"It's easier to fool people than to convince them that they have been fooled."
- Mark Twain
If Physical Gold Demand Soared As Gold Price Tumbled In 2013 | Zero Hedge, why did the "price" of Gold fall 28% over the course of the last year? The WSJ reports that demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013.
"There are a number of good reasons why so many love to hate gold. We rather suspect though that this tends to cloud their judgment. They certainly have no better handle on the future than we do, and their forecasts need to be taken with a big grain of salt. Once there is such a broad consensus about a trend, the trend is usually close to reversing."
“Truth is like the sun. You can shut it out for a time, but it ain't going away.”
― Elvis Presley
I just recently wrote that “2 things will happen:”
1. It will be understood that the central banks have far less gold than they had claimed
2. The true “fractional reserve” nature of the paper gold markets will become common knowledge
I’d like to do a couple of things here, first use a little common sense to show that these will become “conspiracy fact” and then how might the “reaction” be.
“We” conspiracy nuts have long said that physical supply did not and could not meet the current physical demand for nearly 20 years now. We argued that WGC and GFMS demand numbers were always too low and that supply numbers to meet even their too low numbers were fudged with “scrap” used to plug the gap. We argued all along and much more fervently after many central banks turned into buyers that the ONLY places that the supply could have come from were the central banks (particularly the Fed). Using only 3rd grade common sense here, why is it do you suppose that Germany was told 1 year ago that they’d have to wait 8 years to get 20% of their gold back? Was it because as we were “told” that any undertaking “this large” would take many years…or maybe because the gold actually isn’t in the vault anymore? I would ask the question, how has China imported several thousand tons over the last couple of years yet we can’t move 300 tons unless it’s done of 8 years? Does China have “stronger boats” or “more powerful airplanes?” Or is the gold that we are shipping of the “heavier sort?” Yes I know, gold is gold but I never could get the answer correct whenever asked which is heavier, a pound of feathers or a pound of gold.
Dear reader, the majority of “stuff” I read from analysts and economists these days says the 12-year run in gold bullion is over…the U.S. economy is getting better and gold has no reason to go back up. Hogwash, I say.
After a 12-year bull market in gold prices, the correction came in 2013. The depth of the correction caught many gold investors by surprise. And many investors have given up on gold’s future. It’s at that point, when the speculators have left the market, that a correction in an upward-moving market completes itself and the bull resumes. I’ve seen it happen countless times…it’s exactly what’s happening with the 12-year-old bull market in gold bullion.
A massive price shock is coming to the gold market…and it will be on the upside.
On the heels of tremendous volatility in key global markets, today a 42-year market veteran spoke with King World News about exactly what is going to trigger a massive and historic short squeeze that will quickly send gold to new all-time highs. John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also discussed how this short squeeze will unfold, and what it will mean for investors.
Eric King: “Earlier in this interview you predicted a major short squeeze in the gold market. How do you see this short squeeze unfolding, John?”
Hathaway: “There are people who sold gold synthetically. A lot of that settlement will be made in cash. There are a lot of people who are short and you can see that in the CFTC numbers -- managed money accounts, managed futures, HFTs (high frequency traders), etc....
“But all of these shorts will need to get on side. Again, they can settle in cash, but what you see on the Comex is just a fraction of the shorts that are out there. Some of this is because of the opacity of London.
But once people begin to question the integrity of the intermediaries between the financial market and the bullion market, and those would be primarily Comex and even more importantly the London mechanism, those exchanges for dealing with gold will be bypassed. KWN has reported on the increase of gold that is no longer going through London. I think that is really going to hurt the leveraged trading of gold and create a demand for the real metal itself.
This demand for the real thing will be through exchanges like the one in Shanghai, where you have 100% physical gold backing all of the paper. There are a lot of ramifications from this. We have seen the Germans, after asking for their gold over a year ago, have only received 5 tons from the US. What’s that all about?
This all comes down to the integrity or the lack thereof in the connection between financial instruments, financial intermediaries, and physical gold. It seems to me that the potential is great for people to say, in sort of a moment of epiphany, ‘There is a difference. I don’t want to have unallocated gold accounts with my bank. I want to have the real thing. I don’t want to have gold in an ETF where I can’t get my hands on it.’
They will just want to have a form of liquidity, which is physical gold, that’s not in the banking system. The banking system is becoming increasingly oppressive, onerous, and intrusive. So I think we are in the very early days of recognition that banks are instruments of government policy.
Gold and silver manipulation “conspiracy theories” are becoming more conspiracy fact by the day.
Often “a picture paints a thousand words” and the seven key gold charts below should make gold bears nervous. The charts were compiled by Nick Laird ofwww.ShareLynx.com and emailed to us Wednesday night. Sharelynx.com is a great website for charts and well worth the subscription.
The seven gold charts suggest that there is a “bull market ahead”, as Nick says. Again, we may see some further weakness in the short term but the outlook is good for 2014 and the coming years.
So without further ado, lets look at these important gold charts.
Gold in US Dollars - 6 Years
Submitted by Phoenix Capital Research on 01/22/2014
Gold has been in a bear market for some two years now. As a result of this, many investors believe that the precious metal is no longer a viable investment.
No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below)
As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.
With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.
Moreover, at $1,800, Gold is Still Nowhere Near Its All-Time High
If Physical Gold Demand Soared As Gold Price Tumbled In 2013 | Zero Hedge, why did the "price" of Gold fall 28% over the course of the last year? The WSJ reports that demand for gold coins shot up 63% to 241.6 metric tons in the first three quarters of 2013.
"Most people who buy physical gold aren't doing it for the same reason you'd purchase a stock," said Mike Getlin, vice president with Merit Financial, a bullion and coin dealership in Santa Monica, Calif. "They tend to have a much longer investment horizon. They tend to hold onto them forever and pride of ownership is a huge factor in that."What do these buyers of Gold in a market falling in price know that the "mainstream" doesn't?
The Mainstream Loves to Hate Gold
In his famous essay on gold and economic freedom published in 1966, Alan Greenspan stated that gold stands as a “protector of property rights”:
Many readers probably have come across this tidbit already, but for those who haven't, here is an interesting excerpt from an article published by the New York Times:
There is only one problem – this article wasn't written today, or at anytime in the past few weeks. Rather, it appearedin the August 29, 1976 edition of The New York Times. Gold had just gone through a vicious correction, losing almost 50% of its value in a span of a little over 18 months. Unbeknown to the authors of the article, it had actually bottomed exactly four trading days before the article was published, and embarking on a rally that would eventually see it rise by nearly 800% from said low over the next three years.
The reason for mentioning this is not to assert that exactly the same thing is going to happen again these days – we don't know the future after all. It is merely meant to demonstrate how utterly misguided the conventional wisdom often is, especially in connection with financial assets. Every word of this article reflects today's conventional wisdom as much as it reflected the general opinion in 1976. If the NYT wants to publish an article about gold today, it actually doesn't even need to write anything new: it could simply copy/paste this 1976 article. No-one would notice.
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”
Many readers probably have come across this tidbit already, but for those who haven't, here is an interesting excerpt from an article published by the New York Times:
“Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.
The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.
Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare.”This reads exactly like what much of the mainstream press has written about gold over the past several weeks. A more perfect reflection of the current conventional wisdom is hardly imaginable as Peter Schiff has pointed out.
There is only one problem – this article wasn't written today, or at anytime in the past few weeks. Rather, it appearedin the August 29, 1976 edition of The New York Times. Gold had just gone through a vicious correction, losing almost 50% of its value in a span of a little over 18 months. Unbeknown to the authors of the article, it had actually bottomed exactly four trading days before the article was published, and embarking on a rally that would eventually see it rise by nearly 800% from said low over the next three years.
The reason for mentioning this is not to assert that exactly the same thing is going to happen again these days – we don't know the future after all. It is merely meant to demonstrate how utterly misguided the conventional wisdom often is, especially in connection with financial assets. Every word of this article reflects today's conventional wisdom as much as it reflected the general opinion in 1976. If the NYT wants to publish an article about gold today, it actually doesn't even need to write anything new: it could simply copy/paste this 1976 article. No-one would notice.
READ MORE
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Why will gold prices keep falling? A Bank of America Merrill Lynch strategist has said a lack of buyer interest is his biggest worry. A stronger global economy, a continued tapering in the Federal Reserve’s bond buying and no sign of inflation could also pull interest away from gold, analysts say.
___________________________
How low will gold go in 2014? Consensus forecast says down 14.5%
January 15, 2014Why will gold prices keep falling? A Bank of America Merrill Lynch strategist has said a lack of buyer interest is his biggest worry. A stronger global economy, a continued tapering in the Federal Reserve’s bond buying and no sign of inflation could also pull interest away from gold, analysts say.
__________________________
"There are a number of good reasons why so many love to hate gold. We rather suspect though that this tends to cloud their judgment. They certainly have no better handle on the future than we do, and their forecasts need to be taken with a big grain of salt. Once there is such a broad consensus about a trend, the trend is usually close to reversing."
--Pater Tenebrarum in The Mainstream Loves to Hate Gold
― Elvis Presley
Conspiracy Fact?
Author : Bill Holter
Published: January 22nd, 2014
I just recently wrote that “2 things will happen:”
1. It will be understood that the central banks have far less gold than they had claimed
2. The true “fractional reserve” nature of the paper gold markets will become common knowledge
I’d like to do a couple of things here, first use a little common sense to show that these will become “conspiracy fact” and then how might the “reaction” be.
“We” conspiracy nuts have long said that physical supply did not and could not meet the current physical demand for nearly 20 years now. We argued that WGC and GFMS demand numbers were always too low and that supply numbers to meet even their too low numbers were fudged with “scrap” used to plug the gap. We argued all along and much more fervently after many central banks turned into buyers that the ONLY places that the supply could have come from were the central banks (particularly the Fed). Using only 3rd grade common sense here, why is it do you suppose that Germany was told 1 year ago that they’d have to wait 8 years to get 20% of their gold back? Was it because as we were “told” that any undertaking “this large” would take many years…or maybe because the gold actually isn’t in the vault anymore? I would ask the question, how has China imported several thousand tons over the last couple of years yet we can’t move 300 tons unless it’s done of 8 years? Does China have “stronger boats” or “more powerful airplanes?” Or is the gold that we are shipping of the “heavier sort?” Yes I know, gold is gold but I never could get the answer correct whenever asked which is heavier, a pound of feathers or a pound of gold.
___________________________
Dear reader, the majority of “stuff” I read from analysts and economists these days says the 12-year run in gold bullion is over…the U.S. economy is getting better and gold has no reason to go back up. Hogwash, I say.
After a 12-year bull market in gold prices, the correction came in 2013. The depth of the correction caught many gold investors by surprise. And many investors have given up on gold’s future. It’s at that point, when the speculators have left the market, that a correction in an upward-moving market completes itself and the bull resumes. I’ve seen it happen countless times…it’s exactly what’s happening with the 12-year-old bull market in gold bullion.
A massive price shock is coming to the gold market…and it will be on the upside.
___________________________
Historic Short Squeeze To Send Gold To New All-Time Highs
Eric King, KingWorldNews.com - January 22, 2014Eric King: “Earlier in this interview you predicted a major short squeeze in the gold market. How do you see this short squeeze unfolding, John?”
Hathaway: “There are people who sold gold synthetically. A lot of that settlement will be made in cash. There are a lot of people who are short and you can see that in the CFTC numbers -- managed money accounts, managed futures, HFTs (high frequency traders), etc....
“But all of these shorts will need to get on side. Again, they can settle in cash, but what you see on the Comex is just a fraction of the shorts that are out there. Some of this is because of the opacity of London.
But once people begin to question the integrity of the intermediaries between the financial market and the bullion market, and those would be primarily Comex and even more importantly the London mechanism, those exchanges for dealing with gold will be bypassed. KWN has reported on the increase of gold that is no longer going through London. I think that is really going to hurt the leveraged trading of gold and create a demand for the real metal itself.
This demand for the real thing will be through exchanges like the one in Shanghai, where you have 100% physical gold backing all of the paper. There are a lot of ramifications from this. We have seen the Germans, after asking for their gold over a year ago, have only received 5 tons from the US. What’s that all about?
This all comes down to the integrity or the lack thereof in the connection between financial instruments, financial intermediaries, and physical gold. It seems to me that the potential is great for people to say, in sort of a moment of epiphany, ‘There is a difference. I don’t want to have unallocated gold accounts with my bank. I want to have the real thing. I don’t want to have gold in an ETF where I can’t get my hands on it.’
They will just want to have a form of liquidity, which is physical gold, that’s not in the banking system. The banking system is becoming increasingly oppressive, onerous, and intrusive. So I think we are in the very early days of recognition that banks are instruments of government policy.
____________________________
Watch Out, "Bull Market Ahead" - Seven Key Gold Charts
Submitted by GoldCore on 01/17/2014Often “a picture paints a thousand words” and the seven key gold charts below should make gold bears nervous. The charts were compiled by Nick Laird ofwww.ShareLynx.com and emailed to us Wednesday night. Sharelynx.com is a great website for charts and well worth the subscription.
The seven gold charts suggest that there is a “bull market ahead”, as Nick says. Again, we may see some further weakness in the short term but the outlook is good for 2014 and the coming years.
So without further ado, lets look at these important gold charts.
Gold Chart 1 - The banks are long gold ...
Gold Chart 2 - Gold stocks are being withdrawn ...
Gold Chart 3 - Supplies are being held back ...
Gold Chart 4 - COT Data shows that banks and others are positioned perfectly for a bull run to start ...
Gold Chart 5 - Pivot point time - double bottom ...
Gold Chart 6 - Never been a better buy …
Gold Chart 7 - Just bounced off one of it's most oversold phases ...
Sentiment is as bad as we have seen it in the precious metals market. As the charts show, such sentiment, price action and oversold conditions tend to coincide with major lows in gold and silver prices and multi month price gains.
Very poor sentiment towards gold and oversold conditions is reminiscent of the conditions seen in late 2008 and January 2009 when gold prices had fallen by more than 25% in 9 months.
Gold in US Dollars - 6 Years
Subsequently, gold rose from a low on January 15, 2009 at $802.60/oz to a high less than 12 months later at $1,215/oz for a gain of over 50%. A similar move today would see gold above $1,800/oz by year end.
We believe similar gains may be seen in the coming months and years. Investors should position themselves accordingly.
___________________________
What an Inflation-Adjusted All Time High in Gold Would Look Like
No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below)
As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.
With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.
Moreover, at $1,800, Gold is Still Nowhere Near Its All-Time High
____________________________
So I ask again...
What do these buyers of Gold in a market falling in price know that the "mainstream" doesn't?
THE TRUTH!
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