Bloomberg reported last week that Russia is now the world's biggest gold buyer, its central bank having added 570 tonnes (18.3 million troy ounces) over the past decade. At $1,650/ounce, that's $30.1 billion worth of gold.
Russia isn't alone, of course. Central banks as a group have been net buyers for at least two years now. But the 2012 data trickling out shows that the amount of tonnage b... read more
The difficulty in valuing gold (GLD) lies in the fact that it's an asset that is never expected to generate any cash flow. Valuing such an asset is a fundamentally different concept to that of valuing bonds or stocks. Even growth stocks are in theory eventually expected to pay the investor something. These future expected cash flows discounted back to today determine what the stock should be wo... read more
It appears that Virginia is the latest state to take steps toward adopting some sort of metallic currency as lawmakers recently approved a measure to study the creation of alternate money in gold and silver coin form. This follows similar moves by other states in recent years that included the decision last year by the state of Utah to recognize gold and silver coins from the U.S. mint as legal... read more
HOW REALLY BAD ARE THE ECONOMIC FUNDAMENTALS?
The economic situation looks under control currently, that’s because we are now in the eye of the storm. The longer this unbalanced situation goes on, the faster and more severe the eventual collapse will play out.
The main theme is that governments in the US and Europe have lost complete control over their spending and borr... read more
In my previous post, I recommended buying gold. On that occasion, I explained that one main reason for expecting a long term rise in the price of gold is the behavior of the Central Banks. Ever since 2010 the Central Banks have become net buyers of gold after many years of only net selling. On February 14, 2013, the World Gold Council published its report, Gold Demand Trends Q4 and Full Year 20... read more
The collapse of the USSR in 1991 was seen as the triumph of capitalism over communism. The
40-year cold war was over and the West had won. That perception, however, was as premature
as it was misleading. The struggle of world powers wasn’t over. Today, the struggle continues in
a far more fundamental venue; on capitalism’s home court in the arena of paper money.
The West, as M... read more
Central banks added the most gold to reserves in almost a half century last year as prices averaged a record, the World Gold Council said.
The banks bought 145 metric tons in the fourth quarter, an eighth successive quarter of net buying, the London-based industry group said today in a report. They added 534.6 tons to reserves last year, 17 percent more than in 2011 and the most since 1964,... read more
Will oil soon be traded in a currency that is thousands of years old? What would a “gold for oil” system mean for the petrodollar and the U.S. economy? Are Russia and China hoarding massive amounts of gold because they plan to kill the petrodollar?
Since the 1970s, the U.S. dollar has been the currency that the international community has used to trade oil around the globe. This has crea... read more
London Gold Market Report
The PRICE of wholesale gold rallied from fresh 6-week lows at $1641 per ounce on Thursday morning, rising as European stock markets fell after much-worse than forecast economic data.
Silver meantime stalled below $31 per ounce as industrial and energy resources cut earlier gains.
Economic output across the 17-member state Eu... read more
Hard assets are gaining momentum once again as market participants digest the potential impact of central bank printing initiatives.
After last year's record level of central bank intervention, 2013 is gearing up to be an even more prolific year on the money-printing front. Japanese Prime Minister Shinzo Abe recently unveiled Japan's tenth Quantitative Easing program to follow... read more
