THEN, there is this:
Premiums for gold bars jumped to their highest in two years on Tuesday as worries about inflation drove investors in China, the second-largest consumer of the precious metal after India, to bullion ahead of the Lunar New Year..."There's a sudden surge in demand. Demand from China is very good and they are paying very high premiums. Refiners can't meet the demand," said a dealer in Singapore.Here's the article LINK
You can easily track the premiums being paid for gold in countries like India, China, Viet Nam and Turkey at http://www.lemetropolecafe.com/ in the nightly Midas report. Based on the activity in the eastern hemisphere, plus the accelerating demand for silver eagles as reported by the U.S. Mint, I would suspect that at some point the "boy who cried wolf" shortages will actually become very real.
I also suspect that, over a longer timeframe, the entities who utilize the "fractional" method of bullion banking - Comex, LBMA, Scotia, JPM, HSBC, etc - will find themselves in a bit of trouble when the eventual "call" on the metal they supposedly safekeep happens and we find out the cupboard is mostly bare.
And even further down the food chain, the investors who have placed their full faith in the "credit" of these banking entities will be quite shocked when the paper investments - like GLD and SLV - that use these banks as custodians start plummeting in price as the spot price of gold/silver does a rocket launch.
The only question in my mind that remains is how long it will take for this sequence of events to unfold. It has taken a lot longer than I originally expected back in 2002 for a lot of this mess to become real, so I don't cast out timetables anymore. I will say that a long-time, very perceptive friend of mine opined recently that our system won't totally cave in until the Comex defaults on the delivery of physical metal (changing the rule to enable cash settlement is a "de facto" default). It is at this point that a very terrifying dollar crisis will grip our system. It's anyone's best guess when this will happen...Do you know where your bullion is?
Wow My friend and colleague Jesse sent me this - I don't have link but you can probably google the title to get the source news article:
SINGAPORE, Jan 11, 2011 (Dow Jones Commodities News via Comtex) -- Demand for gold bullion from Australia's Perth Mint has been unrelenting since gold's price dropped below $1,400 an ounce, a senior Mint official said Tuesday.
"At the moment demand is such that we cannot meet all the enquiries that we are getting," said Nigel Moffatt, Treasurer of the Perth Mint, one of the world's largest gold refiners and distributors.
"Demand for our coins and medallions is strong, but the biggest demand is coming from banks and traders looking for kilo bars," he told Dow Jones Newswires.
One-kilogram bars are the most popular trading instrument in Asia's physical market