Gold bears cite the inflation adjusted price of gold to tell us that gold has peaked. What they do not provide is an analysis of the figure. Note that we had another gold rally following the failed presidency of another Democrat (Jimmy Carter). The rally began with a preliminary move like the one we are experiencing nowadays and then turned up almost vertically on the scale used here. We are not yet into the final blowoff.
A reason for gold's ascendancy is credited to the amount of debt and derivatives floating around in international finances. The second graph illustrates the size of the derivatives compared to the amount of gold outstanding. Banks are full of these derivatives, which in reality are of dubious value.
The real reason for the expected rise in the value of gold is the coming monetizing of gold. What is amazing is that the lamestream Media says nothing about this unfolding situation. The driving force of it all is the Basel Committee on Banking. It is this Committee that decides on banking rules. And the Committee decided two things: 1. beginning on Jan 1, 2013, gold held by Central Banks will be counted at its full value (it is counted at 50% value now) and 2. international banks will be required to own 6% of their reserve in gold (current value is 4%).
Central banks have been buyers of gold, while the Bouillon banks are keeping the price of gold down. Every time there is a take down, such as last Friday, people flock to acquire coins.
We know that lot of gold may have been leased to control price and the resulting scramble may prove interesting.
No comments:
Post a Comment