All gold everything

I believe we have a genuine conspiracy on our hands. Someone or something is straight monkey hammering the price of gold on the stock market (what we pay) to cataclysmic lows while the demand has never been higher for it. To what ends is wherein lies the conspiracy.

Someone, a group... a conspiracy i believe is artificially keeping the price of gold down for their own reasons, we can only speculate at this time but i believe it's good ol supply and demand. There isn't enough gold in circulation to meet current demand, so to keep things from spiraling out of control and crashing economies thereby making paupers from princes, the game continues. Here me out...

The Big Picture

How much gold, really, is 165,000 metric tons (the total mined throughout human history) and 2,500 metric tons (the total that’s currently mined annually)?

An Olympic swimming pool is 50 by 25 by 2 meters. It therefore contains 2,500 cubic meters of water. Each cubic meter of water is one metric ton. Gold is 19.3 times as dense as water. Therefore an Olympic swimming pool would contain 48,250 metric tons of gold. It follows that 3.42 Olympic-sized swimming pools could contain all the gold that’s ever been mined. Another way to imagine this is to think of all the gold in the world ever mined as a single cube. That would be a cube with each side just over 20 meters, or 67 feet, in length. Given that about 2,500 metric tons of gold is mined each year, this annual production of gold would fit in a cube whose sides were 5 meters, or 16.6 feet, in length. All the production of gold in the world for a given year would thus fit in a 20 by 30 foot room with an 8 foot ceiling.

(Source)

Keep that in mind. It's how much gold is physically out there.

Demand

Two different stories, and this is one reason why I'm calling foul. The talking heads are saying global demand for physical gold is low. That's why the price is so low. Take a look Gold's Price Plunge Not Met by Stronger Physical Demand . FYI, when the price of gold drops bellow a certain price, mining it will cost more than the price invested into it.

"We have not seen a substantial increase in demand," agrees Victor Thianpiriya, commodities analyst at ANZ Bank.

That's from the same source. Here's more so you get the picture painted to your average Joe FOCUS: Gold Continues Slide; Traders Watching For Pickup In Physical Demand. Remember when market prices fall below the magic number, gold mines shut down or go offline.

India is attempting to curtail it's consumption of gold. Why? The largest hedgefund said the demand is for it low so it must be and yet... India Move to Douse Gold Demand Unlikely to Succeed . Monkey hammering. Demand is as high as ever in India and India has traditionally been the largest consumer of gold. Don't believe me? Smack! Gold Demand in India Heads for Quarterly Record After Price Drop. That was about a month ago.

India has increased the duty on gold imports for the second time in six months, in an attempt to rein in surging demand for the precious metal.

Source. Trying to curtail demand or consumption.

China? Next in consumption. How is it demand there? Visualizing Gold Demand In China . Let's get another angle so we can get an encompassing view on the real demand vs what's told.

Demand from China's two largest sectors - jewellery and investment - reached a combined total of 423 tonnes in 2009, with 314 tonnes supplied by domestic mines. "This shortfall creates a snowball effect as China's gold industry may not be able to keep pace with the annual leap in domestic consumption despite rising to be the world's largest gold producer since 2007," WGC said in the report.

Source. More, China Gold demand may hit landmark 1,000 tons this year

Demand in China is as strong as ever. To give you a backdrop, Asia (India and China) consumes more gold than the entire world combined. Just both of them account for more than half global consumption. Remember what SPDR Gold Trust said, global demand for physical (see how i bolded the physical now) gold is low. And yet Asia is wants more!

What global physical demands?

Physical demand reached the point last week where it was overwhelming the New York markets slowly but surely. In summary, the gold market is seeing sales from the SPDR gold ETF which have persisted for nearly three months now. The total held in the SPDR fund is expected to fall below 1,000 tonnes this week if the sales continue as before. We do believe there is a core of holders keeping their gold for the very long term, such as Paulson’s funds. What proportion of the fund these comprise is not certain, but we must be getting close to the point where the selling stops. When it does the robust demand, particularly from China, will quickly absorb all available gold. The timing of that event is impossible to say.

Source.
Translation; the demand for physical gold is surging and someone has to put the breaks on it as people are getting out of paper gold (a piece of paper saying you own X amount of gold or ETF's).

China and India physically rule to the gold market. Commercially, you mine gold, you sell it in India or China. Or use it to backup your currency (the conspiracy). And the market demand for the physical is strong! Shouldn't gold prices reflect such a strong demand in gold? Perhaps we should take a look at supply, maybe that can explain the low price of gold. If you have crates of gold sitting around, it should explain the low value.

Supply

Gold miners have responded to recent falls in the price by concentrating on the highest quality deposits, scrapping extraction of more marginal material. This will cause a "significant decline" in global production of gold, according to Angelos Damaskos, who runs the Junior Gold fund.

Gold faces 'global supply crunch' . This is important, very important. If the market value of gold crashes to a magic number, then gold mines run into the negative. It will cost more to mine it than it does to sell it. So, they plan on going after quality rather than quantity. Yea, right.

Meanwhile in China..

GOLD output in China, the world’s largest producer, is poised to rise about 10% this year to a record even as bullion prices slump, the nation’s mining association said.

China’s gold production keeps on rising. 10% increase ain't enough to cover the demand from supply. And from the looks of things, you can't mine enough to keep up with demand.

It's getting serious it seems.

Gold producers, ignored as global stocks rebounded in the past two years and investors turned to exchange-traded funds that track bullion, face closing mines or shutting themselves down after the metal’s worst slump in three decades this week made 15 percent of miners unprofitable.

Gold Miners Lose $169 Billion as Price Slump Adds ETF Pain.

In essence, gold mines are shutting down due to the LOW price of gold. Only the gold mines whose owners diversified outside of gold or have a small operation are going to weather the storm. Even though demand is, you guessed it, strong. And China seems keen on losing money mining the stuff, as demand is high in Asia? Confusing i know. Need more proof? Take a look, Gold Miners Lose $169 Billion as Price Slump Adds ETF Pain

This article is a stark realistic look at gold supply futures. The Future For Gold Supply Looks Grim: An Opportunity For Gold Investors . No wonder Germany wants it's gold back

The Conspiracy

I have the sinking feeling that there isn't enough gold to go around... that's my conspiracy. And when that shoe drops, all hell breaks loose. In other words, I strongly believe that their isn't enough money in circulation to back up the real costs of physical gold.

The supply of gold is thinning and thinning and getting smaller and smaller. Meanwhile demand is increasing and yet... the price is still low? How is that? That's the conspiracy angle and it seems someone (person or a group) is straight monkey hammering it, to death. It seems to me gold is kept low to keep it together. In other words, if gold spiked and reflected true prices including inflation, then fiat (Euro, Yen, and USD mainly) would die a violent death.

Central Banks are literally, trying to print their way of a recession. That means inflation. We all know everything has increased in prices. Food, oil, even manufacturing and production. Costs are increasing across the board. Everything is increasing in prices and yet the price of gold is low during dare i say record demand. What? Even though production costs are rising, market prices are falling.

Central Banks are buying gold at record paces, just like everyone else, Gold Rout for Central Banks Buying Most Since 1964: Commodities. And prices are still low? And how does this tie into gold prices? Well, you would think that combined with supply (it's at a low and getting lower), demand (high as it ever been), and inflation (obviously) that gold would be doing good.

Central Banks are doing something that has never been done before globally, effectively printing their currency engaging in a currency war, taking a cue from Big Ben's $85 billion dollar monthly buyout special. Everyone is devaluing their currency to increase exports (the respective countries products will be worth less when it's exchanged on the open market) to kick start their economy so they say. And it's failing miserably.

Now we are at the point that interest rates HAVE to stay low, otherwise no one is going to buy bonds or treasures. Once those interest rates those bonds go south, then they were bought for more than they can be sold for and game over as no more debt can be sold and who wants something that going to be worth less than what you bought it for. Those bonds and treasuries are what's backing up the Big Ben's QE. If your a rich and wealthy investor, hell if your a broke consumer, the more the Central Bank prints the less purchasing power your dollar has.

And a lot of stuff on the global scale is primarily bartered in USD, hence it's reserve status. If gold shoots up, I have to use more money to buy the same amount, inflation just like everything else. Gold prices are kept down because the Central Banks don't need gold prices to skyrocket.

Gold is or used to be a great hedge. Now gold is being stomped on to keep the true value of inflation at bay, because simply put if you can print it, then it doesn't have that much value. You have to mine gold, work it, mold it, before giving it to the consumer. Alot of work goes into manufacturing gold (not to mention mining companies taking their cut) hence the price. KISS. Keep IT Simple Stupid. If all indicators are saying there should be a surge in gold prices, then something is keeping it low. Central Banks. Their printing policy will run afoul against the true cost of gold and that would be the first in a long line of dominos.

And if you don't "trust" your currency then what other options do you have? Why gold of course. At least that's the way it used to be. Alas, one more source. Read this and carefully.. Do Western Central Banks Have Any Gold Left???. Whoops!

Because one gold bar in hand is worth two gold bars in the vault. If you stayed tuned, thank you reading. And please by no means, do your own research. The hunt is always interesting and exciting. I wish I could get paid to use this brain.

gold only has the value we humans give it. you can't eat it, you can't drink it. billions of people world wide cannot use it to purchase everyday things. gold miners do not hoard it, they sell it for cash, pay off debt, trade it's value into digital notations in a bank account. you always here what is an ounce of gold worth in different world currencies, not how many bags of rice can you buy with an an ounce of gold. people do not trade in gold

I think that all that paper gold they were mining drove the price up. It should have never gone as high as it did.

reply to post by cenpuppie


Well said. I have read it all and I agree with you.
I always found it strange, people buying paper gold promises.
This is also to scare people who have bought real gold
into thinking that they have been had.

Droping prices are having a effect on the mines.

Canadian miner Barrick Gold will announce more jub cuts and potentially the closure of mines in Western Australia as the falling gold price continues to weigh on the sector,

The Australian Financial Review reports. According to the newspaper, Barrick's Australia Pacific vice-president Mike Feehan is set to address staff in Perth on Wednesday, where he is expected to outline further cost-saving measures.

Barrick, the world's largest gold miner, has already trimmed its WA staff by 60 people this month. The AFR reports around 100 jobs are set to be cut from the group's regional head office in Perth, with more losses - or potentially partial closures – likely at Barrick's five mining operations in WA.

Linky

If the mines shut down one by one because of the price drop then will
that have a effect on the price by causing a shortage and making it go back up ?

reply to post by skuly


Excatly. You would think a correction is in the future.

Originally posted by cenpuppie
I have the sinking feeling that there isn't enough gold to go around... that's my conspiracy. And when that shoe drops, all hell breaks loose.

Yep, you got it. But how will it break loose? We know that the paper market dwarfs the physical market.

"This means that an amount equal to the annual gold mine production was cleared at the LBMA every 4.4 days"
en.wikipedia.org...

We know that on paper, gold is being panic sold, while in physical form it is not and demand remains steady as it always has. Will the demand for gold on paper suddenly rise again to meet physical? Or will paper gold continue to fall until there is no physical for sale. Today I spoke with large dealers and they are saying Kilo bars are hard to find at the current price. What about 1000 Kilos? they say forget about that size order, it's not going to happen. Another $200 drop and the physical market will lock up, paper gold contracts will be settled in cash. A new 'price' to supply physical in any size as required will make your eyes water in a physical only market.

Think of it this way, if all the world's wealth items like fine art, antiques, vintage cars, rare gems were traded on paper like gold, their price would be overwhelmed by the paper trading. The vintage car market would be expanded many times on paper with only a small number of trades being the actual vintage cars. If the paper trading made the price fall dramatically like the gold price today then the owners of those vintage cars would not sell, no vintage cars available until the paper car market closed down and the real price was revealed.

The gold market has been expanded many time over on paper, when that market falls away as the price drops the real 'price' of physical will be revealed as many times higher.

You can't drive vintage cars to work everyday, they are collectors items that act as a store of value. Their value is higher the more you store that vintage car, their utility is not transport but appreciated wealth. You can't eat gold, gold's utility is a store of value, gold's function is wealth. You can't eat paper gold and it's utility is nothing and being demonstrated in the markets today.

Originally posted by cenpuppie

Because one gold bar in hand is worth two gold bars in the vault.

Or if you follow the "rules" of the paper gold scam, one gold bar in the hand is worth anywhere from 10 to 100 gold bars in a vault.

I don't even like the color of gold. I don't care how many people have tried to convince me in the past that it is pretty, I think copper is a better color myself. At least copper turns green which is my favorite color

reply to post by rickymouse

I think that all that paper gold they were mining drove the price up

No, physical demand and the "mums and dads" hanging onto gold. Some price rise is also attributed to miners who hedge their output and get the market wrong in their calculations.

It should have never gone as high as it did.

It has not gone high enough...1) to reflect the true value of all that paper money being printed and 2) being shorted by the likes JP Morgan, Goldman Sachs through ETFs. (and high frequency trading behind the scenes).

As people who hold ETFS as opposed to Physical come to ask to be settled in physical only to discover that there is not enough physical to meet demand as the same ounce has been sold many times over then all hell breaks loose. Now when Germany insisted on inspecting and repatriating its physical gold held by the FED recently they went away quitely, agreeing to a 7 year timeframe to get all their gold back. Who knows what they were threatened with?
You see all that physical gold has been sold leased out to central banks and private banks who use it to pay their gold obligations and to get their commissions in manipulating the gold market.
As anyone who studies this deep enough will reach the conclusion that there are 2 markets for gold. One thats quoted to the mainstream and more importantly a second private market where the price is unpublished and the only players are the banks and central banks who use that price to settle between themselves.

There is no conspiracy, there are enough marks and trails and lessons in history to show that the price of gold is manipulated to the benefit of the super wealthy and in turn to allow Federal govts the power to make future promises to the voting public that they will never keep and more importantly what they do give to the public in social benefits will be repaid by the Govts in tomorrows dollar, devalued currency, ie they kick the can further down the road. After the housing bubble where the banks were bailed out using OUR money now the US Govt is starting to gouge the Pension/superannuation funds to try and balance their books.

The thing is though its all coming unstuck and many have said that the price wil reach $3-5000 in the next 18 months.


From cenpuppie
quote]
Now gold is being stomped on to keep the true value of inflation at bay

And this is where it gets interesting...after all the quadzillions of dollars printed, the only option now to restart economies is to increase interest rates to attract investment and reinflate asset values. We'll start seeing interest rates like the 80's in double digits. The currency wars have already begun as the major economies race to the bottom in devaluing their currencies

And to those who say when a crash happens "you cant eat gold" I say sure you can eat gold but try eating paper money and see where that gets you.

reply to post by TheConstruKctionofLight



But it is just a piece of metal. I think I would rather keep my cow instead of trading it for some gold beans.
My name is Ricky, not Jack and I don't like climbing beanstocks

It is a smackdown to force week hands to sell. OP you have pretty much nailed it. Reserve banks are buying hand over fist. Governments dont want mum and dad buying gold, there is a lot of bs in the media.
While you cannot eat gold,- as we keep hearing, it is used for long term wealth preservation and hedging against inflation.
At current physical supply of gold is slim pickings with long delays getting it out of the mint, the smackdown has people backing up the truck - not selling, maybe their plan has backfired!!!

Blame the OPPT, remember how they had the aliens teleport all the gold away?

So the idea of gold being a bubble and the fact that it went so high was a reflection of gambling is false. But the idea of it going back down must be a conspiracy. I think that there are just too many people who jumped on the gold and silver bandwagon and bought it when it was high and are now pissed and now trying to justify why without looking like a foolish doomsday investor.

Gold will go to $750 within two years.

Then the economy will tank again and gold will go to $2000+