Video: Rep. Mark Kirk says China may be purchasing $80 billion in gold bullion to increase reserves
Editor’s Note: Admittedly, Fox News is not my favorite news organization. This video of an interview on Fox is pretty good and Republican Representative Mark Kirk from Illinois gives a pretty solid perspective of some of the debate that are happening in Washington and globally about the U.S. dollar and China as our largest creditor. The omission that China is going to buy $80 billion in gold bullion says a lot about their inflation expectations in itself. To put that into perspective, if you purchased that amount a current price ($920.00/oz.), that would equal 2,717 tonnes of gold bullion. According to the World Gold Council, that would outstrip an entire years mining production for the entire globe. If that is not some indication about our current situation and what is expected for inflation, than what else do we need? Enjoy the video.
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Gold mining stocks attractive in turbulent times
No doubt, in times of currency devaluation, gold asserts itself as a store of wealth and a secondary reserve currency. I have followed this sector and it is following the 7 year bull trend that gold has shown. It looks like between now and the end of next week, gold will make another shot to top $1,000/oz. Time to protect your wealth before is gets debased through all our bailout and stimulus activity.
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The prospects for equity markets and numerous sector indexes have dimmed during the global recession, but gold and the companies that mine it have not lost their luster.
With gold prices nudging their all-time high and energy and other costs falling, mining company profit margins are widening, making their shares attractive, analysts said on Thursday.
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Merrill Lynch says wealthy individuals turning to gold bars for safety in uncertain times
Historically, gold is the safe haven investment from financial and political instability. Yes, it does not pay interest and that is why in our modern world, it seems to be shunned at every possible turn. The failing, is that people don’t seem to understand that it is a store of value (wealth) and that is its natural role and has been for at least 6,000 years or more.
Gold does not have any built in liability to anyone, it is rare and it takes work to get out of the ground. All of these make it so no matter what happens in the real world, no one will be able to tell someone that their gold is worthless and that is what makes it such a great store of wealth. With the type of fiscal policies government across the globe are running, it should be no surprise that people are looking for this type of safety.
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Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.
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Citigroup says gold could rise above $2,000 next year as world unravels
Well we have seen a tremendous amount of money issuing taking place to try to save a reckless financial system in the United States . At some point this amount of currency will have to come to bear in the real market. People are calling for deflation everyday and to a point this is correct because of the huge gaping hole that has been blown into the credit markets from de-leveraging.
But once we do find a bottom, this massive amount of money will go into the market and you will see prices driven through the roof. Also because we rely on foreign creditors to buy our debt to issue our currency, we could see them lose confidence in our dollar and then we will see them jump away from the dollar and it would crash and that would drive prices up for Americans because we import much of our goods. They would price up their import goods because we have been so reckless in issuing our currency to bail out failing institutions that should of failed….period. Gold is money, not credit and it does not owe to anyone.
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The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.
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Gold miners’ earnings hurt by higher production costs
I agree that if we see oil prices stablize in this $70-90 dollar area, we should see earning improve for this sector compared to the environment of $125-150 dollar a barrel oil. Gold Fields is mentioned in this article and they are in a tougher situation because of the continuing issue of power production from Eskom of South Africa.
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Two of the world’s leading gold miners reported big drops in quarterly earnings on Wednesday as soaring costs for fuel and raw materials ate into margins already narrowed by a slumping gold price.
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Jurg Kiener of Swiss Asia Capital talks about paper precious metals market default and gold price spike
This was a good video on CNBC about the Comex futures market and the possibility of some defaults on precious metals futures contracts because of increase physical demand of gold bullion, especially in the retail weights of 1 ounce gold coins and bars. Jurg Kiener of Swiss Asia Capital said if this happens, we should see the spot price of gold to double in very short order, suggesting it would be in under 12 months citing how small the market is compared to other commodities like oil.
Personally, I have talked to a bunch of bullion dealers and they have told me about the huge demand they are seeing and that they are to the point where they are starting to turn certain orders away because they are starting to lack confidence that the other bullion dealers and clearinghouses will be able to deliver as promised. Watch the video and leave your comments below.
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Jurg Kiener of Swiss Asia Capital talks about Paper Gold and Comex
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Gold Fields CEO says global gold bullion supply to tighten on lack of mining funds
There will be a dip in gold production for sure but I think at investors sniff out this inflation coming down the pipe we will see a major flight to safety and that will be in money being invested in Gold Bullion and mining companies that are in or close to production. It also doesn’t help that Eskom Power in South Africa has had to reduce power to the mining companies that in turn has reduced production.
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Global gold supply will likely contract as the financial crisis in the United States saps funds away from planned mining projects, Nick Holland, the chief executive of Gold Fields said on Friday.
“Some of the juniors and intermediate companies are not going to be able to develop their projects. And I think what this means is that mine supply in gold is probably going to decline more than what people realize,” Holland told Reuters.
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