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Canary In The Gold Mine: In Historic Move, Japanese Pension Fund Switches To Gold For First Time Ever

Tyler Durden's picture


As US weak hands keep piling out of gold whether to make space for the Facebook IPO tomorrow, or just to load up on paper currencies in advance of central banks printing much more, two things have happened: China is now on its way to becoming the biggest source of gold demand, surpassing India, but more importantly as of hours ago, in a truly historic move, "Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies." Not our words: the FT's.


Initially, the fund aims to keep about 1.5 per cent of its total assets of Y40bn ($500m) in bullion-backed exchange traded funds, according to chief investment officer Yoshisuke Kiguchi, who said he was diversifying into gold to “escape sovereign risk”.


The move into a non-yielding asset comes as funds in the world’s second-biggest pension market are under increasing pressure to meet promised payments, as domestic interest rates remain rooted near zero. This year, the first of Japan’s baby boomers turn 65, becoming eligible for payouts.


Mr Kiguchi said the lack of yield was a concern for the fund’s investment committee, but he persuaded them that “from a very long-term point of view, gold may be one of the safe currencies”. He added that he had sold Australian dollars this month to meet his initial target allocation for gold for the fund, which has 20,000 members.


Mizuho Trust & Banking, a unit of Mizuho Financial Group, has begun to offer investment schemes allowing smaller pension funds to invest in gold.


While few fund managers are counting on a crash in core assets such as Japanese government bonds, said Takahiro Morita, head of the Tokyo arm of the World Gold Council, a producers’ association, they were increasingly receptive to the idea that gold could act as a buffer against shocks. “Last year’s tsunami and the eurozone debt crisis shows that it was wise to expect the unexpected,” he said.

The first of many:

Historically, institutions in the $3.4tn Japanese pension market have clung to traditional assets. Bonds accounted for 59 per cent of industry assets in 2011, the highest share in the world, according to Towers Watson, a consultant. Just 6 per cent – the lowest share – was invested in alternatives such as property, private equity and hedge funds.


Nomura, Japan’s biggest wealth manager, added a gold option to its monthly survey of 1,000 randomly selected retail investors in February. Every month since, gold has been ranked the third-most desirable addition to portfolios, well ahead of competing assets such as investment trusts, bonds or foreign securities.

And the absolute punchline:

With institutions warming to gold, too, demand could grow further.  “If you look at assets over the past couple of decades, equity has been a loser, while fixed income offers tiny coupons,” said Yoshio Kuno, Japan head of Newedge, the futures broker. “Gold is becoming an acceptable currency substitute.”

So go ahead - dump all of your gold. The buyers are there.

In the meantime, more and more and more funds comprising the $3.4 trillion Japanese pension market will buy. And soon after, all the other pension funds, which just happen to amount to tens of trillions. Assume they allocate 5% of all assets to gold, or the market begins to discount this inevitability, and things start getting interesting.


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Wed, 05/16/2012 - 12:36 | 2431838 Squishi
Squishi's picture

old people don't have teeth anyway.

Wed, 05/16/2012 - 12:44 | 2431881 battle axe
battle axe's picture

Japanese might be smarter then we think.....

Wed, 05/16/2012 - 12:53 | 2431910 Money 4 Nothing
Money 4 Nothing's picture

I beg to differ.. Their soaking in it.

Wed, 05/16/2012 - 12:57 | 2431966 ihedgemyhedges
ihedgemyhedges's picture

"I'm sure those idiots will just sew little gold coins in to their kimonos."

Sincerely, Advisor to Charlie Munger

Wed, 05/16/2012 - 13:06 | 2431985 nope-1004
nope-1004's picture

Asshat Charlie Munger, lol.  Too old and too corrupt to see where true value lies when faced with currency wars and central bank devaluation.  Charlie Munger is one of those guys that can't change, won't change, too old to change, too corrupt to change, too embedded to change.  F' him. 


Wed, 05/16/2012 - 13:27 | 2432119 Bay of Pigs
Bay of Pigs's picture

His comments (as well as Gates and Buffets) were connected and coordinated with the MSM, FED, UST, COMEX and bullion banks to hammer the PM's. That is without question. The wailing and shrieking is as loud asd I've ever heard in 12 years of following this sector.

What is also clear is that $1895 and $48.70 (London fixes) will not be the highs for gold and silver.

Saddle up bitchez...bigger players are moving in. Don't pay attention to that lying POS Munger. 

Wed, 05/16/2012 - 13:31 | 2432146 markmotive
markmotive's picture

One pension fund in one country does not make a trend...but here's hoping it does! It's happening one-by-one...central banks, pension funds, institutional investors...

Bill Fleckenstein (of Greenspan's bubbles fame) on Gold:

Wed, 05/16/2012 - 13:34 | 2432165 strannick
strannick's picture

Now they just need to dump paper gold etfs for golden gold 

Wed, 05/16/2012 - 15:21 | 2432211 He_Who Carried ...
He_Who Carried The Sun's picture

Well, let's see whether this canary

lives or suffocates. They're already

raking in nice losses.

A pension fund that does not trust

Japanese companies' earnings and

dividends is acting rather foolhardy

from a risk-control point of view and

dismisses the future competitiveness

of Japanese industry, which is rather funny.


Wed, 05/16/2012 - 13:38 | 2432172 Bay of Pigs
Bay of Pigs's picture

Trend? LOL. You mean the 12 year Golden Bull market?

BTW, Fleckenstein a long term bull on gold.

Wed, 05/16/2012 - 13:47 | 2432216 He_Who Carried ...
He_Who Carried The Sun's picture

Every trend cometh to an end...

Wed, 05/16/2012 - 14:09 | 2432340 Bay of Pigs
Bay of Pigs's picture

Yes, and the case for gold and silver is stronger now than ever before. You calling the top?

Wed, 05/16/2012 - 15:22 | 2432705 He_Who Carried ...
He_Who Carried The Sun's picture

I am rather "topless",

as you may have noticed...

I left 'calling the top' to others

and I see no floor other than in the lower

14hundreds right now...


Wed, 05/16/2012 - 13:31 | 2432151 TheFourthStooge-ing
TheFourthStooge-ing's picture

Charlie Munger, also known as Grandpa Sleestak Magoo.


Wed, 05/16/2012 - 13:06 | 2431986 Xkwisetly Paneful
Xkwisetly Paneful's picture

Who bought Rockefeller Center and Pebble Beach at the tippy,tippy top?

 Assume this, assume that-no relative win, none at all.

Great material! Weak hands of the US to the strong hands of the IMF and the Japanese pensions.

OMFG too hysterical!


Wed, 05/16/2012 - 13:44 | 2432189 resurger
resurger's picture


You are so Anti-Semitic



Wed, 05/16/2012 - 13:56 | 2432272 Money 4 Nothing
Money 4 Nothing's picture

No, I am.

Wed, 05/16/2012 - 14:12 | 2432374 JackT
JackT's picture

Damn, if I could give you more up arrows I would at least give you 10.  Thanks for the reminder and the laugh!

Wed, 05/16/2012 - 12:55 | 2431944 Oh regional Indian
Oh regional Indian's picture

You don't need a weatherman to know which way the radioactive wind blows, I guess. 

But, just like CALPERs and Texas Ranchers.... these massive funds don't make independent decisions like this.

Nor do they necessarily make them for the good of it's retirees. Multi-billion anything anywyere is under orders, plain and simple. 

Just look at how much college endowments poured into REITS over the past decade. They number might shock you. Right through 2006-7-8, the debacle, they're still in REITS and doing rather well, against all odds.

Such things are nto smart investment decisions, those are orders.

Especially in Japan. The signal generally into large institution moving to gold is clear. 

What it portends might be an un-known.



Wed, 05/16/2012 - 17:27 | 2433123 Hook Line and S...
Hook Line and Sphincter's picture

Okayama M&M's is indeed a pioneer. Orders or not. They will find arrows in their back like all intrepid foragers of monetary safety. To underestimate the virility of the PTB's iron cock of war machinery is asking for another tsunami! Best keep their fiat and practice origamy with it. We have an infinitely long long way to go before paper-gold takes it's first hatha yoga class. That is..unless..someone revives the pan asian exchange.


wake me when I get my RFID injected

Wed, 05/16/2012 - 12:44 | 2431882 NotApplicable
NotApplicable's picture

It's paper gold. They can gum it.

Wed, 05/16/2012 - 13:08 | 2432018 Sancho Ponzi
Sancho Ponzi's picture

OT, From Rolling Stone: Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'

Wed, 05/16/2012 - 14:04 | 2432310 NotApplicable
NotApplicable's picture

Oh, this is awesome! By their own scumbag lawyer even!

Karma, bitchez!

Wed, 05/16/2012 - 13:27 | 2432122 HarryM
HarryM's picture

Hey - ya gotta start somewhere

Wed, 05/16/2012 - 13:01 | 2431925 SMG
SMG's picture

You know the only thing that bothers me about gold is supposedly there are tremendous amounts being kept off the market, hidden in private vaults and in untapped gold mines.  If that is true the Oligarchs who control such resources could just "print" gold from these hidden resources.  We'd eventually have the same thing we have now all over again, and the useless eaters would lose again.

I think silver would be a much better PM to buy.

Wed, 05/16/2012 - 13:06 | 2432001 lemonobrien
lemonobrien's picture

i have a gold coins sewed into my jeans.

Wed, 05/16/2012 - 12:52 | 2431940 TeMpTeK
TeMpTeK's picture

Just learned to sew....

Wed, 05/16/2012 - 12:59 | 2431963 vast-dom
vast-dom's picture

gold to 2k/oz, gold fronts, or lack thereof, notwithstanding.

Wed, 05/16/2012 - 13:55 | 2432267 Rich Bagg
Rich Bagg's picture

Goldbugs getting cornholed.  Without QE3 to bail their stupid asses out, expect more pain ahead.



Wed, 05/16/2012 - 14:10 | 2432330 NotApplicable
NotApplicable's picture


"Goldbugs" are backing up the truck, duh. Don't you even understand your own insults?

The only ones getting corn-holed are the weak hands who are forced to liquidate (mostly though, those aren't goldbugs, but speculators).

Wed, 05/16/2012 - 18:10 | 2433041 cranky-old-geezer
cranky-old-geezer's picture



If no QE3, you shouldn't be concerned about a few gold bugs here and there, you really should be concerned about all the big Wall Street banks collapsing and bankrupting they would have if TARP, QE1, QE2, and god knows what other backdoor bailouts hadn't happened.

You criticize a few gold bugs for losing 10%?

TBTF banks lost 100%, hell, 150%.  They lost all their money and all their depositors' money too.

No, we don't need QE3 to kick gold back up thank you.  We're not concerned about a 10% loss. 

Besides, we'd have lots of fun watching a few Wall Street zombie banks go down ...finally.

Wed, 05/16/2012 - 17:18 | 2433105 TheFourthStooge-ing
TheFourthStooge-ing's picture

Rich Bagg managed to grunt out the following:

Goldbugs getting cornholed.

Made me laugh©.

You're cornholing yourself with your own head. That's why you have such a limited view.

Without QE3 to bail their stupid asses out, expect more pain ahead.

Pull your head out of your ass and things won't look so shitty.


Wed, 05/16/2012 - 14:15 | 2432383 bernorange
bernorange's picture

You can make teeth out of gold.  Seems like a sound investment.

Wed, 05/16/2012 - 16:00 | 2432854 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

how about.......a gold cornhole plug

you'll find it in SkyMall (silver is also an option and offers some antibacterial benefits)


Wed, 05/16/2012 - 14:53 | 2432569 oldman
oldman's picture


AMEN, brother                        

and with all those boomers to chew an oldman's food---who needs teeth?

Thanks-----light enough for me                             om

Wed, 05/16/2012 - 18:47 | 2433328 Freddie
Freddie's picture

Well I like the ZH/Tyler(s) T-shirt banner ads with girls in tight T-shirts and panties.  It sure beats the O and Mochelle banner ads for 4 more years of misery.  Thanks Tyler's.

Wed, 05/16/2012 - 12:36 | 2431840 Lost Wages
Lost Wages's picture

Japanese Pension Fund.


What other buyers of size shall join in the 3rd stage of the bull market?

Wed, 05/16/2012 - 12:40 | 2431861 Quintus
Wed, 05/16/2012 - 13:10 | 2432025 mrgneiss
mrgneiss's picture

You have to wonder about a company that goes out of their way to talk down demand drivers for their products, Perth Mint and their spokesperson Bron Sucheki, who seems to spend as much time on company business as he does trolling the internet for possible bullish rumors for gold and silver he can attempt to dispel.  Jon Nadler's smarter cousin?

Wed, 05/16/2012 - 13:17 | 2432056 Quintus
Quintus's picture

Generally I would agree with you but in this instance he is correct.

Wed, 05/16/2012 - 14:10 | 2432362 NotApplicable
NotApplicable's picture

Perth Mint is a government operation. Mystery solved.

Thu, 05/17/2012 - 07:49 | 2434589 mrgneiss
mrgneiss's picture

The simplest explanation.................

Wed, 05/16/2012 - 12:45 | 2431892 ReallySparky
ReallySparky's picture

Soros jumped in Q1 too.

Wed, 05/16/2012 - 12:51 | 2431916 Zero Govt
Zero Govt's picture

you mean the Big Boys bought some shares they can rent them to the sharks, sorry shorts, to trash the Gold price even further

Soros buying anything is NOT a recommendation or indication of a bottom but more of the games they play in the rigged metals market

Wed, 05/16/2012 - 12:39 | 2431844 Cognitive Dissonance
Cognitive Dissonance's picture

I sense a change in the Matrix.

The barbarous relic suddenly seems a lot less barbarous. I wonder why?

Wed, 05/16/2012 - 12:48 | 2431904 NemoDeNovo
NemoDeNovo's picture

A "Change" yes there is a BIG Change on the horizon, the question is exactly how is it gonna go though?  I have been pondering this for quite some time -- How Bad and just how Long is this Change/transition going to be?  I don't like to deal in hope so my pragmatic side says , this ain't gonna be easy and or quick, but I do feel there is Light on the other side for those who are prepared/ready to jump this fence in to the next economy.


Just my 2c



Wed, 05/16/2012 - 12:55 | 2431953 Cognitive Dissonance
Cognitive Dissonance's picture

Chance (and luck) favors the prepared.

Wed, 05/16/2012 - 13:19 | 2432061 disabledvet
disabledvet's picture

Gold mining stocks have been flat to down in a market that has doubled. "Now you have to produce as prices are falling"? Doesn't sound bullish for price to me. I did take note John Deere was up big today.

Wed, 05/16/2012 - 18:49 | 2433337 Freddie
Freddie's picture

Someone hand Charlie Munger his ****ing gold slippers.

Wed, 05/16/2012 - 12:39 | 2431845 holdbuysell
holdbuysell's picture

Those Japanese are such uncivilized barbarians. (sarc)


Wed, 05/16/2012 - 12:46 | 2431877 Money 4 Nothing
Money 4 Nothing's picture

God Damn animals! the whole lot of 'em!


Little clue.. it won't do miracles for the spot pricing and you can't eat it either, unless you have a Cognative Disonance Sundae. Yum!

Wed, 05/16/2012 - 12:47 | 2431897 resurger
resurger's picture



Wed, 05/16/2012 - 12:42 | 2431846 Cognitive Dissonance
Cognitive Dissonance's picture

So does this mean we CAN eat Gold?

Bottoms up folks.


Personally I like my Gold southern BBQ style.

Wed, 05/16/2012 - 12:52 | 2431923 malikai
malikai's picture

C'mon man. Trans-fats. You wouldn't want to burden medicare with a triple bypass someday, now, would you?

Edit: Nevermind. I read you wrong. Maybe it was my tummy saying "southern fried".

Wed, 05/16/2012 - 12:37 | 2431847 johngaltfla
johngaltfla's picture

This is going to get good. Wait until they dump their gold in a panic because it drops below $1400, then try to buy it back when it is above $3000 and there is no physical available.

Of course they could always salt Fukushima with coal and rocks to see what the radiation mutates the material into. Perhaps they can be the first nation to create radioactive gold and diamonds.

Wed, 05/16/2012 - 12:37 | 2431852 Zen Bernanke
Zen Bernanke's picture

 i find it a departure for the Japanese not to actually buy the high in any market.  Congrats on that, but they're still wrong.

Wed, 05/16/2012 - 12:49 | 2431914 Confused
Confused's picture

Please state what you feel they are wrong about.

Wed, 05/16/2012 - 12:38 | 2431854 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They have to do something.  The fund is basically running negative in real return.

Wed, 05/16/2012 - 12:52 | 2431927 Manthong
Manthong's picture

"Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold,’

So, does this imply some are secretly buying gold now?

In that case an important question is who and how much.

Wed, 05/16/2012 - 12:40 | 2431858 Kreditanstalt
Kreditanstalt's picture

I keep looking at general equities and, as in "V for Vendetta" I  keep thinking, "WHY WON'T YOU DIE??"

Wed, 05/16/2012 - 12:40 | 2431859 resurger
resurger's picture

To Max Ficher....

Gold in ya face Bitch!

Wed, 05/16/2012 - 12:42 | 2431880 NemoDeNovo
NemoDeNovo's picture

Sir I can not +1 you enough for that comment

Wed, 05/16/2012 - 13:20 | 2432079 fuu
fuu's picture

Ok fess up, Max is really your alt account isn't it?

Wed, 05/16/2012 - 13:29 | 2432137 resurger
resurger's picture

no shit Fuu ....

Wed, 05/16/2012 - 14:12 | 2432365 fuu
fuu's picture

Sorry j/k.

Wed, 05/16/2012 - 12:38 | 2431860 cbaba
cbaba's picture

In the end eveybody will own Gold .

Wed, 05/16/2012 - 12:42 | 2431871 Money 4 Nothing
Money 4 Nothing's picture

And that peg's the price where? $16,000 an ounce?

Wed, 05/16/2012 - 18:14 | 2433263 Max UK
Max UK's picture

Through jewelry, nearly everybody does own some gold already, so it is not far fetched. 

Wed, 05/16/2012 - 19:29 | 2433431 hamurobby
hamurobby's picture

When all paper burns, there is a good chance an ounce of gold will have todays purchasing power well in excess of 100K. The question is, will we be here to see it or will it be our children.

Timing is everything.

Wed, 05/16/2012 - 12:40 | 2431863 beaker
beaker's picture

It's not much if you say it fast.

Wed, 05/16/2012 - 12:41 | 2431866 New Revenue
New Revenue's picture

But Munger said this only made sense for 1930's Austrian Jews?????    What are all these governments and pension funds thinking??????

Wed, 05/16/2012 - 12:50 | 2431924 tocointhephrase
tocointhephrase's picture



Wed, 05/16/2012 - 13:20 | 2432069 kurt
kurt's picture

I had a Butt Munger once. It was more distracting than you might expect.

Wed, 05/16/2012 - 14:14 | 2432375 NotApplicable
NotApplicable's picture

Especially the way it grabs ahold of the hair on both cheeks. It'll bring a tear to your eye.

Wed, 05/16/2012 - 13:22 | 2432081 fuu
fuu's picture

That the whole world is Austria in 1939?

Wed, 05/16/2012 - 12:43 | 2431885 DebtSlaveZombie
DebtSlaveZombie's picture

blah blah blah...

Gold goes down with the Euro and the dollar will be safe haven until its no longer a reserve currency.

Wed, 05/16/2012 - 12:43 | 2431889 Al Huxley
Al Huxley's picture

Fortunately they're buying paper gold, so they'll be able to pick up as much as they want without really moving the price or affecting the physical demand picture.   Kind of like buying pictures of food because you're concerned there may be a famine on the horizon.

Wed, 05/16/2012 - 12:48 | 2431907 BlueCollaredOne
BlueCollaredOne's picture

I love that analogy

Wed, 05/16/2012 - 12:51 | 2431931 tocointhephrase
tocointhephrase's picture

Spot on!

Wed, 05/16/2012 - 12:55 | 2431936 Cognitive Dissonance
Cognitive Dissonance's picture

"Kind of like buying pictures of food because you're concerned there may be a famine on the horizon."

I just love Southern Fried Chicken. And the round bucket is convenient as well.

Yum 2

But I do wish they would put a handle on top. Greasy fingers make for dropped chicken buckets.

Wed, 05/16/2012 - 13:37 | 2432171 BurningFuld
BurningFuld's picture

We would all like to take a moment out of our busy day to present you with the analogy of the year award.

OK, now everyone back to watching your currency depreciate.

Wed, 05/16/2012 - 14:33 | 2432478 Matt
Matt's picture

I just want to say:

"in a sign of dwindling faith in paper currencies"


"in bullion-backed exchange traded funds"

I don't think they (Japanese pension funds) have quite gotten the whole picture yet. Trading your faith in one piece of paper for another piece of paper (or digital representation of a holding in Cede & Co. that represents a piece of paper that represents a bar of gold) is not quite the same as actually owning gold.

Wed, 05/16/2012 - 15:11 | 2432638 Money 4 Nothing
Money 4 Nothing's picture

Farmville Gold.. It work's until it don't.

Wed, 05/16/2012 - 15:20 | 2432708 redguard
redguard's picture

Well said, you deserve that name and avatar.

Wed, 05/16/2012 - 12:45 | 2431894 Zero Govt
Zero Govt's picture

it's hard to get away from the "Buy Gold" theme on ZH these past months as Gold has terminally been tanking

Wed, 05/16/2012 - 12:59 | 2431973 NotApplicable
NotApplicable's picture

As it always has right before the next leg up. It got creamed back in 2008 as well.

Wed, 05/16/2012 - 13:11 | 2432039 lemonobrien
lemonobrien's picture

yeah, this is europe, and the good feelings in the US. The waves will get stronger and stronger.

Wed, 05/16/2012 - 14:05 | 2432315 Banjo
Banjo's picture

Yep. Gold has been tanking from $35 in $1550 today May 2012. Meanwhile the strong dollar....

Oh never mind most docile gamblers are in on highs and out on dips, with no overarching game plan except knee jerk trading of everything un important.

There is a quote I enjoy goes along the lines of. We know more and more about less and less. Until we know absolutely everything about nothing.

Wed, 05/16/2012 - 14:15 | 2432393 NotApplicable
NotApplicable's picture

That quote sounds like FB's business plan.

Wed, 05/16/2012 - 19:07 | 2432463 Zero Govt
Zero Govt's picture

Banjo, feel like i know you (or you know me?) ...are they making any money over at Turd Fergusons yet? ..or are Turd and Norrichi still chuckling over beers about "95% of small investors losing money" while encouraging them to lose it all following Turds 95% of the time wrong advise

if you follow self proclaimed "experts" like Turd or Rob Prechter and his goons at Elliot Wave who get it wrong 95% of the time is it any wonder small investors lose money 95% of the time ...Doh!

Wed, 05/16/2012 - 12:45 | 2431898 KandiRaverHipster
KandiRaverHipster's picture

yeah some canary.  a couple months down the road, when all the World is all in the gold game the game, the Fed and the banks are going to rip out the floor.  then the bombs start dropping.  i've seen this game before.

Wed, 05/16/2012 - 12:47 | 2431901 manhunter
manhunter's picture

They are buying paper gold, not physical.

Wed, 05/16/2012 - 12:46 | 2431903 fonzannoon
fonzannoon's picture

It's asinine. The whole thing. It's still paper pushed all over the place. Until someone asks for delivery and gets nothing.

Wed, 05/16/2012 - 12:48 | 2431905 5880
5880's picture

close to a buy

Wed, 05/16/2012 - 12:47 | 2431909 Rastamon
Rastamon's picture






welllll..... it's not REAL gold .... it's an ETF purchase ... but hey....we all have to start somewhere.

Wed, 05/16/2012 - 12:54 | 2431939 resurger
resurger's picture

good enuff for the short squeeze

Wed, 05/16/2012 - 12:50 | 2431920 fonzannoon
fonzannoon's picture

I own some of the miners. They just keep getting whipsawed all over the place. I just want one of them, just one to come out and say "Hey fk you, we ain't selling at these levels. Go buy the etf"


Wed, 05/16/2012 - 13:18 | 2432064 Floordawg
Floordawg's picture

I'm not sure about the current downtrend, but I just read through the Endeavor Silver circular and they mentioned they stopped selling during the 2011 Q4 - 2012 Q1 lows.

I would like to think that most of these companies realize the value of what they have.

Wed, 05/16/2012 - 13:42 | 2432198 fonzannoon
fonzannoon's picture

I read that too. That stock is getting taken to the woodshed. I would love to jump in but I can't see support anywhere in sight.

Wed, 05/16/2012 - 12:52 | 2431935 silverserfer
silverserfer's picture

Yeah um no. The article is missing the point. They did NOT buy any gold. They bought unbacked gold ETF. All they did was give more ammo($) for the gold ETF provider to short gold some more.

In a gold standard your gold certificates are redeemable for actual gold. You will never get any gold from a gold ETF. 

Gold ETF's are for geezers who watch HSN.  

Wed, 05/16/2012 - 14:04 | 2432307 Nage42
Nage42's picture

Can't resist.

RTFM mate.

There certainly are some ETFs that are 1:1 gold redemable.

From Sprott PHYS "holdings of unencumbered, fully allocated, physical gold bullion and will not speculate with regard to short-term changes in gold prices. One of the unique features of the Trust is the ability of Unitholders to redeem their Units on a monthly basis for physical gold bullion."

N.B. I do not hold any PHYS, cause I don't want to be within spitting distance of any US-traded asset when FATCA comes into effect.

Ultimately, do you want to be reading fine print, hiring lawyers, going to court, and waiting in line if things all come unhinged?  Prolly not, right?  On an ETF, it could well be that the ETF is fully legitimate, but the exchange that it trades on is corrupt, or the broker (broke-her) gambles with your assets while reporting that "ya... sure, we've got your money in our accounts... *cough*"

If you do take ownership of physical, don't tell anyone, diversify the placement, minimum 4-locks, and _expect_ someone to try to kill you for it when everything goes pear-shaped.

I'm just sayin....

Wed, 05/16/2012 - 12:54 | 2431938 Hulk
Hulk's picture

Its on Bitchez !!!

Wed, 05/16/2012 - 12:55 | 2431945 Tao 4 the Show
Tao 4 the Show's picture

Bull markets never take all riders with them until perhaps in the final blow off phase. Logically then, public enthusiasm during the bull has to be matched or overwhelmed by discouragement. After three years of nearly continuous rise (since last sizeable correction), sentiment has to be beaten to a pulp enough to make the obvious no longer obvious to the masses. And the CB's don't mind helping out.

Wed, 05/16/2012 - 12:55 | 2431946 LoneStarHog
LoneStarHog's picture

How does one say UNCIVILIZED in Japanese?

Wed, 05/16/2012 - 13:12 | 2432042 lemonobrien
lemonobrien's picture


Wed, 05/16/2012 - 14:36 | 2432495 Uchtdorf
Uchtdorf's picture

That just means "rude," or, translated literally, "lost manners."

Wed, 05/16/2012 - 13:20 | 2432068 Bizaro World
Bizaro World's picture

Fukufiat.......though it is still paper gold, but I think people should focus on sentiment, not necessary whether they bought the right type of gold.

Wed, 05/16/2012 - 14:39 | 2432492 Uchtdorf
Uchtdorf's picture

That would be "yaban." A "yabanjin" is commonly translated into the English as a savage, as in all the savages from sea to shining sea had to be killed or put on reservations for Manifest Destiny to be fulfilled.


And I can't imagine why somebody would give you negative feedback for that question.

Wed, 05/16/2012 - 12:55 | 2431947 falak pema
falak pema's picture

why isn't this sending gold up? After Soros and Paulson; big people seem to move into gold. Yet no signs of gold losing its flaccid performance of last few weeks. 1540s is no a good date. Council of Trent.

Pope Paul III - Wikipedia, the free encyclopedia

In the bulls Dum diversas (1452) and Romanus Pontifex (1455) the right of taking pagans as perpetual slaves was granted to Christians. In the opinion of some, these bulls served as a justification for the subsequent era of slave trade and colonialism.

The gold value is at 1540, ominous for future slave trade. As if it slips to 1452 all bets are off!  Regression and human hope all depend on the value of gold. Beware of the fall to 1455! Remember when Constantinople was lost. All the fault of gold! Venetian gold.

Wed, 05/16/2012 - 13:00 | 2431980 LoneStarHog
LoneStarHog's picture

Why? ... PAPER DERIVATIVES being used by TPTB to keep gold/silver depressed as the end of fiat progresses to its conclusion.

Wed, 05/16/2012 - 13:05 | 2432000 falak pema
falak pema's picture

Yes, thanks for reminding me, gold is a two headed dog and Soros/Paulson are in paper gold ETFs

Wed, 05/16/2012 - 12:59 | 2431967 Bastiat009
Bastiat009's picture

The higher the demand, the lower the price. That's for the gold market.

The higher the supply, the higher the price. That's for the Treasury and US$ market.

Go figure.

Wed, 05/16/2012 - 13:00 | 2431969 Elmer Fudd
Elmer Fudd's picture

Paper gold?  Stored right there?  With a wittle itty bitty piece o paper with your name on it? 

Wed, 05/16/2012 - 13:28 | 2432130 Money 4 Nothing
Money 4 Nothing's picture

Just don't dare try to warrant it. More theft in progress, we return you to your regular programming.

"The Whale"


Wed, 05/16/2012 - 12:59 | 2431976 Missiondweller
Missiondweller's picture

Last I checked the World Gold Council website, gold represented 1% of world assets under management.


If it just went to 2%, imagine the move in gold.

Wed, 05/16/2012 - 13:01 | 2431977 Venerability
Venerability's picture

But I thought the Japanese were civilized?

Wed, 05/16/2012 - 13:00 | 2431979 midgetrannyporn
midgetrannyporn's picture

Japanese investors are perhaps the dumbest on the planet. Pension funds doubly so. This move confirms it.

Wed, 05/16/2012 - 13:05 | 2431991 Hannibal
Hannibal's picture

Hedgies comments getting really stupid!

Wed, 05/16/2012 - 13:06 | 2431998 Village Smithy
Village Smithy's picture

Imagine the discount that the smart money has procured for themselves simply by selling down the useless over-hypothecated paper GLD, thereby pushing down the price of physical which they have no doubt been buying with both hands. It's nice when we can take advantage of market manipulation to.

Wed, 05/16/2012 - 13:07 | 2432009 GrinandBearit
GrinandBearit's picture

The writing is practically on the wall.  The financial bobbleheads are saying gold is finished.  Even some PM advocates are sounding discouraged.  The negativity is starting to kick into high gear, although it is nowhere near a peak yet.  Contrary investors should take note.

In the meantime I believe PMs will continue to follow the stock market down.  However, I believe there will be a black swan event where people rush out of the USD into gold and silver.  It will happen very quickly and scare the shit out of everyone.

Buy it now while you still can.  

Wed, 05/16/2012 - 13:10 | 2432022 larynx
larynx's picture


If you dont have an FT account, like me - here is how i could read the article:

Do a google search for: Okayama Metal & Machinery gold

Then switch to News search and search again.

I got exactly one result:

Financial Times - vor 2 Stunden Okayama Metal & Machinery has become the  first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in .
Wed, 05/16/2012 - 13:13 | 2432040 DebtSlaveZombie
DebtSlaveZombie's picture

Oh, and on this is unchanged...

It's always something.  I know the ZH writers must have large positions in gold and silver because even when evidence in the near term says gold is gonna go down, its never mentioned that MAYBE its a good time to sell a little to realize some gains and have cash to accumulate on a dip.  Nothing goes straight up.  No asset class outperforms every other class ALL the time.  Sell when others get greedy?  how about dumping silver at 45?  or gold at 1800/1850?  Nope. BUY BUY BUY.  Now, all the sheep are saying "Wow...1550 gold, its super cheap now!!"  Just like housing was cheap last spring...oops...just like silver was a steal at 33....oops.... Maybe, since 99% of the assets around the globe move with news on Europe, it is prudent to tell ZH readers that gold will sink along with the EURUSD and in the near term, the bottom will depend on how far the Euro sinks.  That MAYBE taking some off the table and putting it in cash is a better idea than cramming all the mom and pop investors into an asset class they don't understand.  Gold and Silver are not safe havens.  They are speculative buys just like every other commodity.

Wed, 05/16/2012 - 13:23 | 2432091 larynx
larynx's picture

I understand your Viewpoint - but it has some errors in it.


1. I dont think ZH is a trading letter - there are many trading services out there which will give you exact buy & sell orders.

2. You should not trade Gold and trading Silver is a rocket ride - PM are there, like an issurance, for after the "Event"


Wed, 05/16/2012 - 13:27 | 2432105 kg2601
kg2601's picture

well said but that is precisely why i am buying because Euro will rise from here

Wed, 05/16/2012 - 13:40 | 2432182 DebtSlaveZombie
DebtSlaveZombie's picture

Why?  Everyone in Europe is buying dollars....

Wed, 05/16/2012 - 13:41 | 2432195 fuu
fuu's picture

Faux Concern is Faux.

"That MAYBE taking some off the table and putting it in cash is a better idea than cramming all the mom and pop investors into an asset class they don't understand."

Ma and Pa are not reading ZH.

Even if they were reading ZH, which they aren't,  is Tyler standing over their AmeriTrade account with a gun to their head?


Just another of the never-ending posts re: Tyler is stealing granny's milk money while bending her over her keyboard screaming, "YOU HAVEN'T BEEN FUCKED LIKE THIS SINCE GRADE SCHOOL BITCHEZ!"

Wed, 05/16/2012 - 14:04 | 2432308 DebtSlaveZombie
DebtSlaveZombie's picture

Ma and Pa = inexperienced investors who think they can make money day trading, not your mom and dad

And yes, they are reading this.  Go out to the SLV and GLD message boards... google anything related to economic collapse, currency crises, the Schiff/Faber/Ron Paul conglomerate, debt crises, etc etc and zero hedge will pop up somewhere in that search.  Not hard to find.  And when they read this, they feel like they have a "can't miss" opportunity to make money.  But, thats why most people including the "pros" lose money.  I'm saying if ZH prides itself on giving you the information that the mass media will not discuss or ignores, or fills you in on the BS that the government tries to pedal, then they are obligated to inform you when even gold and silver are approaching short term danger zones, or when commidities are in "overbought" territory.  Just sayin... it works both ways no matter who's reading this blog.

Wed, 05/16/2012 - 14:18 | 2432397 fuu
fuu's picture

"And when they read this, they feel like they have a "can't miss" opportunity to make money."

So Tyler is responsible for people being stupid now?

Wed, 05/16/2012 - 14:25 | 2432443 NotApplicable
NotApplicable's picture

Obligated? I think you're stretching things a bit in order to make a point.

Anybody who reads this post and runs out and buys gold because of it, well that's their prerogative, isn't it? Besides, you could be completely wrong in both your outlook (the short-term danger zone) as well your belief that ZH has any obligation to do anything other than what they already do.


Wed, 05/16/2012 - 15:14 | 2432681 TheFourthStooge-ing
TheFourthStooge-ing's picture

DebtSlaveZombie said:

Ma and Pa = inexperienced investors who think they can make money day trading, not your mom and dad

Sometimes learning is painful. For inexperienced investors who think they can make money day trading, pain will be the most likely, and most effective, pedagogical method employed in their education.

Some people have to stick their hand in a fire more than once before they acquire the basic knowledge that fire is hot.


Wed, 05/16/2012 - 20:15 | 2433535 jackinrichmond
jackinrichmond's picture

maybe people don't trade their bullion..  they accumulate it.  it is a long term investment.. like real estate.

traders have a hard time understanding the mindset of a gold/silver investor.  we all know that we could buy and sell it to make extra return.  the decision not to trade it isn't about short term gain (or loss), it is about a long term investment.  it's a choice to hedge against fiat currency - to rely on countless generations of experience in preservation of wealth.  it's not about trading up, its all about accumulation.


Wed, 05/16/2012 - 13:14 | 2432051 delivered
delivered's picture

Long term, never been more bullish on PMs but short-term, I still see a major hammering coming. The situation is Greece is driving a classic move out of equities and commodities and into of all things (considered safe as hard as it may seem), USDs and USTs. My problem isn't with the situation in Greece as it is dire with really only one way out (default on the debt, exit the Euro, re-introduce the Drachma and take all of your medicine in one major shock all at once). A problem 100x is present with all of Europe as Greece is only a short preview of the shock that is going to come from Spain, Italy, and eventually the balance of Europe. Greece's problem's are nothing compared to what's coming down the pipe and as previously noted, once the real capital flow exits Europe, it has only one place to go which is the USD/USTs (which of course is just a "bigger" Europe but which will take more time to collapse).

When the real panic starts in Europe and their equity and debt markets capitulate, the capital flight will be something truly amazing to watch. At first to the USD/USTs but in the end, once everyone realizes that the US's problems are even bigger than Europe and that they are all on the same side of the trade (in USDs and USTs), real assets will be the last home for capital (including PMs). We've seen this story play out before in terms of global economic stress and the immediate flight out of risk into perceived safety. Been played out multiple times over the past five years. But I can't help but think the turmoil that's coming down the road as the EU disolves will at first, push PMs into a deep dive and then once and for all, every weak hand in PMs is completely flushed out, the flood gate will open to the upside.

Also, wanted to pass along two additional thoughts on the current situation. First, Germany's and the EU's concern isn't with Greece leaving the Euro. Rather, it's with Greece eventually succeeding with leaving the EU and re-introducing a state currency (as the rush to exit would intensify). Second, this rush into the USD and USTs has to be providing large holders including China, Petrodollar countries, etc. with a great opportunity to exit from some of their positions into assets they will need long-term to support their respective country needs. Need energy resources on the cheap, no problem as they're on sale. Need strategic real estate in Greece, again on sale. Just give us your USDs and here you go as we need the cash.

BTW, and here's a thought to consider. Greece's situation is far beyond economic issues now as its relatively strategic location in Europe with its proximity to the Middle East and tremendous energy resources should have caught the attention of the likes of China, Russia, and India. Developing a presence in this region with military resources would help protect their interests long-term and needless to say, ruffle a few feathers with NATO and the US. What's a couple hundred billion USDs to China (given that this asset is going to decrease in value anyhow) to bail out Greece in exchange for say some prime real estate and influence in region. Doesn't matter if it's a distressed company with assets of value remaining or a distressed country of strategic importance, capital will find it as some point for the right price.

Wed, 05/16/2012 - 13:31 | 2432141 DebtSlaveZombie
DebtSlaveZombie's picture

Thank you.  F*ckin' A right.  Nice post.

Wed, 05/16/2012 - 14:17 | 2432395 earleflorida
earleflorida's picture

Yep, and please don't forget that ottoman 'turkey'?

Wed, 05/16/2012 - 13:18 | 2432058 Obnoxio
Obnoxio's picture

Gold miners should start stock piling gold to add value to their shares as gold in hand is worth more than gold in the ground. When real interest rates are negative, government spending is far above revenues and debt is unsustainable then gold is still a good place to be.

Wed, 05/16/2012 - 13:22 | 2432086 DebtSlaveZombie
DebtSlaveZombie's picture

Most don't have the cash flow for this.  And most hedge their positions anyway.  Actual gold prices don't matter much to the miners because they have locked in prices to minimize impact of major swings in the market, like whats going on right now.  You'd be crazy to try and run a business like this and not hedge.

Wed, 05/16/2012 - 13:39 | 2432177 Obnoxio
Obnoxio's picture

I wonder how the miners don't have good cash flow when they make $500+ profit per ounce of gold. They should work together like Canpotex does in the potash market. By hedging they give the paper pushers control of prices. They could stockpile the gold and let out a certain ammount into the market based on the prices offered.

Wed, 05/16/2012 - 14:23 | 2432432 earleflorida
earleflorida's picture

"Gold Field's Inc", sure they hedge,... but in an unorthodox way -- they buy/own the governments!

Wed, 05/16/2012 - 13:20 | 2432073 orangegeek
orangegeek's picture

All these nuggets of info to pump the price of gold.  If gold rises, the USD will likely fall and the markets will likely rise.  Not a likely scenario imo.

Thu, 05/17/2012 - 03:41 | 2434334 Alpha Monkey
Alpha Monkey's picture

You fail to see the big picture.

Wed, 05/16/2012 - 13:24 | 2432085 gckings19
gckings19's picture

Japanese pension fund buying gold at historicalaly high levels and selling equities at historically low levels.....not my idea of a smart trade but maybe they are right.   even a blind squirrel finds a nut sometimes.  but i would be hesitant to bet with a japanese pension fund.

Wed, 05/16/2012 - 13:26 | 2432095 Money 4 Nothing
Money 4 Nothing's picture

Attention citizens of Japan..

Radioactive Gold... must .. be .. quarantined! Thow all that crap in the trucks that are passing out front of your homes!

-J.P. Morgan

witness signature.



Wed, 05/16/2012 - 13:51 | 2432247 Joebloinvestor
Joebloinvestor's picture

Gold cannot be made radioactive.

That is the big technical error in "Goldfinger".

If you don't believe me, look it up.

One of gold's "dirty little secrets".

Wed, 05/16/2012 - 19:53 | 2433490 jackinrichmond
jackinrichmond's picture

what about silver ?  

Wed, 05/16/2012 - 13:27 | 2432116 bugs_
bugs_'s picture

big american coupons

Wed, 05/16/2012 - 13:28 | 2432117 FranSix
FranSix's picture


Ever since a 12-year old girl shot holes through the propaganda tarp in the invasion of South Ossettia by emphatically reversing the story, ppl have been listening to twelve year old girls:

Wed, 05/16/2012 - 13:28 | 2432128 Arnold Ziffel
Arnold Ziffel's picture

Scare 'm out! That's good for PM investors. Last time Hank Paulson scared (and threatened) the world I bought GLD when it plunged to 69......and SLV at 10.2.....he he then rebounded as the Fog (and BS) cleared.

Wed, 05/16/2012 - 13:38 | 2432174 spekulatn
spekulatn's picture

HedgeN-the-Bass, bitchez!


Japanese style.

Wed, 05/16/2012 - 13:42 | 2432191 Dead Canary
Dead Canary's picture

Canary in a GOLD mine! That's a nice change.

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