Category Archives: Precious Metals

China Gold Exchange is Selling Tonnes of Gold. Tiki Has Answers

China Gold Exchange is Selling Tonnes of Gold. Tiki Has Answers
“After being a Senator in Washington for a while, I began to miss the honesty and sincerity of Hollywood.”  Fred Thompson, actor, 1942-2015

Tuesday: Gold $1114.20 down $21.60. Silver: $15.24 down 17 cents

tiki dome          I had thought Halloween was over and scary stories and slimy government budget deals had run their course. But NOOOOO. We still have the lying, cheating Wall Streeters beating up PMs in spite of massive scarcity data. The recent blurb by Lawrence Williams, sometimes frightfully called “Lawrie” is timely. [The quoted story below is taken from lemetropolecafe, and is more updated than the gold-eagle story below.] My snowglobe of Tiki Voices says Lawrie is on to something here. (Um, yes – Tiki Voices from a snowglobe. And only Foghorn can hear these Tiki Voices. But let’s not dwell on that right now…)

         “Full month figures for October aren’t yet available, but announced gold withdrawals out of the Shanghai Gold Exchange (SGE) up to October 23rd have already exceeded last year’s full year total – and last year was the second highest full year ever for SGE gold deliveries. With the SGE, withdrawals are in physical form in small bars only…this is mega tonnage folks in a world that only produces some 2600 tonnes of gold a year out of gold mines. (Scrap or recycled gold doesn’t amount to much these days, maybe a couple hundred tonnes. The reason is lousy prices…)

SGE GOLD WITHDRAWALS – YTD AND PREVIOUS YEAR TOTALS

Year      SGE gold withdrawals:

2015 (to Oct 23rd)  2,119 tonnes

2014  2,102 tonnes

2013  2,181 tonnes

2012  1,134 tonnes

2011  1,043 tonnes

2010  814 tonnes

Source: Shanghai Gold Exchange, Sharelynx.com

         There are various reasons suggested for the enormous discrepancy between known supply and SGE deliveries. Some are valid, some very silly. See the gold-eagle article sited below for details. The obvious fact is that SGE deliveries have been enormous this year, and that should tell you that China is sucking the West dry of gold. And Chinese mothers didn’t raise no stupid communists.

         Together with Indian demand running at close to 900 tonnes this year, sooner or later the level of gold flows draining western inventories must have an impact.” See http://www.gold-eagle.com/article/latest-sge-gold-deliveries-suggest-enormous-2015-total-over-2650-tonnes

Oh, and the Russkies are absorbing all of their own gold production (over 200 tonnes) and that production never comes onto the world market either. And the ever so crafty Russkies are buying in London as well.

tiki revenge        Doug Casey had a three “litmus tests” for gold’s portfolio-diversifying relevance which we believe every global investor should currently be considering. If the litmus turns turgid, I’d suggest buying some gold, and maybe a lot of silver:

First – could the U.S. financial system endure even moderate normalization of interest rate structures?

Second – has the process of debt rationalization been allowed to proceed in U.S. financial markets?

Third – is the U.S. economy capable of 3%-to-4% GDP growth with a healthy net national savings rate of say 8%-to-10%, alleviating the need for copious amounts of U.S. nonfinancial credit growth?

If your answer to these three questions is Not a Chance, Hell no, and Have You been drinking?  then gold remains a mandatory portfolio-diversifying asset.

Post-Litmus Upshot: I’m going with the anti-Ahu Tiki God of Revenge above, and heading for gold and PM shares. I’m not beating a dead horse. I’m trusting the eerily accurate Tiki Voices of prognostication. I’m just the messenger here.

         Tiki Voices Newsflash: Rubicon (RBY) got taken out and acid-washed today. Gold Stock Analyst still kept it on their Top Ten list, but it’s gonna take some courage to buy this one. RBY announced over the weekend that they’d halted their mine and mill construction, and oh yes, fired the president. Mr. Market hates that. The stock dropped from 43 cents to…wait for it, 19 cents. Twenty two million shares traded – for a stock that usually trades about 1.3 million a day.

IF you believe in the gold story and RBY’s huge acreage surrounded by Gold Corp up in Ottawa, you ought to put away a 1000 shares or so. It’ll cost you 200 bucks. Foghorn owns a 1000 shares, and he’ll probably buy more.

 

Skynet Time?

Skynet Time? “For my final exam, I’ll ask the same old questions, but I’ll change the answers.” Sheldon Tefft, Hastings Equity Law Professor, and Foghorn teacher          I noticed that the stock markets are experiencing a tad bit of turmoil the past few days. But the endings of Bull Markets have historically looked like this.… Continue Reading

Bonds . . . James Bonds

11-4-2014 TUESDAY AFTER LUNCH MONEY MEMO By the Financial Foghorn Sign on the back of a Septic Tank Truck: “Caution – This Truck is full of Political Promises” An old Ronald Reagan story:  “Three dogs go into a bar.  An American dog, a Polish dog, and a Soviet dog. The American dog starts by saying,… Continue Reading

More Pain or More Gain?

“Since 1985, there have only been three occasions when the miners have experienced a three-year decline but there has NEVER been a fourth consecutive down year.  2014 is “Year Four.”  —Analyst Michael Ballanger, Richardson GMP Three sons come downstairs and sit at the breakfast table on a Saturday morning.  Their mother asks the oldest boy… Continue Reading

Unwilling Witness Protection for JPM Whistleblowers

“When I find I’m wrong I change my mind.  What do you do?” John Maynard Keynes           Larry Summers decided not to subject himself to impolite questioning during a Senate confirmation hearing in order to become Chairperson of the FED.  Even Mr. Obama’s Senate Democrats were heard to be sharpening swords to go after Mr.-Yes-I-Collected-$5-Million… Continue Reading

Off to the Races

2-5-2013 TUESDAY AFTER LUNCH MONEY MEMO “Money, young man, is good for the nerves.” J.P. Morgan Investing is defined as “Putting some money into something with the goal of getting more money back (after taxes and inflation) later.”  Sounds reasonable.  Well, I rode that definition a bit on Saturday by visiting my local race track.… Continue Reading

There’s No Freakin’ Gold Bubble, OK?

This is from a Tuesday After Lunch Money Memo from March 29, 2011.  It’s still applicable now, in May of 2012.  “No one knows when the bull market in gold will end.”  Richard Russell  In my last TAL, I said not owning gold in the current gold bull market is nuts.  Then I thought, wait,… Continue Reading

Credit Agricole said “Start Hoarding Gold”

Credit Agricole said “Start Hoarding Gold”

“A stock market crash, a depression, and hyperinflation…it’s the triple crown of disasters.” —Gary North, Financial Commentator  Way back on February 2, 2006, a French investment bank, Cheuvreux, which is the investment banking division of Credit Agricole, an even larger French commercial bank, published a report.  The following summary has been cheerfully copied and edited… Continue Reading