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Eric Sprott: The Golden Answer To Chinese Import Data

Tyler Durden's picture




 

Submitted by Eric Sprott, Etienne Bordeleau, and David Franklin of Sprott Group,

Manufacturing data in the last several months has suggested that economic growth around the world is slowing. However, China’s export growth surprised the market this week and unexpectedly accelerated in April, even as shipments to the U.S. and Europe fell. This has created a conundrum for analysts and market watchers. How can China be growing while the countries that purchase its exports are slowing? The numbers don’t add up.

Digging deeper into these figures, several analysts have come to the conclusion that the numbers are faulty. Bank of America Corp. and Mizuho Securities Co. analysts have gone so far to say the figures have been inflated by fake reports. An “astounding” 92.9 percent jump in exports to Hong Kong, the most in 18 years, raises questions on data quality, researcher IHS Inc. said. They even call some of the data ‘absurd’, suggesting that exporters are ‘faking orders’ to obtain export-tax rebates. These observations challenge the credibility of Chinese economic data once again.

It is has been suggested that China’s robust appetite for commodities from iron ore to crude oil show that Chinese domestic demand is healthy, alleviating concerns about a renewed slowdown. China’s recent surge in gold imports puts this ‘increase in domestic demand’ observation into question. Our analysis shows that trade statistics are biased by the large gold inflows the country has experienced over the past few years. Because gold imports are accounted for in the “import” numbers of the current account (instead of the capital account like other investments), they artificially inflate the total import numbers published in the Financial Press. We say “inflate” because gold, unlike other materials, is mostly used for investment purposes and as such should not qualify as an import of “goods and services”, which is used to measure real economic activity. Now that China is importing significant quantities of gold, trade flow numbers are becoming more distorted.

When we strip out the ‘gold effect’, we find that 37% of the increase in imports over the last 12 months into China is due to the massive amount of gold that’s being imported. In Table A, gross imports increased by $82 billion, but $30 billion of this increase was from gold alone.  Put another way, more than one third of China’s import growth has been solely from its citizens’ desire to own gold and not from a growing domestic economy.

Table A

For the 12 months ending Gross Imports Gold Imports (tonnes) Value of Gold Imports Imports excl. Gold
  (USD Bn) (tonnes) (USD Bn) (USD Bn)
March 2012 1,772 546 32 1,740
March 2013 1,854 1,071 62 1,792
Change 82 525 30 52

Source: Bloomberg, General Administration of Customs (via Bloomberg), Census and Statistics Department – Hong Kong, Sprott Asset Management

Many analysts have attributed China’s increasing imports as signs of a healthy manufacturing sector, or increasing investments in infrastructure and property. Our simple analysis shows that more than one third of the increase in imports is due to China’s increasing gold consumption. We expect this will only increase in the near future when the explosion of gold buying in April is accounted for. New reports have suggested that Chinese housewives (affectionately known as ‘aunties’ according to the Beijing Daily newspaper) have purchased as much as 300 tons of gold in the past three weeks alone, worth almost $16 billion USD. This new gold buying could have a significant impact on Chinese import statistics and force analysts to reconsider the strength of the Chinese domestic economy.

 

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Sun, 05/12/2013 - 16:18 | 3554084 Aeternus
Aeternus's picture

It's only a matter of time until COMEX and LBMA run out of phyzz.

 

http://www.youtube.com/watch?v=deuC8GPr31A

Sun, 05/12/2013 - 16:18 | 3554092 Motorhead
Motorhead's picture

Ag & Au, bitchez!

Sun, 05/12/2013 - 16:22 | 3554098 Room 101
Room 101's picture

Wait for it. 

Sun, 05/12/2013 - 16:39 | 3554137 BigJim
BigJim's picture

Aw Tyler, don't I get a "h/t"?

Sun, 05/12/2013 - 16:44 | 3554143 debtor of last ...
debtor of last resort's picture

See something, say something.... ;-)

Sun, 05/12/2013 - 16:52 | 3554156 James_Cole
James_Cole's picture

Hey Sprott, how are your ETFs doing? Good times am I right? Guess everyone is pretty stoked they can pay you guys high fees (let's be fair they are a bit high - but obviously worth it) to climb aboard the Sprott rocket to success. Not every etf manager can rack up a fantastic negative ~40% ytd. 

Keep up the good work, look forward to more hot stock picks like csi.to

Sun, 05/12/2013 - 16:59 | 3554170 Dr Benway
Dr Benway's picture

Here's one way for his funds to engineer some profits fraudulently, to make up for it.

 

Take flailing penny stock, inject enough money to control share price, ramp it 50% immediately, book 50% unrealized profit immediately. Check out Sprott Global's great investment in Birimian Gold.

 

http://au.finance.yahoo.com/echarts?s=BGS.AX

 

Sun, 05/12/2013 - 17:05 | 3554178 James_Cole
James_Cole's picture

Sprott Asset Management's side business of conning investors into garbage penny stock exploration companies unfortunately doesn't work as well when applied to their ETFs. 

Sun, 05/12/2013 - 18:32 | 3554265 Pinto Currency
Pinto Currency's picture

 

These are the declared gold imports through Hong Kong.

Actual gold import levels are likely much higher. 

China is accepting gold as payment for goods delivered to Africa and other nations.

It also has undeclared physical off-take agreements with Australian miners, among others.

Sroll down at this link.  Where is the gold coming from?:

http://www.goldminerpulse.com/v/shanghaiGoldExchangePhysicalDelivery.php

Sun, 05/12/2013 - 18:39 | 3554364 buyingsterling
buyingsterling's picture

People invest with Sprott because they trust him to store actual metal that they can have delivered. If you don't like it don't participate. As for the penny stocks, any time spent researching them and valuing them has to be backed by a fairly sizeable investment to warrant the hassle. In other words, stop crying because you don't own any physical metal. I'm sure you can load up when it tanks vs increasingly valuable fiat.

Sun, 05/12/2013 - 18:59 | 3554413 James_Cole
James_Cole's picture

People invest with Sprott because they trust him to store actual metal that they can have delivered. If you don't like it don't participate.

Whatever reason people are investing in his mutual funds it's certainly not performance lol

Sun, 05/12/2013 - 18:05 | 3554291 quasimodo
quasimodo's picture

Troll? Or are your etf's down -40% ytd?

Sun, 05/12/2013 - 21:15 | 3554747 BigJim
BigJim's picture

Christ, you are a dufus. Mark McGoldPrick... that was one of your previous aliases, wasn't it? We keep beating the shit out of you, but after licking your wounds you just have to come crawling back, don't you.

Can you please just give us a list of all the future aliases you have in mind? So we can down-arrow them without having to waste our time reading them.

Sun, 05/12/2013 - 21:15 | 3554758 akak
akak's picture

James Cole certainly is one committed anti-gold troll, whomever he may have been here earlier.

He certainly has the stink of a paid .gov shill and propagandist about him.

 

Sun, 05/12/2013 - 21:43 | 3554845 James_Cole
James_Cole's picture

Yes not only am I paid .gov shill I am actually head of the comex which is why I am CONSISTENTLY correct on the price direction of gold. Meanwhile Sprott + foolish commentators on here are CONSISTENTLY wrong.

Sprott loses 40% in his garbage ETF YTD and people on here love him, I am correct 8 months straight and people whine at me like little babies.

Reality sucks dont it!

Sun, 05/12/2013 - 23:40 | 3555146 fockewulf190
fockewulf190's picture

I take you invest in paper.  I used to do that years ago, but got sick of all the manipulation, fraud and flat out printing of fiat out of thin air. Now I stack phyzz as fast as I can convert this shit I´m being given for my hard earned work.  It would be great if I could trust the markets again, but they are hopelessly broken.  Maybe one day after the Great Reset.  Good luck to you.

Mon, 05/13/2013 - 00:47 | 3555260 James_Cole
James_Cole's picture

I take you invest in paper.  I used to do that years ago, but got sick of all the manipulation, fraud and flat out printing of fiat out of thin air. Now I stack phyzz as fast as I can convert this shit I´m being given for my hard earned work.  It would be great if I could trust the markets again, but they are hopelessly broken.  Maybe one day after the Great Reset.  Good luck to you.

Gold has proven to be a good long term investment century after century, naturally I think it's a good thing to have a portion of ones portfolio in.

However, like any market the pm market features prominent con-artists trying to take advantage of peoples ignorance. And there are certainly people with an unrealistic expectation of the market and a naiveté of how it functions so I advocate caution. That's it, not telling people to invest in 'paper' or sell their gold. My basic point is don't believe all the hyperbole and don't expect a quick turn around. 

People on here have very thin skin and consider even mild criticism to be totally unacceptable. 

Mon, 05/13/2013 - 02:53 | 3555361 akak
akak's picture

James, you come across here like a (slightly) more polite version of Jon Nadler, trying to ostensibly present yourself as the voice of reason, "caution" and moderation regarding gold, yet you continually misrepresent almost every aspect of its inherent function and value as a monetary asset.  Now why would anyone do that?

Mon, 05/13/2013 - 03:37 | 3555384 James_Cole
James_Cole's picture

yet you continually misrepresent almost every aspect of its inherent function and value as a monetary asset.

If you consider our odd disagreement over jewellery being a separate classification of gold demand to mean 'every aspect of its inherent function and value as a monetary asset' then yes.

Otherwise, I see the value of gold in a pretty non-controversial way - great hedge against inflation / store of wealth. 

My comments that make people angry on here generally involve me complaining about con men like Sprott or saying the story around physical shortage doesn't add up. 

All the same, I don't argue that those factors make gold a bad investment. It just means to me there are good and bad times to buy gold and that it should be seen on either a much longer timeline or as a much riskier investment than what the cabal of con artists suggest. 

Mon, 05/13/2013 - 05:11 | 3555445 silvermail
silvermail's picture

@ James_Cole

I've heard exactly the same arguments and reasons in 2008, when the price of gold fell from $ 1,000 to $ 700.
In 2008, I read these arguments and reasons from some eccentrics, but I laughed at them and buying gold and silver.
And right now I too read these arguments and reasons, I laugh again and I again buy gold and silver. LOL

Sun, 05/12/2013 - 16:24 | 3554104 Alpo for Granny
Alpo for Granny's picture

Come on Sprott...bust this thing won't ya?

Sun, 05/12/2013 - 16:29 | 3554115 jcpicks
jcpicks's picture

BTFD is meaningless now. Spot no longer has any association to physical.

Just buy the phyzz!

Sun, 05/12/2013 - 18:10 | 3554300 SpykerSpeed
SpykerSpeed's picture

Aaaaany day now!  Just you wait and see!  Only a matter of time!

That seems to be the theme of ZeroHedge and gold bugs.

Sun, 05/12/2013 - 18:30 | 3554345 nobodyimportant
nobodyimportant's picture

Idiot!

Sun, 05/12/2013 - 18:41 | 3554369 buyingsterling
buyingsterling's picture

Don't be hard on him. He spends all his time in the gym, waiting for results 'any day now'.

Sun, 05/12/2013 - 16:21 | 3554096 Rustysilver
Rustysilver's picture

So, all Chinese economic data is fake. Except for gold. Right!

Sun, 05/12/2013 - 16:35 | 3554126 duo
duo's picture

Damn near everything in the world right now is fake.

Our money, our food, tungsten in our gold, global warming and cooling at the same time, economic statistics, prices, interest rates, boobs, you name it.

I believe the Cs 137 from Fukushima is real, though.

Sun, 05/12/2013 - 16:57 | 3554165 Rustysilver
Rustysilver's picture

duo,

Your are saying that boobs are fake too. Damn.

Sun, 05/12/2013 - 19:57 | 3554547 duo
duo's picture

most of them, except in France

Sun, 05/12/2013 - 21:58 | 3554875 Rory_Breaker
Rory_Breaker's picture

The ones in Greece? Yes.

Mon, 05/13/2013 - 06:08 | 3555477 Cacete de Ouro
Cacete de Ouro's picture

All the trade stats for gold are 'masked' I would have thought.
For the UK and Switzerland they are at least. I haven't checked for other countries. It would be a full time job...someone can pay me and i'll do it...

For the UK:
the customs authorities and trade collection agencies collect monetary gold imports and export stats but they do not report them. Essentially they report rolled up trade categories but the individual gold category is not reported. To prevent anyone calculating the missing figure by adding up all other categories, they 'mask' and do not report othed categories, so its impossible to goal seek or reverse engineer the data.

This is all done at the request of the Treasury and the Bank of England, in 'the national interest', because old boy we can't have anyone knowing how much gold is flowing in and out of London, you understand..

Mon, 05/13/2013 - 07:59 | 3555630 jerry_theking_lawler
jerry_theking_lawler's picture

i'm OK with fake boobs. party on.

Sun, 05/12/2013 - 16:40 | 3554138 BigJim
BigJim's picture

 So, all Chinese economic data is fake. Except for gold. Right!

Only the Chinese stuff is ersatz. If you've got any data from a Western gub, it's the Real McCoy. 101% !

Sun, 05/12/2013 - 16:52 | 3554160 Rustysilver
Rustysilver's picture

BigJim,

I am in US. All data and statisitics from any .gov in the west as well as in east is as real as Chinese lamb.

Sun, 05/12/2013 - 19:15 | 3554444 Jendrzejczyk
Jendrzejczyk's picture

With so few simple pleasures left, you had to ruin Chinese lamb. ;[)

Sun, 05/12/2013 - 21:09 | 3554741 BigJim
BigJim's picture

Chinese lamb is real!

Admittedly, their lambs are unusually small... and have hairless tails... but they ARE real!

Make me laugh! 

Mon, 05/13/2013 - 05:12 | 3555446 BigJim
BigJim's picture

 BigJim,

I am in US. All data and statisitics from any .gov in the west as well as in east is as real as Chinese lamb.

Sorry, my bad. I should have said 153.127% real. 

Sun, 05/12/2013 - 18:37 | 3554357 DeadFred
DeadFred's picture

Fake data makes one wonder about this calculation as well. The 37% figure assumes the data is real but most likely the Chinese would under report gold and over report other economic numbers meaning the 37% could be a gross underestimate. War is coming and China will likely be involved. The ramp up across all commodity types has an end game feel to it in my estimation. Could be an interesting summer manuevering season.

Sun, 05/12/2013 - 16:28 | 3554108 observer007
observer007's picture

GERALD CELENTE: PRICE OF GOLD IS RIGGED

Gerald Celente comments on gold market rigging, among other things. Celente says: "Why aren't gold and silver prices going up? They should be. Everyone knows that game is rigged. I believe that the Federal Reserve and the other central banks are manipulating the prices to keep interest rates low."

http://homment.com/celente-goldwar

Sun, 05/12/2013 - 18:35 | 3554351 nobodyimportant
nobodyimportant's picture

Gerald Celente -- smart guy - right?  Then how in the hell did he get ripped off by GF Mobile?

Playing the leverage game by someone who should have known better!

Sun, 05/12/2013 - 19:51 | 3554529 Tinky
Tinky's picture

He liked it because it rhymed with "MF Global". Can you blame him?

Sun, 05/12/2013 - 16:29 | 3554113 JumpinJonnyK
JumpinJonnyK's picture

I just keep buying gold and silver every couple months.  Not worried about the price right now, because it's going to go higher in the future (at least I think).  I was a buyer of junk silver coins for silver but the premiums are REALLY high right now (here's the best silver calculator I have found http://www.coinvalues.com/silver )  Im thinking about buying 10 oz silver bars to save money on premium was wondering what some people think about this idea. 

Sun, 05/12/2013 - 18:09 | 3554297 Likstane
Likstane's picture

They sink faster, but they are easier to find.

Sun, 05/12/2013 - 18:12 | 3554310 Room 101
Room 101's picture

You need to look at the spread.  What can you buy for (cheapest dealer) vice what you can sell for (most generous dealer). The 10 Toz bars are pretty good right now; about a .50 spread/per Toz. 

https://comparesilverprices.com/

Sun, 05/12/2013 - 16:29 | 3554116 forwardho
forwardho's picture

 Its a hard.

Its a hard.

Its a hard rain gonna fall.

Sun, 05/12/2013 - 16:31 | 3554120 RaceToTheBottom
RaceToTheBottom's picture

Chinese understand the historical role of Gold.

It will take a while for thier hubris to match that of WS Scum

Sun, 05/12/2013 - 16:32 | 3554123 Kirk2NCC1701
Kirk2NCC1701's picture

How many gold mines does Eric own up there in the Great White North?  Or anywhere else?  Which ones?  I know I would, with his 'fiat'.

Sun, 05/12/2013 - 16:33 | 3554124 W T F II
W T F II's picture

Gold will go still lower in front of NWO...then buy...!!

Sun, 05/12/2013 - 16:55 | 3554164 Rustysilver
Rustysilver's picture

W T F II

My personal question (to myself) is as follow: do I panic and buy now or wait for a some sign to go in.

Mon, 05/13/2013 - 05:39 | 3555459 silvermail
silvermail's picture

@ Rustysilver

No need to panic. You just have to buy now, do not panic. Are you sure that the price will be much lower? Who told you that, God?
What will happen to prices if war breaks out in Syria? What will happen to prices if the example of Cyprus will go the rest of Europe?
The ship of the world economy is sinking like the Titanic. Right now you can book a place in the lifeboat. But you want to wait to find a more beautiful lifeboat and at a lower cost per seat.
But you are taking a risk not to have time to find a place in the lifeboat. And then you will lose the opportunity to take a seat in any lifeboat.
You like to play Russian roulette?

Sun, 05/12/2013 - 17:04 | 3554176 Kirk2NCC1701
Kirk2NCC1701's picture

For some reason, there are still ppl here who seem to think that lower PAPER price means lower Bullion price.  This is true only to a point:  Where the bullion demand (run) does not shock the supply chain again.  Like it did in recent weeks.

Bullion price is set at the low end by the Supply Chain:  Miners and theri marginal cost, and the dustributors (wholesale, retail).  You may see retail prices creep a little lower (if there is not 'run'), but it is bound to bottom out at some point, for the reasons just given.

If you're talking about buying paper-gold (ETF), well, have fun and good luck.  Lemme know how it 'pans out' for ya.

Sun, 05/12/2013 - 17:22 | 3554208 Rustysilver
Rustysilver's picture

Kirk,

I don't understand, nor would ever, buy a substitue. Real stuff is real; paper is and can be fake.

Sun, 05/12/2013 - 19:16 | 3554450 Room 101
Room 101's picture

Well, the reason why some of us do think that a lower paper price means lower phyzz prices is because it does.  It might not happen immediately with a sudden drop, but as of right now you can buy phyzz Au for 1-4% premium and Ag for 5-6%.  That's nothing much in the grand scheme.  

Sun, 05/12/2013 - 20:34 | 3554637 Jungle Jim
Jungle Jim's picture

I have never owned any paper-gold (ETFs). All the silver and gold I have ever owned has been 100 percent physical.

Last month I was forced to sell 48.08 Troy ounces of physical silver, just to pay the rent and keep the lights turned on and the phone connected. I sold it for a great deal less than what I had paid for it.

This week I will be forced to sell some more of my (physical) silver, or some of my (physical) gold. Or some of both. Just to pay the rent and keep the lights turned on and the phone connected. Also to pay for food, toilet paper, gasoline, etc.

I will have no choice or discretion in this matter. I have NO other income whatsoever. No job, and no government assistance of any kind. No food stamps. No welfare. No dole. No "disability" payments. No nothing.

Before selling basically ALL of my ninety percent silver, in desperation I did finally beg my rich uncle to lend me just enough to live out the month of April (~$250). He flatly refused, and basically said "Get a job." 

I then turned to my very well-paid (but otherwise clueless) half-sister with the same request. SHe also turned me down cold.

I have already sold everything else that anyone is willing to buy, even at a pathetic fraction of its value.

So, yes, the "paper" price matters plenty to me, because that will determine what price the coin shop guy will pay me for my silver and/or gold. See how that might matter?

Sun, 05/12/2013 - 22:03 | 3554889 RaceToTheBottom
RaceToTheBottom's picture

Have you tried your rich uncle's idea?  Hate for you to sell your gold/silver now....

Mon, 05/13/2013 - 02:11 | 3555328 Jungle Jim
Jungle Jim's picture

@RaceToTheBottom: Well, let' see, I'm 56, and have a number of health problems, all going untreated. After decades as an unskilled, manual laborer -- hard labor, as in heavy lifting, loading and unloading trucks, digging ditches with pick and shovel, etc. -- I can no longer walk very far, or stand in one place for long. Basically, I'm a worn-out, used-up wreck.

What sort of job do you think I could get on short notice? In time to do any good, I mean? Dishwasher, maybe? Anything that pays more than minimum wage? Or even minimum wage?

I'm literate in the sense of being relatively widely read. Woo-woo. I even have a college degree. In history, LoL! I'm relatively well-informed about current events.

But no employer within 150 miles of here cares about that, or even whether I can read or write anything coherent. Besides that, I can't touch-type, and I know nothing about programming computers. My Internet/computer skills are taxed to their limit just to post on message boards like this. I don't even know how to post a picture or photo, which is why there isn't any.

When I saw which way things were going for me in 2010, I staked everything I had left on my PMs. I lost. It was a sucker bet. I'd have been much better off to have just hoarded greenbacks. They've lost considerably less purchasing power in three years than my once-tall, shiny PM stacks.

I look at these silver Eagles now and think they might about as well be so many 40.6 mm stainless steel plumbing washers. (Have you priced those lately?)

If my uncle had helped me with $250 in time, it would have already have saved me more than ten times that amount in what I've lost by being forced to sell a rare and expensive pistol for barely half its true worth, and ALL my 90 percent silver at a ridiculously suppressed price.

I have a keen sense of obligation, and I always repay real-world favors if at all feasible. I defy any living person to say I ever did not. If the tide had really turned anytime soon, I would have been able to easily pay back the loan ten-fold. But that was lost on him.

I'm not sure it would sway him if he understood that. I'm the black sheep of the family, now, and they all think mostly in terms of what someone does or doesn't deserve. To them it's better that generational wealth be wiped out and future generations sink into poverty (or never be born at all), than that someone they consider undeserving catch a break.

Mon, 05/13/2013 - 05:01 | 3555438 JOYFUL
JOYFUL's picture

That's a great anecdotal story bout what it's like to have gone 'all in' chum. Must be thousands like yourself littering the roadsides of the precious metals highway to hell ...but few step up to testify.

All I can tells ya, you holding a glass which is half full, and describing it as... half empty. Sure you're feeling the pain of having to part with some of what you assumed in your prescient enthusiasm to be the accrued winnings of a sure bet. Great horse, but it didn't come in. End of story.

But unlike the guy who put down his entire savings on an exactor tip which he overheard in the bar last night... your ticket is not yet punched. The firepower that you still own is still intact... less you piss into your pockets and ruin it all for good! This is not a game for guys who think that " If the tide had really turned anytime soon" I woulda n I coulda...this is all about hunkerin down under fire. You're still alive and not missing any body parts... everything else is gravy in these conditions.

Lil bit o faith required here ol son... jus hold on - http://youtu.be/3-cgouy6lE4 -Kenny Bobien & Stephanie Cooke - Hold On To Me

go over to Gentleman Jim's site every now n agin and learn to keep the faith! Our day will come.

 

Sun, 05/12/2013 - 16:58 | 3554169 Kirk2NCC1701
Kirk2NCC1701's picture

Yes Eric, we all f'n know that PM is moving West to East.  The real and far more interesting question is:  Why are Western banks selling their bullion and Eastern banks buying it?  And why are JPM and the Squid (GS) in the middle of all this?  Why?

Is as though the Western CB's (Club Fed) are planning for gold-free currency (or SDR), and the Club Red (Russia, China) are planing oh having their CB's as Gold members.  Two different sets of CB's.

I we live in the West, will having gold matter here, if TPTB refuse gold?  Who benefits, aside from Eric and his ilk (coin, bullion dealers)?

Sun, 05/12/2013 - 17:30 | 3554216 Mineral-Invest
Mineral-Invest's picture

Kirk, owning and buying gold is a big fat middle finger aimed at the experiment known as fractional reserve banking / debt economy / GDP-infinity-model.

 

Owning gold and silver is a hedge against all of this madness going on.

 

I'd rather have Eric Sprott  make another fortune out of this, than to keep partaking in this centrally planned madness.

 

Ofcourse owning gold in the west will matter. Once they roll out the SDR backed by a basket of currencies and gold, gold will be money for sure.

Sun, 05/12/2013 - 18:19 | 3554267 Quinvarius
Quinvarius's picture

SDRs already exist.  That is how you know they don't work.

And you summed it up with your own sentiment.  Jealousy.  Eric Sprott is simply correct.  The bankers refuse to take their losses so they keep digging their hole.  Just like JPM with the Whale trade.  They are just jealous and refuse to take losses even when in an impossible position.  They would rather take down the the whole system than take their earned losses.  If they didn't want Sprott to have all the gold, they should not have insisted on selling it at under 15% of its actual value.  So yeah, Sprott is already fabulously wealthy.

Sun, 05/12/2013 - 19:25 | 3554469 alentia
alentia's picture

As it currently stands, bank's gold reserves are not recognized by Fed, ECB and other Central banks at 100% value. Banks are struggling to keep their "balance shits" in order, to get more "free dollars. euros, yens from CBs. But most likely JP, GS, etc top managers and the board are net buyers of their own banks physical gold. Why would they care about actual corporations (banks) and shareholders, the times ahead are all for one, but not one for all. 

 

I expect paper gold to drop another $500-$1,000 in the months ahead, but physical remain at around $1600-$1700. When miners wake up it will be another ball game.

 

As an example, gold dropped 0.025% last week, we simply increased premiums by the same amount and people are buying it.

Mon, 05/13/2013 - 07:15 | 3555552 supermaxedout
supermaxedout's picture

As it currently stands, bank's gold reserves are not recognized by Fed, ECB and other Central banks at 100% value.

Thats not true.  By January 2013 gold has moved up the value ladder - no more 50% discount mandatory).  The new BIS regulations shows clearly that gold is regarded as a risk free asset (such as cash US Dollars, Treasury Notes etc, German Bunds and so on).  This rule is already in place in Switzerland and several other mayor countries (including Saudi and Australia if I remember correctly).  The ECB is going to introduce this in a few months and also the US is doing it. Its just not heralded but its a fact.

Sun, 05/12/2013 - 20:00 | 3554522 silvermail
silvermail's picture

"...matter here, if TPTB refuse gold?"

You are very exaggerating the role of the West. What is the West?

- This is a smaller part of the population of the planet.

- This is a smaller part of the land.

- This is a smaller part of water resources.

- This is a smaller part of the natural resources.

- And it's a smaller part of the financial resources.

Even if the West along with the U.S. and the Fed suddenly disappear from the face of the earth, a gold will be retain the global value as real money for mankind.
http://english.farsnews.com/newstext.php?nn=9107168122

Sun, 05/12/2013 - 22:36 | 3554985 JOYFUL
JOYFUL's picture

+1

your point is a stunning intrusion onto a delusion... that the 'west' matters anymore. Providing a link to a news source which fails to follow the prescription of the pharisee-controlled fake news narrative gives the onlooker an opportunity to see this point... in action, so to speak. Only because what they read\watch gives the Gulagistani inmates a continued sense of being at the center of the universe, do these persons believe that they are not peripheral to the real economy... and that their continued existence is a guaranteed thing/ watching them natter away about China whilst the movers are carrying out their household possessions at the direction of the baliff is a most bizarre phenomena to observe.

Their wealth hollowed out or 'missing'... their personal liberties vanished like smoke, future options of mobility and\or investment elsewhere tightly controlled and also disappearing - denizens of the fallen lands don't seem to grasp still that 'they' are in the course of vanishing... as a culture... a people... as a market.

I can only compare it to the story line of the movie Carnival of Souls. One of the spookiest Hollow-wood ever made.

Mon, 05/13/2013 - 06:03 | 3555474 silvermail
silvermail's picture

@ JOYFUL

Please forget about Iraq and a link, that I cited at the end of my post.
Just think of the West - it is really only a minority of humanity, earth, water, natural resources and financial resources. West - it's just more propaganda and lies.

Sun, 05/12/2013 - 22:04 | 3554898 Nitrocharged
Nitrocharged's picture

When idiots like Bernanke say gold isn't money - it kind of points out where the problem lies...

 

http://www.youtube.com/watch?v=OghDOApA-1k

Sun, 05/12/2013 - 16:59 | 3554171 Sudden Debt
Sudden Debt's picture

just look at the American deficit!!!
is that also about gold imports?.....

Sun, 05/12/2013 - 17:17 | 3554200 Save_America1st
Save_America1st's picture

and the U.S. is counting it's massive gold exports to fudge it's own numbers...exporting all our gold to China isn't exactly the hallmark of a robust export economy of goods and/or services.  But they still count it, don't they?  What are they going to count when all the gold runs out?  We don't even make "widgets" anymore! lol

Sun, 05/12/2013 - 17:54 | 3554252 hardcleareye
hardcleareye's picture

Pettis has a new post on China Investment and consumption, goes into a little more detail.

http://www.mpettis.com/2013/05/10/investment-and-consumption/

Sun, 05/12/2013 - 18:21 | 3554331 devo
devo's picture

Sprott can suck it; he sold his silver.

Sun, 05/12/2013 - 22:57 | 3555037 James
James's picture

devo, It is my understanding that the Silver sold by Sprott was accumalated @ $9.00 or less. Held a long time. Ask yourself if you had Silver and price tomorrow was $50.00 would you consider cashing in SOME? Same thing. He did'nt sell it all.

Remember, Sprott (Potter) is'nt selling, Sprott (Potter) is buying.

Myself I can't dismiss a multi-billionaires financial moves as uninformed. That's how he got rich.

 

Sun, 05/12/2013 - 19:26 | 3554472 q99x2
q99x2's picture

PANIC

Sun, 05/12/2013 - 19:56 | 3554533 Loophole
Loophole's picture

Gold is going East because our politicians have sold us out to the Chinese, I suspect.  Remember the Chinese lecturing us for our money printing about 5 years ago?  But it has stopped despite the fact that we are continuing to print.  I'm inclined to think the Chinese have just decided to accumulate as much gold as they can, and then replace the dollar as the world's reserve currency with a partially gold backed currency.  Meanwhile, the powers that be here now are continuing to borrow from themnow for domestic spending here and investing accordingly.

 

 

Sun, 05/12/2013 - 22:07 | 3554907 Nitrocharged
Nitrocharged's picture

The big gold buyers are also part of the BRICS natons who want to get away from the reserve dollar.

Sun, 05/12/2013 - 22:07 | 3554908 Nitrocharged
Nitrocharged's picture

The big gold buyers are also part of the BRICS natons who want to get away from the reserve dollar.

Sun, 05/12/2013 - 22:43 | 3555000 JOYFUL
JOYFUL's picture

Let's see if I can help out here... yes your point is worth repeating.

The big gold buyers are also part of the BRICS non-nato nations who want to sink the reserve dollar.

They are but months away from achieving that goal. Which is why all the fuss in the ME... it's now... or never.

Mon, 05/13/2013 - 09:37 | 3555863 silvermail
silvermail's picture

@ JOYFUL

Why "it's now... or never"?!

The U.S. contribution to total global GDP, almost twice less, than U.S. consumption from the world's global GDP.
I'm sorry, but this is called as "country-parasite."
Today everyone knows about it, but not all can talk about it out loud.
The world is tired to feed U.S. free lunches at their own expense.

For this reason, the Euro currency was created. For this reason, China made ??a firm peg the yuan to the dollar.

Today the whole world is against the hegemony of the U.S. dollar. Just some countries are doing it openly and some countries do it covertly.

The dollar is doomed. The only question is whether new World War, preceded the death of the dollar or not.

 

Sun, 05/12/2013 - 20:53 | 3554706 awakening
awakening's picture

I'll take it China is about to sneeze again, means winter in Australia is going to be very cold.

Sun, 05/12/2013 - 21:12 | 3554750 Divine Wind
Divine Wind's picture

 

 

The big question is what happened to PUD?

Sun, 05/12/2013 - 21:39 | 3554828 Almost Solvent
Almost Solvent's picture

Those lions in his avatar stopped fucking and ate him, then shat over the remains of Johnny Bravo and Master Bates . . .

Sun, 05/12/2013 - 21:24 | 3554786 Herdee
Herdee's picture

Sprott even owns a chunk of a little micro-cap on the Toronto Venture Exchange called Wildcat Exploration.Wildcat owns the largest land position on the Uchi Sub-province gold belt and is positioned near Sangold.It's the same belt that some of the biggest miners are on which stretches across Northern Ontario and runs up to Flin Flon,Manitoba.As well, they are exploring in Saskatchewan and in New Brunswick.They recently partnered with one of the biggest lead miners in the world from Missouri who has a Canadian exploration arm now.

Mon, 05/13/2013 - 00:07 | 3554887 Rory_Breaker
Rory_Breaker's picture

And now Real Estate Investment Trusts (REIT) (for muppets): Http://economictimes.indiatimes.com/markets/global-markets/investors-in-...

Sun, 05/12/2013 - 23:39 | 3555113 JOYFUL
JOYFUL's picture

With the lessening of it's poisoned legacy of "communism"  a certain amount of 'revisionist' scholarship has been allowed to enter into competition with the ideological narratives which China still pays lip service to.

Out of  that new scholarly probing has dawned a terrible realization... not only were the Chinese held hostage to a clique of western-trained and financed adventurists who used their hegemonist ambitions masked as a "peoples crusade" to build up personal fortunes and power - but it turns out that they were guided at every step by an 'inner politburo' of foreign agents whose ahhhh...[ethnicity] shall we say...bears a startling resemblance to that same one which operates the de facto 'inner politburos' of all of the satrapies of the formerly free fallen lands of the west! http://jewishfaces.com/china.html

Awareness of this historical fact ...and as the last of the true 'leaders' of the Chinese Revolution now die off... a counter propulsion of revulsion to their legacy of terror has made the Chinese intelligensia wary of whatever comes their way out of the poisoned west...

Almost two centuries of pillage and humiliation at the hands of foreign powers (who turn out to have been in their turn... also hollowed out victims of an internal phariseutical putsch) have left the Sino cultural imagination struggling to find new compass points to orient with... return to the past glories of Confucian myth... or find a new story line to follow in keeping with the new millenium? Whatever the ultimate choice of the future road to follow... it will not be one that emulates the west... only now are even the Chinese waking to that reality! They are finally free to choose...

as for the west... what exactly would you expect of a people who have been hoodwinked and headfaked by your fathers for generations past? Yes, the Chinese are practising duplicity and mercantilist trickery uponst youse... having forced to become beggars at your tables... they have learned the lessons of their former masters well... and are intent pon applying them!

 

Mon, 05/13/2013 - 00:16 | 3555209 GoldenDonuts
GoldenDonuts's picture

Well I guess that as long as the People's "Liberation" Army are willing to shoot their fellow citizens then China will remain one country.  Building cities for nobody and bridges to nowhere has to come up and bite them in the ass at some point.

 

 

Mon, 05/13/2013 - 00:16 | 3555210 GoldenDonuts
GoldenDonuts's picture

Well I guess that as long as the People's "Liberation" Army are willing to shoot their fellow citizens then China will remain one country.  Building cities for nobody and bridges to nowhere has to come up and bite them in the ass at some point.

 

 

Mon, 05/13/2013 - 04:37 | 3555424 JOYFUL
JOYFUL's picture

Can't argue with that well-reasoned thesis chum! ... in fact...

I can't even understand what you is on about! But hey... lay it down a third time and mabee it'll all come clear!

Cheers! ...but hold the crullers pls.// that a "Timmies" bag o'er yur head or you Funkin n Dunkin Bro?

Sun, 05/12/2013 - 23:36 | 3555133 Son of Loki
Son of Loki's picture

The China Gubbermint encourages its people to buy gold as a store of wealth. Makes sense; if yoru people own the yellow metal, the gov is also increasig its wealth. I notice Singapore wised up and removed limits and taxes on its denizens importing gold into their warm Singaporean pockets.

Mon, 05/13/2013 - 06:15 | 3555484 silvermail
silvermail's picture
Canada's Gold Reserves -- the Vault Is Empty

http://www.goldminerpulse.com/

Mon, 05/13/2013 - 06:24 | 3555490 Urban Redneck
Urban Redneck's picture

Then the SNB needs to pull its couple hundred tons out of Canada. Yesterday

Good thing they already won the petition battle in Switzerland, and good luck with the petition in Canuck land (too bad it isn't binding)

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