East to West

http://www.ibtimes.com/golds-journey-west-east-switzerland-1393831


The gold is moving to the East (refer link).


Gresham's law is an economic principle that states: "When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."^[1] It is commonly stated as: "Bad money drives out good".
This law applies specifically when there are two forms of commodity money in circulation which are required by legal-tender laws to be accepted as having similar face values for economic transactions. The artificially overvalued money tends to drive an artificially undervalued money out of circulation^[2] and is a consequence of price control.
http://en.wikipedia.org/wiki/Gresham's_law


Would a government figure be worried that a rising gold price may send a signal to the sheepulation?


In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
Alan Greenspan


An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

• Gold and Economic Freedom, by Alan Greenspan, 1966.

The facts are the facts

“Facts do not cease to exist because they are ignored.”   Aldous Huxley


The last two and half years for gold have been terrible - and in the miners disastrous, but their performance does not diminish the facts that exist today. The Fed and all Central bankers have been manipulating the price of money to provide an illusion of prosperity, which appears as facts to many. Yet the key questions are rarely asked; maybe we like the illusion.
- Why, 6 years after the crisis, is the US Fed still buying bonds?
- Why is it we have the lowest interest rates in hundreds of years?
- Why under these conditions are economies growing at "sub-par" rates?

When asking Allianz SE’s chief investment officer about the euro area’s sovereign debt woes, be prepared for an emphatic response.
“The fundamental problems are not solved and everybody knows it,” Maximilian Zimmerer said at Bloomberg LP’s London office. The “euro crisis is not over,” he said.

http://www.bloomberg.com/news/2014-07-10/portugal-smolders-as-allianz-says-debt-crisis-isn-t-over.html

Container Store coins the investor catchphrase of the summer: "Consistent with so many of our fellow retailers, we are experiencing a retail funk," said Container Store (TCS_) Chairman and CEO Kip Tindell in the company's first-quarter earnings report. Tindell also said the company continues" to experience slight traffic declines in this surprisingly tepid retail environment."

http://www.thestreet.com/story/12771365/1/5-new-signs-the-us-consumer-is-still-struggling.html

Meanwhile equity investors are exuberant: (mea culpa: the stock market has performed way better than anticipated - especially the last 18 months):
CYNK Technology (a US social media company) shares are traded 'over-the-counter' in the US on an unregulated exchange.  Three days ago its market value was $US1 billion.  Two days ago: US$3 billion.  Yesterday: US$4 billion.
For now, some further questions to ponder:
- if the US is in such a strong position why is it's dollar so weak?
- if the economy is so strong, why are real incomes declining

http://www.usgovernmentdebt.us/federal_debt
US government Debt has risen approximately $7T since FY2009 while US GDP has risen just over $2T...hmmmm.

Gold will have it's day - it must, because the central bankers and the governments only have one major practical policy tool - "print", to make most debts "money good". Those who save (i.e. the east) accumulate, those in the west watch "reality" tv.

Gold gets crushed...gold equities get demolished!...but CBs get physical

And yet the beat goes on...the beat being the need for QE to continue else economies collapse.

Spain records negative GDP, Japan goes QE full bore and now all the discussions centre around the need to cut back on austerity.

Central banks seeing the "inflation" set out to protect themselves
http://www.bloomberg.com/news/2013-04-24/gold-rout-for-central-banks-buying-most-since-1964-commodities.html

Jim Sinclair explains it here (lets get physical)...If he is a master, and I believe he is...something quite interesting this way comes.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/25_Sinclair_-_This_Is_The_Beginning_Of_The_End_For_The_Gold_Shorts.html


Meanwhile gold equities behave as though gold goes to $900 from here. They are down 50% since November 2012, The SP500 makes new highs...

Just when you think you get things...your pants get pulled down.

Trust is fading

The post GFC world has set off a domino effect. Globally, trust in government is beginning to erode. We first saw it in the "Arab Spring", but it's everywhere if you care to look.

Europe has gone from one disaster to another - the most recent being Cyprus. Now the Japanese will undertake a massive version of their own QE. In the US the job participation rate in the lowest since 1979. Even in Aus we see a government scrambling for cash, looking to make things sustainable.

The markets sill signify a loss of trust and force the govt's hands.

Where is the good news? Like each season, this too shall pass. First comes the pain.

http://www.jsmineset.com/2013/04/06/you-must-act-now/

Gold gets crushed in USD...down to 1545USD today

meanwhile...

Largest Dutch bank defaults on physical gold deliveries to customers April 3, 2013
By: Kenneth Schortgen Jr

Last week, a rubicon was crossed in the precious metals market as one of the largest banks in Europe defaulted on their gold contracts, and informed their customers there was no physical gold available for delivery.

ABN AMRO, the largest Dutch bank in the Eurozone, issued a letter to their gold contract customers of failure of delivery, and instead will pay account holders in a paper currency equivalent to the current spot value of the metal.

ABN AMRO, the biggest Dutch bank, has sent a letter to its clients stating that they will no longer be able to take physical deliveries of the gold they have bought through ABN. Instead they are offered money at the current market rate for gold. Basically, instead of owning a risk free, physical asset (a gold bar or a gold coin), the bank’s clients now own a monetary claim on ABN AMRO, being exposed to the bank’s credit risk. – Voice of Russia
http://www.examiner.com/article/largest-dutch-bank-defaults-on-physical-gold-deliveries-to-customers

They can't deliver?? Can't they just buy what everyone is selling?...shhhhh.... Ponzi Ponzi


meanwhile in Venzeula Gold does it's job!

Japan goes Nuclear

The Bank of Japan has agreed an aggressive fresh programme of quantitative easing (QE) measures to give more momentum to its gradual recovery.

Overnight the bank’s new governor, Haruhiko Kuroda, announced that the bank would buy roughly ¥50trn (£347.6bn) worth of government bonds a year as well as putting another ¥70-80trn into the financial system through “money market operations”.

http://www.ftadviser.com/2013/04/04/investments/japan/japan-launches-aggressive-qe-programme-ODAfVvEZxQzKrx1YC8qt3H/article.html


Fiat currency is on the decline - this is what Japan is doing, this is what must be done OR the debt burden collapses on itself.

The debts must default or be inflated away! 5 years after the GFC...QE continues

Gold market unloved - Gold shares despised

Equity markets have been very upbeat the last 4 months or so. Meanwhile gold has been travelling sideways for nearly 20 months. Sentiment is very low and hedge fund managers are short.
The gold equities have been a very poor investment down close to 40%. Why hold them?

Becasue, nothing has been fixed - global liquidity by the central bankers is the key policy right now. Gold will reflect it soon and in due course the equities will follow. The train has nobody on it!

http://edegrootinsights.blogspot.ca/2013/03/gold-primed-for-unexpected-upside.html

Eric has some very good points in this article. A great analysis, by a very careful and thoughtful watcher of markets.

While Dan Norcini notes,
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/15_Incredibly_Important_Developments_In_Gold_%26_Silver_Markets.html

“Today the hedge funds are short a staggering 68,700 contracts. What makes this number even more amazing is that it represents an astounding 10+% of the entire open interest in the gold market of 667,000 contracts. So this is by far the hedge funds’ largest short position in percentage terms in history.
The bottom line is I don’t recall seeing anything like this since this bull market began 12 years ago. The hedge funds are now essentially battling against Middle-East and Far-East central banks and commercial banks. The problem is these central banks are behemoths compared to the hedge funds. 

Something has to give!