(Photo: YOSHIKAZU TSUNO AFP/Getty Images)
“The Refusal of King George III to Allow The Colonies To Operate An Honest Money System, Which Freed The Ordinary Man From The Clutches of The Money Manipulators Was Probably The Prime Cause Of the Revolution.”
-Benjamin Franklin, U.S. Founding Father
Is this huge drop in gold prices a prelude to major global economic events?
Gold selloff intensifies, falls below $1400
Monday, April 15, 2013
The bear market in gold intensified Monday with frenzied selling knocking the yellow metal down more than 7% and below the key $1,400-per-ounce level.
At 11 am ET, gold was down $118.20 or 7.87%, to $1383.20 an ounce. Gold, often viewed as a haven in tough times and a hedge against inflation, is down nearly $500 from its all-time high of $1,888.70 on Aug.. 22, 2011.
The 26.3% drop from its all-time high puts in deeply in bear market territory. It is gold’s worst drop since a 39% plunge Jan. 2, 1996 through Aug. 25, 1999, according to Bespoke Investment Group. The average gold bear market has sliced nearly 32% off gold’s price, according to Bespoke.
On Monday, a slowdown in Chinese economic growth added to doubts about the strength of the world economy. It also raised fears that Chinese consumers would buy less gold.
Investors’ trashing of gold Monday follows a 5% plunge Friday.
Rich Suttmeier, chief market strategist at ValueEngine.com, suspects the selling is being fueled in part by selling by big investors, such as hedge funds and pension funds, that are looking to stem their losses as well as reduce exposure to a hard asset.
In recent years, an increasing number of investors, big and small, have started to treat gold as a key “asset class” in their asset allocation, and have upped their stakes in gold as a result.
Suttmeier says the heavy selling has the feel of that bubble bursting, adding that selling by the nation of Cyprus to meet obligations to European financiers is intensifying the downdraft.
Analysts attributed last week’s plunge to investors who fear gold won’t be the safe haven it has been when inflation spikes, the economy deteriorates or the sale of gold to raise cash skyrockets.
As recently as mid-September, gold prices were flying above $1,800 an ounce.
The yellow metal has now hit a two-year low amid concerns that a 12-year bull run for the commodity has come to an end.
Oil prices were also seeing steep declines on Monday. Crude prices were down nearly $3 a barrel to $88.21 per barrel.
Article by Adam Shell and Kim Hjelmgaard, USA TODAY
Gold Prices Drop as Investors Throw in Towel
Gold – there’s a dramatic drop on Friday and today gold is at its lowest point since March 2011 what’s going on. Yet this — he’s a bit — — give up here in the gold market Eagles had a phenomenal rally last twelve years really but — struggled the past six months or so and think the fact that it it wasn’t able to gain more traction even with the Fed doing quantitative easing — — Bank of Japan doing quantitative easing which in theory. Would stimulate inflation the inflation is not taking hold and a lot of I think a lot of speculative investors are getting — are thrown in the towel giving up and that is feeding on itself right here at its.
Is getting ugly for gold and — organ for the end of the selloff but it’s not pretty right now. So is officially in a bear market and — — affect other industries. — say it is officially a bear market as of this morning down more than 27%.
From its all time high. You know it’s — other industries that think again — ties back — the story the broader story for commodities selling off amid fears that China’s economy is slowing. The US economy you know we’re doing okay but not create Europe’s a basket case.
GOLD CARTEL RAID – “I’ve NEVER seen anything like it,” – Bill Murphy
Reserves of foreign exchange and gold
Source: The World Fact Book (CIA)
This entry gives the dollar value for the stock of all financial assets that are available to the central monetary authority for use in meeting a country’s balance of payments needs as of the end-date of the period specified. This category includes not only foreign currency and gold, but also a country’s holdings of Special Drawing Rights in the International Monetary Fund, and its reserve position in the Fund.
Here is the list for the top 50 countries:
|
Rank
|
Country | Reserves of foreign exchange and gold | Date of Information |
|---|
| 1 | China |
$ 3,312,000,000,000
|
31 December 2012 est.
|
| 2 | Japan |
$ 1,351,000,000,000
|
31 December 2012 est.
|
| 3 | European Union |
$ 863,800,000,000
|
31 December 2011
|
| 4 | Saudi Arabia |
$ 626,800,000,000
|
31 December 2012 est.
|
| 5 | Russia |
$ 537,600,000,000
|
31 December 2012 est.
|
| 6 | Taiwan |
$ 408,500,000,000
|
31 December 2012 est.
|
| 7 | Brazil |
$ 371,100,000,000
|
31 December 2012 est.
|
| 8 | Switzerland |
$ 331,900,000,000
|
31 December 2011 est.
|
| 9 | Korea, South |
$ 326,900,000,000
|
31 December 2012 est.
|
| 10 | Hong Kong |
$ 317,300,000,000
|
31 December 2012 est.
|
| 11 | India |
$ 287,200,000,000
|
31 December 2012 est.
|
| 12 | Singapore |
$ 259,300,000,000
|
31 December 2012 est.
|
| 13 | Germany |
$ 238,900,000,000
|
31 December 2011 est.
|
| 14 | Algeria |
$ 190,500,000,000
|
31 December 2012 est.
|
| 15 | Thailand |
$ 181,600,000,000
|
31 December 2012 est.
|
| 16 | Italy |
$ 173,300,000,000
|
31 December 2011 est.
|
| 17 | France |
$ 171,900,000,000
|
31 December 2011 est.
|
| 18 | Mexico |
$ 163,600,000,000
|
31 December 2012 est.
|
| 19 | United States |
$ 148,000,000,000
|
31 December 2011 est.
|
| 20 | Malaysia |
$ 140,400,000,000
|
31 December 2012 est.
|
| 21 | Libya |
$ 130,300,000,000
|
31 December 2012 est.
|
| 22 | Indonesia |
$ 103,800,000,000
|
31 December 2012 est.
|
| 23 | Poland |
$ 99,930,000,000
|
31 December 2012 est.
|
| 24 | United Kingdom |
$ 94,540,000,000
|
31 December 2011 est.
|
| 25 | Turkey |
$ 93,380,000,000
|
31 December 2012 est.
|
| 26 | Denmark |
$ 85,050,000,000
|
31 December 2011 est.
|
| 27 | Philippines |
$ 83,800,000,000
|
31 December 2012 est.
|
| 28 | Israel |
$ 75,240,000,000
|
31 December 2012 est.
|
| 29 | Iran |
$ 69,860,000,000
|
31 December 2012 est.
|
| 30 | Hungary |
$ 67,000,000,000
|
31 December 2012 est.
|
| 31 | Canada |
$ 65,820,000,000
|
31 December 2011 est.
|
| 32 | Iraq |
$ 61,840,000,000
|
31 December 2012 est.
|
| 33 | Peru |
$ 61,300,000,000
|
31 December 2012 est.
|
| 34 | South Africa |
$ 54,980,000,000
|
31 December 2012 est.
|
| 35 | Netherlands |
$ 51,270,000,000
|
31 December 2011 est.
|
| 36 | Lebanon |
$ 51,200,000,000
|
31 December 2012 est.
|
| 37 | Sweden |
$ 50,350,000,000
|
31 December 2011 est.
|
| 38 | Spain |
$ 50,300,000,000
|
31 December 2012 est.
|
| 39 | Norway |
$ 49,400,000,000
|
31 December 2011 est.
|
| 40 | Australia |
$ 47,700,000,000
|
31 December 2012 est.
|
| 41 | Romania |
$ 46,790,000,000
|
31 December 2012 est.
|
| 42 | United Arab Emirates |
$ 43,770,000,000
|
31 December 2012 est.
|
| 43 | Chile |
$ 42,990,000,000
|
31 December 2012 est.
|
| 44 | Nigeria |
$ 42,800,000,000
|
31 December 2012 est.
|
| 45 | Argentina |
$ 41,200,000,000
|
31 December 2012 est.
|
| 46 | Czech Republic |
$ 35,260,000,000
|
31 December 2012 est.
|
| 47 | Colombia |
$ 34,740,000,000
|
31 December 2012 est.
|
| 48 | Angola |
$ 34,630,000,000
|
31 December 2012 est.
|
| 49 | Belgium |
$ 29,430,000,000
|
31 December 2011 est.
|
| 50 | Kuwait |
$ 29,260,000,000
|
31 December 2012 est.
|
The one reason why gold’s sell-off doesn’t matter…
Somewhere, Paul Krugman is smiling.
The Nobel Prize winning economist, whose brilliant ideas include:
- spending your way out of recession
- borrowing your way out of debt
- conjuring unprecedented amounts of currency out of thin air without consequence
- staging a false flag alien invasion of planet Earth
is perhaps most famous in certain circles for calling gold a “barbarous relic“. He also recently suggested that Europe’s failing euro monetary union is the modern day equivalent of the gold standard. I’m told he was completely sober when he said this.
Of course, Krugman is smiling right now because he thinks that he’s been proven right. Gold’s massive sell-off over the last few days has shaved over $200 from the metal’s nominal price… a steep move any way you look at it.
And as Krugman has been saying, ‘gold is not a safe investment.’ But that’s because he fails to understand the fundamental premise of gold.
Gold is, in fact, a terrible investment. It’s an even worse speculation. But let’s look at what those actually mean–
When you ‘invest’, you risk a portion of your savings, typically for several years, hoping for a nominal gain when denominated in paper currency. You buy for $1,000 and you sell for $2,000.
‘Speculating‘ involves taking much higher risk, often for shorter periods of time with a smaller percentage of your portfolio, hoping for outsized nominal gains when denominated in paper currency. You buy for $100 and you sell for $2,000. But you could easily lose everything.
Well, gold makes for a really bad speculation. Like almost any real asset, it can’t really go to zero. It’s physical. It’s real. It’s always going to be worth something. And for physical gold, there’s very little leverage available.
Gold makes for a bad investment too… because in either case, the price of gold tends to rise and fall over the long-term with inflation and inflation expectations. If it’s leading (or keeping pace with) inflation, then you can’t expect much of an inflation-adjusted return.
But these reasons for buying gold miss the point.
Gold is a proxy against the financial system. It’s a way to withdraw savings from a corrupt fiat currency and hold something that cannot be conjured out of thin air by a tiny banking elite. We don’t buy gold hoping to sell it down the road for even more paper currency.
This is the same reason why I’m buying so much agricultural property in South America… it’s controlled by nature, not by men. Plus, I get paid huge dividends by way of organic fruit.
If you look at the fundamentals briefly, gold had a major sell-off this morning in part because the Chinese reported poor economic data. In addition there was Friday’s pitiful consumer numbers in the Land of the Free.
Yet with–
– poor economic data still abounding from the US to China…
– massive, debilitating debt still accumulating…
– Europe still completely bust..
– Japan promising unprecedented money printing in an era already marked by unprecedented money printing…
… what will the general trend be? Will central bankers around the world continue printing money?
It certainly seems likely. If they stop printing, interest rates surge… and nearly every government in the developed word will go bankrupt. That’s a big incentive to bankers.
With this in mind, while the gold correction probably has quite some time to play out, the long-term trend is obvious.
by Simon Black
Comments
Buy cheap sell High is the rule! Silver will continue to drop till middle of 2014 reaching a low of $15. The Elitist shall buy it up while idiots that are scared out or wore out of the market. $75 Dollars a Troy ounce will result as demand excels. They will have a meeting and Globalists will then shut you out as its value will be declared $750 an ounce for silver. Gold figure it out 10:1 Ratio Silver to gold. Says who Elitist From London.
— T. Tucker
Absolutely Must Watch! SILVER CRASH was PLANNED to SAVE JPMORGAN – Greg Mannarino
PS What the Future may hold…
The Most Stunning Development In Gold
[…] Gold Selloff Mystery […]