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Anytime
you see PAPER PM prices plummeting – or mildly declining –
ask yourself this – “WHO IS SELLING PHYSICAL GOLD?”
Years of brainwashing
have taught us gold is a “speculative, volatile investment,”
subject to seemingly constant sentiment changes – particularly
when (manipulated) “bad news” emerges, such as a “better
than expected” employment report – which, by the way, rarely
occurs anymore. Conversely, the TRUTH of the matter is thus; NO ONE IS
SELLING PHYSICAL GOLD, or PHYSICAL SILVER.
Even in
the 1990s and early 2000s, when Central banks were MASSIVE PHYSICAL gold
sellers – overtly and covertly – they were essentially the
market’s only sellers. Sure, corrupt banks like JP Morgan
hoodwinked corrupt miners like Barrick Gold to
“hedge” production by flooding the market with PAPER gold; but
again, that was not REAL gold, but fake, essentially naked-shorted PAPER gold
(as future production is always uncertain).
As I
reported this weekend, China has overtly bought more than 500 tonnes of PHYSICAL GOLD this year alone – or 6% of
the America’s supposed 8,133 tonnes of
gold reserves (“supposed,” as it NO LONGER EXISTS) – and
China is one many Central banks buying PHYSICAL PMs, “hand over
fist.”
Name
The New Reserve Currency: China Imports More Gold In 2012 Than All ECB
Holdings
Moreover
– for the hundredth time – essentially ZERO retail selling
occurs, which I know first-hand from my role as Marketing Director of one of
the nation’s largest bullion dealers. Over the entire 12-year PM bull
market, I’d estimate 99% of Miles Franklin’s revenues have been
generated from Product Sales, compared to just 1% from buying coins back from
clients. And – in NEARLY ALL cases – such “buybacks”
relate to near-term financial requirements necessitating the sale of
liquid assets.
On a day
like June 3rd – when gold rose $58/oz
following a horrific NFP employment report – I’d estimate
99% of the day’s total sell volume to be
PAPER-based. To that end, on days like last Friday – when gold rose
$36/oz after an EQUALLY catastrophic NFP
report – I scratch my head trying to figure where the PHYSICAL PMs, if
any, came available to satiate PHYSICAL DEMAND. At Miles Franklin –
for instance, we sold roughly $5 million of bullion to customers last week,
and bought back perhaps $50,000.
The fact
remains that in today’s world, the only material source of
supply is new production, which goes directly from the smelters into armies
of investors’ pockets. China is the world’s largest gold
producer, but its government purchases EVERY ounce produced – keeping
them off the market FOREVER – and then some. U.S. production is
in decline – forcing America to depend increasingly on imports –
and scrap sales have ground to a halt, as essentially all that “Cash for
Gold” was ever going to get has been sold.
Global
production still hasn’t surpassed the 2001-02 peak –
despite a decade-long bull market, and soaring mining capital
expenditures – and I ASSURE you the road to higher production will only
grow rockier in the coming years. As production costs soar – and
nationalization/taxation/environmental/operational/financing risks escalate
– the world will be lucky to see higher production, as if such
piddling increases can make even a dent in the expanding EXPLOSION of
PHYSICAL PM demand.
The moral
of this story is, NO ONE IS SELLING PHYSICAL GOLD, and NO ONE WILL until a
new gold standard is inevitably - and possibly, imminently
– created, at MUCH, MUCH, higher prices.
PROTECT
YOURSELF, and do it NOW!
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