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IMF: Gold Is Scarce “Safe Asset” And “Growing Shortage of Safe Assets”

Tyler Durden's picture




 

From GoldCore

IMF: Gold Is Scarce “Safe Asset” And “Growing Shortage of Safe Assets”

Gold’s London AM fix this morning was USD 1,655.50, EUR 1,261.33, and GBP 1,039.04 per ounce. Yesterday's AM fix was USD 1,654.00, EUR 1,261.63 and GBP 1,040.25 per ounce.

Silver is trading at $31.56/oz, €24.01/oz and £19.78/oz. Platinum is trading at $1,583.75/oz, palladium at $637.50/oz and rhodium at $1,350/oz. 


Cross Currency Table – (Bloomberg)

Gold fell $0.90 or 0.05% in New York yesterday and closed at $1,658.10/oz. Gold has been trading sideways in Asian trading and remains in a tight range in Europe this morning near $1,656.07/oz. 

Gold remains supported this morning as the ECB signalled that it would intervene in the debt markets on worries about Spain and the risk of contagion in the Eurozone.  ECB board member Benoit Coeure said “the European Central Bank still has its bond-buying programme as an option”.  

Investors are also still concerned about other peripheral Eurozone economies like Italy and how they might affect the core Eurozone nations.  Italy saw its 1 year borrowing costs rise for the first time since November during its sale of short term bills yesterday, ahead of a 3 year bond auction later today.

The number two official at the US Fed, Yellen, said overnight that due to high unemployment facing the economy, the Fed has left the door open to further Fed action including QE.

Further QE and the continuation of ultra loose monetary policies will be positive for gold.

IMF: Gold Is Scarce “Safe Asset” And “Rising Demand for Safe Assets” 
Further confirmation of gold’s continuing but gradual renaissance as a safe haven asset was given by the IMF yesterday who warned that a “growing shortage of safe assets” poses a threat to “global financial stability.” 

The IMF identified $74.4 trillion of potentially safe assets today, including gold, investment grade government and corporate debt, and covered bonds.


Dow Jones Industrial Average Index in Gold USD 

Sovereign debt crises are reducing the number of governments that investors trust to issue "risk-free" bonds just as new financial regulations are increasing demand for safe securities from banks.

Importantly, the IMF’s latest Global Financial Stability Report’s introduction finds that 

"In the future there will be rising demand for safe assets, but fewer of them will be available, increasing the price for safety in global markets.” 

“Both the lack of political will to reshape fiscal policies at times of rising concern over debt sustainability and an overly rapid reduction of fiscal deficits limit governments’ capacity to produce assets with low credit risk.”

The IMF has warned regarding illiquidity in “safe haven” markets. Gold remains one of the most liquid markets in the world and the illiquidity in bond markets would see increased safe haven demand for gold. 

The IMF is warning regarding deteriorating public finances. As many governments see themselves being downgraded - safe haven bonds may become less safe.

This bodes well for gold in the coming years and should see gold again be seen as a leading if not the ultimate safe haven asset.

Gold To Reach $2,000/oz Within Year On QE, Inflation and Spain -  GFMS 
Gold may climb to a record above $2,000 an ounce within the year as concerns about sovereign debts and inflation lead to safe haven and inflation hedging demand from investors, Thomson Reuters GFMS said.

While the near term may be “challenging” because of concern about demand in the top physical markets, especially India, the possibility of further quantitative easing will likely support gold.

The price floor may be at or below $1,650 an ounce, according to the report.


Gold 2 Year Chart- (Bloomberg)

“While short-term downside risks remain in place for the gold price, the economic and financial background continues to point to higher prices,” GFMS said. “It is too soon to dismiss the possibility of further quantitative easing in either the United States or Europe, and the Chinese government may yet ease its monetary policy.”

Global gold demand rose 0.6 percent last year as a jump in central-bank buying offset a decline in fabrication, GFMS said. Central banks boosted net purchases almost six fold to 455 tons last year, and may buy about 100 tons each quarter in 2012 as emerging countries maintain a similar rate of purchases and sales from Europe remain “tiny,” according to the report. 

Total investment fell 10 percent to 1,605 tons last year, with bar demand climbing 37 percent to a record 1,209 tons, GFMS said.

China’s jewelry fabrication may rise to a new high in 2012 after jumping 15 percent to a record 496 tons, according to GFMS. Growth in China will be driven by the country’s economic expansion, while exports will remain “moribund” due to a weak global economy.

It is important to note that GFMS have been quite bearish on gold in the long term in recent years. 

Any positive outlook has usually been short term in nature and tempered by warning that the price would “peak” in a year or two or the near term. There is the risk that they are again conservative and overly cautious.

South African Production Plummets Again 
On the supply side, South African gold production continues to plummet. South African gold production fell 11.5% in February from a year earlier, Juan-Pierre Terblanche, a spokesman for Statistics South Africa told Bloomberg today.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
Gold 'to Hit $2000' on Spain Fears – The Telegraph

Gold Could Climb to $2,000 Within A Year – The Financial Times

Gold treads water; euro zone caution remains‎ - Reuters

Physical gold demand strong: GFMS - MarketWatch

IMF: Growing shortage of safe assets such as Gold – The Financial Times

Gold could peak in 2013 after 12-year bull run: GFMS - Reuters

COMMENTARY
China Buying Gold? - MarketWatch

Europe's banks beached as ECB stimulus runs dry – The Telegraph

How Serious are China and India About Their Gold? – Fox Business

Buying The Dips In Gold Has Been The Right Move For A Decade - Forbes

 

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Thu, 04/12/2012 - 08:21 | 2337213 spiral_eyes
spiral_eyes's picture

counterparty risk, bitches.

Thu, 04/12/2012 - 08:32 | 2337231 Oh regional Indian
Oh regional Indian's picture

AzNom, good to see your article carried a weekend or so ago. Good stuff.

As for Gold. When the IMF is saying it's good for you, can it really be good for you? Think about it, bugz.

The reality and the presented reality are so far apart that even erudite folks cannot cross the brige, the Ruby-con! ;-)

ori

/unedited-stream-of-consciousness/

Thu, 04/12/2012 - 08:35 | 2337241 spiral_eyes
spiral_eyes's picture

Sup Ori.

Off topic, but I think ZH readers would do well to check out your article on garlic. 

Garlic is a wonder drug you can grow at home for tough times.

http://aadivaahan.wordpress.com/2012/03/29/candida-albicans-and-a-health-challenge-for-everyone/

Thu, 04/12/2012 - 08:56 | 2337323 resurger
resurger's picture

Garlic is FTW +1

Thu, 04/12/2012 - 09:27 | 2337400 Yardfarmer
Yardfarmer's picture

225 bunches of Grandma Concetta Cibona's Heirloom Rainbow Italian garlic growing in southern Colorado high plains. Bless you Concetta. meanwhile, seems like a lot of Big Brothers out there got an eye on your gold these days. IMF'ers.Central Gangsters.US Gubmint.Goldman. I seem to have forgotten where I planted that Au. hmmmmmmm....

Thu, 04/12/2012 - 09:23 | 2337434 DosZap
DosZap's picture

Off topic, but I think ZH readers would do well to check out your article on garlic.

Garlic is a wonder drug you can grow at home for tough times.

Great stuff, IF you do not want any human contact affter consumption.

Thu, 04/12/2012 - 09:46 | 2337519 TheGardener
TheGardener's picture

Garlic works well against unwanted paternity, you`r right Dos !

Best consumed with prodigious amounts of red wine, that
should keep the doctor away.

Up here in my hills I need to leave it in the ground for a
second year or I only harvest as much as I put in. Dry sunny place will do, even in rough climate.

P.S. this article with all those delicious yeasts and fungi
reminds me of my vegetarian ex-girlfriend, never forget that
smell.So make sure you have plenty of good red meat with
your garlic and wine :-)

Thu, 04/12/2012 - 09:40 | 2337502 fuu
fuu's picture

Fluffers.

Thu, 04/12/2012 - 08:39 | 2337256 Born Patriot
Born Patriot's picture

What about the counterparty risk of foreigners overrunning this great country?? Nobody wants to talk about this ... Except for Ron Paul.

Thu, 04/12/2012 - 08:41 | 2337260 spiral_eyes
spiral_eyes's picture

What the fuck has counterparty risk got to do with immigration? 

Thu, 04/12/2012 - 08:46 | 2337274 Born Patriot
Born Patriot's picture

A HELL of a lot actually. If America does business with an immigrant, we are taking a RISK. This risk is the totall destruction of our great country through multiculturalism. You need to listen to Ron Paul buddy.

Thu, 04/12/2012 - 08:54 | 2337316 Gazooks
Gazooks's picture

nation of immigrants, asswipe

Thu, 04/12/2012 - 09:08 | 2337378 Comay Mierda
Comay Mierda's picture

Born Patriot = another CIA blog provocateur troll

and he's not even funny

Thu, 04/12/2012 - 08:57 | 2337330 LowProfile
LowProfile's picture

Well...  I say...

          TROLOLOLOLO

Thu, 04/12/2012 - 09:08 | 2337373 trembo slice
trembo slice's picture

I think you need to listen to Ron Paul.

Thu, 04/12/2012 - 09:33 | 2337480 The Beam
The Beam's picture

America has been about "bring us your tired, your poor, and your weak; and we will make something out of them". My grandfather's family faced discrimination during the mass influx of Irish immigrants for the same reason. They took crap jobs, jobs nobody wanted. The Japanese and Vietnamese? SAME THING. Difference is they came here to become Americans. They did bring their culture with them though.

I support immigrants. I DON'T support illegal immigrants. I support people wanting to come over (even for a little bit  to work) as long as they respect this country. I DON'T support idiots bringing their flag and thinking they are going to take over the country.

Multiculturalism is one of the things that makes us great. Ultimately though you should, at the end of the day,  be what you believe in. If you want to be here, you don't have to forget your culture, but you American FIRST and FOREMOST.

Born Patriot, the simplistic nature of your opinion does not do this issue justice and actually detracts from our side of the argument.

Thu, 04/12/2012 - 09:53 | 2337548 Ace Ventura
Ace Ventura's picture

Dude, I'm with you on the evils of multiculturalist voodoo, but you need to consider if you're directing your thread-hijacking remarks at immigrants in general, or specifically at ILLEGAL immigrants. There is a titanic world of difference.

 

Thu, 04/12/2012 - 10:56 | 2337852 Astraea
Astraea's picture

I do not like immigration arranged and used to destroy societies and culltures - yet I believe that it is absolutely wrong to restrict the movement of people.     They should be able to go anywhere on this Earth, freely.     I think passports are not much more than a century old - and they annoy me!     I would like to be able to drop in anywhere, anytime!

 

Thu, 04/12/2012 - 11:18 | 2337981 Ace Ventura
Ace Ventura's picture

I tend to agree with your feelings on restricting the free movement of people. However, that freedom must equally extend to soveriegn cultures seeking to retain their identity. To the point that, should such a society feel their way of life threatened by excess immigration, they should be free to adjust their immigration policies accordingly.

What I do NOT agree with is the notion of ringing a truly free sovereign nation with an actual wall. If immigration policy is enforced, and better yet, the bait used to attract illegal immigration is removed....there is no need for a wall. Unless, of course, the REAL goal is to keep people IN.

 

Thu, 04/12/2012 - 10:34 | 2337740 El Oregonian
El Oregonian's picture

Ah, excuse me, My family's roots go back to 1586 here so drop the B/S. We're all patriots here who love liberty.

Thu, 04/12/2012 - 12:26 | 2338364 mc_LDN
mc_LDN's picture

Hillbilly.

Thu, 04/12/2012 - 14:18 | 2338766 Au Shucks
Au Shucks's picture

Cock smoke deceiver propagandist establishment shill paid troll agent provocateur.

Mon, 04/16/2012 - 01:57 | 2347906 MeelionDollerBogus
MeelionDollerBogus's picture

America's mostly immigrants anyhow.

If you don't do business with immigrants you have a higher risk. You lose the gene pool diversity, you lose economic diversity, you lose cultural diversity and you lose external assets (investing) brought to America. Well, if that's how you want it...

last I heard Ron Paul wasn't in any way against multi-culturalism. Canada does it & it's going overy very well there.

Thu, 04/12/2012 - 08:46 | 2337276 CH1
CH1's picture

Distraction.

Thu, 04/12/2012 - 09:13 | 2337394 Zero Govt
Zero Govt's picture

Ron Paul sings a good tune but hasn't amounted to anything (i'm sorry to say)

you can't expect the truth to rise to the top in a human sewer called Govt

Thu, 04/12/2012 - 10:14 | 2337613 cranky-old-geezer
cranky-old-geezer's picture

 

 

The IMF identified $74.4 trillion of potentially safe assets today, including gold, investment grade government and corporate debt, and covered bonds.

Gold is the only one of these asset classes with no counterparty risk, assuming it's physical gold in your possession.

Everything else is a paper promise to pay some other form of paper at some point in the future.   They are not assets. 

A promise to pay an asset is not an asset.  A promise to pay some other form of paper is certainly not an asset. 

A promise to pay some amount of a paper currency is a pure joke.  There's no way to tell how much that paper curency will be worth at maturity.

This is the underlying problem in the financial system.   Everybody considers a promise to pay some asset as an asset, but promises are worthless, as everyone is discovering, so these promises put on balance sheets as assets are continually losing value.  

A great example is Greek bonds, which are promises to pay euros.  Greece is constantly breaking those promises, so Greek bonds are constantly losing value.

Most of the "assets" in the financial system are nothing but promises to pay some asset in the future, and much of those future "assets" to be paid are fiat currencies which can lose a lot of value between now and maturity.

A great example is US treasuries, which are promises to pay dollars.  But the dollar has lost 40% of it's value in the past 4 years.

In summary, most of the "assets" in the financial system are nothing but promises, and promises are worthless.

Physical gold has no promises attached to it, hence no counterparty risk.  It's a true asset.   The only true asset on IMF's list mentioned in the article.

Thu, 04/12/2012 - 10:38 | 2337759 Hedgetard55
Hedgetard55's picture

+55

 

You are right, geez. Only gold (PMs in general) is a "safe asset" today, all the rest can be printed to oblivion as they are priced in fiat.

Thu, 04/12/2012 - 11:06 | 2337909 cranky-old-geezer
cranky-old-geezer's picture

 

 

Followup:

A promise to pay an asset should never be considered an asset, because the asset to be paid in the future is presently carried on someone else's balance sheet as an asset.

Booking the promise to pay as an asset means the object asset is being carried on two different balance sheets as an asset.

Showing an asset on two different balance sheets at the same time is fraud.  Showing a promise to pay on your balance sheet as an asset is accounting fraud, because the object asset is being carried on someone else's balance sheet.

Yet this is how the entire financial system operates.  A given asset is shown on multiple balance sheets.  It's called "rehypothecation", showing an asset on multiple balance sheets at the same time.

Yes, the entire financial system operates by accounting fraud.  Strip all the rehypothecated assets out of balance sheets, and the entire system would implode.

Thu, 04/12/2012 - 08:22 | 2337216 GetZeeGold
GetZeeGold's picture

 

 

Ctrl+P GOLD

 

Wait....it's not working.

 

Thu, 04/12/2012 - 08:39 | 2337255 Colombian Gringo
Colombian Gringo's picture

Imagine that, an asset that is not someone else's liability. No wonder the Central Banksters hate Gold in Public, but keep it in private for their masters.

Thu, 04/12/2012 - 09:19 | 2337417 youngman
youngman's picture

Actually how much are they going to sell this year to the Chinese...oops..I mean to the public.....???  Or have they stopped selling now that it is an asset and the USA will just give them as much paper as they want

Thu, 04/12/2012 - 08:22 | 2337218 JustObserving
JustObserving's picture

It would have been $2000 today sans the manipulation.

Thu, 04/12/2012 - 09:37 | 2337494 The Beam
The Beam's picture

I am okay with the manipulation right now. Gives us more time to get more and educate other to do so too.

Thu, 04/12/2012 - 12:14 | 2338273 alfred b.
alfred b.'s picture

 

   that old song about giving us more time to buy has gone on long enough over the past 6 or 7 years, and many of the early investors are entitled to huge profits at this time.   If you're offering more free time to the parasites, enablers and financial terrorists rigging these markets to retire from their post or exclude themselves from the responsibility and/or find ways to stick a patch on the scam and/or take it underground or perhaps transfer the scheme to the far east, you'll be granting them a big favor.   One never knows, so we must keep their feet to the fire now!   Enough with giving the crooks more time...it's illogical!

 

 

Thu, 04/12/2012 - 14:23 | 2338791 Au Shucks
Au Shucks's picture

+100

YES!!  I've been saying exactly this for 2+ years.. I am so freakin' tired of that played out, lame ass excuse of a rational that evertime I see it now I automatically assume the person is either a troll or an idiot.  there simply is no other explanation.  If one hasn't accumulated as much as they can already, why are they typing such an idiotic remark rather than liquidating everything they can, maxing out whatever resources they can to buy RIGHT THIS SECOND?

 

Thank you

Thu, 04/12/2012 - 14:33 | 2338829 The Beam
The Beam's picture

Okay, on a PERSONAL note it allows MYSELF an opportunity to get MORE. Does that work? I am being semi-selfish!

Yes we deserve the profits and I have been accumulating  for years myself. So I totally understand and agree.

They are going to run the full gambit though. So I can either complain about the manipulation or add positions knowing it WILL COME (the bubble  bursting in the paper contracts).

CME and NYMEX are taking longer and longer to fill their contracts (on many of the commodities)

I don't think it takes the tumble until derivative crisis gets to Asia (after crushing the various European nations). I am going out on a limb and say hit Hong Kong first. At that times you will start to see a shift from "everything vs the US$" to "everything vs commodities".

This is when I think the QEs stop doing the designed plan of propping paper markets.

Just my opinion. Now is 2012 that year? I don't think so. So am I going to complain till it happens? No. I want to see the optimism personally.

Just my opinion.

Thu, 04/12/2012 - 08:24 | 2337219 LongSoupLine
LongSoupLine's picture

Shortage of safe assets??

 

Uhh, hello?...everyone knows AAPL is the reserve currency!

 

(yes it's sarc...)

Thu, 04/12/2012 - 08:51 | 2337305 GetZeeGold
GetZeeGold's picture

 

(yes it's sarc...)

 

Apparently at least one person doesn't know what sarc means.....wait....there could be more.

 

 

Thu, 04/12/2012 - 10:43 | 2337782 oddjob
oddjob's picture

If you have to tell the reader it is sarcastic, then its not.

<sarc on>

Thu, 04/12/2012 - 08:29 | 2337227 zonetraders
zonetraders's picture

Important Forex setup and charts

http://capital3x.com/think-tank/chart-updates/

Thu, 04/12/2012 - 08:30 | 2337229 disabledvet
disabledvet's picture

Sounds even better for the soft commodities actually. And at the risk of repeating myself "arable land." sounds like a downgrade of all us humans is in the works as well...

Thu, 04/12/2012 - 08:30 | 2337230 zilverreiger
zilverreiger's picture

is this a PM sell signal?

Thu, 04/12/2012 - 08:33 | 2337234 Central Wanker
Central Wanker's picture

Yes, someone desperately wants your safe assets

Thu, 04/12/2012 - 08:34 | 2337239 zilverreiger
zilverreiger's picture

so you trust the IMF?

Thu, 04/12/2012 - 09:03 | 2337357 Gazooks
Gazooks's picture

Intrusive Manipulation and Fraud, lay odds in it

Thu, 04/12/2012 - 08:33 | 2337238 GetZeeGold
GetZeeGold's picture

 

 

Would of had to have bought it first.

 

Thu, 04/12/2012 - 08:32 | 2337232 Long-John-Silver
Long-John-Silver's picture

South African Production Plummets Again

 

It's a good thing Blythe Masters can print all the Gold and Silver we need. /SARC

Thu, 04/12/2012 - 08:33 | 2337236 JPMorgan
JPMorgan's picture

In tanglable assets we trust.

 

Thu, 04/12/2012 - 08:35 | 2337243 apberusdisvet
apberusdisvet's picture

$2000 is the low end; the psychopaths are just getting started  in their agenda of mass destruction of all fiat.  In other news,  the Rothschild vaults are expanding.

Thu, 04/12/2012 - 08:38 | 2337252 GetZeeGold
GetZeeGold's picture

 

 

The Rothschild's get criticized a lot.....but the one thing they never lacked....was brains.

 

Thu, 04/12/2012 - 08:43 | 2337266 Zero Govt
Zero Govt's picture

brains to do what ..take us forward or manipulate us into a sewer?

Thu, 04/12/2012 - 08:52 | 2337313 GetZeeGold
GetZeeGold's picture

 

 

You're doing it wrong.....they're subsidizing gold.....say thank you.

 

Thu, 04/12/2012 - 09:16 | 2337403 Zero Govt
Zero Govt's picture

if the Rothchilds, and their front Govt, was out of humanities hair we wouldn't need Gold... we'd have a productive (free) economy

you need to lick-up on history mate, go find the key ingredients to economic and national destruction/bankruptcy ...you'll find the words 'bankers' and 'politicians' have their thieiving hands in all of them

Thu, 04/12/2012 - 16:55 | 2339371 valkyrie99
valkyrie99's picture

Maybe, but aside from heritage I still don't see why the Rothchilds get blamed for the fractional reserve systems that had already been going strong for 4 centuries.

Thu, 04/12/2012 - 09:31 | 2337476 Ace Ventura
Ace Ventura's picture

They're not doing it for you. They're only doing it because it serves their interests........for now.

What us peasants need to figure out is the approximate timing of when they will "pull it", so we can be at a safe distance. But yes, in a twisted sort of way we should be glad it hasn't been 'pulled' yet. Wish they would have subsidized the stuff when it was still $700 or so. But then again, it is much harder for the average prole to shell out $1,600 per oz when there isn't enough money in the bank for next week's groceries.

 

Thu, 04/12/2012 - 09:40 | 2337498 Zero Govt
Zero Govt's picture

it's not up to them "pulling" anything.. it's 100% our call (and responsibility) pulling the plug on the bankers puppet that is Govt

Stop Paying Your Taxes

..then see how long the parasites last without their social drip-feed (tax) creaming off societies wealth 

Thu, 04/12/2012 - 11:10 | 2337927 Ace Ventura
Ace Ventura's picture

I'd love to stop paying my taxes. If you have a means of doing so that won't land me in prison next to Ed and Elaine Brown, Sherry Jackson, or Wesley Snipes....I'm all eyes.

If you're referencing 'voting the scoundrels out' as the way to pull the plug on the bankster puppets, I'm afraid that is no longer a possibility in the era of Diebold, flat out vote fraud, and a growing sector of the populace which is wholly dependent on the handouts it gets from gubment. If you're referencing physically uprooting the vile bankster puppets, 1776-style, as the way to pull the plug....then we're essentially seeing eye to eye. Although you do realize that makes us terrzit radicalz, right?

 

 

Thu, 04/12/2012 - 14:34 | 2338835 Zero Govt
Zero Govt's picture

there is not a snowball in Hells chance of voting anyone anywhere to get what you want ...the entire system is rigged

the only system that gives people what they want as an individual is freedom (and free markets) ...that means zero Govt (no rules from on high)

bringing Govt down with a Tax Revolt is the surest way to not only personal and society-wide freedom but economic prosperity ..without the parasites (elite and welfare spoungers) of society creaming off productive peoples backs

there will be a Tax Revolt in the years ahead ..be ready for it

Mon, 04/16/2012 - 01:53 | 2347899 MeelionDollerBogus
MeelionDollerBogus's picture

It's called tax-havens, reporting a lower income & living off-grid. Where property-tax is the concern you leave. Where social solidarity is concerned everyone publicly says no taxes shall be paid and stands together - cops included - but we'll see. THAT day is the day no enforcement to prison happens.

Otherwise run. Just find another nation to live in that is safer for taxes & food supplies.

Thu, 04/12/2012 - 08:36 | 2337248 youngman
youngman's picture

It has been very quiet.....gold is being bought....now the questin is who and why....my bet is China is buying as much as possible....then again the last few days is the selling of treasuries...they never allow gold to look good when they are selling...back up on Friday...but lets see..just this week we added 100 billion in paper across the western world.....paper..more paper...lots of metal leaving the Comex from the customers accounts..and nothing going to the dealers..wierd...I also think there is some "need some Tax cash selling"

Thu, 04/12/2012 - 08:44 | 2337251 WoodMizer
WoodMizer's picture

Question, how much gold is held in physical form above ground?

I remember a video that claimed that all the gold mined throughout human history would amount to a cube less than 150' to a side.

Are centeral banks buying physical or paper gold to serve as collateral?

Thu, 04/12/2012 - 08:46 | 2337279 Quinvarius
Quinvarius's picture

1 trillion dollars in $1 bills covers about 1 square mile about 1 inch deep.

http://nowandfutures.com/images/m3_plus_credit_long_term.png

So we are looking at a paper cube of 1 square mile about 5.8 feet high.  Then you can do the math on how that would stack up on a  150 x 150 square foot base.

Thu, 04/12/2012 - 09:28 | 2337456 WoodMizer
WoodMizer's picture

According to how stuff works

Humans have mined 10 billion ounces,

A cube roughly 25m to a side 15625m^3

312,500 tons

I guess CB holdings could all be physical

 

Thu, 04/12/2012 - 08:42 | 2337265 ivars
ivars's picture

I think first USD will go up and until USA default will remain world reserve currency ( about 2016).

USA partial default prediction

Only after that, the favor will switch to Euro zone. While USD is going up, there will be inflation in Eurozone, after 2016, in the USA etc.

EUR/USD prediction chart

After partial USD defaults or in imminent anticipation of such USD will start to go down, inflation moves to the USA (after/during 2016)

In this scenario, there will never be a time when gold will cost much less in USD (or EUR) than in costs today. There is no reason to be.

Gold prices 2011-2017

But, the gold bubble may end in 2017 with some settling price or perhaps some totally different currency system-when Gold/DJIA is around 1.

Gold bubble burst

DJIA/Gold ratio until 2016

DJIA/Gold chart has wrong intial part (2011-2012-2013) , to be corrected once we see how deep/long is current stockmarket correction, but it does not matter for the long term forecast.

Even this time schedule might be a bit hurried seeing how long equilibrium can be maintained employing more and more of current paper commodities- currencies which have reserve currency status, especially USD.

That is how I see it, at this moment. May be the whole sequence is not right-perhaps its too simple- but that will be clear before this year ends.

Thu, 04/12/2012 - 08:49 | 2337293 CH1
CH1's picture

Well, I think it will be sooner than that, but we're all guessing, and important parts of the machine are not visible to us.

Thu, 04/12/2012 - 09:11 | 2337388 eaglefalcon
eaglefalcon's picture

Partial default?  Alan Greenspan went on TV and touted "the United States will never default.  We can always print the money to pay our debt."  I guess debt monetization is technically not default.  We borrowed paper from you, we return you the same paper

Mon, 04/16/2012 - 01:49 | 2347894 MeelionDollerBogus
MeelionDollerBogus's picture

DJIA/Gold ratio until 2016

DJIA/Gold chart has wrong intial part (2011-2012-2013) , to be corrected once we see how deep/long is current stockmarket correction, but it does not matter for the long term forecast.

How do you figure?

I think we can see dow/gold to 1.0 or 2.0 inside a year. Maybe 2 years if somehow both go stagnant vs the decade.

Thu, 04/12/2012 - 08:48 | 2337284 resurger
resurger's picture

Tyler,

a guy came to my trading desk today from Thomas Reuters and he told me that Islamic banks in the GCC  are about to decouple from the International Money market operations "

when i asked him how it works, he told me the IIBR "which is the Islamic Interbank Benchmark Rate" has 3 major subindicies:

1- The Wakala (Agent): you place your money with the bank, and then there is a human being out there who will go and trade with the money and give you the return next day or something.

2- The Murabha (Profit Sharing): you place your funds, the go buy commodities and then give you a proft at the end.

3- Mudarabah (Speculating): where you lend your money, they speculate in some commodities or islamic shares and then give you the return, i dont how different is it from the top one.

Either way, this index soon to go viral, becuase it actually moves the economies where you have people buying commodities (Gold,Silver, Copper, Iron , Stocks) and if they lose, they gurantee to give you your return back and incur the loss.

so now, you have a new MM index called IIBR

see here

http://thomsonreuters.com/content/financial/pdf/cross_asset/iibr_factshe...

 

 

Thu, 04/12/2012 - 08:52 | 2337295 El Oregonian
El Oregonian's picture

As I get older that Physical Gold, like a pretty ex-girlfriend, seemed more beautiful when she's with someone else. I said long ago that I was a jealous sort and that she'd never again leave my side. We've been together happily ever since.

Best part, my wife approves completely...

Thu, 04/12/2012 - 09:54 | 2337550 Deo vindice
Deo vindice's picture

Just don't take them canoeing. Lots of tragic losses happen that way.

Thu, 04/12/2012 - 11:21 | 2337995 El Oregonian
El Oregonian's picture

Scuba diving fixes that.

Thu, 04/12/2012 - 08:51 | 2337308 ivars
ivars's picture

Updated with actual prices GOLD and SILVER prediction charts extended till September 1st. Seems like later (Oct 2011-green line) prediction fits actual prices better (actual prices-blue line):

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=1720#p37176

Thu, 04/12/2012 - 09:50 | 2337530 Zero Govt
Zero Govt's picture

so you think Gold will continue the downtrend into September?

you won't get an invite on King World News (KWN) with that type of down beat info

did you see Sinclair and KWN pump Dan Norrichi's latest cry the shorts got hammered yesterday? 2 months of downtrend and the shorts are laughing all the way to the bank (unlike high on hopium KWN listeners!)

but Dan is trying to put a positive spin on it, a (brief) 1% spike in Gold yesterday and he's trying to paint it as the shorts having a hard time when it's the longs that are getting fleeced every which way

KWN are approaching the Iraqi Information Ministry levels of shrillness

Thu, 04/12/2012 - 08:54 | 2337309 Sudden Debt
Sudden Debt's picture

but Bernanke said....

tradition?....

for God and the Printing Press?...

the almighty fiat?....

...

 

 

Thu, 04/12/2012 - 08:54 | 2337317 Die Weiße Rose
Die Weiße Rose's picture

" The IMF identified $74.4 trillion of potentially safe assets today "

( said Christine Lagarde with her asset Bernanked by tiny Tim )

IMF - Global has no "safe assets" !

wr;)


Thu, 04/12/2012 - 08:55 | 2337321 Levadiakos
Levadiakos's picture

IMF: Gold Is Scarce “Safe Asset” And “Rising Demand for Safe Assets”

The muppet craze goes viral. 


Thu, 04/12/2012 - 09:07 | 2337369 TheGardener
TheGardener's picture

If I were manipulating markets I would let some steam off on
Friday 13th, don`t even need to blame it on the weather.

Start over on Monday with dry powder legally transferred
from muppets accounts.

Thu, 04/12/2012 - 09:24 | 2337435 Hulk
Hulk's picture

Investment grade Government debt ??? no such thing and the planet is about to run head on into that fact

Got Gold ???

Thu, 04/12/2012 - 09:45 | 2337513 Sizzurp
Sizzurp's picture

The muppets will be left behind when the music stops.  If just a few of those 75 trillion try to make it into the gold market, actually own the physical, the prices will go stratospheric. The rush for the golden door will be a site to behold.

Thu, 04/12/2012 - 09:47 | 2337518 TWSceptic
TWSceptic's picture

"It is important to note that GFMS have been quite bearish on gold in the long term in recent years. "

 

Why would anyone take them serious then. If anything, this makes me more bearish. Although I tend to agree with them that money printing will likely continue.

Thu, 04/12/2012 - 09:55 | 2337551 youngman
youngman's picture

Looks like someone read their report...gold and silver going up...

Thu, 04/12/2012 - 10:00 | 2337560 Sandoz
Sandoz's picture

This article headline is a flat out lie. The report never calls gold a "safe asset." In fact, the report states, "demand for some noncredit instruments, such as gold, is largely driven by perceptions of its store of value, with less regard to its market risk." The report states that gold is "perceived" as a safe asset. Big difference there. 

Thu, 04/12/2012 - 11:12 | 2337941 _underscore
_underscore's picture

So, 'perceptions' don't apply then, in bonds, currencies & equities (or any other credit instruments..) ? If that's the case, then risk has been abolished - which isn't a logically maintainable argument, imho.

Thu, 04/12/2012 - 11:21 | 2337994 Sandoz
Sandoz's picture

I think you misunderstand. There's a big difference between the IMF calling gold a "safe asset" and the IMF saying that others "perceive gold as a safe asset." The headline states that the IMF believes gold to be a safe asset, when in reality the IMF has simply observed that others believe gold to be a safe asset. In other words, the IMF has not lent its support to the idea that gold is a safe asset. In fact, the IMF seems to indicate that the perception of gold as a safe asset may be misguided because it ignores market risk. 

Thu, 04/12/2012 - 11:28 | 2338023 Zero Govt
Zero Govt's picture

and we all know those bunch of turkeys (crones) at the IMF know all about "market risk"

cushy job, not a budget cut in sight since recession (Depression) hit 4 years ago, revolving door career in banking etc etc

Thu, 04/12/2012 - 11:35 | 2338055 _underscore
_underscore's picture

Yes I see your point Sandoz, but the IMF could never advocate a named asset, just as it doesn't name the credit instruments by name (e.g. it doesn't say either that US treasuries are safe or otherwise).

As gold can't be 'named' without identifying it, they must qualify their statement - in this case by using the passive case in the third person. A bit like a lawyer in a court of law emitting a statement - even if that is ruled out of order, it can't (actually) be un-heard by those who heard it.

Sorry to sound pedantic, but I think the august IMF pays clever people lots of money to word their statements to express an exquisitely precise meaning and subsequent interpretation.

 

 

 

Thu, 04/12/2012 - 10:08 | 2337606 Catullus
Catullus's picture

Those govvies are safe as long as they're going up. Of course there's not much more up to go.

What I think they're saying is that 2007 is repeating in that banks are running out of "safe" assets to lever off of. They'll set this up as the banks "starving" for more treasuries to lever off of. This is the nature of the relationship between fractional reservists and the governments.

Thu, 04/12/2012 - 14:27 | 2338808 Temporalist
Temporalist's picture

Eldorado Gold Corp. (EGO) said it plans $1.95 billion of development spending over the next five years, including more than $1 billion for new-mine development in Greece http://news.google.com/news/section?ned=us&q=eldorado+gold+greece&btnG=Search+News&cf=all&hl=en&js=0

Thu, 04/12/2012 - 19:32 | 2339904 engineertheeconomy
engineertheeconomy's picture

Immigration is what happens to the value of your wages and assets every second of every minute of every day they keep devaluing the paper its valued in by printing more and more of it.

Gold and the other precious metals are the only assets besides arable land that do not experience continual immigration of value.

When's the best time to buy precious metals?

When it's still on the shelf.

Once it leaves the shelves, good luck trying to get it at a reasonable price

Fri, 04/13/2012 - 06:41 | 2341002 Youri Carma
Youri Carma's picture

The Bizarro Plunge Protection Team (PPT) wanted to create the Illusion for the average msm reading man on the street that gold is in a declining trend .

In order to do that you need lower lows but also lower high’s. People who are in the know about this blatant gold manipulation wondered why they bashed the market as they did lately with too much force at once? It is because they needed the lower low to create that illusion.

But it seems that they’ve partly failed now because we just had an higher high than before. See this 60 days gold price chard http://goldprice.org/charts/history/gold_60_day_o_b_usd.png?0.5938697620687026

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