Thursday, April 26, 2012

Central Banks Increase Gold Buying

London (Mineweb)

According to the latest IMF statistics at least 12 countries are known to have increased their gold reserves in March indicating the continuation of a trend now going back more than two years, and one which has been on its own a substantial supporter of the higher gold prices seen over the period.  Overall Central Banks appear to have purchased no less than 58 tonnes in the month, which could suggest an acceleration in their increases in holdings if buying at this rate continues throughout the year.   LINK...
Protect your wealth-- learn to become your own "Central Bank" with our one-of-a-kind, U-Vault Account. Global vault storage solutions for the individual and institutional investor.   BK

Wednesday, April 25, 2012

The Best Reason In The World To Buy Gold

by Gordon G. Chang

Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold.  China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices.   LINK...
China has in essence cemented the fact that "Gold is Money" by saying to the USA, we don't need your SWIFT system because we have gold to settle our accounts with Iran. We also have the State of Missouri introducing a sound money bill yesterday that will include gold and silver. We have recently explained WHY gold is money, and here are two perfect real life examples that prove it. Throughout history nations have always used gold as a medium of exchange when paper money loses it's significance or tensions between counties rise. Gold will always be the default currency of choice, now and forever because of the reasons we explained in our April 21 post. Gold is NOT a risky investment, it is the most conservative investment you can make because Gold is Money, and it never changes. The only thing that changes is the value of the paper currency you are measuring it against, and when Central Banks control the supply of that paper currency then it's destined to be printed into devaluation.   BK

Saturday, April 21, 2012

"Gold is Money, Everything Else is Credit." JP Morgan

So WHY is gold considered money?
By: Bosko Kacarevic

We've all heard that gold is money, but rarely does anyone explain exactly why gold is money.
In my experience I have never seen such a controversial financial topic as in the gold market. It's the only investment that disturbs bankers to the core. We never hear the financial industry down play any other investment as much as gold. We never heard them seriously criticize the Internet craze in the late nineties or the real estate craze in early 2000? But you mention gold to a banker or financial planner and they'll have a fit. WHY? Because they expect gold to produce interest and dividends like other investments, but money is NOT supposed to do this. It's supposed to be a store of value and a medium of exchange. Volatility is also another common criticizm of gold, however gold does not change, rather the currency it's being measured aginst is changing. Historically one ounce of gold will buy the similar amount of goods and services as in any time period.
The late JP Morgan himself said that "gold is money, everything else is credit." So why all the arguments about gold? After all, it has been considered wealth longer than any bank, government or stock market that has ever existed. 
So I decided to try and explain why I think gold is money. The best way to start is to define the roll of MONEY. Money, by definition is supposed to act as a medium of exchange and a store of value, so we don't have to return to the cumbersome barter system. In order for a medium of exchange to function successfully it has to be evenly divisible and consistent as a unit of measure, so when compared to other goods and services you have a uniform and consistent base to reference for prices. Gold performs in this regard perfectly because it can be purely refined to exactly one ounce or one kilogram or what ever unit of measure you require. Each unit of gold will be exactly consistent with another, so therefore it is successful in being evenly and consistently measured.  Yes of course there are many other metals and materials that can be evenly divisible but none are as rare as gold, or require as much labour and energy to produce. This was reported by the engineering department from Cambridge University and posted on this blog HERE. The fact that gold is RARE, make it valuable, just like a rare diamond or a rare piece of art. This is simple economics 101, supply and demand. Also gold cannot be counterfeit, although many have tried, none have succeeded in the art of alchemy.  Besides there are many simple ways to verify a pure gold coin or bar, you just have to take the time to test it. Also, gold cannot be CREATED out of thin air like today's electronic money and credit. The hard labour, technology, and energy going into the discovery and refining of gold is inherently built into it FOREVER and this is why gold ALWAYS has "intrinsic value."
Another important characteristic of MONEY is that it has to be a "store of value." Well, we just explained why gold has value, so what makes it STORABLE? Gold is the only material that can sit at the bottom of the ocean for 1000 years and still maintain it's original form. Gold does not rust, tarnish or corrode like many other metals so it can be easily stored in a vault, underground or at the bottom of the sea. Gold is not consumable like most other commodities so it has no real utility besides jewellery and gold lasts forever so this makes it the perfect form of wealth to be handed down from generation to generation. 
After all, Kings and Queens fought Wars to protect their gold and Central Banks around the world keep gold in reserve, WHY NOT YOU!

Below, Jim Rickards talks about some of the global issues surrounding gold as money and why it will continue to be the safe haven asset of choice by millionaire's and billionaire's alike.

Friday, April 20, 2012

Gold Radio Cafe With Bob Chapman

Real Interest Rates And The Lack of a Gold Bubble

Ross Norman

Speaking to Mineweb from the Denver Gold Group's European Gold Forum, Ross Norman explains why gold is not in a bubble and why investors must continue to come to the party

Thursday, April 19, 2012

Silver’s 2011 Annual Average Price Posts All-Time Record at $35.12

Silver posted an annual average price of $35.12 in 2011, more than double the $14.67 annual average price achieved in 2009.  This offers further testament to investors’ enthusiasm for the metal as silver World Investment (including implied net investment, silver bars and coins & medals) produced another historic high total last year of 282.2 million ounces (Moz), the equivalent of approximately $10 billion on a net basis, itself a record high.   LINK...

Conservatively positive for gold in 2012

Conservatively positive for gold in 2012 - Murenbeeld - GOLD ANALYSIS - | The world's premier mining and mining investment website Mineweb

Wednesday, April 18, 2012

Gold's Long-Term Price Trend is Maintained During Q1 2012

World Gold Council Report
Q1 2012 saw the gold price rise 8.6% to reach US$1,662.50/oz on the London PM fix by quarter-end on 30 March (Chart 1). The average price for the quarter was marginally higher than Q4 2011 (+0.2%) and 22% higher on a year-over-year basis, as drivers of gold demand and supply continued to support its long-term trend. This performance was echoed in all major currencies. Local Japanese investors benefited the most as a weaker yen on investment outflows for foreign acquisition and a Bank of Japan commitment to quantitative easing saw gold rise 16.1% in local currency terms.   LINK...

Tuesday, April 17, 2012

Gold Bars Now Italy's Fastest Growing Export

Exports to Switzerland from Italy soared by 35.6pc in February compared with the year before, "mostly due to sales of non-monetary gold", according to Italy's official statistics office, Istat.
The figures showed that the solid gold bars are now Italy's fastest growing export.  LINK...

Tuesday, April 10, 2012

Central Bank Gold Buying Fuels Global Demand

Here's the report from USAGOLD:  LINK...

Bernanke to Congress: We're Much Closer to Total Destruction Than You Think

By: John Carney
Feb 9, 2011

Official Congressional budget estimates understate the peril of rising debt, Fed chair Ben Bernanke told the Budget Committee on Capitol Hill today.
Warning that our nation's fiscal health has deteriorated appreciably since the onset of the financial crisis and the recession, Bernanke called upon lawmakers to confront the long term fiscal challenges sooner rather than later. If lawmakers don't confront them, they'll find themselves confronted by them.  LINK...
Last week in the FED minutes, Bernanke said he doesn't see the need for QE3, implying the economy is healthy? This knocks gold down instantly. Two months ago he says the U.S. economy is close to total destruction? Talk about a change of heart? It took only a year to fix the entire U.S. economy? Great job Ben! I guess all the manufacturing jobs that we lost in the past ten years came back? How can anyone trade or invest based on Bernanke's comments?  Fundamentally, gold has been steadily rising for the past 12 years while any measure of any financial index is sluggish to say the least. There is NO WHERE else to go for safety of your capital except gold and silver, period!  BK

The Wealthy are Buying Gold Coins

Confiscation of Gold and Silver Coins Will Not Happen
Greg Hunter
April 9, 2012

People ask me on a consistent basis if I think the government will confiscate their gold and silver coins if times get rough.  I feel there is little chance of this happening, and here’s why.  Gold and silver coins are predominantly held by the wealthy (especially gold).  The wealthy are not going to allow the government they support with campaign money to take their gold.  It is just not going to happen.  Think about it, poor and moderate income people (and that is at least half the population) do not have a significant holding of gold or silver.  Most of the rest of the population have the bulk of their wealth tied up in 401-K’s or IRA’s.  This may come as a surprise, but most rich people do not have 401-K’s or IRA’s.  They have stocks and bonds, but the rich also have the money and smarts to diversify their portfolios.   LINK...

Tuesday, April 3, 2012

Marc Faber: Massive Wealth Destruction

Marc Faber says the question is not, where can I get the best return on my investment, but rather, where will I loose the least? He says depressed real estate assets in the South like Georgia and Florida will stabilize and that everyone should own some gold.  LINK...