Hopefully you heard this news yesterday…
European Central Banks Halt Gold Sales
Europe’s central banks have all but halted sales of their gold reserves, ending a run of large disposals each year for more than a decade.
The central banks of the euro zone plus Sweden and Switzerland are bound by the Central Bank Gold Agreement, which caps their collective sales.
In the CBGA’s year to September, which expired on Sunday, the signatories sold 6.2 tons, down 96 per cent, according to provisional data.
The sales are the lowest since the agreement was signed in 1999 and well below the peak of 497 tons in 2004-05.
The shift away from gold selling comes as European central banks reassess gold amid the financial crisis and Europe’s sovereign debt crisis.
In the 1990s and 2000s, central banks swapped their non- yielding bullion for sovereign debt, which gives a steady annual return. But now, central banks and investors are seeking the security of gold.
Odd, how this comes down after this bit of news from just last week…..
What’s the hot topic at the United Nations General Assembly? Gold.
Now, I’m hearing that the hot topic at the United Nations, in the corridors, is not Iran or Afghanistan, but gold. The United Nations General Assembly is in session and friends told me last night and this morning that all eyes are on gold.
Bottom line: We may be having a major shift in the demand curve for gold. The old demand curve was based on only goldbugs buying gold (until serious inflation kicks in). If we do indeed have a new demand curve, the goldbugs are joined by hedge fund managers and even more important the international elite. This moves the demand curve much higher, and I don’t think their is a forecast out there yet reflecting how high this demand curve may have moved.
The Assembly already attempts to regulate much of what we do here in America. How long do you think it’ll be until they attempt to tells un how much precious metals we are allowed to own?
And with the current occupant of the Oval Office, how fast do you think he’ll beg to sign it to “improve America’s reputation of cooperation”?
There ARE people out there looking at the higher demand curve, and they have been out there for years. They were laughed at a decade ago when they predicted $800/oz gold, again five years ago when they predicted $1200 gold, and are laughed at now when they predict $3000 gold, and they will get laughed at in a few years when they predict $5000 gold. They won’t be laughed at to much when they bail near the market top in a half-dozen or so years (I’ll looking for it to peak in 2017 +/- one year, if historic cycles hold). Because politicians hate and deride anything they cannot control, expect increasing demonization of Au and Ag at time goes on.
…and with a conservative Congress in the offing, any bill to regulate the private possession of AU will not get far.
RD, you have too much faith in politicians.
Remember, buy gold, not the paper saying you own gold, and pay with paper.
Optimists buy gold. Pessimists buy brass and lead.
Someone told me there is something like twice as much gold on paper as there is gold that has ever been mined.
That’s been my biggest hurdle. I’d have no problem with buying gold. But buying some certificate that represents some gold just doesn’t make sense to me.
Rivrdog,
You have a lot more faith in the increasingly dubious distinction between Classic Authoritarian Statism and New Authoritarian Statism than I do.
If clamping down on individual possession of gold is perceived to enhance .gov power, I think the Rs will be just as happy to do that as the Ds.