Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree

Tyler Durden's picture

Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24 karat pool. The only thing that matters from China's perspective is that "suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB." Now, what would happen if mutual and pension funds finally comprehend they are massively underinvested in the one asset which China is without a trace of doubt massively accumulating behind the scenes is nothing short of a worldwide scramble, not so much for paper, but every last ounce of physical gold...

From Wikileaks:

3. CHINA'S GOLD RESERVES 

 

"China increases its gold reserves in order to kill two birds with one stone"

 

"The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): "According to China's National Foreign Exchanges Administration China 's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB."

Perhaps now is a good time to remind readers what will happen if and when America's always behind the curve mutual and pension fund managers finally comprehend that they are massively underinvested in the one best performing asset class.

From The Driver for Gold You’re Not Watching (via Casey Research)

You already know the basic reasons for owning gold – currency protection, inflation hedge, store of value, calamity insurance – many of which are becoming clichés even in mainstream articles. Throw in the supply and demand imbalance, and you’ve got the basic arguments for why one should hold gold for the foreseeable future.

All of these factors remain very bullish, in spite of gold’s 450% rise over the past 10 years. No, it’s not too late to buy, especially if you don’t own a meaningful amount; and yes, I’m convinced the price is headed much higher, regardless of the corrections we’ll inevitably see. Each of the aforementioned catalysts will force gold’s price higher and higher in the years ahead, especially the currency issues.

But there’s another driver of the price that escapes many gold watchers and certainly the mainstream media. And I’m convinced that once this sleeping giant wakes, it could ignite the gold market like nothing we’ve ever seen.

The fund management industry handles the bulk of the world’s wealth. These institutions include insurance companies, hedge funds, mutual funds, sovereign wealth funds, etc. But the elephant in the room is pension funds. These are institutions that provide retirement income, both public and private.

Global pension assets are estimated to be – drum roll, please – $31.1 trillion. No, that is not a misprint. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion).

We know a few hedge fund managers have invested in gold, like John Paulson, David Einhorn, Jean-Marie Eveillard. There are close to twenty mutual funds devoted to gold and precious metals. Lots of gold and silver bugs have been buying.

So, what about pension funds?

  

According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector.

Shayne is head of global research at the Teacher Retirement System of Texas. He bases his estimate on the fact that commodities represent about 3% of the total assets in the average pension fund. And of that 3%, about 5% is devoted to gold. It is, by any account, a negligible portion of a fund’s asset allocation.

Now here’s the fun part. Let’s say fund managers as a group realize that bonds, equities, and real estate have become poor or risky investments and so decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases.

How much is that? The assets of GLD total $55.2 billion, so this amount of money is 1.7 times bigger than the largest gold ETF. SLV, the largest silver ETF, has net assets of $9.3 billion, a mere one-tenth of that extra allocation.

The market cap of the entire sector of gold stocks (producers only) is about $234 billion. The gold industry would see a 40% increase in new money to the sector. Its market cap would double if pension institutions allocated just 1.2% of their assets to it.

But what if currency issues spiral out of control? What if bonds wither and die? What if real estate takes ten years to recover? What if inflation becomes a rabid dog like it has every other time in history when governments have diluted their currency to this degree? If these funds allocate just 5% of their assets to gold – which would amount to $1.5 trillion – it would overwhelm the system and rocket prices skyward. 

And let’s not forget that this is only one class of institution. Insurance companies have about $18.7 trillion in assets. Hedge funds manage approximately $1.7 trillion. Sovereign wealth funds control $3.8 trillion. Then there are mutual funds, ETFs, private equity funds, and private wealth funds. Throw in millions of retail investors like you and me and Joe Sixpack and Jiao Sixpack, and we’re looking in the rear view mirror at $100 trillion.

I don’t know if pension funds will devote that much money to this sector or not. What I do know is that sovereign debt risks are far from over, the U.S. dollar and other currencies will lose considerably more value against gold, interest rates will most certainly rise in the years ahead, and inflation is just getting started. These forces are in place and building, and if there’s a paradigm shift in how these managers view gold, look out!

I thought of titling this piece, “Why $5,000 Gold May Be Too Low.” Because once fund managers enter the gold market in mass, this tiny sector will light on fire with blazing speed. 

My advice is to not just hope you can jump in once these drivers hit the gas, but to claim your seat during the relative calm of this month's level prices.

h/t Simon via TF Metals Report

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duo's picture

China had been through several paper-money blowups before the Venice loaned their first dime/ducat/whatever.  I've been saying for years that their ultimate goal is to bring down the Anglo/American banking system, and gold is the way to do it.

Snidley Whipsnae's picture

Duo... Currency wars between soverign states are continuous. There are no rules to these wars and if you read the history of the dollar as a 'fiat reserve currency' you will find that the US has caused enormous inflation to be shipped to foreign countries.

It was only a matter of time until foreigners became fed up with the 'dollar exhorbitant reserve currency privilage' and started fighting back with their own currencies and gold/silver.

When the cost of food reaches about 40% of disposable income, revolutions erupt and soverign governments fall.

Exactly what we have witnessed with the revolutions in N African countries... and coming to a country near you soon.

Silver Dreamer's picture

The last time I checked, China had a central bank too.

Snidley Whipsnae's picture

Of course 'China has a central bank too'... but China does not issue the world reserve currency and therefore, China does not export inflation.

We are observers of a currency war, and I am not choosing sides. To see how this game works it's best to be as impartial an observer as possible. Bias will cloud one's thinking.

hound dog vigilante's picture

 

"but China does not issue the world reserve currency..."

So sure of that are you?  We may look back 10 or 20 years from now and recognize that that China was indeed issuing the GRC in 2011.

"...and therefore, China does not export inflation..."

Granted. But if China does indeed export inflation, perhaps sooner than later, then we would be forced to admit certain truths per the asian currency.

 

Silver Dreamer's picture

The point I was trying to make is that China is just another chess piece of the banking oligarchy.

Hearst's picture

In Gold we trust.  Pay me in Silver or bust!

Payable on Death's picture

Sheeple waking? Second photo shows KC Fed in background--the artist intended this juxtaposition. The temporary installation says "USA" on one side and "IOU" on the other.

http://blog.ericbowersphoto.com/2011/09/shipping-container-art-installat...

uno's picture

In gold and silver we trust, just what the constitution says

Hard Assets's picture

"....the majority of its gold reserves have been located in the U.S. and European countries."

For the life of me I don't understand why governments hold their gold reserves in foreign countries. Why do they do that?

Where is Hugo kissing butt to get his back? London?  

bid the soldiers shoot's picture

I'd like to see London not send back Venezuela's bullion. I've never seen a run on a gold depository before.

What do you think? A lot of armored trucks lined up waiting for the depository to open it's doors?

Snidley Whipsnae's picture

"For the life of me I don't understand why governments hold their gold reserves in foreign countries. Why do they do that?"

Germany, for example, holds a portion of it's gold in the US for several reasons...foremost is Germanys proximatity to the Soviet Union. During the cold war. If Germany had been invaded and overrun by the CCCP their gold would have gone to the Kremlin.

Governments of banana republics sometimes hold their gold abroad because their people are oppressed and liable to revolt and sieze the gold.

There are probably as many reasons as there are governments.

DoneThis2Long's picture

In gold we trust.

In china we don't !!!

About the only thing china has not done is openly declare war on (the) US, yet, the idiots in DC continue to waste jet fuel > & < china. Or perhaps they were being interviewed for jobs in the PLA, for having done such a fine job of selling us, and @ such fire-sale prices. I wonder which co Chelsey clinton is working for? I am sure, the ohbummer sisters will also be cared for. Needless to say, so will, soros, william "blow me" clinton and the rest of the transfer facilitators will be WELL rewarded, for life. It was a dirty job, but someone had to do it, and collectively, in their selfless styles, they've sacrificed for us. Willy always 'felt our pain' (and Monica's bodily parts). He told us so repeatedly, remember?!? As for you and I .... time to take a much deserved rest. Most of us have worked our asses hard, long enough. Besides, as a nation we are too damn fat anyway. Hey .... got an idea: replace Labor Day with Lent or Diet Day ..... Week even better. You'll feel so much better after shedding 1/4 to 1/2 of your body weight. Walking is good for us too - pretty soon we'll be doing lots of it cuz we won't be able to afford the gasoline, or the maintenance bill for the old jalopy. Those reclining seats will make for fine sleeping quarters - almost as cozy as a Trans-Atlantic 1st class seat, except we need not worry of jet-lag cuz we'll be going nowhere.

Looking back over the last ~ 30 years, gotta admit, we've had a mutually beneficial relationship: the chinese learned how to perform & make a plethora of processes, from manufacturing standards to broad range of policies (human rights notwithstanding), while clinton & ohbummer, learned how to shaft a large number of the population w/least amount of effort, how to nationalize institutions even damn near entire industries, minimize the number of Americans within the true middle-class - who needs all those shades of gray anyways? Filthy rich, and poor will be so much easier to deal with, just as will far fewer constitutional rights. Since we are in the budget cutting more, we must lighten up the load of the Supreme Court docket so to keep their labor budget low. What better example than the DoJ under Holder: why waste perfectly worthless, sorry, I mean good $$$ on prosecuting those two lonely black panthers thugs playing the intimidation game in front of polling place. So what they were holding billy clubs ....??

It appears that the world is sick n tired of looking at those drab looking greenbacks anyways. At least some people are so, first, those 'new world order" brainiacs introduced such colorful Euros, but they've been around too long now. It is time for a change. Time we see red - not just on our personal balance sheets - but in our wallets too. Mao could have passed for Budha's brother, so how could one dislike a face like that??? Everybody should/must/will have some papers with his mug shot image on it.

But enough whining. Will have plenty of time for that sooner than i'd care to think anyways.

Happy Labor Day everyone. Enjoy however many we have left of them, for you never know what tomorrow brings - sure as hell not peace nor prosperity (speaking of the east side of the big pond or west of the smaller one) !!!

 

 

narapoiddyslexia's picture

Your near-religious aversion to discussing the central causes of the problems of the last 30 years is amazing. 

AVERT YOUR EYES FROM THE BUSHES! AVERT YOUR EYES FROM THE BUSHES! THERE"S NOTHING THERE! THERE"S NOTHING THERE! MOVE ON! 

It all started with Nixon. If you don't begin there, you'll go nowhere.

 

Smiddywesson's picture

Oops, let's not forget FDR.  This is a bipartisan problem.  But rather than blame the parties, we should blame ourselves for our indifference to the Constitution.  The bankers always win, no matter the political system.  The Constitution was written to limit the system and protect us from it.

narapoiddyslexia's picture

You're right. I forgot FDR. And the fellows who wrote the Constitution could never foresee that one day there would be a debate over whether corporations possessed constitutional rights. The very existence of the debate means the people lose. Or, rather, lost. Too busy trying to make ends meet to notice they left the government in the hands of the looters.

Inibo E. Exibo's picture

Actually it stated with Woodrow Wilson.  Everyone since, Republican and Democrat has milked it for all they are worth. Anyone who thinks one politcal party or the other cares about ordinary people is under a strong delusion.  Voting got us into this, voting is not going to get us out.

DoneThis2Long's picture

Everyone since, Republican and Democrat has milked it for all they are worth. Anyone who thinks one politcal party or the other cares about ordinary people is under a strong delusion.  Voting got us into this, voting is not going to get us out.

Bingo!!! I fully agree w/your point, however, the larger question of the country being betrayed and sold to (mainly) the chinese was the main point I was addressing. Sadly, for what it implies, your last statement is quite accurate,

technovelist's picture

Actually, you have to go about 50 years earlier than Wilson, to the original "American Fascist".

DoneThis2Long's picture
  1. "It all started with Nixon." Did you mean Kissinger? I do not see Nixon as one to concede the Top Dog status to anyone, let alone a communist regime. I seem to recall him suffering a severe allergy to commies, while clinton and obama clearly more than employ(ed increasingly more of) their ideology, all the while making zero attempts to counter their increasingly anti-American moves, moves which have been adversarial from the get-go but are getting increasingly overt and belligerent.
  2. the damn post was long enough. It was not meant to be a play by play, nor a complete historical account of the Post Constitution period, nor a re-write of "History of the World - Part 2" - Mel Brooks did Part 1;
  3. I've been an Independent long before most begun looking how to spell the word! I have no problem pointing fingers @ whomever I believe to be full of shit. The only loyalty I have is to my intellectual integrity, not a political party! I am not partial to bushes, shrubs or any other plant form. Politically they are mostly parasitical weeds.
  4. 43 was a dope. He fell for the generous helpings of caca-de-toro served by Wolfowitz on the war, and the main reason we go into it. After that, it became a whole 'nother mess. That having been said, clinton had ample opportunities to deal w/ UBL, not the least of which, a reportedly marksman having the bastard in his cross-hairs and on a direct line to the Pentagon awaiting to clinton's blessing to expedite his expiration date which clinton declined to approve, choosing instead to stick to worthless rhetoric. By and large, while 43 was a dumb ass, he at least he kept the chinese politicians @ arms length. He had enough of his own wealth, he did not need to be the puppet of the likes of soros, unlike clinton & obama!!!I do not see him sticking his nose in any of today's bullshit, unlike clinton. BTW, I do not seem to recall Kennedy giving 43 standing o's, or opening (m)any doors for him, but he sure all hell did for obama. At times i wonder what his inner thoughts of his protoge would be today! Carter sure as hell shut the fuck up, and crawled back under the rock he crawled out from under, so to bash 43 at every move, for a while. One thing I for sure: he is thanking obama for taking over the 'worst president' title, something it pains me to state for it means, we, Americans, are the losers as are our future generations. BTW, the point about 43 was one I was going to include in my initial post but, the damn thing got long enough to begin with, in addition to having forgotten to as it was getting late.
  5. I seem to remember the 110th Congress being labeled 'the worst'. Lets not forget those bastards as well. Both sides for all I give a damn.
  6. in my book, 41, was so so, but wise enough regarding the 1st Gulf War - whether he should have finished it off or not, might have been answered by V 2.0, although much could be said about that, which I wont.
  7. but in the final analysis you missed my whole point: while pre willie "blow me" clinton, we did not have a series of political sainthood candidates, all pure and innocent, it was during his reign that the country begun going to hell, and continued to worsen progressively with the passage of time. Would you rather live in the America as left by 41, or in today's America? I believe you are wise enough to know my answer. Unfortunately however, the problems facing us remain just as they were .... ahhh .... wrong ... worse given the velocity with which our debt is increasing, simultaneously along with the number of jobs being lost in the US. As fucked up as today might be, and it is, I am certain we'll be fondly referring to these days, as 'the good old days', something, I would not have believed 3o years ago.
trav7777's picture

pension funds need returns, not lumps of metal

Spitzer's picture

The whole idea of "returns" is the problem.

A perfect inflation hedge does not compete with other aggregate savings or gain purchasing power by volume. It gains purchasing power by weight(gold)

sun tzu's picture

They need to "returns" those pieces of paper they've been buying the past 12 years and start buying lumps of metal like copper, silver, zinc, nickel etc. The emerging markets can't build their infrastructure with piece of paper.

Smiddywesson's picture

Apparently the baby boomers are not pulling a chew and screw on the system.  They are going to pay up whether they know it or not.  (unless they hold gold).

tmosley's picture

Trying to murder old people now, eh Trav?

Kelley's picture

 

I'm putting this here because it would be great to get some sincere opinions.

Most of the articles here are over my head. Would it be correct to say that this news released by Wikileaks could be the impetus to push gold, and maybe silver, up faster and higher than any other news story in many years?

My uneducted reading says gold and silver could soar beyond anyone's imagination in the next month or two in response to this publicized admission by China. Is that a correct interpretation?

How does this look to you?

 

Citxmech's picture

I wouldn't bet on such a short time frame.  This market is fickle, and manipulated - but the trend is clear.

Smiddywesson's picture

I wuldn't be too wowed by the article.  All the central banks of the world are buying.  That is not a secret.  China has upwardly revised its past acquisitions before, which shows they are double dealing with the other central banks.  There is a conspiracy afoot for central banks to lay hands on cheap gold.  Any long time observer of gold markets can see it if they choose.  The game is similar to the Distribution you see at a market top, that is, when the insiders sell into strength/volume and buy weakness/low volume.  This artifically holds prices up while insiders divest themselves of highly concentrated position in the rocks stars.  [Contrary to popular belief, they don't dump, but move into numerous small and easily sold positons in the Russel, so at the end of the day, Joe Six Pack doesn't notice any change].  The central banks have agreed to control their buying of gold, purchasing on weakness and selling on strength, thereby suppressing prices.  Countries like China are playing both sides, both agreeing to their allocation of purchases, and simply buying more than was agreed upon with the other central banks.  This process is mirrored in the OPEC nations, many of which cheat on the quotas, but they never pump freely and crash the price of oil.

The current situation should be apparent to anyone with any degree of intelligence and with access to the information.  It is an experiment in huan psychology for all to see that so many are so conditioned that they refuse to see the facts, or to even consider that history is relevant to their everyday lives.  We are living history, today, right now.  You are just as likely to see a meteorite fall from the sky and kill everyone as any dinosaur that ever lived.  A currency crisis is a lot more likely, and yet, nobody believes it can happen.  

The conspiracy is not going to end until central banks cannot get ahold of cheap gold anymore.  Gold acquisition is the one and only long term action being taken.  It's the reason we are kicking the can.  A few other things can lead to End Game, where gold prices go vertical.  They could lose control of silver (unlikely, it is a small market) or there could be generalized rioting and warfare of a serious enough degree to threaten TPTB.  Any of these things will make them pull the plug, ramp gold prices, and put us on a new financial system that is gold related.  The fact that this will leave anyone in the West who doesn't hold gold with an enormous haircut will be lost on most of the sheeple.  It most certainly won't be emphasized in the history books when they write about how Ben Bernanke and the president single handedly saved the world.

You have time.  They are going to play this out as long as possible. 

Kelley's picture

Thank you for your extended answer. 

From what you're saying, maybe the pensions funds and all the rest won't change their investment portfolis to add PM's or mining stocks. 

Gold did go up another $16 in a short day. What's the saying? "Patience, grasshopper."

e2thex's picture

Make yourself comfortable on the couch and lemme explain a few things to you. China is a bubble in search of a needle. Their Achilles heel isn't their currency, or their air pollution, or their lack of oil. It's water. Potable water. The lack of it kills civilizations. Not currencies. You need to find out what what causes a lake or any other body of water to literally turn yellow and give off noxious, deadly fumes? 

Most of you  are over fifty and you think St. Gaudens are your salvation. At some point in time you're gonna realize that you and China have an illiquid asset of fear. You can be like James Dine who, thirty years ago, rode Gold up to $800 and then rode it down to below $140.  

FEDbuster's picture

PMs are a fairly safe way to store excess wealth, however, people better have their basics taken care of first.  Productive land, clean water source, debt free lifestyle, means to protect it all, etc... get this squared away, then buy your silver and gold.  There won't be a Newsweek magazine in a post Walmart world, but if there were, it's cover may read "We're All Amish Now". 

Smiddywesson's picture

You forgot the Middle Eastern nations that now sport huge populations thanks to oil revenues and have run out of water.  Saudi Arabia and Iran are in big trouble because they are out of water and must use potential revenue producing oil to make water.

Yes, fear can be dibilitating at the wrong time, but it spells survival at the right time.  I just happen to think this is one of those times.  Dines was early, so he was wrong. If you don't think it is time to move to gold, stay in paper.  Civilizations come and go, but I'm not aware of a single instance when gold became worthless, even after a collapse.  

akenathon's picture

This is exactly what I have been thinking for a long time namely that the US Dollar weakness was the results of Chinese selling more then any of QE and monetary policy.

The problem is that the Chinese have been doing the same thing with Japan (China lately bought massive JGBs and JPY as a way to weakens Japanese manufacturing as well) and they are doing the same with Europeans.

The key question although is: Do you think that Japan, the US and Europe will let China keep going like this? I seriously think that you dream as those who got the biggest Gold reserves are the US + EU.

As such to me it's quite easy to understands that the US and EU will be more than happy to link the US Dollar + Euro + JPY to gold at the highest possible price of Gold as their currencies will be backed by something and leaving the Chinese with nothing as they will not permit the exchangeability of currencies to gold anymore once the conversion takes place.

The big trade here, once again, is to sell the JPY as I wouldn't be surprised at all to see a bilateral move between Japan and the US on the currency, which would eventually trigger all the rest and leave China with massive losses...

DoneThis2Long's picture

Coordinated their selling of $$$ so to piggyback the JPY going back home as they are needed for repairs. The whacky thing though, RMB being pegged to the USD, would imply weak USD=weak RMB=inflation which is what they've been fighting of late. It seems quite neurotic, unless they are/have been making it back up by buying gold, its levitation covering the losses in the conversion ....

If this AMs trading does not remind one of the flick ITS A MAD MAD MAD WORLD nothing will. Shit flying every which way.

akenathon's picture

This is exactly what I have been thinking for a long time namely that the US Dollar weakness was the results of Chinese selling more then any of QE and monetary policy.

The problem is that the Chinese have been doing the same thing with Japan (China lately bought massive JGBs and JPY as a way to weakens Japanese manufacturing as well) and they are doing the same with Europeans.

The key question although is: Do you think that Japan, the US and Europe will let China keep going like this? I seriously think that you dream as those who got the biggest Gold reserves are the US + EU.

As such to me it's quite easy to understands that the US and EU will be more than happy to link the US Dollar + Euro + JPY to gold at the highest possible price of Gold as their currencies will be backed by something and leaving the Chinese with nothing as they will not permit the exchangeability of currencies to gold anymore once the conversion takes place.

The big trade here, once again, is to sell the JPY as I wouldn't be surprised at all to see a bilateral move between Japan and the US on the currency, which would eventually trigger all the rest and leave China with massive losses...

Smiddywesson's picture

Absolutely, the current conspiracy to kick the can at any cost and acquire cheap gold is being orchestrated by the ECB, the Fed, and the Japanese central bank.  The Chinese don't like it.  They were supposed to be the top dog in The Century of China.  They were going to get sweet mail order brides from California to augment their One Child Policy male-dominated society, and now all they are going to get a a hand job from some gay transvestite every other Saturday night.  It's just not fair!!!

So Solly, Cholly.  No central government is a match for the most cunning criminal minds in the world, central bankers.

DoChenRollingBearing's picture

VERY interesting comments akenathon and Smiddywesson.

+ $1880 and green

Like any bureaucracy (in this case, the central banks), you don't make it to the top without knowing how to step on other people's fingers and be smart as hell.

Filanderer's picture

You guys got ripped off in stock markets, housing & real estate  and you will get ripped off in gold & silver also in the next five years , is it not clearly visible when  entire  populations enmasse lean towards any asset class in the past, what has happened ? Being ZH readers, why there is no contrarian thinking about gold and silver ?Uncomfortable questions no doubt ,lol.

Hulk's picture

You sir, are at the end of the line of clueless trolls...

honestann's picture

Because gold is real, and fiat is - by definition - fake.

So in this case, to be contrarian is to be a completely insane believer in self-destructive lies.  This is an easy choice.

If we drink water, and somebody proposes we drink chlorine bleach, that would certainly be a contrarian position.  And what?  Because we read ZH we should drink bleach?  Even consider drinking bleach?

No need to be stupid just to be contrarian.  And believe me, holding our assets in physical gold (under our own control) is plenty contrarian.

Captain Benny's picture

Gold rush commences in 5, 4, 3, 2.... I'm already buying :)

This is of course news that isn't "secret" and was well known three years ago... any fund manager just now hearing it should probably re-evaluate their ability to research investment opportunities.

Troll Magnet's picture

I bought some two weeks ago and two weeks prior to that as well.  I was going to take this weekend off but not anymore!

SuperRay's picture

hey Capt, you talk like fund managers have ability.  Funny...

Smiddywesson's picture

It just goes to show that most people, even highly intelligent people, cannot think for themselves and go about their professions by copying everyone else.  The reason this is taking so long to take ahold is because people are unable to break out of the very deep mental ruts carved by them by the central banks.

Remember this when selecting a surgeon.

DosZap's picture

Captain Benny,@17:45,

<any fund manager just now hearing it should probably re-evaluate their ability to research investment opportunities. >

Sadly, the MAJORITY of these funds allow NO holding of any type Pm's, or Mining stocks.

As for Captain Benny's remark,

 I would say, ANY fund manager that has NOT had a percentage of their clients portfolios invested in this sector already, should be fired IMMEDIATELY.

Because they are idiots,or co-conspirators in the paper ponzi.(knowingly), or are just used to the paper markets.

Any moron can read the newspapers, and the internet, and the signs of the global economy collapsing, and the values of ALL the major world  currencies going to hell.

Long-John-Silver's picture

the MAJORITY of these funds allow NO holding of any type Pm's

GOOD! More for US!

DosZap's picture

LJS, @18:56

Just check the Average 401k Prospectus, and see what choices one is offered, same with Pension Funds.

It's your frn's, and they LIMIT your choices..................WHY?.

Easy.........................to figure that one out.

The first answer I ever got, and the Last was Commodities are TOO risky.

(Er', and the Markets NOT?).

It's RIGGED.

Captain Benny's picture

Actually funds can and do hold cash and in the United States, they can choose to hold any US mint issued coin as "cash" ... there is your gold and silver holdings!  Imagine if PIMCO Total Return held 1% of is holdings as gold or silver... well the physical market would be dried up in no time.  Eventually a few smart fund managers will do this...

sun tzu's picture

Most fund managers are fucking idiots