Posts Tagged Gold

Real life imitates art – India will buy Iranian oil with gold

In The Way to Freedom, Iceland abandons its fiat currency, shuts down its central bank and allows gold to be used as money. Iceland is then followed by Switzerland and (with a little armtwisting) China.  The rest of the world immediately sees the sense of this and enthusiastically follows suit. No, wait! That’s not what happens! But this below IS happening. Today. For real.

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile’s intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports.

via DEBKAfile, Political Analysis, Espionage, Terrorism, Security.

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Who Owns Most of the World’s Gold?

It’s no surprise that governments, central banks, and investment funds are world’s largest holders of gold reserves. These organizations know gold is the ultimate store of value that protects against inflation and offers a safe haven during times of economic and geopolitical turmoil.To find out who owns the most gold in the world, we referred to data from the International Monetary Fund’s International Financial Statistics Report.


p>via Who Owns Most of the World’s Gold?.

With photos of key landmarks of the relevant countries, in case you don’t know what France is. Still, interesting stats. NB, Japan is #9. That’ in spite of the fact that the Japanese are selling their gold as fast as they can, taking the cash and running.


Analysis: Japanese cash in on gold price boom | Reuters

Interesting article on gold, particularly regarding how the Japanese view it:

For Eriko Ebina, standing outside a downtown Tokyo medical equipment store that has a side business buying gold, the recent surge in prices for the precious metal was just too tempting.

“For more than 30 years, I kept gold jewelry mother bought for me, and with media saying prices are high, I thought I would sell them now except for a few keepsakes from her,” said Ebina, in her 60s.

“I earned more than I thought they were worth. I’m not interested in buying gold.”

via Analysis: Japanese cash in on gold price boom | Reuters.

The other day, I passed a gold shop.  The last time I’d been there, there was hardly anyone around but that day there was a queue snaking out the door. Almost everyone was selling their gold/jewelry.  When I inquired, I was told that just to get to the front of the queue (where you got a numbered ticket and had to wait again) was a 1-hour wait!

The article above taught me that Japan actually exports gold:


As long as Japanese remain sellers as the price rallies, Japan is set to be a net gold exporter for the sixth consecutive year in 2011.


Gold in Japan is not so much associated with risk aversion, but more as an asset that many bought when prices languished for 30 years.

The retail price at Japan’s largest bullion house Tanaka Kikinzoku Kogyo was 4,745 yen per gram on August 23, excluding the 5 percent consumption tax, the highest since September 1980. Retail gold peaked in January 1980 at 6,495 yen.

Selling of gold has snowballed since the start of August, unlike in January 2008 when a spike in gold prices led to an explosive but short-lived gold sales boom, said Osamu Ikeda, Tanaka’s general manager.

“Selling accelerated in August as gold rallied to historic highs, and that is symbolic of a matured Japan,” Ikeda said.

Ikeda said the amount of gold for investment purposes that the house bought back from customers more than doubled to 10.2 tonnes as of August 23 from 4.3 tonnes in July. At the August 23 prices this would be worth around 48.4 billion yen.

Sellers are not limited to retired or retiring generations nor shops confined to established bullion houses.

“Customers bring all sorts of jewelry, gold cups, watch, teeth, but sometimes desperate ones bring fake gold or even their talismans,” said Seiichi Nakamura, manager at confectionery retail chain Nakamuraya.

“A lot of stores of this kind appeared recently, so that it turned into sort of a survival game,” he said, adding the number of customers, mainly women in their 40-50s, had doubled to 20 a day in recent days.

Media playing up the surge in gold is also driving the move.

“The media helped us, I think. When people learned there is a boom for selling gold now, they decided to do it too. It’s like a chain effect,” said shop manager Kenta Okiyama at antique dealer Otakaraya.

Tanaka Kikinzoku’s Ikeda said buying interest has picked up, even in the physical market, from those in their 30s and 40s, although sellers still outnumber buyers by 5 to 1.

“It used to be one-way flows of just sellers. Now, there are sellers to book profits and some buyers betting on further rises in prices,” Ikeda said.

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As Chavez Pulls Venezuela’s Gold From JP Morgan, Is The Great Scramble For Physical Starting? | ZeroHedge

according to an update from Bloomberg, Venezuela has gold with, you guessed it, JP Morgan, Barclays, and Bank Of Nova Scotia. As most know, JPM is one of the 5 vault banks. The fun begins if Chavez demands physical delivery of more than 10.6 tons of physical because as today’s CME update of metal depository statistics, JPM only has 338,303 ounces of registered gold in storage. Or roughly 10.6 tons. A modest deposit of this size would cause some serious white hair at JPM as the bank scrambles to find the replacement gold, which has already been pledged about 100 times across the various paper markets. Keep an eye on gold in the illiquid after hour market. The overdue scramble for delivery may be about to begin.

via As Chavez Pulls Venezuela’s Gold From JP Morgan, Is The Great Scramble For Physical Starting? | ZeroHedge.


“Our fathers lied”

Kipling, aged 60, on the cover of Time magazin...
Image via Wikipedia

24hGold, a website devoted to precious metals, includes a  randomly selected relevant quotation. Today’s:

If any question why we died,
Tell them, because our fathers lied.

This anti-war sentiment  is uncharacteristic of Kipling, and so I had to look it up: where did it come from? When and why did he write it? Read the rest of this entry »

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Jim Rogers – the extraordinarily ordinary investor

SHANGHAI, CHINA - JUNE 30:  International inve...
Image by Getty Images via Daylife

I always enjoy watching and listening to Jim Rogers, the investor famous for being George Soros‘ partner in the record-breaking Quantum Fund, and for his world travels. Here he is again, being interviewed on CNBC. He exudes charm and calm, like a Zen master. The bright young things in the studio ask him sophisticated questions to which he responds by saying something like, “Well, you’ve put it very well yourself!” He manages to make his hosts sound and feel several times smarter than he is. He avoids any predictions, he reminds his audience regularly that he is the world’s worst timer of the market, a terrible short-term trader, and simply tells what he is (or is not) buying or selling. Will the price of gold go up? He says he has no idea! Consolidation in the price of gold is not surprising, he says, given the recent rise, and if the price continues to fall he hopes he’ll be sensible enough to buy some!

The people on these news programs are all interested in the short-term; none of them are interested in the long-term, nor are they interested in understanding the principles that underpin sound investing or the movements of the markets. They only want to know one thing: “Give us a hot tip!” What will go up? By how much? When? Rogers is supremely indifferent to all this, yet he never sounds condescending or belittling or rude. Plus he always wears these huge bow-ties!

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