Merry Christmas & Happy Holidays

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It’s that time of year again when we can’t help but break out the Burl Ive’s classic Silver & Gold from our all-time favorite child-hood Christmas movie: Rudolph the Red Nosed Reindeer. Admittedly, we were quite restless through the musical parts of this wonderful show and couldn’t wait for the scenes with Yukon Cornelius taming the Abominable Snowman. However, we’ve grown to appreciate this particular piece much more today!

Burl Ives, Silver & Gold – from Rudolph the Red Nosed Reindeer

May you and your loved ones be blessed during the holidays and experience much joy and happiness in the new year. While its a tall order, let’s all do our part to bring peace on earth and good will toward men.

PMBull

The Death of Money by Jim Rickards – Giveaway

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thedeathofmoneyIn his newest book, The Death of Money: The Coming Collapse of the International Monetary System, Jim Rickards tells us that “only nations and individuals who make provision today will survive the maelstrom to come.”

In his best selling prior release, Currency Wars: The Making of the Next Global Crisis, Rickards details a full-blown currency crisis that occurs inside war games held by the Defense Department, where his team won. Rickards was playing the part of China. In that book, Rickards argues that the collapse of the U.S. Dollar is greater than any other economic threat and that a crisis is inevitable.

Rickards continues where he left off with The Death of Money. In this newest book, Rickards prepares readers by encouraging the conversion of fiat currency into real, tangible assets that can better serve as stores of value. These assets include gold, land and even fine art. Continue Reading …

There Is No Gold Shortage: New Source Discovered (Joke)

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Somali Gold LetterWe are finding it necessary to clearly disclose that this post is a joke. The email we reference appears to be nothing more than a different version of the Nigerian Scam. Many other websites certainly received this email, and it should not be taken seriously. Really, did we have to post this disclaimer? Yes, sadly, we did.

PMBull received an email this morning (below) that puts to rest the idea that a gold shortage has been developing. Nevermind repeated instances of Negative GOFO, or significant withdrawals from the SPDR Gold Trust (GLD) by authorized participants, or the record imports of gold into China through Hong Kong. The email we received proves that there is plenty of gold available and that gold producing countries are in fact having difficulty finding buyers. So much difficulty that they are offering to provide samples of kilogram bars at what we presume to be “deeply discounted” prices.

Many die-hard gold buyers have also recently come to the conclusion that there is no shortage. After all, there must be a lot of gold to sell, given the quantity that has been dumped on the market to suppress prices, right? The debate in recent days has turned to where the gold being sold is actually coming from, and there are theories about that floating around out there. Continue Reading …

Gold Shortage Developing Again?

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Where is all the gold in the gold ETF SPDR Gold Trust (Symbol GLD) going, and why? Could we be looking at a developing gold shortage again?

Year to date, actual physical gold inventory in the GLD is down over 30%. Gold inventory in Sprott’s Physical Gold Trust (PHYS) is down only 1.3%. Further, silver inventory in the Silver ETF (SLV) is actually up 3%.

Hmmm… There is certainly a correlation between gold and silver prices. There is certainly a correlation between Spot Gold Prices and GLD’s price per share. And of course there is a correlation between the price per share of GLD and Sprott’s physical fund. This is expected.

Yet, there is no correlation between the actual inventory levels in these funds. Which leads us back to our opening question. Where is all the Gold in the gold ETF SPDR Gold Trust (Symbol GLD) going, and why?

Many don’t understand the relationship between the GLD, the bullion banks and COMEX, where gold futures are traded and spot gold prices are at least partially derived. Mr. Furguson over at TF Metals Report does.

In his latest public missive, Mr. Furguson puts together a variety of data to draw (prove?) a pointed conclusion about the status of physical gold supply:

“The GLD is being consistently and regularly pillaged by the bullion banks as they desperately search for gold to settle their obligations.”

  -Turd Furguson, TF Metals Report

You see, the GLD has something called “authorized participants” which are essentially the bullion banks (JPM, HSBC, etc.). These banks have frequently sold paper gold futures on COMEX. If the buyers of these Gold Futures demand delivery of actual physical metal in future settlement months, the banks have to come up with real, physical gold to meet those delivery demands. Continue Reading …

The Bernanke Bullard Bluff: The Return of Taper Talk

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Image of Rising PriceIs Bullard bluffing? Gold and silver markets reversed Wednesday’s No-Taper rally today after St. Louis Federal Reserve Bank President James Bullard threw cold water on the dollar dumping party.

In an interview with Bloomberg News this morning, Bullard reignited talk of taper when he said that October might still see a reduction in QE and that the vote this week to continue the $85 Billion in monthly bond purchases was a close one.

A week before the Surprise FOMC Decision on Wednesday, PMBull observed that all the talk of taper was missing an important fact. The economy was in no condition to justify an end to QE. We hinted that the Fed may be boxed into a corner, unable to stop the flood of easy money (didn’t Bernake also tell Congress that very thing?). Louis Cammarosano at the Smaulgld Economics and Real Estate blog provided a nice, concise background on current economic conditions, going into the Federal Reserve Open Market Committee meeting.

The Bernanke Bullard Bluff?

In a follow-up piece today, Louis says that Bullard is Bluffing with regards to October QE talk, in general agreement with our assessment that the Fed is trapped. In that Bloomberg interview that rocked the markets backwards again today, Bullard suggested that the vote was close with respect to the September FOMC statement, and we are now to be on the lookout for Taper in October. Louis observes that the vote was 11-1 in favor of leaving things as they are. Real close Mr. Bullard.