Sunday, April 14, 2013

Note on Gold

Oh no, the end of the gold bull is here. Gold is getting iced in the markets. Goldman is telling clients to sell gold, the NY Times is ripping on the folly of gold owners, and all is well in the stock market. I'm doing the opposite and picking up some now (so is Goldman).

1. Money printing has begun in Japan in a new phase of the currency wars.
2. JP Morgan and the Comex depositories have both declined significantly since the start of '13. Comex eligible gold down nearly 2 mil oz while JP Morgan eligible gold is down 1.5 mil.
3. Germany's gold repatriation program from the FED is a 7 year program of 674 metric tons. Simple math means 8 tons a month are going out of the NY banker system.
4. The FED is doing QE3 open ended still, and while hawks have made some noise, there is no end in sight or even an outline. The FED has telegraphed all rate hikes since the '94 rate hike surprise that messed with Wall St.
5. The US is still running trillion dollar deficits.
6. Governments are still dumb and pawns of the banking interests.
7. Governments have started confiscating assets to cover for the banks.

We are in the middle of a long event that is the end of a financial order. These events take years if not decades. When Nixon closed the gold window and ended the Bretton Woods agreement, it took the world roughly a decade to figure out the new system. Spikes up and quick drops down happen along the way. Gold should not be viewed as a capital gains type investment but more like an insurance policy against the idiocy of our leaders.

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