the issue of fraud is addressed first.  Sorry, the stability of bicoin isn't there.  Heads are going to have to role before anyone is going to accept another intanglible storage of wealth.  History is very clear on this.

Mon, 04/22/2013 - 11:41 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Speaking of heads rolling:

http://www.businessinsider.com/johan-palmstruch-central-banking-sweden-2...

There is nothing new under the sun.

Mon, 04/22/2013 - 11:43 | Link to Comment IridiumRebel
IridiumRebel's picture

and manipulated.....must have intangible. Gold is finite. Nothing else is. I see your concern, but it will be for not.

Mon, 04/22/2013 - 11:56 | Link to Comment XitSam
XitSam's picture

Have you seen how much electricity is going into bitcoin mining recently? Do you think this is without environmental cost?

Mon, 04/22/2013 - 11:58 | Link to Comment PUD
PUD's picture

did I say bitcoins?  did I? Thought not

Mon, 04/22/2013 - 12:07 | Link to Comment espirit
espirit's picture

Upvote the troll.

Mon, 04/22/2013 - 15:43 | Link to Comment XitSam
XitSam's picture

Did I ask about a theoretical virtual currency? Did I? Thought not.

Mon, 04/22/2013 - 12:01 | Link to Comment espirit
espirit's picture

Upvote for the trolls.

Mon, 04/22/2013 - 17:54 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

Doable and desirable, indeed (and learn how to use a spell checker, too).

You, taking a long walk off a short pier is both, but why don't we see it happening?

Please, STFU.

Mon, 04/22/2013 - 11:33 | Link to Comment Tinky
Tinky's picture

Pass the tuna salad, please.

Mon, 04/22/2013 - 11:34 | Link to Comment Temporalist
Temporalist's picture

Some people say you can't eat cyanide but you should really try.  Let us know how it goes we'll all be waiting with bated breath.

Mon, 04/22/2013 - 11:36 | Link to Comment PUD
PUD's picture

why would you say such a thing?

Mon, 04/22/2013 - 11:43 | Link to Comment Temporalist
Temporalist's picture

Ohh boo hoo someone made a mean remark on the internet.  Does this mean you'll leave now?  No...probably not.  Time wasted then. 

Mon, 04/22/2013 - 11:43 | Link to Comment PUD
PUD's picture

What do you think of the ivory trade?  or child labor?

Mon, 04/22/2013 - 11:47 | Link to Comment IridiumRebel
IridiumRebel's picture

Your beef should be with child labor. Chocolate shouldnt be eaten with this thought process.

Mon, 04/22/2013 - 11:51 | Link to Comment PUD
PUD's picture

it is. The gold mining business enslaves 1000's of children. it also is the most filthy mining practice on earth. Destroys lives, eco systems and even you stupid irrational gold tards.

Mon, 04/22/2013 - 11:58 | Link to Comment IridiumRebel
IridiumRebel's picture

I get your point be as a father, I loathe slavery in any form. That being said, if I do not stack, my child will become a slave. I shall call you LIONFUCK!

Mon, 04/22/2013 - 11:59 | Link to Comment PUD
PUD's picture

You do not know that. you just think it. Gold is no guarantee of anything. All in your imagination fueled by stories like the one above

Mon, 04/22/2013 - 12:02 | Link to Comment IridiumRebel
IridiumRebel's picture

I've placed my bets. I respect your tenacity and defense in your position. I disagree LIONFUCK.

Mon, 04/22/2013 - 12:22 | Link to Comment PUD
PUD's picture

Which do you disagree with?  The mercury poisoning of the planet or the child labor? Or is it the heap leaching or the open pit toxic metal runnoff?

Thanks

Mon, 04/22/2013 - 12:08 | Link to Comment espirit
espirit's picture

Upvote the troll.

Mon, 04/22/2013 - 12:14 | Link to Comment toys for tits
toys for tits's picture

Citations or it didn't happen.

Mon, 04/22/2013 - 12:31 | Link to Comment Zero Debt
Zero Debt's picture

Gold is not a guarantee of anything because IT IS ALREADY A THING, A SOMETHING. To take possession is superior to a guarantee of possession and promise of payment. There is no need to rely on promises or trust anyone when you hold gold.

Mon, 04/22/2013 - 12:41 | Link to Comment Ignorance is bliss
Ignorance is bliss's picture

Is it "lionfuck" or Lianfuck?

Mon, 04/22/2013 - 13:26 | Link to Comment IridiumRebel
IridiumRebel's picture

LIONFUCK!

Mon, 04/22/2013 - 12:36 | Link to Comment Zero Debt
Zero Debt's picture

Your passion to discredit gold implies that your own hard work to present a viable alternative has failed.

Besides, I heard that empty houses and unused bridges and vacant malls is a waste of construction material, energy and labor, but I may, of course be wrong.

Mon, 04/22/2013 - 11:52 | Link to Comment Temporalist
Temporalist's picture

I think you should leave those poor elephants and children alone.  I will no longer reply to you on this thread my new pet troll because I don't want to push the comments down and waste any more time feeding you.

Mon, 04/22/2013 - 11:54 | Link to Comment PUD
PUD's picture

I am not a troll. I am a voice of reason and rationality on these otherwise biased and incomplete stories

Mon, 04/22/2013 - 12:08 | Link to Comment espirit
espirit's picture

Upvote the troll.

Mon, 04/22/2013 - 12:11 | Link to Comment Bay of Pigs
Bay of Pigs's picture

LMAO. Nice way to start a monday...   

Mon, 04/22/2013 - 13:07 | Link to Comment akak
akak's picture

Personally, I adore both ivory and gold.  Also blue whale steaks and dolphin sashimi.  Also bear gall bladders, tiger penises and human fetus broth.

Uh oh, I think I am blobbing-up! 
Quick, somebody check my citizenism!

Mon, 04/22/2013 - 13:27 | Link to Comment RafterManFMJ
RafterManFMJ's picture

I am not a troll. I am a voice of reason and rationality on these otherwise biased and incomplete stories

I AM NOT A WOODEN REPETITIVE DOLL! I'm a real live little boy!

Mon, 04/22/2013 - 22:46 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

IVORY trade is fine so long as excessive killing doesn’t happen. Child labour is fine too so long as it’s legal & safe and in some cases it is, and in some of those cases families will starve without the work to help. Once upon a time child labor was normal – I don’t want to see children exploited but I don’t want to see ADULT labour exploited with dangerous underpaid and/or illegal jobs either.

And yes, you are a troll. A copy-paste-bot troll.

Mon, 04/22/2013 - 12:02 | Link to Comment espirit
espirit's picture

Upvote for the troll.

Mon, 04/22/2013 - 13:29 | Link to Comment lostintheflood
lostintheflood's picture

some people are compelled to idiocy.

Mon, 04/22/2013 - 12:32 | Link to Comment ljag
ljag's picture

Yo temp

What did you bait your breath with?.....or did u mean ABATED?

Mon, 04/22/2013 - 20:09 | Link to Comment Au Shucks
Au Shucks's picture

don't try to be grammatically clever when you are grammatically unsure of your grammar. 

 

ps.

your grammar is wrong.  bated breath is the correct term.  Verb - to reduce, lower, restrict.

Mon, 04/22/2013 - 11:55 | Link to Comment robertocarlos
robertocarlos's picture

Where does mercury come from?

Mon, 04/22/2013 - 11:56 | Link to Comment PUD
PUD's picture

It is mined

Mon, 04/22/2013 - 12:10 | Link to Comment espirit
espirit's picture

+1 Skipping classes today, troll?

Mon, 04/22/2013 - 11:58 | Link to Comment XitSam
Mon, 04/22/2013 - 13:18 | Link to Comment Crisismode
Crisismode's picture

Men are from Mars.

Women are from Venus.

Trolls are from Mercury.

 

Mon, 04/22/2013 - 13:26 | Link to Comment akak
akak's picture

No, trolls are Clingons from Uranus.

Mon, 04/22/2013 - 13:28 | Link to Comment RafterManFMJ
RafterManFMJ's picture

Where does mercury come from?

From a bunch of coalescing asteroids, but that's not important right now... - Dr. Barry Rumack.

Mon, 04/22/2013 - 12:03 | Link to Comment moonstears
moonstears's picture

PUD...tell your masters you've convinced us all, we get it, and kindly go the fuck away, bu-bye.

Mon, 04/22/2013 - 12:05 | Link to Comment PUD
PUD's picture

If anyone has a master it is you. I am a freethinker and capable of objective analysis something you groupthinkers are not

Mon, 04/22/2013 - 12:12 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Are you the former poster known as bob dabolina? genemarchbanks? goldenmiddlefinger?

Mon, 04/22/2013 - 12:17 | Link to Comment PUD
PUD's picture

NO

Mon, 04/22/2013 - 12:11 | Link to Comment espirit
espirit's picture

+1 Do not feed the trolls.

Mon, 04/22/2013 - 20:14 | Link to Comment Au Shucks
Au Shucks's picture

Okay PUD.. please share with us the viable, proven alternative to Gold please.  If you do not have an alternative, you have zero credibility in the argument.  Like telling a starving boy not to eat discarded bread because it is not his property... or perhaps more similarly telling the lumberjacks to save the trees without providing them a means to earn a living in its stead. 

so, what is the solution?  And you are forbidden in your answer to go all Zeitgeist on us as that is not a solution for today, right now.

Mon, 04/22/2013 - 12:47 | Link to Comment Alpha Monkey
Alpha Monkey's picture

All the more reason to fund research into mining asteroids!! 

Mon, 04/22/2013 - 12:53 | Link to Comment Zero Debt
Zero Debt's picture

You have a point here but why single out gold? This issue is true for all mining, such as copper, silver, lead, cadmium, zinc, copper, uranium.

Why don't you promote a constructive cause instead? It has been proven by EPA over 30 years ago that mines can operate profitably without discharging waste into the water. EPA adopted a zero discharge standard at that time already. There is no technical reason why it cannot happen. The US could fix the Clean Water Act by closing this loophole. But I guess all the Obama supporters are too busy with gay rights, gun rights and contraception issues rather than serious environmental issues.

Mon, 04/22/2013 - 12:54 | Link to Comment bi-polar ben
bi-polar ben's picture

Gold = Small operations poisoning families

FRN = Largest Operation financing wars which kill 100 thousands of people and will eventually starve millions

 

ill take the gold.

 

Mon, 04/22/2013 - 11:32 | Link to Comment JustObserving
JustObserving's picture

Twenty years ago, China's real estate was worth $1 trillion to $2 trillion.  Now it is worth $250 trillion.  Chinese have lots of money to buy gold unfortunately for the Fed that keeps attacking gold.

Indians are also buying massive amounts of gold due to high inflation in India.

The Fed will see massive losses in gold.

Mon, 04/22/2013 - 11:31 | Link to Comment Al Huxley
Al Huxley's picture

Shouldn't be a problem, right?  I mean, just a week ago or so 'somebody' dumped 400 tons on the Comex.  So that should be plenty, right?  All they have to do is load it up and deliver it.  I can't fucking wait to see how this turns out.

Mon, 04/22/2013 - 11:37 | Link to Comment Pareto
Pareto's picture

Where I am at, spreads continue to widen between spot and retail price (>10%).  Supply is incerasingly becoming restricted - almost inelastic.  Can only put an order in and hope it gets filled.

Mon, 04/22/2013 - 11:54 | Link to Comment Terminus C
Terminus C's picture

At my dealer, silver is $4.50 over spot.

Gold is $76 over spot.

Mon, 04/22/2013 - 12:17 | Link to Comment Pareto
Pareto's picture

Almost 20%.  Thats brutal.  OTC quantity has been restricted from 25 to 10 rounds.  That was last week.  Don't know today.  Am afraid to go in and find out.  You can place orders, but, you're waiting 8 weeks minimum.  But again, that was last week.

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