Posted on 11/05/2009 5:20:26 AM PST by Red Badger
Gold prices yesterday surged to an all-time high after India's central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country's finance minister warned that the economies of the US and Europe had "collapsed".
India's decision to exchange $6.7bn for gold, equivalent to 8 per cent of world annual mine production, sent the strongest signal yet that Asian countries were moving away from the US currency.
The purchase by New Delhi's Reserve Bank from the International Monetary Fund pushed gold prices to a record $1,087.45 per troy ounce, up 2.7 per cent on the day, as traders bet that other central banks would also become buyers. Pranab Mukherjee, India's finance minister, said the acquisition reflected the power of an economy that laid claim to the fifth-largest global foreign reserves: "We have money to buy gold. We have enough foreign exchange reserves."
He contrasted India's strength with weakness elsewhere: "Europe collapsed and North America collapsed."
"This is a landmark trade," said Jonathan Spall, a director at Barclays Capital and a gold -specialist. "Central banks are conservative institutions and India's move is a sign for other central banks and sovereign wealth funds that were contemplating buying gold."
New Delhi's acquisition came months after China revealed it had almost doubled its gold reserves in the past six years, and as bullion sales from European central banks slowed to a crawl after two decades of large disposals. Traders and mining executives tipped China, Saudi Arabia and Middle Eastern sovereign wealth funds as candidates to snap up the rest of the gold the IMF plans to sell. The Washington-based institution said it wanted to sell 403 tonnes.
Philip Klapwijk, chairman of GFMS, the London-based precious metal consultancy, said India's purchase was "bullish" for gold prices. "A large central bank from a developing country is declaring it likes more gold than dollars."
Traders said the purchase marked the end of the so-called anti-gold sentiment prevalent for 20 years among central banks.
Since 1989, the official sector has been a net seller of gold, increasing supplies and depressing prices.
Haven’t heard a worod of this in the ABCNNBCBSFOX media. This is hugh and series!..................
Haven’t heard a word of this in the ABCNNBCBSFOX media. This is hugh and series!..................
What if the unthinkable happens and the price of gold actually drops with respect to the dollar?
Gonna be some pissed off Indians and Asians.
I don’t see that happening..............
>> I don’t see that happening..............
I honestly don’t know WHAT is going to happen. My best guess is deflation followed by inflation. But timing and magnitude of both is anyone’s guess.
It does seem to me that gold is starting to look a lot like tulips.
I wonder about the same thing. Gold is still being mined. Where is the top of that bubble?
meanwhile, the band played on
and democrats crowed about a minor league NY democrat congressman defeating a 3rd party candidate by a couple of percentage points
The change to another currency is underway. This can’t be good for the US. The upside to this is that imports will become higher priced and that should help boost sales of US made stuff. I predict we will become isolationists.
As I have been saying for years, India is not our ally.
When they did not DENOUNCE being associated with three other Marxist countries (Brazil, Russia, China) that was one thing. When they started talk of a separate reserve currency, that was another.
They have started dumping the dollar. In our current economic situation, this is exactly the type of action that could prove to be the first crack in the dike. With U6 unemployment approaching 17%, we still send them the jobs that created the tech industry and raised the living standard for millions of Americans.
On top of that, for the last two decades they have kept the value of their monetary base (the rupee) about even with where it was 40 years ago. They did this screw their own people, strengthen the government, and to screw the American economy.
Where are all those hundreds of thousands of “even better” jobs the American offshoring free-traders promised us over the years? Where is our raised standard of living by having goods and services provided at a lesser cost that supposedly gave us lots of extra money to invest elsewhere?
With friends like these...
Harry Dent predicts commodities bubble bursting next year.
We’ll see. They can’t eat gold.
Tulips may whither and die, but gold will always be worth more that fiat currency printed by the ton...............
free-traders should have been free-traitors.
There is a stark difference. Free trade is fine. But the dark side of capitalism is that profit trumps everything else, even loyalty to your country and community. The free-traitors are those who hide behind Capitalism and use it as an excuse to do whatever makes them the most money, regardless of those it destroys.
Besides, nations have no permanent friends, and no permanent enemies- only permanent interests
>> gold will always be worth more that fiat currency printed by the ton
So the saying goes, and I’m not arguing with it.
I just believe there are better inflation hedges — for example, arable land, farm buildings, a couple tractors and implements. Or oil. Or even silver.
But IMHO every hard asset is overpriced, as are equities. With massive unemployment, I can’t see anything in the near horizon but prices falling.
I have dollars now. My strategy is to hold them for know, believing I’ll be able to exchange them for something of value (who knows, maybe even including some gold) AFTER prices drop but BEFORE inflation kicks in.
Like everyone, I could be wrong and I’m going to have to take my chances. Good luck with *your* strategy.
FRegards
>> They can’t eat gold.
Isn’t the Taj Mahal covered with gold? Maybe it’s just time for a new roof.
Great. So India is attacking us and you’re saying, “We deserve it.”
We made India what they are today, economically.
I agree with you that collectivists of every stripe in the WH and throughout the central-banking system have colluded to strip America and Americans of our wealth, which they are in the process of doing. They are now preparing to shift the economic power to Asia, where they can get the next few generations of slave labor to further consolidate their wealth. This is their Modus Operandi.
This does not change the fact that India pretended to be our friend, took our jobs while making the self-contradictory statement that if we gave them our jobs, it would create new jobs for us (if true, they should have been asking to give us their jobs so they could “create” all the jobs they wanted), and even engaged in military exercises with us.
I say now what I said then: they are using us and all of their actions deny their words. They are partnering with our most serious threats.
Our sovereignty and that means your liberty and mine, are at risk.
And American companies continue to outsource whatever jobs that they can to INDIA. This is the only area that the govt should impose strict fines for each position outsourced to another country, something along the lines of double the difference “saved” by outsourcing. Corporate greed is one of the problems with our economy.
I think silver is a better alernative, myself. The amounts are smaller and more manageable if TSHTF and it actually needs to be used to purchase goods.
The historical ratio per oz of silver to gold is 16:1. It’s at 60+ : 1 now, making it much undervalued.
Just my two cents.
Its hard to eat gold or pretty paper
Good idea, IMO gold is a good investment but is in its own little bubble right now.
Ag=$18 per ounce right now?
True, but if you were a “seller” of food or goods, which would you take in trade?......................
right this second, $ 17.51 up today. All other metals are down, but just a little.
>>”I just believe there are better inflation hedges — for example, arable land, farm buildings, a couple tractors and implements. Or oil. Or even silver.”<<
I agree. Things of ‘real value’ will win out in the end, e.g. good deer rifle, shotgun, ammo, ability to produce most of your own food, good source of water, NO DEBTS, stockpile of silver and an understanding like-minded wife. The most important thing of all is knowledge.
Gold has peaked and I think it’s time to sell and invest in the above, if you can. Just my opinion.
Also, I’ve been buying “junk silver” so in case TSHTF my son can buy a loaf of bread or a gallon of gas. I’ve been mailing to him back in Ohio.
These kids these days are clueless. meh
‘True, but if you were a “seller” of food or goods, which would you take in trade”
Depends on the state of civilization. If TSHTF then I’d only take other goods or perhaps services in trade.
The middle ground will be dangerous as the govt can easily confiscate gold and make ownership illegal. They are less likely to make ownership of food illegal.
As an investment gold is at an all time high. IMO buying anything that’s currently at an all time high is extremely risky.
Exactly.
As the ChiComs took our manufacturing WHEN WE OFFERED IT TO THEM, the ComIndians took our white-collar jobs WHEN WE OFFERED IT TO THEM.
Those that have lost their job now look around them and say, “Where can I go? I can’t step down to an assembly line. They’re gone. I can’t go to school for two years to step up to tech. They’re gone.”
The Statists love to claim that investing in gold is an investment against the future of your country. I disagree.
Investing in gold is a no-confidence vote that your elected representatives are looking out for the country’s and your best interest.
And there is no greater no-confidence vote in the future of your country than almost unanimously voting to extend unemployment benefits to UP TO ABOUT 2 YEARS.
demographically, India and the developing world mostly in Asia (not China) are the economic future of the world
Instead of bemoaning India taking prudent steps to preserve their own national assets, suggest you look into investing in emerging markets
I hope that someone more financially savvy than me, will correct me, but I was under the impression that today’s inflation adjusted high would be closer to $ 2,000.
If true, then we aren’t anywhere near the historical high.
Eff you.
Traitor.
Ezekiel 7:19
They will throw their silver into the streets, and their gold will be an unclean thing. Their silver and gold will not be able to save them in the day of the LORD’s wrath. They will not satisfy their hunger or fill their stomachs with it, for it has made them stumble into sin.
>>”I think silver is a better alernative, myself.”<<
Our home-based business always advertised that we would take silver coins at a 10:1 ratio for payment.
You missed my point.
The central bankers — the tyrants that control economies — ARE TRYING TO MAKE ASIA THE NEXT ECONOMIC SUPER POWER.
America is still and can continue to be the economic super power if we get back to liberty and free-market principles.
To give up on America because the ahole Rogers moves to Singapore is suicide.
We should not be investing in emerging/foreign markets for this one simple reason:
If America dissolves and is reduced to a third-world status, those nations will become tyrannical and you will not be able to keep whatever wealth you think you earned.
That is what the profiteers are not telling us. That many of the “emerging markets” are commies in disguise.
I, for one, will not give up on America, let the communists win, and prop up the central banks and other communist countries.
EFF THAT.
Honestly I don’t know. I was basing my statement on the multitude of commercials hawking gold these days. They all say gold is at an all time high.
They couldn’t be lying could they? I mean just to sell some more of their overpriced inedible stuff?
I’ll poke around later today and see what I can find!
Where did the IMF get $6 billion worth of gold? How much do they hold?
Here’s an interesting development.
Good questions, no answers......................
>>that the economies of the US and Europe had “collapsed”.
“against all enemies, foreign and DOMESTIC”
Enron
Ameriquest...
...with a little help from H1B software engineers who built/tweaked the systems that facilitated the systemic corruption.
“Wanted, foreign agents to work inside national financial infrastructure; experience as a saboteur helpful but not required... will train”
| Noun | 1. | quisling - someone who collaborates with an enemy occupying force
traitor, treasonist - someone who betrays his country by committing treason
|
I think sheer demographics will make Asia (India, Iran, Indonesia, SEA, not China) the next economic superpower. They will have the most young people, the largest labor force, and hence- the most demand for goods
America is aging and “families” (many now single parent) having no or fewer kids (except for immigration) ditto Europe too few kids, most born to immigrants. China and Japan are aging. Russia is dwindling fast. China screwed itself with its population controls, millions of fertile women are missing. Never born
Read Harry Dent’s analysis of world demographics and the impact on future economies in “the Great Depression Ahead”
Nothing personal, it’s just business.
“Demographics is Destiny”?
The historical ratio was 16:1. That was prior to an entire mountain of silver was discovered in Nevada (Comstock lode);
silver flooded world markets, and congress had to mandate the government to buy it. Billions of dollars were minted, languishing in bank vaults for decades, because nobody wants to carry around silver dollars.
Where did the IMF get $6 billion worth of gold? How much do they hold?
_______________________
That is our gold that India just paid the IMF for
US gold that was pledged and loaned to these IMF parasites
European nations also contributed some gold to fund the IMF but we contributed the most
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