The Golden Truth: JUMP BALL For the IMF Gold...

Thursday, February 25, 2010

JUMP BALL For the IMF Gold...

Looks like India is now going to compete for the IMF gold, along with China. From The Daily Times of Pakistan:

India’s central bank, which has increased its gold holdings to diversify its reserves, looks set to be a buyer again when the International Monetary Fund begins selling 191.3 tonnes of the precious metal amid volatility in major currencies...The uncertain outlook for two of the world’s major reserve currencies — the dollar and euro — provides a spur for central banks, including India’s, to buy gold. India’s gold holdings lag those of major economies despite a big purchase in October.

Here's the full link: India Wants More Gold

This reinforces the idea that the 191 tons of IMF gold for sale is the only large chunk of gold available in the context of the current price range ($1000 - 1200/oz.). This raises the possibility that the big buyers of gold out there, once this 191 tons clears the market, could be motivated to drive the price of gold a lot higher, up to the next price level at which a large seller might be induced to put a large "chunk" up for auction.

2010 could be a very interesting year for the yellow dog.

4 comments:

John MacFriday, 26 February, 2010
Any color from overseas on the quality of those sources? Gold behaving more like the big disconnect is just ahead dude, shares another matter but even those are acting well when Gold reverses.

Sentiment is poor across the spectrum and with everyone looking down... well, you know.

Thanks for the insights dude, keep up the excellent work.

Your compatriot pirate amigo
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Dave in DenverFriday, 26 February, 2010
Thanks for the feedback J-Mac.

Waiting to hear back from my buddy on that source of the China news. The India news about the IMF gold was in several spots, so I'm sure it's good.

Sometimes my buddy can be a little flakey w/email, but I'll give ya a jingle when I get any color.
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AnonymousFriday, 26 February, 2010
[The India news about the IMF gold was in several spots, so I'm sure it's good.]

dave these multiple spots are just quoting each other...
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Dave in DenverFriday, 26 February, 2010
"He said/she said" - bottom line is that both India and China want/need a LOT more gold and if this IMF 191 tonnes is bona fide and not just an accounting adjustment like the first 212 tonnes, then there is no doubt in my mind - or in the minds of others who have scrutinized this market for at least 9 years, that India and China are in the hunt for this 191 tonnes.

All else is noise. BUT, where there's smoke, there's fire and there's a lot of smoke coming out of Asia regarding this 191 tonnes.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.