Bloomberg News has all the details :
Is gold really going up,or is the dollar tanking?
I say again, the value of gold is entirely based on psychology and psychiatry, and not on economics or physics. You can get hurt really bad buying the stuff.
Since late July 2010 the London gold exchange (LBMA) are under pressure from Chinese, Arab, some Russian and other billionaires for physical gold deliveries. The LBMA is suppose to be storage facility for allocated accounts of gold. Allocated accounts means the LBMA cannot touch the gold, loan against it or loan it out. For decades the US COMEX and London Exchanges have created paper investments that are suppose to be backed by “physical” gold. There are analysts who claim that for every 40 to 100 troy ounce of gold represented by the paper investments, there is only one ounce of physical gold.
To cover these shortfalls the gold in the untouchable allocated accounts may have been loaned out and when the owners want their gold the exchanges scramble to buy gold on the open market or go to the other exchanges to get physical gold to cover the empty allocated accounts. There is a shell game amongst the exchanges to cover each other. The problem is what happens when all the owners of the allocated accounts want their physical gold.
China and Dubai recently open their own gold and silver storage facilities. The Chinese government already moved their national gold supply from London to Hong Kong. The Arabs governments moved their national gold supply from London to Dubai. Now the Arab, Chinese, Russian and some unknown billionaires are furious to find out that the LBMA have touched their allocated gold accounts. These billionaires are nicknamed “gold vigilantes”.
Ever since September they are launching gold purchases every ten to fourteen days with the aim to expose the LBMA’s lack of physical gold to back all their paper investment and contracts they sell to investors. The LBMA is having problems and are desperately borrowing physical gold from the US COMEX and other central bank exchanges as well as buying what is available on the open spot market to make deliveries to the allocated account owners requesting physical deliveries to Hong Kong and Dubai. In the past the LBMA would publish on a website for the public the amount of gold entering and leaving the London exchange. As of last July 2010, the LBMA stopped posting such data on its website.
The Chinese and Arab buyers swore to continue the demand for deliveries from their LBMA gold contracts/accounts till the LBMA bankers are “dead and castrated”..
How does that impact us? Price of gold and silver will go up because the current price of the metals are based on paper contracts that over estimate the physical metal supply by 40 to 100 times. When the LBMA is desperately buying gold to cover the deliveries, gold would go up. Silver usually follows the gold prices. If the LBMA scheme is exposed and confirmed, imagine the price of gold and silver based on a true physical supply that is 40 to 100 times less then previous official numbers.
The biggest danger this poses to the US is the US COMEX may get dragged into the LBMA crisis because they are loaning gold out of their allocated accounts to the LBMA. If the LBMA collapses and the paper shortfalls are exposed, JP Morgan and Golden Sachs investments in gold and silver derivatives will be severely impacted.
Let us pray that the US Treasury and Federal Reserve in desperation to rescue the US banks and COMEX do not involve loaning the US gold in Fort Knox (US has not done a physical inventory of its gold bars since the late 1950’s. US Treasury and Federal Reserve opposes calls in the current Congress to do a physical inventory. Hmnnn I wonder why). Congress would be in an uproar!!!
Local car dealer advertised they’re having gold buyers there this week.
“Sell your gold to get the down payment!”
(Yeah, not really to the point, but it’s the wierdest promotion I’ve ever seen...)
Question: I have a friend who was given his mother’s gold teeth after she died. He is now unemployed and wants to sell the gold. Does anyone know the value of gold used in dental cavities and where would he go to sell it? Thanks.
FYI...
Off track but how`s silver doing?