Gold offered for sale from COMEX warehouses totals 36.41 metric tons (mt), down from the June 2011 average, 47mt. At the time, contracts for gold (open interest) rose through July as the debt ceiling debate hit the media. Of course congress voted to raise total debt issueable, and the dollar rose (on the fundamentally bearish news) off it's newest floor of 1/1,900 of a troy ounce.
Guess what--the same debate over raising the debt ceiling is back this fall. Will it again mean the federal government has the "headroom" to spend into escape velocity recovery (trying for a 5th summer), green-shoots and all ?
For those who do not understand the price action over the last two years, please check out how prices are subjectively formed (recently , , and ), rather than assuming a "quantity theory."
The chart shows interest in buying gold at the COMEX has fallen, and now only 3.1% of contracts for gold could be covered by gold in the vaults. Hedge fund principle Kyle Bass asked the Head of Deliveries at COMEX in 2011 "what if like 4% of the people want delivery," the reply? "."
So how quickly could 36mt be purchased? Well, 37mt of gold were purchased from GLD in the past two weeks.
We feel crying wolf won't last--this annual "recovery," supposedly corroborated by interest rate rises (it's ), only has interest rates falling far lower than each time before (see below chart).
Marc Faber was the first to say gold is again acting as an early warning signal, as deflation returns, agreeing with the "real deflation" Mike Maloney predicted in his best-selling .
Now, Kyle Bass joins on deflation and gold, from his June 5 letter to clients:
"The reason you've see such a big selloff in gold is that inflation expectations are in check due to China's massive slowdown while at the same time the US's industrial production is trending lower. The inflation expectations the central bank uses (the five-year/five-year swaps in the US) fell 80 basis points right when gold was falling precipitously from 1552 to almost 1300.
The world is switching gears and thinking, 'We still have this debt overhang and deflationary forces are still acting on us.' Long-term, with all the central banks printing full steam, you're going to see gold move higher. It's just a matter of time.
In summary, short to medium-term gold may still move lower, but in the long-term I think you will see it go a lot higher."
Betting against logical patience has proven a poor choice.
Kyle Bass correctly warned of the housing bubble, just as Mike "" Maloney did, back in 2005.
Moreover, markets have begun to agree with Bass' thesis on Japan, and he is now saying prompted him to "dramatically reduce risk."
Those who hear deflation ahead is bad for silver and gold need to for 1934 and 2008.
Gold offered for sale from COMEX warehouses totals 36.41 metric tons (mt), down from the June 2011 average, 47mt. At the time, contracts for gold (open interest) rose through July as the debt ceiling debate hit the media. Of course congress voted to raise total debt issueable, and the dollar rose (on the fundamentally bearish news) off it's newest floor of 1/1,900 of a troy ounce.
Guess what--the same debate over raising the debt ceiling is back this fall. Will it again mean the federal government has the "headroom" to spend into escape velocity recovery (trying for a 5th summer), green-shoots and all ?
For those who do not understand the price action over the last two years, please check out how prices are subjectively formed (recently , , and ), rather than assuming a "quantity theory."
The chart shows interest in buying gold at the COMEX has fallen, and now only 3.1% of contracts for gold could be covered by gold in the vaults. Hedge fund principle Kyle Bass asked the Head of Deliveries at COMEX in 2011 "what if like 4% of the people want delivery," the reply? "."
So how quickly could 36mt be purchased? Well, 37mt of gold were purchased from GLD in the past two weeks.
We feel crying wolf won't last--this annual "recovery," supposedly corroborated by interest rate rises (it's ), only has interest rates falling far lower than each time before (see below chart).
Marc Faber was the first to say gold is again acting as an early warning signal, as deflation returns, agreeing with the "real deflation" Mike Maloney predicted in his best-selling .
Now, Kyle Bass joins on deflation and gold, from his June 5 letter to clients:
"The reason you've see such a big selloff in gold is that inflation expectations are in check due to China's massive slowdown while at the same time the US's industrial production is trending lower. The inflation expectations the central bank uses (the five-year/five-year swaps in the US) fell 80 basis points right when gold was falling precipitously from 1552 to almost 1300.
The world is switching gears and thinking, 'We still have this debt overhang and deflationary forces are still acting on us.' Long-term, with all the central banks printing full steam, you're going to see gold move higher. It's just a matter of time.
In summary, short to medium-term gold may still move lower, but in the long-term I think you will see it go a lot higher."
Betting against logical patience has proven a poor choice.
Kyle Bass correctly warned of the housing bubble, just as Mike "" Maloney did, back in 2005.
Moreover, markets have begun to agree with Bass' thesis on Japan, and he is now saying prompted him to "dramatically reduce risk."
Those who hear deflation ahead is bad for silver and gold need to for 1934 and 2008.
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