gold and silver prices in deflationary environment

 

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This topic contains 7 replies, has 1 voice, and was last updated by  alan2102 6 years, 1 month ago.

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  • #6608

    Anonymous

    I agree with the deflation argument, but will foreign goverments not use any excuse to accumulate precious metals and are looking way beyond a period of deflation
    The chinese and other countries would love to get there hands on large amounts of precious metals and divest of dollars. But are they be allowed to that is the question. I read recently that 58 tons of goldl went from america to lbme in london destined for Asia. do you think gold is really headed east in any quanity . THis senerio where governments want to get the gold under any senario makes me hesitant to sell gold and espically silver under the deflation argument .what do you think of this logic

    #6613

    alan2102
    Participant

    Ha. Yes, they will be “allowed” to.

    Gold, silver and other wealth are moving from West to East. The metals are being hoarded in the East, prior to the big reset. The official reserve numbers for China are grossly understated. Foolish Americans and Westerners are letting their metals go at today’s bargain prices — the mistake of a lifetime. But it is all part of the big pattern, which now cannot be stopped, or even slowed: decline of the West, rise of the East.

    https://www.globalresearch.ca/china-is-quietly-becoming-gold-superpower/5310579
    China Is Quietly Becoming Gold Superpower
    Global Research, November 04, 2012
    World’s Top Gold Producer Holding Onto All of Its Gold
    While Western central banks have frittered away their gold, China is quietly building up its reserves.

    https://www.gold-eagle.com/gold_digest_08/fekete101911.html
    What Chinese Unemployment?
    Antal E. Fekete
    19 October 2011
    […snip…]
    Gold…has the uncanny property that it leaves the place where it is not appreciated and seeks out places where it is welcome. One such place in the world today is China. China knows how to become the world’s #1 gold producer. China knows how to double its gold reserves unobtrusively in a couple of years. Incredibly, the Chinese government openly exhorts its people, all 1.34 billion of them, to have gold (and silver) on hand for a rainy day. The advice is wise. There is no free lunch. Be prepared for adversity. Be self-reliant. Have gold.

    https://www.zerohedge.com/article/china-becomes-world%E2%80%99s-larest-gold-buyer-buys-935-tonnes-gold-coins-bars-q1-gold-ownership-ri
    China Becomes World’s Larest Gold Buyer – Buys 93.5 Tonnes Of Gold Coins / Bars in Q1 – Gold Ownership Rising From Miniscule Levels
    Submitted by Tyler Durden on 05/20/2011

    https://www.zerohedge.com/news/hoarding-continues-china-has-imported-more-gold-six-months-portugals-entire-gold-reserves
    The Hoarding Continues: China Has Imported More Gold In Six Months Than Portugal’s Entire Gold Reserve
    Submitted by Tyler Durden on 08/15/2012

    https://blogs.ft.com/beyond-brics/2012/08/17/sunny-skies-a-glimpse-into-chinas-gold-ambitions
    Sunny skies: China’s gold ambitions
    August 17, 2012 12:11 pm by Robert Cookson

    https://www.goldismoney2.com/showthread.php?28324-Why-Are-the-Chinese-Buying-Record-Quantities-of-Gold-Forbes
    01-31-2012 02:13 PM #2
    Why Are the Chinese Buying Record Quantities of Gold?
    [long article, much detail]

    #6616

    Nassim
    Participant

    This has been going on for an awfully long time. The main difference between India and China is that the traffic for China is only ever been in one direction. The Indians occasionally export precious metals – when they think that it is overvalued.

    Check out Marco Polo. He was an arbitrageur who took silver to China and came back with gold. Most of the silver the Spaniards acquired in South America ended up in the Far East. The precious metals that the Japanese grabbed during their recent excursion into mainland Asia was never returned – there are lots of articles about it on the Internet. Perhaps that is why they didn’t need a Marshal Plan after WW2.

    #6617

    alan2102
    Participant

    https://www.gata.org/files/QBAMCOItsTime-12-2012.pdf
    It’s Time! by Lee Quaintance & Paul Brodsky, QB Asset Management
    December 2012
    [snip]
    We certainly agree that gold should fundamentally be priced much higher than where it is presently [their figures on page 5 depict shadow gold prices of $10-20,000/ounce; see page 4 for explanation — alan2102] and that the way gold futures seem to be reliably stepped-on before Treasury auctions and Fed meetings is a bit snarky, but as for the progenitors of the crime? It might be better to look east. Conspiracy theorists should consider foreign dollar reserve holders that would like to take delivery of as much physical gold (and silver?) as possible in a very short time, and do so at cheap prices. It would be simple to do: fund offshore hedge funds that continually short gold futures through US bank accounts, thereby keeping the spot price and London fixings down. Physical gold could then be delivered to sovereign accounts directly from mines and through exports at the suppressed prices.
    Why would sovereigns like China, Russia, even Japan and South Korea want to take physical possession of bullion at current prices and so quickly? The short answers are that they could not buy size required on exchanges without driving prices multiples higher and because there is likely to be a reset of the global currency system, soon.
    END QUOTE

    …………………………

    The smart money is buying physical gold and silver, and dumping U.S. bonds (e.g. Bill Gross). And, as per the above, the big smart money is surely smart enough to rig the paper market and suppress the paper price while loading up on physical. This is very likely what is happening at this moment. It will continue happening until it cannot happen anymore. Then, Boom.

    #6619

    Nassim
    Participant

    alan,

    What these guys say they are doing is what they want others to do, no more and no less. Nothing to do with what they are really doing with their private money. It might be the same thing, but then it might not.

    #6728

    alan2102
    Participant

    https://www.pimco.com/EN/Insights/Pages/Money-for-Nothin-Writing-Checks-for-Free.aspx

    Investment Outlook
    January 2013
    Money for Nothin’
    Writing Checks for Free

    William H. Gross

    [snip]

    “Like gold,” [Bernanke] said, “U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

    Mr. Bernanke never provided additional clarity as to what he meant by “no cost.” Perhaps he was referring to zero-bound interest rates, although at the time in 2002, 10-year Treasuries were at 4%. Or perhaps he knew something that American citizens, their political representatives, and almost all investors still don’t know: that quantitative easing – the purchase of Treasury and Agency mortgage obligations from the private sector – IS essentially costless in a number of ways. That might strike almost all of us as rather incredible – writing checks for free – but that in effect is what a central bank does. Yet if ordinary citizens and corporations can’t overdraft their accounts without criminal liability, how can the Fed or the European Central Bank or any central bank get away with printing “electronic money” and distributing it via helicopter flyovers in the trillions and trillions of dollars?

    Well, the answer is sort of complicated but then it’s sort of simple: They just make it up. When the Fed now writes $85 billion of checks to buy Treasuries and mortgages every month, they really have nothing in the “bank” to back them. Supposedly they own a few billion dollars of “gold certificates” that represent a fairy-tale claim on Ft. Knox’s secret stash, but there’s essentially nothing there but trust.

    [snip]

    Investors and ordinary citizens might wonder … why the fuss over the fiscal cliff and the increasing amount of debt/GDP that current deficits portend? Why the austerity push in the U.K., and why the possibly exaggerated concern by U.S. Republicans over spending and entitlements? If a country can issue debt, have its central bank buy it, and then return the interest, what’s to worry? Alfred E. Neuman for President (or House Speaker!).

    Well ultimately government financing schemes such as today’s QE’s or England’s early 1700s South Sea Bubble end badly. At the time Sir Isaac Newton was asked about the apparent success of the government’s plan and he responded by saying that “I can calculate the movement of the stars but not the madness of men.” The madness he referred to was the rather blatant acceptance by government and its citizen investors, that they had discovered the key to perpetual prosperity: “essentially costless” debt financing. The plan’s originator, Scotsman John Law, could not have conceived of helicopters like Ben Bernanke did 300 years later, but the concept was the same: writing checks for free.

    Yet the common sense of John Law – and likewise that of Ben Bernanke – must have known that only air comes for free and is “essentially costless.” The future price tag of printing six trillion dollars’ worth of checks comes in the form of inflation and devaluation of currencies either relative to each other, or to commodities in less limitless supply such as oil or gold.

    #6743

    alan2102
    Participant

    Look East. Behold the changing world.

    https://www.gold-eagle.com/editorials_12/willie123112.html

    The Coming Isolation of USDollar
    Jim Willie CB
    31 December 2012

    [snip]

    The typical human reaction to any infection, vermin, danger, or toxicity is to stand back, to isolate the agent, to trap it, to prevent its further spread or release, then to remove it in a safe secure way if possible using trained professionals. Eventually decisions must be made on the level of acceptable risk on the removal, like what is willing to be lost or damaged or killed in the process. Risk analysis, cost trade-offs, and minimization decisions must be evaluated and executed. The toxic agent in global trade, global banking, and global bond market is the USDollar. In 2009, the Jackass began making a certain firm point. Those nations that depart from the entire USDollar system early will be the leading nations in the next chapter, with stronger foundations, richer solvency, emerging economies, healthier financial markets, efficient credit engines, growing wealth, stronger political helm activity, and better functioning systems generally. Imagine a contaminated blood system that infects, corrupts, and destroys all interior organs from the spread of the toxin. Those nations that stick with the crumbling USDollar system stubbornly will find a horrible fate with devastating effects, rampant economic damage, broken financial markets, sputtering credit engines, tremendous loss of wealth, wrecked supply lines, poverty spreading like wildfire, ruined political structures, social disorder, isolation from the rest of the world, and a fast ticket to the Third World. That is EXACTLY what is happening in the last several months. A division has begun, as the East has been busily installing the next generation platforms, as related to trade, banking, and commercial integration.

    [snip]

    A Paradigm Shift is taking place, and the ASEAN-China summit gave proof positive in a seminal event of the vast changes in progress. The United States just suffered its worst humiliation ever as a nation on the Eastern global stage. It was exceeded only by the humiliation for a US president personally. The story went uncovered by the lapdog inept US press. The late November Asian summit meeting held in Phnom Penh included 15 Asian nations, which represent half the world’s population. They decided to form a Regional Comprehensive Economic Partnership that excludes the United States. The Asians are pushing to isolate the United States. Regard it as punishment for hegemony, or a reaction to prevent further capital drainage, or to protect from central bank abuse, or to wall off continued bond fraud export, or to defend against military aggression. Regard it as confirmation that China is the regional leader in Asia, even for military security. Regard it as a response to banker criminality, or simply for being totally full to the brim of American corruption and arrogance and abuse of position, led by creation of the USDollar as an elaborate weapon and credit card whose balance is never to be repaid. Abuse of power and sponsored financial corruption will have extreme consequences in the reshaping of global commerce and banking. The US will be isolated, so as to protect the rest of the world from its fascist exhibitions and deep manifestations.

    [snip]

    The new system will be decentralized, meaning not funneled through the major banks, not passing through the USFed as clearing house. Turkey will be essential in the formation of the Eurasia trade zone. First comes the Asian trade zone (the US excluded), and next comes the hand shake between the Asians and Europeans to create Eurasia. Some folks have expressed doubt toward the arrival of a vast trans-continental trade region. They seem painfully unaware of an incredible network of railway lines connecting Russia to Germany and China, and of a incredible network of liquified natural gas lines connecting Russia with all of Europe and Central Asia. Across the new trade zone and its diverse commerce, the USDollar will not be at the center. It is in fact being isolated, since it is a toxic agent. Everything US$-based is crumbling, from currencies to bonds to banks to credit lines to economies.

    [snip]

    The described isolation on numerous fronts, whether trade or COMEX or banks, all work toward the elimination of the toxic agent in the USDollar. The world wants a more just, more functional, more efficient, more equitable global trade system. The United States has abused its global reserve custodian position too long. The world is fighting vigorously to remove it. The usage of the USDollar as a credit card to finance its consumption binge without ability to pay will come to an end. The usage of the USDollar as a device to enable powerful aggression in war to advance syndicate interests like vertically integrated narcotics will come to an end. The usage of the USDollar as a banking monopoly device will come to an end. The usage of the USDollar as an instrument for bond fraud will come to an end. The usage of the USDollar as a free lunch device to finance the USGovt deficit will come to an end. When the USDollar is no longer the global reserve currency, the door to the Third World will be opened wide. When the USDollar is no longer the global reserve currency, the supply lines will be interrupted to the USEconomy, giving off a prominent Third World stench. When the USDollar is no longer the global reserve currency, the price inflation effect will become a national topic of grand debate and extreme anger. When the USDollar is no longer the global reserve currency, the United States as a nation will experience tremendous additional isolation and hardship, as most Third World nations do. The level of corruption within the USGovt and US banking corner offices is already far more entrenched than any Third World nation. The vote fraud for US national elections is equally prevalent, but more sophisticated.

    When the USDollar is no longer the global reserve currency, the Gold Standard will be right around the corner, if not already in the implementation stage. The Gold price will react quickly to the removal of the USDollar from its prized perch of abuse. The center of the new trade settlement system will be GOLD, which is not even being discussed by the enlightened denizens of the gold community. It will be the basis of the Letters of Credit, in the form of gold trade notes. The short-term credit that facilitates trade will have a truly magnificent grand Gold core. The common agreement will be to make the Gold price at least $5000 per ounce, probably closer to $7000 per ounce. They will in the process dismiss, overrun, and put into oblivion the COMEX and the LBMA, rendering them to the scrap heap of irrelevance.

    #6746

    alan2102
    Participant

    More signs of the times: China dramatically
    accelerates its gold accumulation. Preparing for the
    end of dollar hegemony.

    https://www.zerohedge.com/news/2013-01-10/chart-day-chinese-november-gold-imports-soar-91-tons-2012-total-720-tons
    “If last year is any indication, the December total will be roughly
    the same amount, and will bring the total 2012 import amount
    to over 800 tons, double the 392.6 tons imported in 2011.”

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