Paper Gold: Utopia for Alchemists
Paper Gold: Utopia for Alchemists
John Hathaway, respected authority on the gold market and senior portfolio manager with Tocqueville Asset Management has written an excellent research paper on the fundamentals driving the gold market today.
“An acute shortage of readily marketable physical gold is developing that we believe will deepen in years to come. This possibility seems to be unrecognized by those who are short the gold market through paper contracts. The relentless dumping of synthetic or paper gold contracts since 2011 by speculators in Western financial markets has caused the shortage. The steady selling has driven down the price of physical gold, hobbled the gold-mining industry, and drained the stores of gold held in the vaults of Western financial centers …”
Veteran gold market analyst and CFA, Hathaway concludes that:
“Much of what passes for financial wealth is in our opinion imprisoned in a matrix from which there is no easy exit. The return migration of capital to real assets promises to be disruptive. The misdirection of capital could well cause losses for many but opportunity for a few. The list of opportunities is short, limited in capacity, possibly complex, and difficult to access. Among the possible opportunities, gold is accessible and straightforward. Gold has a history of responding inversely to the direction of confidence.
The pool of liquid gold to meet that need has been severely depleted.
We believe that the stage has been set for a significant repricing of gold in all currencies, including the US dollar. Ownership of physical gold outside of the financial system seems to make more sense than ever. Gold-mining equities, which have been severely depressed by the four-year decline in the gold price, should also participate. We believe that a trend reversal could prove explosive for the entire precious metals complex.”
Hathaway’s comprehensive piece is well worth taking the time to read and can be accessed here
Precious Metal Prices
13 Jan LBMA Gold Prices: USD 1,081.80, EUR 1,000.00 and GBP 749.04 per ounce
12 Jan LBMA Gold Prices: USD 1,094.95, EUR 1,008.76 and GBP 756.92 per ounce
11 Jan LBMA Gold Prices: USD 1,104.70, EUR 1,014.08 and GBP 758.18 per ounce
8 Jan LBMA Gold Prices: USD 1,097.45, EUR 1,009.86 and GBP 750.67 per ounce
7 Jan LBMA Gold Prices: USD 1,096.00, EUR 1,009.45 and GBP 752.51 per ounce
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Entire city blocks will go for one gold coin. Rockefeller Center will be valued at one 2016 American Eagle... in the future.
I sometimes wonder why George W. Bush bought 300,000 acres in Paraguay Vs 300,000 Gold Buffaloes.
I hope he is fully aware, that the banksters have discussed how they could steal the sprott stockpile.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
The article talks about gold imports but doesn't say how much is offset by exports. I imagine much of India's imports are offset with exports in the form of jewelry.
No. India re-exports diamonds, but not gold.
Yikes!! Read the full article for a lot more good stuff. Maybe the best thing I've read in 6 months.
(WARNING - long but very well written piece)
Gold- where paper goes to become universal, permanent money.
I'd like to see Palladium crash. I'd love to get some maples for $300 or so.
Good luck, because That won't happen.
Especially with maples.
The price may get there but premiums will push that price up to $600 U.S.
Just like in 08, & 09
You can get them for about 5 bills now, no?
i need to fart.... ahhh.....
Was this the entry that got you all excited and filled up with gas?
"..the ratio of paper to physical gold traded is therefore 309:1..."
It's counterfeit paper gold. Some call it naked shorts, shorts without backing. I hate all these fancy words. If I can't describe an action as promises, lyin', stealin, and killin', it ain't financial. All financial paper transactions are promises. And when those paper promises are not kept, someone's lyin', stealin' or killin'. If two parties to a paper promise both lose, it was probably an honest transaction. Otherwise, it's head we win, tails you lose. Somebody's lyin' and stealin'.
socialism
Wow!!!!!! The is the most succinct article I have read on this site!!!!! Thank-you!!!!
This story is confirmed by the amount of registered gold available at the COMEX London market : it's historically low. The Chinese are not stupid by far : they imported over 2550 TONNES of gold ( physical ) in 2015. That's more than the total global production. Not even mentioning the Indians, Turks, some western investors, ....
Gold = where money goes to stop working to produce income, to rot and die.
InnVestuhrr You are so right. I think best you have all your money in US stocks and bonds. Some people just need to learn the hard way. 5000 years of monetary history has been repealed by a group of dishonest bankers? I do not thing that will be the case!
kinda like the bank.
DOW, NASDAQ, BOND MARKET = Where currency goes to be stolen.
"real wealth" -a free man's activity, fiat backed cash , and precious metals -are all being locked up in a regulatory and tax trap
they are threats to the erzatz world of debt and ocialism
Says WHO? TAX TRAP THIS! People have about had it with that Useless Tax Trap we call our Government
Where money goes? It is the truest form of money. Nitwit.
Gold is where worthless money goes to gain value.
Funny how when sunken gold treasure has been found after 500 years it still hasn't rotted and died
Your right, gold is so worthless I toss a couple of Gold Assay bars out on my Yard sale table, just to hear people say.. How much for the Paper Weights
/s
Gold, so worthless Gadaffi and Saddam had to die because of it, even if it meant destroying their countries and d-stabalising the whole of the Middle East.
Gold, so worthless Russia, China and India are stacking stacking stacking, by the ton
Gold, so worthless that the USA will destroy anyone who dares to use it as currency
John Hathaway is the grey eminence I listen to when he speaks on gold. This article summarizes best the mechanics underlying that wizard-of-oz like machine that keeps on producing a completely reality de-coupled gold-price-signal that for historical reasons is still accepted as a value-indicating, market-discovered price in the real world by miners and gold investors - albeit increasingly reluctantly. The bare fact that bucket shops such as COMEX or the LME are referred to as "commodity exchanges" is an insult for anyone with at least one functioning brain cell left.