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The Price of Gold: Does It Matter?

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostWed Sep 06, 2017 12:10 am

Jim Rickards posted....

Last week featured two unusual stories on gold — one strange and the other truly weird.
These stories explain why gold is not just money but is the most politicized form of
money. They show that while politicians publicly disparage gold, they quietly pay close
attention to it. The first strange gold story involves Germany… The Deutsche Bundesbank,
the central bank of Germany, announced that it had completed the repatriation of gold to
Frankfurt from foreign vaults. The German story is the completion of a process that began
in 2013. That’s when the Deutsche Bundesbank first requested a return of some of the
German gold from vaults in Paris, in London and at the Federal Reserve Bank of New York.
Those gold transfers have now been completed. This is a topic I first raised in the
introduction to Currency Wars in 2011. I suggested that in extremis, the U.S. might
freeze or confiscate foreign gold stored on U.S. soil using powers under the
International Emergency Economic Powers Act, the Trading With the Enemy Act or the
USA Patriot Act. This then became a political issue in Europe with agitation for
repatriation in the Netherlands, Germany and Austria. Europeans wanted to get gold
out of the U.S. and safely back to their own national vaults. The German transfer
was completed ahead of schedule; the original completion date was 2020. But the
German central bank does not actually want the gold back because there is no well-
developed gold-leasing market in Frankfurt and no experience leasing gold under
German law. German gold in New York or London was available for "leasing" under
New York or U.K. law as part of global price-manipulation schemes. Moving gold to
Frankfurt reduces the floating supply available for "leasing," making it more
difficult to keep the manipulation going.

Why did (occupied) Germany do it?

The driving force both in 2013 (date of announcement) and 2017 (date of completion)
is that both years are election years in Germany. Angela Merkel’s position as chancellor
of Germany is up for a vote on Sept. 24, 2017. She may need a coalition to stay in
power, and there’s a small nationalist party (NPD?) in Germany that agitates for
gold repatriation. Merkel stage-managed this gold repatriation with the Deutsche
Bundesbank both in 2013 and this week to appease that small nationalist party (NPD
maybe not so small?) and keep them in the coalition. That’s why the repatriation was
completed three years early. She needs the votes now. The truly weird gold story
comes from the United States… Secretary of the Treasury Steve Mnuchin and Senate
Majority Leader Mitch McConnell just paid a visit to Fort Knox to see the U.S. gold
supply. Mnuchin is only the third Treasury secretary in history ever to visit Fort
Knox and this was the first official visit from Washington, D.C., since 1974. The
U.S. government likes to ignore gold and not draw attention to it. Official visits
to Fort Knox give gold some monetary credence that central banks would prefer it
does not have.

Why an impromptu visit by Mnuchin and McConnell? Why now?

The answer may lie in the fact that the Treasury is running out of cash and could
be broke by Sept. 29 if Congress does not increase the debt ceiling by then. But
the Treasury could get $355 billion in cash from thin air without increasing the
debt simply by revaluing U.S. gold to a market price. (U.S. gold is currently
officially valued at $42.22 [which it was in 1973 two years after Nixon] per ounce
on the Treasury’s books versus a market price of $1,285 per ounce.) Once the Treasury
revalues the gold, the Treasury can issue new “gold certificates” to the Fed and
demand newly printed money in the Treasury’s account under the Gold Reserve Act of
1934. Since this money comes from gold revaluation, it does not increase the national
debt and no debt ceiling legislation is required. This would be a way around the debt
ceiling if Congress cannot increase it in a timely way. This weird gold trick was
actually done by the Eisenhower administration in 1953. Maybe Mnuchin and McConnell
just wanted to make sure the gold was there before they revalue it and issue new
certificates. Whatever the reason, this much official attention to gold is just one
more psychological lift to the price along with Fed ease, scarce supply and continued
voracious buying by Russia and China.

***

Editor’s Note – The math produces a dollar amount of US gold reserves in excess of
$318,208,000,000 (assuming 8,000 tons and $1285/oz gold)

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostThu Oct 12, 2017 10:03 am

Russian De-Dollarization!

The World Gold Council has reported that the Central Bank of Russia has
more than doubled the pace of its gold purchases, bringing its reserves
to the highest level since Putin took power 17 years ago. Russia’s desire
to break away from the hegemony of the U.S. dollar and the dollar payment
system is well-known. Over 60% of global reserves and 80% of global payments
are in dollars. The U.S. is the only country with veto power at the
International Monetary Fund, the global lender of last resort. Perhaps
Russia’s most aggressive weapon in its war on dollars is gold. The first
line of defense is to acquire physical gold, which cannot be frozen out
of the international payments system or hacked…. … …

Russia is also part of a reported Chinese plan to install a new international
monetary order that excludes U.S. dollars. Under that plan, China could buy
Russian oil with yuan and Russia could then exchange that yuan for gold on
the Shanghai exchange. Now it appears Russia has another weapon in its anti-
dollar arsenal. The ultimate loser here will be the dollar. That’s one more
reason for investors to allocate part of their portfolios to assets such as
gold… … …

Continue reading →

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostThu Oct 12, 2017 7:48 pm

£1.5 Million Of Gold Goes Through Swiss Sewers!

Hell of a payday, if you can sort through all that sewage, by Sara Rense, OCT 11, 2017.

Switzerland seems like a lovely place to live: snowy mountain peaks to ski, lakeside
cities to explore, and 43 kilograms of gold flowing through the sewers that no one
seems all that worried about. According to Bloomberg, Swiss scientists estimate
Switzerland's bustling gold refineries disperse about $1.8 million worth of gold
into the country's sewer system every year. In the southern Ticino region of Switzerland,
home to many of its refineries, the "concentrations of gold in sewage sludge are sufficiently
high for recovery to be potentially worthwhile," the scientists said. Swiss refineries process
about 70 percent of the world's gold. The scientists also found $1.7 million worth of silver
(or 3,000 kilograms) flowing through wastewater every year, most of which comes from chemical
and medical plants. There isn't enough wasted metal in the system to pose an environmental risk,
but there is enough to make spelunking through Switzerland's underground waterways seem like a
worthwhile use of time. Hell of a payday for anyone who can figure out a clever (and sanitary)
way to extract gold and silver from sewage.
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostFri Oct 13, 2017 8:11 am

New China Gold Standard....

China sees new world order with oil benchmark backed by gold
Yuan-denominated contract will let exporters circumvent US dollar!

DAMON EVANS, Contributing writer....

China is expected shortly to launch a crude oil futures contract
priced in yuan and convertible into gold in what analysts say
could be a game-changer for the industry. The contract could become
the most important Asia-based crude oil benchmark, given that China
is the world's biggest oil importer. Crude oil is usually priced in
relation to Brent or West Texas Intermediate futures, both denominated
in U.S. dollars. China's move will allow exporters such as Russia and
Iran to circumvent U.S. sanctions by trading in yuan. To further entice
trade, China says the yuan will be fully convertible into gold on
exchanges in Shanghai and Hong Kong.

"The rules of the global oil game may begin to change enormously,"
said Luke Gromen, founder of U.S.-based macroeconomic research company
FFTT. The Shanghai International Energy Exchange has started to train
potential users and is carrying out systems tests following substantial
preparations in June and July. This will be China's first commodities
futures contract open to foreign companies such as investment funds,
trading houses and petroleum companies.

More here...

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Re: The Price of Gold: Does It Matter?

PostSat Oct 14, 2017 2:52 am

Wade Hampton III wrote:New China Gold Standard....

China sees new world order with oil benchmark backed by gold
Yuan-denominated contract will let exporters circumvent US dollar!

DAMON EVANS, Contributing writer....

China is expected shortly to launch a crude oil futures contract
priced in yuan and convertible into gold in what analysts say
could be a game-changer for the industry. The contract could become
the most important Asia-based crude oil benchmark, given that China
is the world's biggest oil importer. Crude oil is usually priced in
relation to Brent or West Texas Intermediate futures, both denominated
in U.S. dollars. China's move will allow exporters such as Russia and
Iran to circumvent U.S. sanctions by trading in yuan. To further entice
trade, China says the yuan will be fully convertible into gold on
exchanges in Shanghai and Hong Kong.

"The rules of the global oil game may begin to change enormously,"
said Luke Gromen, founder of U.S.-based macroeconomic research company
FFTT. The Shanghai International Energy Exchange has started to train
potential users and is carrying out systems tests following substantial
preparations in June and July. This will be China's first commodities
futures contract open to foreign companies such as investment funds,
trading houses and petroleum companies.

More here...

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https://asia.nikkei.com/Markets/Commodi ... old?page=1

Let them worship gold! They'll find their future masters will be the -steins, -golds, -bergs, etc.
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostSat Oct 14, 2017 8:07 am

An interesting factoid....in the Middle Ages, Jews commonly put gold coins into leather
bags and shook them for days on end. As a result, gold dust would flake off the coin and
gather in the bottom of the bag. The Jews would then have enough gold for another coin
or two, and still use the remaining coins for transactions albeit minus the gold that had
been flaked off. Jews will be Jews!

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostTue Oct 17, 2017 11:10 am

Sarah Knapton,The Telegraph Mon, Oct 16 10:00 AM EDT posted....

The secret of creating gold has fascinated alchemists for thousands of years,
but now scientists have finally solved the mystery. Precious metals are forged
in the cataclysmic collision of neutron stars and then flung out into the universe
where they eventually aggregate with other stardust into larger bodies, like planets
or comets. Previously scientists had theorised that such cosmic smashes could create
the vast amount of energy needed to create gold, platinum and silver, but for the
first time, they have actually recorded it happening.

On August 17, astronomers in the US picked up a signal from two neutron stars crashing
together 130 million years ago, when dinosaurs still roamed the Earth. The impact, known
as a ‘kilanova’ was so powerful that it shook not only space but also time, sending
ripples - or gravitational waves - through the fabric of the universe.

After the ripple was detected on Earth, astronomers across the world pointed their
telescopes to the area of space from which it had originated and soon also picked up
the bright afterglow from the collision. Inside that light were the distinct chemical
signatures for gold, silver and platinum. Dr Joe Lyman, of the University of Warwick,
who was observing at the European Southern Observatory, in Germany, was the first to
alert the scientific community to the fact they were witnessing a completely new event.

Precious metals are forged in the cataclysmic collision of neutron stars and then flung
out into the universe where they eventually aggregate with other stardust into larger
bodies, like planets or comets. Previously scientists had theorised that such cosmic
smashes could create the vast amount of energy needed to create gold, platinum and silver,
but for the first time, they have actually recorded it happening. On August 17, astronomers
in the US picked up a signal from two neutron stars crashing together 130 million years
ago, when dinosaurs still roamed the Earth. The impact, known as a ‘kilanova’ was so
powerful that it shook not only space but also time, sending ripples - or gravitational
waves - through the fabric of the universe. After the ripple was detected on Earth,
astronomers across the world pointed their telescopes to the area of space from which
it had originated and soon also picked up the bright afterglow from the collision.
Inside that light were the distinct chemical signatures for gold, silver and platinum.
Dr Joe Lyman, of the University of Warwick, who was observing at the European Southern
Observatory, in Germany, was the first to alert the scientific community to the fact
they were witnessing a completely new event. The neutron star crash was so powerful
it shook time and space sending a ripple out across the universe -

“This tells us that the heavy elements, like the gold or platinum in jewellery, are
the cinders, forged in the billion degree remnants of a merging neutron star.” Neutron
stars are created when giant stars die in spectacular supernovas. Their cores collapse,
allowing protons and electrons to meld together to form neutrons, creating small yet
incredibly dense stars. Just a teaspoon of neutron star material would have a mass of
about a billion tons. The two stars which were detected in August were as heavy as our
Sun, yet only six miles (10km) across. They existed in a galaxy called NGC 4993.

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The pair drew towards each other over millions of years, and revolved around each other
increasingly quickly as they got closer – eventually spinning around each other five
hundred times per second, until they crashed, forming either a larger neutron star or
collapsing into a black hole.

The origins of gold...

The spacetime ripples created by the collision were detected by the Advanced Laser
Interferometer Gravitational-Wave Observatory in Washington and Louisiana (Ligo). It
was here the first discovery of gravitational waves was made in September 2015. In
that instance, black holes collided so only the ripples were detected because everything
else was swallowed inside. But neutron stars are relatively lighter than black holes,
so when they collide and merge, a small part of their mass and radiation does escape
and can be detected along with gravitational waves.

Professor David Wiltshire, Department of Physics & Astronomy, University of Canterbury,
said: “The first discovery of gravitational waves from the merger of two neutron stars
is an historic event. “It is every bit as exciting as the first discovery of gravitational
waves from merging black holes. Since this involves neutron stars that radiate light,
for the first time we can also see what is going on in an extreme astronomical event
that shakes up space-time.” Dr J.J. Eldridge, astrophysicist at the University of
Auckland, added: “We’re all made of stardust, but gold, silver and platinum are made
of neutron stardust. “In this particular event, it’s likely that 100s or 1000s of Earth
masses of gold and other elements were made. If the rate of neutron stars mergers is as
high as we now think, these dying stars are now the source of most of these elements in
the universe.” The discovery has also solved the mystery of what creates short wave
gamma ray bursts which are picked up on Earth and could help pinpoint how fast the
universe is expanding. Dr Samantha Oates, of Warwick’s Astronomy and Astrophysics group
added: “This discovery has answered three questions that astronomers have been puzzling
for decades: what happens when neutron stars merge? What causes the short duration gamma
-ray bursts? Where are the heavy elements, like gold, made? In the space of about a week
all three of these mysteries were solved.”

The new findings were published in research papers in the journals Nature, Nature Astronomy
and Science.
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostThu Nov 09, 2017 11:24 pm

Gold was once a common form of payment around the developed world, but after
World War II the precious metal's influence began to wane. In 1971, when the
United States finally put an end to the gold standard, the role of the yellow
metal changed for good. But that doesn't mean gold is just an antiquated relic
or a bad investment; you need to get past such myths about gold to understand
its place in the world, and, perhaps, your portfolio. Here are five myths about
gold debunked:

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostMon Nov 13, 2017 1:57 pm

Russia Today...

BUSINESS
18:44 10.11.2017

Russia has been expanding its gold reserves at a record pace, according to information
from the World Gold Council (WGC). Russian business newspaper Kommersant suggests this
gold rush will give Russia guarantees against sanctions and economic and geopolitical
risks. In the third quarter of 2017, the Central Bank of Russia bought 63 tons of the
precious metal, bringing its gold stockpiles to 1,778.9 tons as of the end of September.
In September only, the regulator added 34.6 tons of bullion to its reserves, in the
highest monthly increase since October 2016. Currently, the Russian Central Bank has
been ranked sixth in the world in terms of bullion reserves. The top five are the
United States (8,133.5 tons), Germany (3,373.7), Italy (2,451.8 tons), France (2,435.9)
and China (1,842.6).

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At the same time, according to the WGC, the Russian Central Bank is leading in terms
of the pace at which it is stockpiling gold. According to the Russian business daily
Kommersant, by stockpiling bullion, Russian wants to have guarantees amid the tightening
of the US Federal Reserve’s policy and amid the growing tensions between Moscow and
Washington. Russia also wants to protect its reserves against possible geopolitical risks.
If US sanctions are expanded to block Russia’s assets invested in US Treasuries, gold
will be a "magic wand," Andrei Vernikov, senior investment analyst with the asset
management company Zerich Capital Management, told Kommersant. Market analysts also
suggest that the Russian Central Bank will continue to expand its gold reserves. "The
regulator will continue to amass gold in its reserves, decreasing the share of US
Treasuries," Alexander Losev, CEO of Sputnik Asset Management, told the newspaper.
If the Russian Central Bank continues to buy gold at the same pace Russia is likely
to topple China as the world’s fifth-biggest holder of bullion in early 2018, according
to Kommersant. On September 7, it was reported that Russia’s gold and foreign exchange
reserves reached nearly $424 billion as of September 1, a record high since October 2014.
The Russian Central Bank has been the world leader in terms of increasing gold reserves
for five years in a row. Last year, the regulator bought 201 tons of the precious metal.
In 2017, Russia is expected to add nearly 200 tons to its gold reserves.

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostThu Nov 23, 2017 11:56 am

Gold has, in one way or another, been at the heart of much human history for
thousands of years. It has sparked wars, alliances and massacres, and it
still holds a central place in many cultures. But despite all this,
scientists know very little about how it came to exist. Now, an
international team of scientists has published research in Nature
Communications that could shed new light on how the iconic metal first
came into being in the Earth’s crust. The team studied the Deseado Massif
at the Argentinean Patagonia, part of one of the world’s largest gold-producing
regions, according to Phys.org.

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