Precious metals disconnect
Silver is plumbing new depths, as are all of the platinum group metals. Gold dropped below $800 again today. So if the metals are so damn cheap, why can't we buy any? After all, if the prices have dropped so much it must be because the metals are in surplus, falling out of people's sock drawers and the like, and nobody wants them.
But when I check the web site of my usual precious metals dealer I see that most items are out of stock. You can't buy platinum or palladium at all. Gold is available but priced at 11% over spot. Silver coins are available but priced at 55% over spot. I've never seen such mark ups in my life. If I had the money I'd just buy a long contract with a near term expiration on the futures market and take delivery. That seems to be the only way to get anywhere near spot these days.
You'd think that some metals refiner would see the disparity between the retail and the COMEX prices for these metals and start cranking out retail sized bars. But so far it doesn't seem to be happening.
Explanation
A great explanation is:
http://www.moneyandmarkets.com/dow-drops-733another-reason-t...
Beijing knows that the dollar’s status as a reserve currency is soon going to be history. Just like the pound sterling lost its status as the world’s reserve currency in the early 20th century.
And authorities in Beijing also believe that as China rapidly progresses toward superpower economic status, the yuan should be a world-class, stable medium of exchange.
They envision the yuan as a major international currency some day, with as much (or more) status than the U.S. dollar. That’s why they’re going to back the yuan with gold … loads of it.
Plus, there’s another reason for Beijing to buy more gold as part of China’s piggy bank. China has an estimated $1.3 trillion invested in dollar-denominated investments. They can’t get out of the dollar quickly. It would destroy the U.S. economy which would have a direct negative impact on China.
So the smart thing to do: Hedge and diversify existing dollar holdings with gold.
Consider this: Right now, China has a mere 0.9% of its reserves in gold (600 tons). That’s the lowest of any industrialized economy! To put it into perspective …
* The U.S. has 77.3% of its foreign reserves in gold.
* The European Union has 23% of its reserves in gold.
* Lithuania, Mozambique, and even tiny Nepal all have more of their reserves in gold than China.
Just to up its reserves to 5% in gold, Beijing would have to purchase $93 billion worth of bullion. That could easily send the yellow metal skyrocketing to more than $2,000 an ounce.
Detective Krum Investigates:
http://victory1project.wordpress.com/
http://v1-p.com/
Detective Krum Investigates:
http://victory1project.wordpress.com/
..
isnt the yuan cheaper than gold?
Exactly. India is doing the same thing.
They're the world's #1 purchaser of gold right now.
The Indian people buy a lot of gold
but I don't know if the Indian government does. Indian demand has actually declined this year as a result of the people there finding it hard to digest the fact of gold being over $800.
As for China, I've seen lots of writing about how China will soon go into gold in a big way, but I see no evidence of that happening. If China was buying they'd never pay more that the futures price (since they could just buy through the futures market and take delivery). So that doesn't explain why physical gold and silver are so out of whack with the paper markets.
It's Simple Bob
China thinks the yuan should be a world-class, stable medium of exchange.
They envision the yuan as a major international currency some day, with as much (or more) status than the U.S. dollar. That’s why they’re going to back the yuan with gold … loads of it.
China can't make the claim the yuan is a major stable medium of exchange, and the world agree UNLESS they back it with gold.
Detective Krum Investigates:
http://victory1project.wordpress.com/
http://v1-p.com/
Detective Krum Investigates:
http://victory1project.wordpress.com/
Agreed
That's right John Adams, India plays a big roll in this as well. Wonder how this impact the G8 economic emergency meeting this weekend.
Detective Krum Investigates:
http://victory1project.wordpress.com/
http://v1-p.com/
Detective Krum Investigates:
http://victory1project.wordpress.com/
For what it's worth
I heard the same talk when I was a kid in the 1980's.
Japan was going to own America
Their growth can never be contained
The Yen will replace the dollar
Japan's growth was a bubble, a manipulated number by a mercantilist government hell bent on growth at any cost.
They've paid their cost (15-20 years of recession)
China will pay theirs. 15% growth year over year is not sustainable...it's collectivist tinkering.
China's bubble is popping, the only thing that will save them is the interest payments on the US debt they hold. They will use that money to feed their people. Remember, this is how communism works.
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
Peter Schiff
Even Peter Schiff is saying gold. Ron Paul is saying gold. And the point, regardless of the "spot" price try to buy gold & silver.
For what it's worth, I never heard them say Japan would take over our country, they said Japan is steeling our jobs when in reality:
1. We had the know how & technology
2. We sold the technology to Japan (caring more about the buck than principle)
3. Japan took the technology and put together a better product
4. Because of too much big government intervention Japan, through trade agreements, was able to import their products.
5. Quality and price conquered American market. Look at how many products you have in your home that have Japan products built in.
Detective Krum Investigates:
http://victory1project.wordpress.com/
http://v1-p.com/
Detective Krum Investigates:
http://victory1project.wordpress.com/
Yah, gold is wacky right now.
.
Maybe manipulation buyers?
Maybe whoever is buying buying buying (some of the big boys) are manipulating it down so they can buy it cheaperl.
economics in reverse! just
economics in reverse! just think how big things will pop when it turns back to normal!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
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