You read it everyday but few connect the dots to a lift in precious metals. I see them, hopefully you do too, the problem is the masses do not. Today I want to include not only what I view as news worthy events but events soon to project silver and gold out of reach for most in the middle class. Once again, I don’t believe one particular event will send metal beyond what most view as unimaginable. Accumulation of multiple events will ultimately push, or influence, your PM (precious metal) higher.
The attraction to precious metal is NOT universal, let me explain. Indians buy gold stemming from tradition realizing gold jewelry is not only attractive but a great store of wealth. China buys gold to empower themselves into the next reserve currency. Americans buy gold either to hedge against uncertainty or grow rich. Canadians buy gold for the same reasons as Americans.
But Europeans buy gold for an entirely different reason, the same reason most will eventually own PM. Europe is trading currency, or other assets, for gold to preserve wealth lost otherwise. This reason, their reasoning, is a snapshot of our world’s future.
By the way, be sure to read the six plus reasons Why Silver & Gold Will Go Higher available right here.
THE DAILY CALLER: “The US has 2-5 years before financial meltdown….it is dishonorable to lie to the American people….based on the debt we have now, it takes $650 billion annually just to pay its interest. I want people to see what’s coming, this is why I wrote The Debt Bomb.” U.S. SENATOR TOM COBURN. You can watch a short video right here.
ZERO HEDGE: As US weak hands keep piling out of gold whether to make space for the Facebook IPO tomorrow, or just to load up on paper currencies in advance of central banks printing much more, two things have happened: China is now on its way to becoming the biggest source of gold demand, surpassing India, but more importantly as of hours ago, in a truly historic move, “Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies.” Not our words: the FT‘s. This is worth the time to read.
THE GOLD STANDARD: The Rising Price of the Falling Dollar by Charles Kadlec – Forbes:
The debauch of the dollar also erodes our prosperity and our security. Since the final link between the dollar and gold was severed in 1971, the paper-dollar system has produced slower growth, higher average unemployment, deeper recessions and more frequent financial crises.
• Chinese yuan, the price of oil today would be $78 and a gallon of regular gas would cost about $2.95;
• euro, the price of oil today would be $74 and regular gas about $2.80;
• Japanese yen, the price of oil today would be $67 and regular gas about $2.60;
• Swiss franc, the price of oil today would be $60 and regular gas about $2.40.
Very interesting read for those questioning the value of a gold standard, it’s right here.
FOX BUSINESS: Gold Fields Says Prices Need to Rise to Avoid Industry Cuts
JOHANNESBURG – Gold prices need to rise or mining companies may be forced to start cutting output and project financing, Gold Fields Ltd. (GFI) chief executive said Thursday.
In recent weeks the price of gold has fallen, with the metal trading around a four-and-a-half-month low in Europe this week.
“We need higher prices over the long term or we will see curtailment of projects,” Nick Holland said. “(The industry) could see output cut if we see gold go down to some of the forecasts.”
The promising production target comes despite mining companies in South Africa experiencing bigger-than-normal drops in output due to more frequent labor disruptions and Department of Mineral Resources-mandated safety stoppages. Read more right here.
L.A. TIMES: “Grexit”: Are Greece’s Euro Fears Causing a $1-Billion Bank Run?
Greek officials were busy today cobbling together an emergency plan after talks to form a coalition government disintegrated Tuesday. In the meantime, Greeks have withdrawn $900 million from local banks.
So said President Karolos Papoulias, according to minutes of a government meeting procured by Reuters. Papoulias, in turn, was quoting George Provopoulos, governor of the Greek Central Bank, who said depositors took out 700 million euros earlier this week and will likely withdraw at least 100 million more.
Greeks have withdrawn 72 billion euros since January 2010, leaving bank deposits with 165 billion euros in March, according to the central bank. Social media users were buzzing Wednesday about rumors that Greek banks had set a withdrawal limit of 50 euros on accounts. Read it here.
PROSPECTOR: It is hard for me to say which article above concerns me most. I wrote about all the above in Why Silver & Gold Will Go Higher so I’m certainly not surprised. Senator Coburn’s book The Debt Bomb intrigues me and sounds like my weekend read, you might consider it too.
Gold Field’s honesty as it relates to mining challenges is something I see as a sign of times to come. The likelihood of environmental concerns complicating an already complex mining industry is something all metal owners should expect, and plan for. Gold and silver are already in short supply at least compared to demand. How can this not affect metal prices of both silver and gold?
Japanese pension funds investing in physical gold could be the purest example of today’s flight to all things real. Folks, this is only the tip and you and I both know it. All the reasons above are why I’m not concerned when gold metal drops $50 or $350 over short term!
Miles Franklin sent over an offer (5-17-12) selling 1/4 ounce fractional gold bullion at a very good price. Supplies limited and will not last considering the offering at 5.5 % over spot. You can find them here if interested.
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