Monday, June 24, 2013

Strange Days Indeed

So we have all sorts of people telling us that gold is a goner. No good, kaput. Prices have slumped and no sane person is buying. Put your money into equities and property. This is where the money is flowing and the returns are greatest.

But wouldn't it be intriguing to 'follow the real money' in this whole saga. Money being that which can ultimately be swapped for goods and services and not be devalued. Gold that is. So where is the gold headed?

Mums and Dads are ignorant of golds monetary usefulness and are so hard pressed by stifling debt that money ain't going to flow anyway, anyhow from that direction. Secondly, most fund managers are telling you gold is useless in that it provides no returns such as dividends (maybe this has something to do with the fact that fund managers can't earn fees from you holding gold...hmm). So no one appears to like gold right now. It's falling, in a bear market and has no chance of recovering.

This is all true if you look at gold as an investment. But it's not; well not completely. As stated before here, it is primarily an insurance against bad government.

Therefore, follow the real money; follow gold. Where's it heading? Yep, Central Banks are buying. Interesting. A useless relic and a tradition is being bought by those that control capital flows worldwide.

And because they are buying, did you think they would want to buy at $1900 per ounce rather than $1250? And do you think they have the means to beat the paper price down in order to snap up the physical from distressed long-gold holders? Yep.

My figuring is that once this Central Banking cartel have enough gold, they will reset the price of fiat money to a higher plain against that gold, as the US did back in '33 to produce inflation, then the fun will start. And the wealth destruction for Mums and Dads will begin in earnest.

Anyway, here's a curious wee article on a NZ news website on Sunday. Curious in that everyone hates gold, but this article is telling us how and where to buy it!!

"A price slump is often a signal that investors are deserting a market but a sharp fall in the gold price has had the opposite effect"....more

Strange days indeed.

Gold in New Zealand dollars: $1669.20 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $25.78 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)

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1 comment:

  1. It's really interesting to chart the popular excitement over gold, and the parallel ambivalence of Central Banks. When one changes direction, the other changes in lock-step.

    If banks don't want to touch gold, why would a civilian? That's the time to get in I think. The price drops due to classic and basic economic forces.

    I can't help but think it's a ploy sometimes by central bank planners and fund managers to scare off the chaff and clear the way for a low-buying of a worthwhile investment while no-one's looking.

    Don't get me wrong, it's not a conspiracy. It's exactly what we all do in self-interested businesses.