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Guest Post: Gold Is Being Supplied By Western Governments
Submitted by Alasdair Macleod via GoldMoney blog,
There has been considerable throughput of gold in western capital markets, with substantial buying from all round the world following the April price crash. The supply can only have come from two sources: the general public, or one or more governments. It really is that simple. Two months later the gold price has only partially recovered, so physical supplies have continued to be made available. Physical demand cannot have been entirely satisfied by ETF liquidations, confirming governments are involved. This article looks at the dynamics of the gold market around this event and the implications.
While the investing public in the western nations has been generally stunned following the April price smash, demand from Asia is running at record levels, illustrated in the chart below, which is of physical gold deliveries on the Shanghai Gold Exchange. (Thanks due to @KoosJansen for pointing me to the data on the SGE’s Chinese website).
The increase in deliveries for April and May was spectacular, totalling 460.5 tonnes, with the week ending 26 April alone seeing phenomenal deliveries of 117 tonnes. In addition, according to the Economic Times, India imported 142.5 tonnes in April and 162 tonnes in May, compared with an average monthly rate of 86 tonnes in Q1 2013. Therefore these two countries imported 765 tonnes of gold in two months, before considering any unofficial imports or their government purchases in foreign markets. The rest of Asia, from Turkey to Indonesia would certainly have stepped up their demand for gold as well, as did the western world itself for physical metal as opposed to paper entitlements.
The table below puts this into context.
A prefatory note about the statistics in this table: there is no single defined source of statistics on gold movements, and there are considerable variations in the same numbers reported by different organisations. The figures in the table above can only illustrate bullion flows. I have sourced the statistics from official sources where possible. The cash-for-gold business has had the easy pickings by now, so an assumption that this is about 600 tonnes per annum is I believe cautiously over-generous. It is based on a speech made by Jeffrey Rhodes of INTL Commodities DMCC to the LBMA in 2010, when he identified scrap supply as 583 tonnes in North America and Europe, whose central banks are in the gold suppression business. At that time, 1,091 tonnes were recycled in the East, including Turkey. Since the Chinese, Russian and other gold-producing governments of Central Asia retain most if not all of their domestically mined gold amounting to over 700 tonnes, there is less than 2,000 tonnes of free mine supply annually available for global markets, based on US Geological Survey figures.
Looking at the bottom line for 2012, there were only 87 tonnes of gold supply for the rest-of-the-world, after Asian and Russian central bank and global ETF purchases. In other words, there must have been a severe deficit overall, which can only have been covered by central bank sales.
About 150 tonnes of ETF gold were liquidated in Q1, providing temporary relief until the Cypriot crisis, when concerns over the security of large deposits in eurozone banks prompted a flight into physical gold, but interestingly, not into ETFs. This was because there were escalating systemic concerns over having physical gold and currency deposits with European banks, while at the same time portfolio investors were worried that the 12-year bull market might have ended.
From the point of view of the western central banks, as well as the bullion banks with short positions on Comex, in March the alarm bells must have been ringing loudly. Chinese demand was accelerating and there was an increasing likelihood that ETF liquidation would cease if the gold price stabilised. If that happened, as the table above clearly shows, an epic bear-squeeze would likely develop, fuelling a rush into gold and potentially bankrupting many of the bullion banks short in the futures markets and/or offering unallocated accounts on a fractional reserve basis.
Therefore, investors had to be dissuaded from buying gold, otherwise the ensuing crisis would not only cause a market failure that could spread to other derivatives (particularly silver), but it would come at the worst possible time, given the coincidental programme of monetary expansion currently being undertaken by all the major central banks.
The reasons for governments to intervene on the side of the bullion banks were therefore compelling. As one would expect, the intervention was well-timed: on Friday 12 April two large sell orders of 100 and 300 tonnes were placed on Comex, clearly designed to do maximum damage to the price, and setting it up for all remaining stops to be taken out the following Monday. Furthermore, central banks were prepared to supply physical gold to keep the price from recovering. We know this because lower prices generated a surge in private demand, not only in China and India, but from everywhere. The only possible supply, other than inadequate ETF liquidation, is from governments.
India and China have absorbed enough gold in the last two months of April and May to leave the rest of the world in a supply deficit, requiring matching sales of western government gold to continue to suppress the price.
The future
We now know for certain that government-controlled gold has been used to defuse a developing crisis in gold markets that had the potential to destabilise bullion banks, other derivative markets and ultimately the whole fiat currency system. We have seen the surge in demand for physical gold, which is the consequence of sharply lower prices. Realistically, the priority has been to ensure such a crisis is avoided, rather than for the price of gold to be continually suppressed.
The difficulty for the casual observer is compounded by the available information being one-sided. We are all painfully aware of both the losses inflicted on investors and their loss of faith in gold at a time when other investment media, such as stocks and bonds, have been doing well. Concealed from us is the real financial condition of the banks and governments themselves, which is the fundamental reason for owning gold. We are acutely aware of the sellers’ pain and only dimly aware of the buyers’ motivation.
Nervous western investors in a market of 160,000 tonnes are in truth a small part of the whole, particularly since gold has been migrating from the west to the east where it has been more valued ever since the 1970s oil crisis. More fundamentally we know that the stock of gold grows at about 1½% annually in line with global population growth. We also know that central banks everywhere are expanding their balance sheets at an accelerating rate. The disparity between the rate of growth for gold and paper currencies will certainly lead to increased tensions between precious metals and currencies generally, and it is this that will drive future demand for gold, not whether or not western investors think it is in a bull or bear market.
A second point about the market being 160,000 tonnes and not just the sum of mine and scrap supply is that the market is far bigger than western governments’ gold reserves. Gold held by them is officially about 19,000 tonnes, but it may well be only half that, or 5% of the aboveground stock, when unrecorded leasing and selling over the last 25 years are taken into account. The ability of central banks to contain a global surge in gold demand such as that which followed the April price-crash and continuing to this day is therefore limited.
But this is only a part of the story. There are the factors concealed from us, such as the buying opportunity given to gold-friendly governments and sovereign wealth funds, both with surplus dollars, as well as the appetite for gold from the growing ranks of the Russian and Asian mega-rich. There are factors known to the financially savvy, such as the growing instability of the Indian rupee and other emerging market currencies, the increasing systemic risks in eurozone banks with the threat posed to deposits, and the revenue shortfalls that force governments to raise money by printing their currencies at an increasing pace: all will impact the gold market in coming months.
These and other systemic problems are deteriorating. A potentially destabilising crisis in the gold market from runaway prices has been defused by allowing the bullion banks the space to square their books. There can be no other realistic objective in supplying government-owned gold into the market. As to the embarrassment of the gold price rising at a time of accelerating money printing – that will have to be accepted, presumably emphasising the official line, that the gold price is irrelevant to a modern economy.
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And despite all this, with an impending market top and subsequent collapse, and the reality that all major banks are still undercapitalized (as is being reported of Deutsche), gold will somehow test the $1000 level again...
How does one short civilization?
http://goldsilverbitcoin.com
And COMEX inventories just hit their lowest levels of the year - 250k ounces left just last week:
http://seekingalpha.com/article/1504592-comex-gold-inventories-continue-their-steep-decline
Blah blah blah huge physical demand being covered up blah blah blah.
Meanwhile them crazy miners be shuttin' down financially unviable projects at an increasing clip, how's that fit into the conspiracy?
Just when I think you've reached rock fucking bottom, you surprise me yet again...
Back to your fema tent Troll
@jamescole - that means gold suppression is going to come unglued when the suppressors realize that newly mined gold is no longer viable.
listen, jamescole has a point...much of the allegations are nothing more than speculation.......you have experienced guys like jim rogers who dont see gold suppression........so how do we REALLY KNOW???
The COMEX suppression and manipulation scheme was plotted and graphed by Adrian Douglas (of GATA) several years ago.
The data is all there if you care to look at it. It sure as hell isnt speculation.
Edit: Here it is if you want to see it. (6:30)
http://www.youtube.com/watch?v=GmpVurAewpo
Even if you dont believe supply is getting short, we know demand has gone up. Therefore, in order to justify the recent price action, there has to have been a huge increase in supply. From where?
@kito, I’m one of the biggest Gold Bugs there is and I believe the future impact of Gold is far greater than even the most radical here can allow themselves to think however, you waste your time posting any reasonable viewpoint on ZH these days.
Personally, I don’t believe they’re manipulating or suppressing the price of Gold, because when you own both the Gold and the Currency with which it is denominated, then manipulation and suppression is becomes meaningless.
http://twoshortplanksunplugged.blogspot.com.au/2013/06/onthe-gold-price-and-insanity-of.html
I read your link which didn't tell me anything I didn't already know, and didn't address anything concerning the COMEX, which was my main point
And you're talking to kito about reasonable views on gold? That's pretty rich.
that's how un-rigged markets work. How rigged markets work is there's a non-supply batch of contracts to soak up dollars. They may never get delivered & the ounces may not exist anywhere. It's called fraud. It makes market activity look legit short-term then it collapses like MF Global (many non-deliveries of gold & silver went right to JPM's possession)
http://www.zerohedge.com/news/2013-05-22/they-better-pray-there-no-short...
No suppression, right!
i didnt say that....i just said how do we really know???
kito, there isn't a market oiut there that isn't manipulated by the CB's.
How do we know? Well they have been busted manipulating everything else.
Now go out and buy that second silver quarter, before its too late !!!
LOL!!! i found that quarter.....but it is nice.....feels real................but if i buy, it would be the money of kings..........but im waiting for it to hit 1200......
Due to the physical outflows, I don't believe we will ever see 1200 (usd) again.
But then again, what the fuck do I know ???
Just when we have things figured out...bam!!! Some crazy "market" anomaly pops up.....
How many one in a quadrillion moves in the gold "price" would you like to see to become a believer?
Confirmation bias is a bitch, ain't it?
You know Rocky, when Adrian Douglas went into that CFTC hearing and kicked ass on Gensler and Christian, I knew those clowns would never be considered credible sources ever again (at least to those of us who can connect the dots on this continuing bankster farce).
The CFTC is a pitiful joke. They will never stop the COMEX fraud or the financial raping of the public by the bullion banks.
The whole thing will have to blow up on its own, and it will, we just dont know when.
.
he's certainly not willing to say so publicly but the public statement is opposite of proven fact.
EVERY commodity price is manipulated using insider trading & fraud - we can literally see the trades taking place just before news announcements & quote-stuffing to ruin trading that's legit using traffic that's NOT legit.
Even Heinz had insider trading, it was blatantly obvious.
Jim Rogers doesn't have to say it. If you have to ask it's because you forgot how to use your own eyeballs.
that means gold suppression is going to come unglued when the suppressors realize that newly mined gold is no longer viable
This theory hinges on the idea that the miners know less about their industry than the folks posting on here OR they're in on it it and are mothballing their mines to help the price explode at a later date (crushing their finances in the interim).
The first idea here is obviously nonsense, the second has a number of holes the most obvious being if this price suppression and eventual parabolic rise are so inevitable why aren't the miners hoarding all available product? Certainly TBTF (who own most of the miners) would suggest it being a good idea?
On top of that, there has been an "astronomical" ratio of insider buying to selling of gold miners in Canada since the April crash. See http://seekingalpha.com/article/1505032
I wonder if unmined gold could be considered buried treasure.
Much like gold stored deep underground in a vault.
Hmmm.... I wonder.
miners know MINING not trading or market cycles.
They had hedges losing money on the books all the way up from 300/oz to like 1500 or something.
No, they know fuck all about it.
They know how to DIG. Traders DON'T know how to dig for gold efficiently.
They are 2 separate fields.
Why are you arguing with gold perma bulls?
Gold crosses borders for one reason: trade settlement. Ignore the noise. We are in a gold standard whether sponsored, defined, condoned, or what have you.
werd
Volcker has specifically stated that his Fed didn't do enough to keep the gold price down ... why? Because it makes no sense to redirect considerable wealth from real production to the manifold means to control inflation, money supply, interest rates, bond yields, stock prices, exchange rates, taxes, duties, fees, regulations, enforcement, litigation, market access, labor contracts, energy prices, etc. if you (as in you, TPTB) have this one itty bitty little fuckin shiny biscuit that a single trade "partner" could suddenly / inexplicably / inescapably / irrevocably crank up the price of using your own methods and market-insider-moles in order to settle up accounts that YOU (as in you, TPTB) would have rather had remain unsettled.
That single "commodity" becomes a choke point to the entire scheme to not pay a bill, or the scheme to control prices so that you effectively do not pay the bill.
This is all a mathematical game to me, I do not profess to know anyone's mind at the upper echelons. But, I do not believe these cats are omnipotent, or omni-anything besides omnivorous like myself. They have, actually, limited choices.
This is how I could rationalize that the more non-COMEX-favored banks, central banks, groups, individuals, sovereigns, agencies, or corporations hold gold, the more the COMEX would testify via price information that gold is worthless. "See? Everyone is selling. Says so right there in the record. A year of mine supply in ten minutes dumped. It's a fuckin panic, run for the hills. Buy shtawks. Gold is for savages."
The minute the flow of gold reverses, you will find gold reversing course in price if COMEX has its say. Which, it may not. But, good luck getting a Chinese or Vietnam price from your corner dealer in Anytown, USA.
Control prices, control everything.
does it actually cross borders? or does the paper claim on it cross borders? and when you say "trade settlement", please specify. who is settling what in gold?
I see trade deficit, and, coincidentally I see physical gold disappearing from one exchange and reappearing somewhere else. Where those to two lines on the graph meet by country, I call that trade settlement. IMO No one knows the true data of trade deficit, nor of physical gold in/out. We only see indicators of flow that can be reasonably corroborated.
Nobody else may be heard to call it that but me. It's just a rainy day thesis that nags at me while I'm on the train.
Price inclines or declines in PM have cascading effects in all markets for money, that's my belief. The pyramid of libor and fx fixing culminates in a downward suck on PM. Widen the base, lower the apex. Liquidity will not boost PM prices directly, maybe for gamblers but not broadly. This is a misunderstanding IMO. Contraction of that money- and money-like thing base will send PM to the stratosphere like a mountain thrusted upwards.
People talk about how small those markets are by volume, I say, those markets are choke points, seminal, the international nerve-ending-clustered groins of global monetary exchange. I remember that it takes a centimeter-deep cut in the right place to bleed a body dry. This was the lethality of the rapier masters, who not so much hacked with heavy blades but sliced in tiny radii. They didn't need to hack off your limb to bleed you dry,if they angled their quick cuts correctly the needed a half inch or less at the arteries and you wouldn't see the end of the fight.
Trying to come up with metaphors here.
The future of gold is actually simple. At some price point, my guess is $5k - $7k, the price will be fixed, buying and selling made illegal and all gold held by private citizens, NOT CORPORATIONS or BANKS, will be confiscated by the Federal Government. Who will likely give you $2k per ounce if your lucky despite all gold held by Corps and Banks and Govs being held at $5k-$7k, for reserve value status.
B4 that happens,they will likely do like India, it will start with coins and bullion being either taxed in the extreme or outright made illegal. However, one caveat in modern gov. is that Jewelry will likely NOT be confiscated below a certain value, likely around $5k or less per piece. Most Americans will think all this is fine and dandy and not give a dang.
There was a guy in England who made his living smuggling ancient Egyptian artifacts out of Egypt and selling them to collectors. He just walked them in past customs for years by covering them in Plaster of Paris, painting them in garrish primary colors and declaring them as souvenirs.
Gold can be coated in nail polish, paint, cement, you name it...let your right brain run wild...it is nonreactive. They pull it up from Roman wrecks, they wash the coral crap off and the debossing and gleam are as good as the first mint.
France has now made it illegal to ship coins by mail. Say what? One more brick in the wall.
.
...leading to the establishment of a black market, which will ignore price fixing,
...ignored by the black market,
...and, like the confiscation in 1933, will be ignored by most of those who hold physical.
...which will affect only those who bow down before their masters.
If your senario turns out to be correct, how will this black market operate? The NSA is tracking web sites, emails, phone conversations, etc. You will have to trade among friends, go to garage sales, etc.
The police will patrol even flea markets (when fine citizens turn folks in). I don't see how you'll be able to sell gold this way for a profit.
Jackagain,
You surely must be correct - after all, I hear that it's pretty much impossible to buy illegal drugs any more. There was no way the dealers could sell their drugs this way for a profit, so they turned all their pot, cocaine, and meth over to the federal gov't.
It's all in the TRANSACTION COSTS. The transaction costs dealing illegal drugs is astronomical. That's why some people are willing to risk it.
If the transactions costs in dealing gold was buy @ $100 per oz and sell @ $10,000 due to the risk, the market would still exist, but it wouldn't be that much fun for the gold holders. It would only be fun for the gold dealers that were getting away with it.
"You will have to trade among friends, go to garage sales, etc. "
which is untrackable except by those yelling along the sidewalk "thanks for selling me all that illegal gold for my illegal silver, Bob, you're the MAN!"
"The police will patrol even flea markets (when fine citizens turn folks in). I don't see how you'll be able to sell gold this way for a profit"
Somehow people sell gold, silver, crack and even raw milk for a profit this way. Now.
and also those 'bowing' down before their matterings.
Yeah, right. And the government is going to record every conversation on the phone and email of every American. Pffft!
doubt it. Making gold illegal would instantly triple its real street value and that's opposite of what's intended - like having a price-controlled currency and a black-market rate for the same currency. It's borderline collapse.
No one will think this is fine.
They'll freak the fuck out. Americans are dense sheep but you tell them they CAN'T have it and magically that's all they fucking want.
Tea leaf reading considering the " hundreds of times the underlying physical". 1000 dolares will not test the worth of gold.
"How does one short civilization?" Easy, by making it rational and thus they have to pay tribute.
Gold/Dow ratio 1:1 coming and there will be now civilzation left to short... http://tinyurl.com/mem7o7x
gold will somehow test the $1000 level again
Paper Gold is going to test ZERO as Physical Gold for delivery is heading to infinity (the average person will not be able to buy it).
How does one short civilization?
war......
if I'm not mistaken you go to a walmart with legit looking custom signage put on to pitch forks saying "free pitch forks" not far from another spot you mark on as "free Nintendo DS and free black forest cake to first 250 customers"
Then watch the carnage ensue.
Silver is at multiyear support and I expect it to give way to the $18's ... unless we get a hot war in the ME there is nothing looking good on its horizon. The trouble is trading it b/c it is a thin market and usually the move is accomplished at the gap in the a.m.
Horseshit analysis, but entirely possible.
TYLER,
Where is the trade ticket? Even one assumption undermines a thesis. Ten assumptions make it very hard to take with more than a grain of salt. This article is full of assumptions. Reading tea leaves in Fortrum and Mason would be more accurate.
I suggest GoldMoney employ some expert hackers recruited at one of those Vegas events; to target BIS NT and fax and mail servers, BIS intranet and eBIS. FRBNY and US Treasury NT and mail servers. Bank of England fax mail servers. Bank of England "gold" "custody" inventory levels. While they are at it, Bank of England legal department, specifically agreements on bullion ownership. These contracts are also stored in drawers so you have to walk in to get them. Bundesbank fax and mail servers. Hack the London clearing entity AURUM. Hack LBMA mail servers. The list goes On...
Silver is used in Cruise and Hellfire missiles.
Yeah, and no doubt there quite a few ounces in the new NSA facility in Utah. Talk about secure storage.
god i hope so. i have been sitting on a couple thousand, salivating, waiting for that day...already have my shopping list in hand.
Trading silver is a great way to lose your shirt. It's the most manipulated market in existence. Silver will be the best play ever but not until Earth 2.0
At that point -
Good luck trying to find someone to sell it!
At least not without a huge premium. Bad money (fiat) drives good money gold & silver) into hiding.
The Ecstasy of Gold - Ennio Morricone
http://www.youtube.com/watch?v=nOr0na6mKJQ
gold is dead silver is dead yada yada yada
fuck charts. They are roping you all in for the "gold bear market" sentiments. Then, they will hit you with the left hook. Everyone was all "gold to the moon" last year. Kansas City Shuffle. Short the fuck out of it if you dare. Good luck.
My favorite CHART!
http://www.zerohedge.com/news/2013-05-22/they-better-pray-there-no-short...
Gold and silver are both the most oversold they've been in this bull run. Last time that happened we saw silver gain 500%. Sure it's the devil's metal and can burn you both ways, but now is not the time to be shorting.
Commercials AKA banks are now net long gold.
Gold and silver are both the most oversold they've been in this bull run.
Not in the USA.Dumb arses still waiting for the market to crush them yet AGAIN.
People still don't understand the difference between paper and physical I see. One simple rule applies here; when fraud is the status quo, posession is the law.
9/10ths of it at least ;)
http://sweetiessweeps.com/2013/06/dial-65k-gold-giveaway.html
the answer is quite simple, actually. There is FAR, FAR more above ground supplies of Gold than is reported by sovereigns or central banks. Gold is more plentful than is made known, and huge stockpiles have been secured over the centuries in off-balance sheet "national" and private accounts. Eric Sprott can't figure out where the supply is coming from.. nobody can because they will only consider official data on existing stockpiles. I don't know this as fact, but the evidence certainly points in this direction and, if correct, means that Gold might be the ultimate and final scam card in the puppet-master's playbook.
Silver, on the other hand....
So, gold rose from $252 in 2001 to almost $1900 in 2011 before everyone found out that CB's had shitloads moar stored away to crush the price back down?
That's the story we are supposed to believe now? LOL...
BoP - I'm not selling anything... not a story, nor my PMs. But yes, what if what you say IS correct? What if the gold market was managed using exisiting supplies, leasing, naked positions, paper gold, etc. until the point where it could not be any longer (within the past couple years) due to the ponzi collapse?
Do you believe the official gold holdings data? Do you believe ANYTHING the puppet masters and their inbred minions report?
What is a plausible alternative to explain what is happening. How is it possible in gold, and especially in silver, to have held the price this low, this long, in the face of unprecedented demand? Do you really believe the CB's, etc. would sell this near the end-game to hold paper prices for just a tiny bit longer?
Before being so fast to junk a comment, offer intelligent dialogue. If you get intelligence in return, it's a good thing. If not, junk away
Easy, I was not attacking you, just observing what you said and wondering outloud how this could all add up to a rational and logical explanation?
(I didnt junk you).
sorry for jumping the gun there. would still enjoy knowing your thoughts in greater detail if you're so inclined.
ponders the finite amount of gold that can ever exist o the planet..barring an end of earth event...against the amount of gold used by a 7 billion and growing population for weddings, fillings, bling, gold leaf on mosques and hindu temples (theres a thought for a midnight raid or 5), gold paint (can't be imitated),
against stock and supply..
could mine sea water for the billionth of an ounce per tonne of sea water...proven unmined gold reserves = ? proven gold in bullion form..proven gold in jewlleryescalating cost of mining "harder to get" gold ore..
gold cannot be created or destroyed..pass a message to PRISM immediately...there done..i think they tracked my keystrokes!
Scientists in Japan have actually managed to create own gold. BUT, the cost of creating tiny piece of gold, through some sort of fusion, completely and utterly exceeded the value compared to the energy(cost) put into the creation. I think they created like a miligram of gold and the cost/production ratio was skyhigh. Though they managed to create a process that actually made gold.
and if I remember correctly, the gold they did produce lasted only a few seconds.
how radioactive was the isotope?
US M1:
http://research.stlouisfed.org/fred2/data/M1.txt
273 billion 1975 to 2618 billion today. Almost 10* increase.
Inflation = 6% over the entire period.
Gold:
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
$150 in 1975 to $1380 today. Almost 10* increase.
Inflation = 6% over the entire period.
Funny how they kind of match up like that. Gold was overbought at 1900, at 1400 - 1500 it's fairly priced. It'll be trading at 1550 next year.
Your presumption therefore includes increasing rates to balance back the printing so far & continuing rate, and a setting of that printing rate to zero.
I disagree with those presumptions & if needed I'll disagree that these presumptions can be detached from your conclusion.
Gold prices are NOT ONLY manipulated down. They are manipulated UP as well by the Ones That Have The Gold. The Marcos/Yamashita gold story has too much evidence attached to it to ignore it.
There is a LARGE AMOUNT OF UNACCOUNTED GOLD in existence. It does not trade much, its ownership and quantities are not publicly reported. It is NOT ON THE BOOKS.
Au Shucks
"the answer is quite simple, actually."
Yes, it's the FLOW, stupid, not the stock. Gold has always been hoarded as savings and wealth.
It would be the longest running scam in history. Thousands of years. No scam has lasted that long unless, like some you consider religion a scam. (I make no claim one way or the other on that particular subject) Consider that governments for thousands of years have mined for it, stored it, secured it in extreme fashion and when every failing despot heads for the hills the plane is always loaded with it's nations gold.
Then consider that since the 1930's in the US the owning of gold has been considered illegal and confiscated. After that the owning of gold has the owner described as a bug, crackpot and unamerican and has never been advocated by the "financial pro's".
Given the above I'm going to go out on a limb and say your conjecture may be a little off the mark.
my father laughed at me
when i pursued studies
in glassblowing and alchemy ...
I do not know where all the gold is coming from that is going to Aisa...i think we will be suprised and mad when the truth comes out...but I can´t believe its an individual investor....they are in for the long haul....it has to be a government and the only reason to sell it is to manipulate the market...why they have to have gold held down will be brought out in the end.....there is some gameplan here at play...and of course we the sheeple will pay for it.....and there is a game being played right now...a big game..and we can´t lose it or chaos will ensue....
There is some account settling going on, in addition to JPM shedding its short position, and I mean massive. This thing ain't over yet. Be sure to stock up on plenty of popcorn. The boyz could all do the short thing again to see if they can smash the price again. The speculators have not been fully shorn yet. But that could eat up another two years or more to run the cycle. Gold ain't for the faint of heart.
If global fiat continues to reign supreme for the next few years, then they may have a chance to drive gold lower. If however, physical gold buying continues at its present pace, then the Western World is driving its citizens to perpetual poverty. Their ability to recapitalize the banking system without gold as a sovereign/central bank(s) asset will be one the greatest self inflicted wounds of all time.
If I were China I'd spend all those surplus dollars on gold! And then use the gold to buy oil from China. The amount of $ that China sits on is enough to strangle the supply of gold world wide.
Unless of course someone has figured out how to extract gold from seawater economically and the US government (or whichever government has the poor soul in captivity) has him under wraps while piling up thousands of tons of the shiny stuff and using it to manipulate the markets. Nahhh - never happen. Fun story though.
If they every find away to extract gold from sea water .... then all the low grade ore and mine tailings .... will be a bonanza !
My Arizona sea water gold extraction method is almost completed. Just need some NY investors to send me a few kilo's of real gold to get it completed. Waiting on the temp to get to 118 degrees to facilitate extraction method. Plans to be sent via fed ex upon receipt of gold bars.
Disclaimer: Gold investing can be rewarding for certain individuals but no guarantee of profitability is implied. Invest at your own risk but send gold now to jump on this once in a lifetime deal.
Seawater extraction in Arizona, I'm all in !!!
Arizona sea water means there's no Kallyfornia. That would be a good thing.
Alasdair Macleo
Excellent read.
Oooooh I keep stackin, oooooh I keep stackin. Stackin's what I do
Melody: unknown
They are giving our gold away for fistfuls of fiat .... like they had every confidence .... they will be able to recover it .... when the time comes .... so don't keep "your" .... in large depositories .... where they can get their hands on it .... "Home school your gold" ! Just like naked shorting .... maybe they are pretending to provide gold .... and it's still in the same vault .... once you comit .... to fraud .... there are many ways .... to be fraudulent !
I am a believer in the absolutely weird concept that there is an above ground gold supply many multiples as large as "reported" and we have been led to believe. There have been rumors circulating to as much for a long time. All that is required for the bankers is to contol the supply so that they can mainatin price and the illusion of scarcity ... not actual scarcity.
Diamonds would be a perfect example of how controlling supply and the market allows one to set price. Daimonds are a lot more common top find and easy to make than they would like us to believe. deBeers had to buy out the GE diamond manufacturing process and also have Sierra Leone diamonds declared "blood diamonds" just to keep there from being competition in the market.
Gold has been mined for many thousands of years and at one time it was much more available on the surface of this planet. Current figures do not take the ancient history into account. Figure it out, eh?!?
I figured it out. You have no idea what you're talking about. All research and data says you are wrong until you can come up with ANY evidence.
Turns out there's a supernova at the center of our planet !!!
Wow that's impressive
Have you ever mined gold? It is not easy and does not come out of seams like coal, it comes in little specs the size of a pin head and you gotta move about 25 pounds of gravel per pinhead or smaller piece of gold. It aint easy or fast. Even the big boys cannot find it for much less than 1200 an ounce. and that is with cheap low wages and working conditions in 3rd world countries.
Fort Knox
largest gold mine in alaska...
560.00 $ per oz
total cost to mine
Now that's a gold mine !!!!!!!!!!!! Where do I sign up?
So are you sying those ebay ads for gold mine claims won't pan out..lol..all kidding aside I live in Arizona and have done my share of gold mining and it is a tremendous amount of work and I have never had a 1 ounce day. Most of my gold found was measured in grams. Had a 40 acre claim that I pulled 2 ounces out of over a year and a half. Got tired of digging and panning and moved on to metal detecting. Got tired of that and moved on to just buying my gold. Although it does sound interesting to maybe get me a claim up in Alaska and try my hand at dredging like they do on that TV show.
"The Welcome Stranger is the largest alluvial gold nugget found, which had a calculated refined weight of 3,123 oz 6 dwts 9 gr[2] (71.018 kg). It measured 61 by 31 cm (24 by 12 in) and was discovered by Cornish prospectors John Deason and Richard Oates on 5 February 1869 at Moliagul, Victoria, Australia,[3] about 9 miles (5.6 kilometers) north-west of Dunolly.
Found only 3 cm (1.2 in) below the surface, near a bark of a tree on a slope leading to what was then known as Bulldog Gully, its gross weight was 3,523.5 troy ounces (109.59 kg), the trimmed weight was 2,520 troy ounces (78 kg), and net it weighed 2,315.5 troy ounces (72.02 kg).[2] "
If such a nugget can be found barely under the surface, I'm surprised there have not been dozens found deeper down.
If such a nugget can be found barely under the surface, I'm surprised there have not been dozens found deeper down.
Yep, only in Aussie land.A few have been found in the US like that, the largest around 5-6#'s if mem serves.Dude was cutting in a new driveway with a blade.Never did give state, or names, the dude did not want Midnight prosectors digging up his property.
Several nuggets in Victoria were found this way. In fact, most of central Victoria was stripped mined of gold by removing the topsoil, the after effects can be still seen today with this region lacking quality topsoil due to the mining conducted in the 1850s.
I mined silver and gold. The assay came in at $115 per TON. The cost of the ball milling and transport, at the time, exceeded the price per ounce. This was in 1971 in the White Mountains near Bishop California. The Lucky Penny Mine.
the problem with this theory is that diamonds are carbon, carbon isn't rare & we can even make diamonds now from carbon-vapor deposition under high pressure.
What we can't do is make more gold. We can estimate the mined gold of the ages but we know already many warships from 2000 years ago to today's recent history that a fair chunk of gold is in those ships at the bottom of the ocean.
So if the Western governments are selling and the Chinese/Indian retail investor is buying, which is the smart money? If the flow continues long enough, do the Western governments end up with so little supply that they can no longer influence the price?
Yours are two of the eternal questions of finance.
BTFD.
Do you really need more information?
Is the FedRes still printing FRNs?
Yup. 11%/year.
BTFD.
Do you really need more information?
Is the FedRes still printing FRNs?
Yes, and they must continue, however even if they COULD stop,the amount already out is staggering and can never be repaid, ever.So tuck that away belfore you do anything rash.
isn't it funny how that works out? They print trillions of FRN's and say your dollar is still worth a dollar and everybody believes that. They can't and won't let gold go to its true value against FRN's as it would blow their scam wide open for the sleeping masses. Can't awaken the sheep now can they? It would become very messy for those still holding FRN's and not real assets.
>> All that is required for the bankers is to contol the supply so that they can mainatin price and the illusion of scarcity ... not actual scarcity.
Hm, ok, so there's possibly a massive supply of unreported gold and the bankers are artifically running up the price, not depressing it. That would explain the massive dump of 400 tons. Someone with a large stash got wind of the situation and decided to get out, out at any price, in order to avoid getting caught with their pants down when the situation is exposed and gold completely collapses.
I'm not much for these kinds of completely unsupported conspiracy theories, but wtf. If it were to happed I'd really be fucked.
As much as I too love PM (and have some), there is one scenario, where having PM will mean precious little: CBs use SDRs after the big reset. This is forecast as on of 4 scenarios in Jim Rickard's 'Currency Wars'.
If they do... they will not make it a "fiat" SDR (as Rickards expects), but anchored in Real Assets, that are customized to each country. If a country is resources-poor, their currency will likely be anchored to their gold reserves (e.g. China). If they are resource-rich (US, Canada...), they won't need much PM and will anchor it to some basket of real assets. Whereby the baskets for each CB is agreed upon.
In this scenario PM holders in US and Canada will do OK, but won't realize the huge windfall that many are hoping for. This is entirely 'possible', regardless of emotional tags of hopes, fears or expectations -- given the huge amount of new type of $100 FRNs held in reserve. In which case, have a diversified set of real assets makes sense: Productive land, quality stock, patents and royalties, mining rights, PM... as these will lose least in comparison to the current fiat-FRNs.
Your post makes a lot of sense. The issue of what the SDR is composed of is a bit problematic. The majority asset(s) in the SDR would have to be of such quantity, be replenishable and majority controlled by the central government and or central bank. Private ownership would delute the asset.
Will be fun to watch them set up such a complex method. I seem to remember their first go around at fixing without gold between countries, something maybe called the Smithsonian Agreement? Worked flawlessly (sarcasm).
That's not how SDR's work: they are not customized by region, they are one SDR basket for the entire currency. This means that if they have enough gold-backing to be good for trade it's worldwide. I read Currency Wars, this multiple-adapted basket version of the SDR is not mentioned in it.
"Productive land, quality stock, patents and royalties, mining rights"
Mining rights can change at any time. Patents & royalties are enforced by government monopolies against the free market, that will have little reliability too because those with the best lawyers win the court battles over ownership & those with the best connections write the LAWS over what will or won't be patented and for how long. That's way too high risk for me - I'd rather go with pennystocks in place of that item. I also regard copyright as anti-market financial terrorism fascism. I want no part of it.
ha-ha...my ammo holdings have done quite well over the last two years. I have made a killing and bought more gold with the profits.
He did campaign on hope and change. The hope of other countries to reduce the US and the change of our gold reserves to other third world countries.
Is it me or the Ockham-razored answer is "send gold, get permission for moar debt"?
Gold has always gone to where it has to. Western world will soon wake up and understand this. There is no free lunch, never was. If you only can see value in a currency you will never know your true worth. Gold is valued trough it´s mulipled claims in this paper world. The "price" of today is a bargin.
The last time gold was free was b4 oil made us all worth more. I´ts in this context one can imagine golds real price (value). Oil brought forward riches manual labor would never acchive. Half a century of prosperity only have to be priced right once.
+50K/ounce easy, go get you some while it s still on sale!
Alistar, love your work!
5k/oz for sure but 50k? I think not. The purchasing power can't go that far over vs other goods because food, copper, silver, lumber, land, clean water (source and/or filtration) isn't that much rarer in rate of change of availability, so it would need to be pure fiat inflation.
Now that has a limit too: for 50k gold, 100/loaf of bread, etc., the currency will break before we get to those numbers.
Of course I am expecting the currency itself to break which is my purpose in holding gold & silver bars & coins in hand, not any stupid paper. I am trading options too for slv but they are low cost vs high estimated fiat returns. Even if I get only 5 or 6 silver ounces from each such option at whatever nonsense price happens by then, that will suit me and I got bullion first already.
Ah yes, it's not a day on ZH without a post about gold. Suckers can keep ranting about it and lamenting the drop. Everyone else is making money in equities.
I save in gold for my retirement 12 years away. Who cares about equities? It all depends on your timeframe. Moar paper or real wealth in the long run? Hmm lemme think :)
And when the day of reckoning comes all those equity investors will be holding what value? Hyper inflation is not a friend to equities and FRN's when that day comes, and that day is coming. You may not be so smug when that day arrives. I got burnt 15,000 shares on a day that arrived in 2008. Won't ever happen to me again. I will be holding PM's on that day.
Freedom Isnt Cheap
And when the day of reckoning comes all those equity investors will be holding what value? Hyper inflation is not a friend to equities and FRN's when that day comes, and that day is coming.
Sad part is folks will be TRYING to bail, but good luck getting in, and better luck for buyers.LOL
Of course there are those who think that holding base metals (brass, lead) makes more cents that precious metals.
The anecdotal evidence I have ben able to glean is that since the attack on gold, buyers have far outpaced sellers so the question of who is supplying is a fair one.
The answer willprobably be known if we could know who dumped hundreds of tonnes of paper gold which precipitated the plunge.
It pays to keep in mind that if the Indian governemnt's attck on gold has any success, this will also effect short term price movements .
Bottom line......the reality of our mess will still hit regardless of where the gold price is at any point n time.
During the Roman Empire, the Romans paid off the barbarians in gold. Then the barbarians traded that gold for Roman goods. As long as the West has goods to sell China et al - ie food and water and military hardware - they will get their gold back. But not before stealing from Western serfs their bread and water. And so we are back where we were 2,000 years ago.