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Guest Post: The World’s Gold Is Moving From West To East

Tyler Durden's picture




 

Submitted by Tim Staermose of Sovereign Man

The World’s Gold Is Moving From West To East

Did you know that, according to Capgemini and the Royal Bank of Canada’s latest World Wealth Report, there are now more millionaires in Asia than North America…?

An estimated 3.37 million individuals in the Asia-Pacific region have a liquid net worth of over US$1 million. That compares to 3.35 million in North America.

The same trend is evident in the gold market.

While the current world hubs for gold trading and storage are London, Zurich, and New York, stores of physical metal are also beginning to migrate east. Gold storage facilities are springing up all over Asia like mushrooms after a summer rain.

Back in 2009, the Hong Kong Airport Authority set up the first secure gold storage facility inside the confines of the Hong Kong Airport.

This September, Malca-Amit, the Tel Aviv-based diamonds and precious metals company is opening a second state of the art facility at the airport, which will have capacity for 1,000 metric tons of gold.

That compares to the 4,582 tons that the US government claims is in Fort Knox, and the record 2,414 million tons that the world’s exchange traded gold funds collectively held – mostly in London– as of July 5th.

Malca-Amit also has a facility in Singapore’s Freeport complex, and the company is planning a third Asian precious metals storage facility in Shanghai in the near future.

Speaking of Singapore, Simon has written before that the government there recently announced a series of incentive measures aimed at grabbing as much as 15% of the world’s physical gold trade within 5 to 10 years.

Among the measures, the Singapore government will exempt investment-grade gold, silver and platinum from the local goods and services taxes (similar to VAT or sales tax), beginning October 1, 2012.

ViaMat, one of the world’s most well-known secure logistics companies, is also doing heavy business in Singapore and Hong Kong. ViaMat, in fact, is the security partner for such groups like GoldMoney.com and HardAssetsAlliance.net which offer turnkey gold storage solutions.

Private individuals can contract directly with ViaMat, though their fees can be quite steep… so this may not make sense unless/until your holdings exceed several hundred ounces.

For private investors with smaller holdings, a place like The Storage in Hong Kong is a great option, especially considering how inexpensive it is to buy gold in Hong Kong.

Simon and I have both written before that premiums on gold coins in Hong Kong can run as little as 0.15% above spot—you can see this for yourself at places like Hang Seng Bank and the Bank of China, both located on Des Voeux Road.

One of the great advantages of Hong Kong as a place to buy, sell and store gold is that there are no taxes or duties on imports or exports of precious metals. There is no local sales tax either.

Moreover, the market for precious metals is deep and active, and no one bats an eyelid if you walk into the bank and drop a wad of cash to exchange for gold bullion.

Contrast this with places like the United States where cash transactions are increasingly being viewed with major suspicion, and the government is trying to recruit everyone from bankers to coin dealers into being unpaid spies.

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Mon, 07/30/2012 - 15:15 | 2663111 debtor of last ...
debtor of last resort's picture

So is production.

Mon, 07/30/2012 - 15:19 | 2663131 Haddock
Haddock's picture

And jobs.

Mon, 07/30/2012 - 15:27 | 2663159 Wakanda
Wakanda's picture

And artistic talent.  Check the awesome Asian musicians at Julliard, Mannes, Manhattan School of Music, Curtis...

Mon, 07/30/2012 - 15:29 | 2663172 Pladizow
Pladizow's picture

 

 

1807 - London

1907 - New York

2007 - Asia

Mon, 07/30/2012 - 15:40 | 2663219 Pladizow
Pladizow's picture

TSA advise on how to transport your gold: http://www.youtube.com/watch?v=olEoc_1ZkfA

Mon, 07/30/2012 - 15:46 | 2663239 flacon
flacon's picture

Is that million dollars tied up in illiquid and mark-to-fantasy assets like real estate?

Mon, 07/30/2012 - 15:58 | 2663258 Dr Benway
Dr Benway's picture

LOL. First off, how many gold coins would you need to buy to get 0.15% over spot?

 

Secondly, several of the author's articles idiotically suggest buying gold in ways that remove key advantages of gold, so that in effect you do not have gold any more.

 

To wit: Suggesting we lend our gold to Vietnamese banks and receive paper certificates, or that we buy and store gold in China. I'm not sure who sees those things as having no counterparty risk.

Mon, 07/30/2012 - 16:15 | 2663313 HungrySeagull
HungrySeagull's picture

I think 4 gold coins get you reported to the IRS.

 

Me thinks a gold lined cardboard box in Singapore might be a good buy.. or at least a long boat.

Mon, 07/30/2012 - 18:51 | 2663683 boogerbently
boogerbently's picture

So, why is the price of gold stagnant???

And, when will it be "allowed" to run???

Tue, 07/31/2012 - 04:28 | 2664313 Harlequin001
Harlequin001's picture

'The World’s Gold Is Moving From West To East'

So the gold price in terms of goods will be higher in the West than in the East...

Cool...

Mon, 07/30/2012 - 18:06 | 2663623 Panafrican Funk...
Panafrican Funktron Robot's picture

Indeed.

"turnkey gold storage solutions"

Anytime I see the word "turnkey", I jog vigorously in the opposite direction. 

Tue, 07/31/2012 - 17:35 | 2666522 Hobbleknee
Hobbleknee's picture

Isn't that what the US does?

 

___________________________________

Compare gold and silver prices

Mon, 07/30/2012 - 15:40 | 2663217 Wakanda
Wakanda's picture

2057 - India?

Mon, 07/30/2012 - 15:48 | 2663241 Cast Iron Skillet
Cast Iron Skillet's picture

but ... asia isn't a city ...

Mon, 07/30/2012 - 15:28 | 2663163 Precious
Precious's picture

If you owned 90% of the west's debt, you might want gold instead of paper too. 

Mon, 07/30/2012 - 19:16 | 2663723 Muddy1
Muddy1's picture

SO WHAT???????????????  With over a BILLION people in China alone they should have more millionaires.  Now then, go back and look at the numbers as a percentage of population and find out what really matters.

Mon, 07/30/2012 - 15:14 | 2663115 Rahm
Rahm's picture

Do you need another reason to buy gold?  BUY with both hands!

Mon, 07/30/2012 - 15:17 | 2663121 Jason T
Jason T's picture

"The soft summer wind stirs the redwoods, and Wild-Water ripples sweet cadences over its mossy stones. There are butterflies in the sunshine, and from everywhere arises the drowsy hum of bees. It is so quiet and peaceful, and I sit here, and ponder, and am restless. It is the quiet that makes me restless. It seems unreal. All the world is quiet, but it is the quiet before the storm. I strain my ears, and all my senses, for some betrayal of that impending storm. Oh, that it may not be premature! That it may not be premature!"
- Jack London, Iron Heel

Mon, 07/30/2012 - 20:24 | 2663827 Dugald
Dugald's picture

Thank you for that..............

Mon, 07/30/2012 - 21:55 | 2663968 goat
goat's picture

Who the fuck downvotes Jack London?

Mon, 07/30/2012 - 15:17 | 2663123 Conax
Conax's picture

While it has been discussed for many months, it's always good to headline the story once in a while.

Wait til the silver runs low, they will be chasing that white metal all over the joint.. Hopefully I'll live to see that great day.

Mon, 07/30/2012 - 16:08 | 2663293 Haddock
Haddock's picture

Then you'll be rich through speculation like a million other wankers whom you claim to despise.

Mon, 07/30/2012 - 16:17 | 2663323 HungrySeagull
HungrySeagull's picture

I don't know about rich.

If there is for example 1000 dollars per ounce silver spot, I would liquidate instantly.

Stories of a few coins buying a city block are out there.

Mon, 07/30/2012 - 16:43 | 2663409 Conax
Conax's picture

Nah, not rich. I will be exonerated from fooldom in my family, though.

Mon, 07/30/2012 - 17:13 | 2663506 americanspirit
americanspirit's picture

Hi Seagull - if silver were to hit $1000 spot and you were to liquidate I would keep a close watch over my shoulder if I were you. My guess is that any place that was buying silver at that price would be under multiple levels of surveillance and that you would be followed home by little cameras in the sky. Next thing you know, men in black would be paying you a visit. As for me if it gets anywhere near that level in $ I would be executing some more clandestine strategies - that is, if I had any, which I don't. Wish I did tho. But if I did I sure wouldn't be trading it for paper money. I remember in the 40's and 50's on military bases overseas we used script, not dollars. About every 6 months or so there would be an announcement to turn in all your old script for new script because in 24 hours the old money would be worthless. A lot of black market traders would be caught with large amounts of soon-to-be worthless script. I was only a kid but boy did I make some great deals. Completely illegal of course, and my Dad would have been court-martialed if his son had been caught, trading in script for black marketeers, but I never was caught and I had an awesome collection of Nazi regalia by the time everything settled. Just saying - there's nothing at all to prevent the US government from announcing that in 24 hours all currently circulating money will be worthless and that you have 24 hours to trade in your old money for new notes. All electronic money would be frozen and automatically converted. Your old $100 in that Schwab account would now be a brand new shiny $1, and just try to bitch about it. Wouldn't you feel foolish if you had just liquidated your stash of silver for cash?

Mon, 07/30/2012 - 17:36 | 2663550 HungrySeagull
HungrySeagull's picture

Valid points.

I suppose everyone tries to get ready for the final cremation of the US Dollar by buying Bullion, however very little if anything is written about post-conversion.

I would feel foolish if I sold at the wrong time at losses yet to be imagined.

I would think to explain my stragety because in the post-collaspe of the Dollar from 100 to one new money, no one is going to be able to move anything of value in a transaction without it being recorded.

Bankers would find themselves out, as in all the way out. The Nation will forever truly be the master of your purse. Not the Banks.

People will not be able to function without cash in some form even if it is in Brandy and Cigerettes. (Or even some services rendered privately....)

 

If the US Dollar system was no good, worthless and so on these Pre -64 coinage would be a sack full of pre-melt silver and whatever else by percentage.

Mon, 07/30/2012 - 18:58 | 2663690 boogerbently
boogerbently's picture

For the price of silver or gold to increase, by any great level, that would imply the "ceiling" had been lifted.

If the manipulation were ended, that would mean the margins for the miners improve IMMEDIATELY.

No "men in black" controlling investments there.

Mon, 07/30/2012 - 15:17 | 2663124 Robot Traders Mom
Robot Traders Mom's picture

Is a diamond company in Israel a safe place to store large quantities of gold?

 

You learn something new every day!

Mon, 07/30/2012 - 15:29 | 2663177 Precious
Precious's picture

Maybe if you have some perverse desire to have your gold melted down someday.

Mon, 07/30/2012 - 15:19 | 2663130 Elmer Fudd
Elmer Fudd's picture

2414 million tonnes are held by the ETF's? For real?

Mon, 07/30/2012 - 15:23 | 2663143 johny2
johny2's picture

Its the gold made of paper ofcourse

Mon, 07/30/2012 - 15:23 | 2663147 francis_sawyer
francis_sawyer's picture

Auric Goldfinger will be along to visit the London Olympics any minute now...

Mon, 07/30/2012 - 15:28 | 2663152 JustObserving
JustObserving's picture

About 160,000 tons mined in human history

About 100,000 tons available as bullion today (maximum)

USA claims to have about 8000 tons (unaudited)

Indian consumers have 18,000 tons

Mon, 07/30/2012 - 15:29 | 2663178 ParkAveFlasher
ParkAveFlasher's picture

I believe the author meant to say, "a thousand million boojoogillian zillion"

Mon, 07/30/2012 - 18:59 | 2663694 boogerbently
boogerbently's picture

I believe you misspelled "boojoogillian."

:)

Mon, 07/30/2012 - 15:37 | 2663197 Pladizow
Pladizow's picture

More interesting:

50,000 tons believed to be still in the earth.

About 2500 tons mined per year.

So in 20 years - all gold is gone!

Silver may beat this, Adrian Douglas says silver could be the first element to go extinct!

Mon, 07/30/2012 - 16:19 | 2663331 AnAnonymous
AnAnonymous's picture

Depletion of resources, depletion of resources, ultimate goal for US citizens...

Coming to a place near to you

US world order...

Mon, 07/30/2012 - 22:00 | 2663976 goat
goat's picture

All your citizenism are belong to us

Tue, 07/31/2012 - 03:20 | 2664276 CompassionateFascist
CompassionateFascist's picture

Depletion of puppy dogs...ultimate goal of Chicom citizenist citizens. Yum. 

Mon, 07/30/2012 - 19:01 | 2663698 boogerbently
boogerbently's picture

87% of all statistics are completely fabricated.

Mon, 07/30/2012 - 16:45 | 2663418 DosZap
DosZap's picture

About 160,000 tons mined in human history

About 100,000 tons available as bullion today (maximum)

USA claims to have about 8000 tons (unaudited)

Indian consumers have 18,000 tons (this figure has been adjusted, now the # is 22,000 Tons.

More than ALL the soverign countries reported holdings on the globe.

Mon, 07/30/2012 - 15:32 | 2663185 Michael
Michael's picture


Estimates vary buy ZH's number is incorrect. How Much Gold is in the World?

“What people need to realize is, they call it precious metals because it really is so rare. If you took all of the physical gold that exists above ground in the world and melted it down into one giant cube, that cube would measure 20 yards, by 20 yards, by 20 yards. It’s a tiny market.”

That figurative cube of gold would measure to be the length and width of two volleyball courts side-by-side, while being 20 yards thick.

http://www.wealthdaily.com/resources/how-much-gold-is-in-the-world

If the estimates are correct and there has  been 158,000 tones of gold recovered from “Mother Earth” (assuming 24 K purity) then that would translate into 5,079,817,925 troy oz. of the precious metal. However unless you are Bill Gates or one of the other billionaires on the planet, I still have a hard time grasping what over 5 billion ounces of gold would look like. Back to the calculator.

http://www.coinweek.com/bullion-report/how-much-gold-is-there-in-the-world/

Mon, 07/30/2012 - 15:37 | 2663208 youngman
youngman's picture

"that cube would measure 20 yards, by 20 yards, by 20 yards.".......yeah but you couldnt pick it up......

Mon, 07/30/2012 - 19:00 | 2663695 Wakanda
Wakanda's picture

But I could stare with my jaw hanging open.

Mon, 07/30/2012 - 19:01 | 2663700 boogerbently
boogerbently's picture

30 kubits by 20 kubits......

Mon, 07/30/2012 - 16:19 | 2663329 HungrySeagull
HungrySeagull's picture

In other words for every bar of actual gold in existance there are a thousand claims of ownership?

 

Good god, the Inferno would be something to behold. I hope these ETF facilities are one story buildings instead of skyscrapers as a anti suicide preventive measure.

Mon, 07/30/2012 - 15:20 | 2663138 hkfundie
Mon, 07/30/2012 - 15:22 | 2663144 Robot Traders Mom
Robot Traders Mom's picture

If anyone is going to pimp a website around here, it will be me.

Mon, 07/30/2012 - 15:26 | 2663155 francis_sawyer
francis_sawyer's picture

Last week your son was telling everyone how 10y notes combined with the strong dollar was the best game in town... How's that trade working out for him?

Mon, 07/30/2012 - 15:49 | 2663244 Robot Traders Mom
Robot Traders Mom's picture

He is still in Juvenile. They cut off his computer access.

Do NOT follow this link or you will be banned from the site!