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From the Gold Anti-Trust Action Committee:
Worldwide gold redistribution suspected
Recent assertions by fund manager and geopolitical analyst James G. Rickards – author of “Currency Wars” and, more recently, “The Death of Money” – that the United States and China are cooperating in suppressing the gold price so that China more easily may obtain enough metal to hedge its grotesque foreign exchange surplus in dollars, are not necessarily the first ones along those lines.
As Rickards has held U.S. Defense Department security clearance and was the lawyer for Long-Term Capital Management during the rescue arranged by the Federal Reserve in 1998, he is always worth the closest attention and surely knows more than he can tell without breaching some confidence.
But the first suggestion that central banks were working surreptitiously to redistribute the world’s gold among governments as the transition to some sort of worldwide currency revaluation may have been made by economists and fund managers Paul Brodsky and Lee Quaintance, then of QB Asset Management, now of Kopernik Global Investors, whose dissertation on the issue was published in May 2012.
Brodsky and Quaintance speculated that central banks actually want the gold price up – way up – at least in the long term. They wrote:
“The key to a successful transition is a credible monetary reset. Gold is the default collateral for money because it has a long and established precedent in this role. All that would be needed would be a fairly equitable distribution of gold among global monetary authorities (taking place now?), and an agreed-upon exchange rate vis-a-vis baseless paper. It would have to be an exchange rate at which central banks could successfully monetize assets by tendering for physical gold with newly manufactured paper money, an exchange rate high enough to attract enough gold to cover unreserved credit held in the banking system. It’s a high figure.
“The relative cost of holding physical gold today is minimal (above-ground bullion or in-ground bullion through mining shares) against the negative real returns offered by the preponderance of financial assets in float. We suggest that one keep identities straight; invest with central banks, not against them; and consider the hollow rhetoric of the establishment that may temporarily suppress its paper price a ‘gift.’ They are working for physical gold holders, not against them.”
Brodsky and Quaintance did not speculate as to the lifespans of the physical gold holders for whom central banks are working. (Five years? Ten? Fifty? A hundred?) Nor did they make a judgment about the vast deception and cheating such policy by central banks would entail, nor wonder why the planet should be governed so comprehensively by such secretive and undemocratic institutions, the bigger issues behind the gold price suppression scheme. But the Brodsky and Quaintance study remains compelling and can be found here.
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From Uncommon Wisdom Daily:
Could Apple eat up world’s gold supply?
The Wall Street Journal reports that Apple plans to ramp up production of the Apple Watch Edition to over 1 million units per month in its second quarter of production. That’s an unbelievable number of gold watches, especially considering that they could cost as much as $10,000 each. But never underestimate Apple’s ability to sell lots of an expensive product.
For the sake of argument, assume each Apple Watch Edition contains 2 troy ounces of gold (Apple Spotlight estimates 50-75 grams in the Apple Watch Edition; 2 troy ounces equals 62.2 grams). Now, 18-karat gold is only 75 percent pure, because pure gold is too soft for everyday use, but for easier math, also assume 75 percent still uses 2 troy ounces of gold. (Even if Apple uses only 1 troy ounce, halving all the numbers below, they’re still huge.)
If Apple makes 1 million Apple Watch Edition units every month, that equals 24 million troy ounces of gold used per year, or roughly 746 metric tons.
That’s enough gold to make even a Bond villain blush, but just how much is it? About 2,500 metric tons of gold are mined per year. If Apple uses 746 metric tons every year, that’s about 30 percent of the world’s annual gold production.
Obviously, this projection depends on several assumptions that may be wrong. However, it is still plausible.
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From GoldMoney.com:
The new London gold fix and China
As of March 20, when the London daily gold price fixing is democratized a little with the participation of Chinese banks and made more transparent, China will be in a position to control the price of the monetary metal, says GoldMoney research director Alasdair Macleod.
“What is truly amazing,” Macleod writes, “is that the Western economic and political establishments have dismissed the importance of gold and ignored all the warning signals. They do not seem to realize the power they have given China and Russia to create financial chaos by simply hiking the gold price. If they do, which seems to be only a matter of time, then London’s fractional-reserve system of unallocated gold accounts would simply collapse, leaving Shanghai as the only major physical market.”
Macleod’s commentary is headlined “The New London Gold Fix and China” and is posted at GoldMoney.
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From The Times of India, Mumbai:
Gold has worked for Indians, billionaire investor Thomas Kaplan says
NEW DELHI – Telling Indians not to buy gold is like asking Americans not to consume liquor, billionaire investor Thomas Kaplan has said.
Appreciating Indians’ appetite for gold, Kaplan said the precious metal has historically been a very good way to store wealth for India and pointed out that China is “specifically and overtly”
encouraging its people to buy gold.
India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tons of gold each year.
“I think trying to ban gold or to ban gold imports, you know, would have about as much success as trying to tell Americans not to drink alcohol. And prohibition did not work and eventually someone had to accept the reality,” he told PTI on the sidelines of a CII event when asked whether India’s efforts to curb gold imports would work.
Finance Minister Arun Jaitley in Budget 2015-16 had proposed three schemes, including redeemable gold bonds and a monetization scheme, to curb gold imports and monetize large stocks of the precious metal lying idle in the country.
“The price of gold has shown that those Indians who purchased these metals over the years can look back and they can say, you know what, it worked. So, that’s what is known as positive reinforcement.
“If you tell people, particularly really smart people like Indians, that they can’t do something that has given them gratification for a very, very long time, they will find another way to get what they want,” said Kaplan, widely known as a gold evangelist.
Referring to China, another huge consumer of precious metals, Kaplan said: “I was in Beijing a couple of weeks ago. The Chinese government specifically and overtly is encouraging its people to buy gold. They want to buy gold. China is importing almost as much gold as the world’s annual production and they, like India, are sucking it out of the West.”
Kaplan, who figures in the Forbes 2015 list of world’s billionaires, said that when people tell him gold and silver are commodities, he counters them, saying they are currencies.
“In the world of massive money printing, they can’t be debased. Gold and silver are the only financial assets that you can own that do not represent someone else’s liability. When I used to explain that a decade ago, people found that whole concept to be very esoteric,” he added.
Referring to the situation faced by the Bank of Greece and the Royal Bank of Scotland, Kaplan said with these precious metals, one does not have to worry about bankruptcy.
“Then the question is: What is the long-term price? I happen to be bullish and so I believe that the positive reinforcements that the Indians have on precious metals is going to continue,” he added.
Read the whole article here.
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From BullionStar.com:
Where did the gold in Fort Knox come from?
The impression that most of the gold in the U.S. gold reserve stored at Fort Knox originated with coin melt following the U.S. government’s confiscation of privately held monetary gold in 1933 is wrong, gold researcher and GATA consultant Koos Jansen writes. His commentary is posted at Bullion Star.
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From Reuters:
Perth Mint’s silver sales drop to 10-month low in February
The Perth Mint’s sales of silver coins slumped to a 10-month low in February, while gold product sales rose from a near-three-year low.
The Perth Mint runs the only gold refinery in Australia, the world’s second-biggest gold producer after China.
The mint’s gold sales rose to 31,981 ounces in February from 23,174 ounces in January, which was the lowest monthly sales figures since April 2012, data on the mint’s website showed.
Sales of silver coins fell to 392,114 ounces in February, from 585,953 ounces in the previous month. Gold and silver prices declined in February after posting sharp jumps in the previous month.
Read more here.
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From the SGT Report:
Gold repatriation movement far broader than thought
Peter Boehringer, leader of the gold repatriation movement in Germany, remarks in an interview with the SGT Report that many more countries are trying to repatriate their foreign-vaulted gold than is generally understood. In the interview, Boehringer describes those movements as well as Germany’s. The interview is 30 minutes long and can be heard here.
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