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German Gold Demand Blows the Rest of the West Away

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Click For Original Post - German Gold Demand Blows the Rest of the West Away

Written by Nathan McDonald

 

 

 

 

Anyone remotely following the gold market, knows that the East is deeply connected with metals. They rightly believe that they are a safe store of value and have a deep affinity that has lasted throughout the ages.

 

China, India and Russia are three major sources of gold demand and will continue to be so going forward into the future as they quietly behind the scenes continue to make deals that will eventually displace the US dollar as the reserve currency of the world.

 

Yet, what is not quite as well known is that despite the mainstream media’s attempts to tarnish the yellow metal and precious metals in general, it simply is not working. Western demand, although not as intense as the East, continues on with private investors and certain nation states, as more and more people begin to realize the importance of having a portion of your hard earned savings in a tangible asset, such as gold and silver.

 

Two Western countries that are still deeply invested in gold is Switzerland and Germany, but how much demand do these two countries have for precious metals. The Swiss, who have always been closely associated with money, had significant demand for gold in the first quart of 2015, showing demand of 13.8 metric tonnes.

 

Yet, this was nothing compared to Germany, which as the SRSrocco Report above shows, is blowing the rest of the West away in the race for ownership of the yellow metal.

 

Germany, in the first Quarter of 2015 saw a staggering demand of 32.2 metric tonnes of gold! What is more shocking is what this looks like compared to the rest of the Western nations (see chart).

 

WestGoldBarCoinDemand2015Q1
(Image source, SRSrocco Report)


As can be seen from the chart, Germany is accumulating gold at a rapid pace, seeing an increase of 20% over last year’s demand and twelve times faster than that of the United States!

 

When compared to the entirety of the rest of the West, Germany is accumulating roughly 45% of the entire Western gold production.

 

What does Germany know that others in the West don’t? Perhaps they simply can see the writing on the wall and don’t like what they see, the never ending production of fiat money can only end one way and one way alone, hyperinflation. Clearly, the Germans have not forgotten their history.

 

 

Click For Original Post - German Gold Demand Blows the Rest of the West Away

Written by Nathan McDonald


 

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Sun, 06/07/2015 - 02:10 | 6170978 walküre
walküre's picture

Germans are productive and innovative. There's alot at stake for us in terms of real wealth preservation. We've been fucked numerous times by our own governments and outsiders.

How do you really protect the fruits of your labor for the ages?

Nothing better for that than gold and silver. Also never allow your family to be in Shylock's shackles.

Think longterm.

That's all.

Sun, 06/07/2015 - 09:50 | 6171417 stocktivity
stocktivity's picture

The Germans are smart...much smarter than the US. They don't have the expense of having to defend themselves. The stupid United States spends the money for bases there. Let's see....going on 70 years after World War Two.

Sun, 06/07/2015 - 01:37 | 6170951 firestarter_916
firestarter_916's picture

I hate the fukn ads on this site.

G-Donut, what was your point on Canada?

Sun, 06/07/2015 - 01:59 | 6170971 walküre
walküre's picture

Firefox and AdBlock

No ads whatsoever

Sun, 06/07/2015 - 02:36 | 6170999 Rock On Roger
Rock On Roger's picture

Aye, works good.

Nary a problem since.

Sun, 06/07/2015 - 00:29 | 6170880 GoldenDonuts
GoldenDonuts's picture

Notice that Canada isn't even on the list.  We are so brain dead that we put our full faith and trust in something called "the loonie"

Oh and our "honored leaders sold our gold just ahead of the brown bottled.

Sun, 06/07/2015 - 03:11 | 6171025 Kiwi Pete
Kiwi Pete's picture

You mean the Brown bottom!

Sun, 06/07/2015 - 02:37 | 6171003 Rock On Roger
Rock On Roger's picture

We've got lots in deep storage.

And the oil to dig it.

Sun, 06/07/2015 - 00:15 | 6170856 honestann
honestann's picture

Nobody figured this out?  Seriously?  Please do remember that Germany asked for their gold back from the fed, but the fed effectively said "screw you" by refusing to return the German gold they were holding for Germany (returning laughably tiny amounts in dribs and drabs so they could say "we're working on it").

So what Germany is doing is replacing that gold by purchases in the markets before the gold price explodes.  Once they import enough gold to replace the gold stolen by the federal reserve, Germany can simply say "the next trillion dollars of our bills we refuse to pay... take it from our gold reserves".

Of course, that's an oversimplification, because Germany is importing gold for other purposes and customers too.  So it will actually take much longer to get their gold back this way.  Too long in fact, unless they buy more.

Sun, 06/07/2015 - 05:33 | 6171148 Boeing Boy
Boeing Boy's picture

Germany lost the war and was never going to be allowed to have her gold back.

 

 

Mon, 06/08/2015 - 08:10 | 6171455 honestann
honestann's picture

A great many others who didn't lose the war will also not get their gold back.

Sat, 06/06/2015 - 17:56 | 6170157 kchrisc
kchrisc's picture

"Gold. It's what's for money."

Liberty is a demand. Tyranny is submission..

 

First rule of surviving a system of grift and tyranny: "If you don't have it, you don't got it."

Sat, 06/06/2015 - 17:41 | 6170118 alexcojones
alexcojones's picture

One of the greatest coups of the ZioCon media, was/ is to convince American sheep that precious metals are so past last century.

Until such time that they aren't-! And only ZioCons have some (lots) stored away.

 

Sat, 06/06/2015 - 15:57 | 6169877 Handful of Dust
Handful of Dust's picture

I read the number one buyer of Perth Mint PMs is Mainland China followed by Germany .....It's always fascinating to read that stuff and see who the prudent people are. I don't know where the local Australian buyers fit in there, however.

Sat, 06/06/2015 - 19:59 | 6170428 TeethVillage88s
TeethVillage88s's picture

But look how Brain washed the Australians are they must have a cultural bias against owning & buying Gold. China number are not correct of course... Italy what a Surprise.

- Rank, Country/Agency, Tons Gold,

1. United States, 8,133.5,
2. Germany, 3,383.4,
3. IMF, 2,814.0,
4. Italy, 2,451.8,
5. France, 2,435.4,
6. Russia, 1,238.3,
7. China, 1,054.1,
8. Switzerland, 1,040.0,
9. Japan, 765.2,
10. Netherlands, 612.5,
20. Spain, 281.6,
21. Austria, 280.0,
38. Australia, 79.9,

Who taught the Australians that PM were unneeded?

"...Of the remaining 103,000 tons of gold, about a third (35,000 tons) had been made into gold bars held by national banks." (1986 Study)

Sun, 06/07/2015 - 02:23 | 6170982 firestarter_916
firestarter_916's picture

They have nothing going for themselves.  The English sent their prisoners there. If it were such a great place to live they would have kept it. So they just happen to own a ton of natural resoures and are selling to anyone. I think it's the only way they have a thriving economy but it's overinflated nearly EVERYTHING.

Sun, 06/07/2015 - 17:59 | 6172505 PhilofOz
PhilofOz's picture

Based on that comment, they'd have kept another 50 countries should they be such great places! I know were I'll rather be when the shit finally hits the fan and at best I'd have another five countries on that list above Australia. Your ignorance is showing through.

Sat, 06/06/2015 - 21:53 | 6170626 PhilofOz
PhilofOz's picture

Nah, all our gold is still waiting in the ground to dig out whenever the government decides to nationalise the mines. It's more secure leaving it there for now while prices are depressed instead of bearing the cost of keeping it stored in some vault.

edit/// "while prices are supressed", sorry.

Sat, 06/06/2015 - 15:06 | 6169754 Crisnach
Crisnach's picture
Acciones populares pronosticos intradia Popular shares intraday forecasts:
Sat, 06/06/2015 - 15:06 | 6169753 Crisnach
Crisnach's picture
Acciones populares pronosticos intradia Popular shares intraday forecasts:
Sat, 06/06/2015 - 14:49 | 6169713 Herdee
Herdee's picture

No mention of fiat paper currency mentioned in The Constitution of The United States of America.Only Gold and Silver are money it says.So,what are the present powers of politicians having over the Supreme Court and why do they jail Americans for not paying their income tax?And why then is The Constitution treated like garbage by The Supreme Court on behalf of criminals?

Sat, 06/06/2015 - 13:00 | 6169497 Yancey Ward
Yancey Ward's picture

The Germans are such morons.  Every good American Keynsian knows that when the shit hits the fan you can't wipe your ass with a gold coin.

Sat, 06/06/2015 - 13:14 | 6169524 Four chan
Four chan's picture

Americans have been programmed to forget what gold and silver is and why it is superior in every way to frns.

https://www.youtube.com/watch?v=ndshbH3qZ6Y

https://www.youtube.com/watch?v=Ef0VG1WEP10

Sat, 06/06/2015 - 12:31 | 6169446 Bemused Observer
Bemused Observer's picture

Just keep the price down for the summer...Yard sales have been FANTASTIC so far...No one is checking their jewelry, and I'm getting gold and silver every weekend...

Keep up the good work, whoever is keeping the price depressed!

Sat, 06/06/2015 - 10:46 | 6169129 lunaticfringe
lunaticfringe's picture

In Germany, Keynesians are flogged and beaten.

Sat, 06/06/2015 - 10:36 | 6169109 BoredRoom
BoredRoom's picture

The world desires Gold, but the world NEEDS Silver. When PMs skyrocket in the near future I predict the GSR to quickly drop to near 40:1, but I don't see the historical 16:1 ever in my lifetime.

Sat, 06/06/2015 - 11:38 | 6169291 KnuckleDragger-X
KnuckleDragger-X's picture

The world needs anything that has an intrinsic value, remember copper was once a monetary metal and if it all collapses might be again.

Sat, 06/06/2015 - 19:40 | 6170363 daveO
Sat, 06/06/2015 - 11:31 | 6169263 Bastiat
Bastiat's picture

Why not?  The properties of silver that make it useful won't change and there will be less to be found.

 

Sat, 06/06/2015 - 14:14 | 6169619 Sashko89
Sashko89's picture

I heard the silver to gold mining ratio is more like 2:1 as for every ounce of gold they mine out of the ground they get 2 ounces of silver... Not sure if it's true but if its even 10:1 for mining the stuff, I def think we will see a gold to silver ratio of 16:1 or even less in the monetary field in our lifetimes. Of course I'm not an expert in this, but this is my noob opinion...

Sat, 06/06/2015 - 15:36 | 6169829 MrSteve
MrSteve's picture

The 1800s ratio of US coinage was 16:1, silver to gold. The actual mine yield may be much higher for silver : gold. The ratio doesn't lend itself to analysis like the US' hog:corn ratio because politics, supply, ore quality, regulation and demand vary greatly around the world according to local conditions.

I do know the classic way to make a small fortune in silver is to start out with a large one!

Good Luck

 

 

 

 

 

Sat, 06/06/2015 - 16:08 | 6169904 Nage42
Nage42's picture

I believe the actual statistic is closer to the volume of silver in the earth's crust is found to be at a ratio of around 17:1 more silver than gold.

The _problem_ is that gold is found in concentrations in certain types of rock that can be targetted.

Whereas, Silver is mixed in with other base metals and tends to be more diluted and thus you must spend a lot more work if you actually want to _target_ only Silver production.  Exceptions to this tendancy of course exist (Potossi, Mexico, Urals, etc.); however, it is harder to ramp up production of Silver when compared to Gold.

 

Thus, although the ratio may be 17:1, you _should_ price it higher because it takes much more energy to seperate it from the other stuff, so if/when we enter into an energy crisis, this goes non-linear quickly.

 

If it costs [all in] around $13 to get it out of the ground in today's very low energy prices, then I would like to see someone with more hard numbers in the industry calculate a more realistic extraction cost representing what I imagine to be a very viable future, that being:

Energy costs with a $200/barrel of oil (and/or electricity costs)

50% more expensive shipping costs to represent various cross-border taxes/tarrifs to reflect future protectionism policies that countries will effect on eachother... as they _always_ do when things go pear-shaped

at _least_ a 33% at-source tax rate from the local soveriegn who wants his pound of flesh at source (at the gun-barrel), see above about pear-shape

and 200% increased demand from solar, pharma, bio-med, investment, and other novel/emergent sciences.

 

If someone has any inside numbers of actual mine profit/cost numbers, can they plug those in and tell me where we will be at in the next few years?

 

I'm thinking it'll be closer to $80-$150/ounce, then gold would maybe be priced at 32:1 that to reflect its sovereign reserve wealth status (read ~2.5K - 6K/ounce effective). [edit: what I'm saying is that the price of silver should be higher, but that the price of gold should be much higher]

 

Just my thoughts, but that's the projection I'm making and 67% of my net wealth is committed already (holding 15% in liquid reserve to buy a last tranche if it goes overswing low).

Good hunting all!

 

Nage42.

 

Sat, 06/06/2015 - 09:45 | 6168996 Cycle
Cycle's picture

Looking at this cyclical decadal model of gold prices, there is a strong push for higher gold prices going into the Solstice and beyond, with a target price of ~$2k by the end of 2015. An increase in demand spreading to other countries in addition to Germany aligns with the model prediction.  The usual caveat that all models are wrong but some are useful applies.

Sat, 06/06/2015 - 09:29 | 6168989 YuShun
YuShun's picture

The population of Germany is nearly ten times that of Switzerland, so it was
stupid to say that Switzerland's 13.8 "was nothing" compared to Germany's 32.2.

Sat, 06/06/2015 - 18:26 | 6170218 Max UK
Max UK's picture

Did you notice in turn, that little Switzerland generates more demand than the entirety of the USA?

Interesting referendum result, in light of that. Is it a popular citizen thing to buy gold, or just entities operating out of Switzerland who are buying, i wonder. 

Sat, 06/06/2015 - 19:31 | 6170345 daveO
daveO's picture

Do they net out exports or foreign holdings? I've bought Swiss gold. Those numbers could be a lot different.

Sat, 06/06/2015 - 09:27 | 6168987 joego1
joego1's picture

The Germans see how the Euro is unraveling via Greece. Who will be next?

Sat, 06/06/2015 - 15:02 | 6169746 ebworthen
ebworthen's picture

Yes, and there is enough familial memory of Wiemar hyperinflation for them to do the common sense thing.

"Neither a borrower nor a lender be" came right before the line "To thine own self be true." 

Greece can't repay their debt, the ECB is insolvent, and the EU is unraveling.

Sat, 06/06/2015 - 11:34 | 6169280 KnuckleDragger-X
KnuckleDragger-X's picture

Anybody with a clue knows that paper promises basically have the worth of the paper they are printed on. Full faith and credit my ass....

Sun, 06/07/2015 - 04:54 | 6171118 Pinche Caballero
Pinche Caballero's picture

? 0:41
www.youtube.com/watch?v=7GSXbgfKFWg

Do you mean to imply FRNs are merely IOUs? That is such a hard principle to get one's head around... Hmmmm- how to get the point across?

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