Buying Gold | Gold Will Be the Final Currency Yes or No? | Gold Silver Worlds | News2Gold

Gold Will Be the Final Currency Yes or No? | Gold Silver Worlds
Why patience will be rewarded for anybody buying gold in June ...
Why this top technician recommends buying gold now - CNBC.com

Gold Will Be the Final Currency Yes or No? | Gold Silver Worlds

Posted: 01 Jul 2014 10:21 AM PDT

Will gold regain its monetary standing and will it again back a major currency as in previous centuries?

Readers on www.deviantinvestor.com responded to my question about the creation of a gold backed currency by July 2017. The voting shows about 78% believe that within 3 years there will be a gold backed currency – perhaps issued by China, Russia, or even the United States. This is sensible because readers on the DI site are generally pro-gold and suspicious of unbacked debt based paper currencies.

For additional perspective on gold, consider what Bill Holter stated in his always insightful column. Here are a few quotes from his article:

"JP Morgan was in my opinion trying to convey the idea that gold was the money itself and everything else was a 'derivative' (derived) from this money."

"He understood that any currency, any debt, any equity or receipt had counterparty risk."

"Counterparty risk is the risk that whoever you are doing business with does not or cannot perform his side of the bargain."

"… the world must run on 'trust' but there is now a problem. The problem is that credit has engulfed the world. And the danger that a counterparty cascade begins because the risk of a default has never been greater than it is now."

"The derivatives chain will break and that everything financial will have a worth or 'value' far lower than it does now… because of counterparty failures creating a credit contraction."

"… physical gold in your possession has no counterparty risk."

"When the credit edifice comes down, people from all walks of life (including governments themselves) will seek safety."

"Truly folks this is what it's all about and why you own (or should) own gold. The financial system is mathematically going to come down and the best position to have when this occurs is to have 'money' [gold]."

Okay, he made convincing arguments. Gold is important now and will become essential when/if the cracks in the financial system widen and a massive crash occurs, which seems more likely each day.

But will a gold backed currency be the answer? Clearly central banks want to peddle their debt backed paper currencies that they create at no cost. We can assume the politicians are either owned or controlled by the banks, so what the banks want will be the deciding factor, not political rhetoric. So why would central banks want to abandon their mountains of paper assets and embrace gold?

They might do so because they had no choice – such as in the event of a massive financial crash. After "inflate or die" might come "gold – real money – or die." Central banks will choose gold, no matter how distasteful to them, rather than extinction. Banks will find a way to remain profitable, viable, and in control. When gold looks like the only good option to reestablish trust in a failed financial system, they will embrace gold.

On the other hand, many non-mainstream thinkers, such as myself, could be horribly wrong about their concerns for the viability of our financial system – the system might continue enriching politicians and bankers for many more decades. It is comforting, but often delusional, to believe all is well, especially when so much data indicates otherwise.

But please ask yourself why the central banks and the citizens of Russia, China, India and many other countries are aggressively buying gold! I believe they more correctly understand the risks and the vulnerabilities of our debt based pyramid of paper that western governments and central bankers have constructed. I believe they have chosen to hedge their paper risks with physical gold.

Should you convert some paper or digital dollars, euros, pounds, and yen into physical gold? What is your "Plan B" in case paper currencies and over-valued stocks and bonds approach their intrinsic values – at much lower prices?

More to consider:

How much central bank gold actually remains in their (unaudited) vaults? Has most of it been shipped to Switzerland, China, India, and Russia?
The precedent for "bail-ins" was set in Cyprus last year. Further bail-ins could occur in Europe and the United States in the event of another financial crash. How safe is your digital bank account if global monetary systems repeat the 2008 Lehman experience?
You could trade digital currencies for physical gold and reduce your anxiety level.

You might also enjoy: Italian Government Explains How We All Can Be $250,000 Richer.

GE Christenson | The Deviant Investor

Why patience will be rewarded for anybody buying gold in June ...

Posted: 02 Jun 2014 10:06 PM PDT

Posted on 03 June 2014 with no comments from readers

Patient investors who buy when prices are at the low-point of the cycle always win in the long run. Historically gold prices are cheapest in June. Gold prices are at a low-point in their cycle. Buy while prices are low this month and your reward may come sooner than expected.

Why's that? Did gold prices not fall $50 in the past week? Yes, gold prices are exceptionally cheap. Bullion billionaire Eric Sprott offers the following bullish thoughts in his latest missive:

1. The Gold Forward Offered Rate remains very low, with extended periods of time in negative territory.

2. Why is Germany's repatriation of their 674 tonnes of gold taking so long? As of March 2014, only 69 tonnes had made their way back, a pace of less than five tonnes a month. If there is no shortage of gold, why are the US and UK exporting so much gold to Switzerland? (which itself exports most of it to China).

3. According to some estimates, China consumed over 4,800 tonnes of gold in 2013, implying that about 3,600 tonnes were drawn from global stocks (i.e. western vaults) to satisfy demand.

4. All this Chinese buying is reflected in the monstrous amounts of gold deliveries on the Shanghai Gold Exchange.

5. Dubai is building a new gold refinery capable of handling 1,400 tonnes, and current global gold refining capacity is about 6,000 tonnes (world mine production is less than 3,000 tonnes a year). Why would they need so much refining capacity if physical demand was not buoyant?

6. As the major gold miners cut back on exploration, future mine supply will remain constrained.

7. Another 'temporary source of supply' (900 tonnes) has been ETFs, which have been raided for most of 2013. However, they have now stabilized. Other things being equal in demand, where will that 900 tonnes of supply come from in 2014?

8. Interestingly, the Silver Institute, in its 2014 World Silver Survey, noted that there was a 96 million ounces shortfall in 2013 due to strong physical demand.

ArabianMoney investment newsletter readers have the benefit of more insights this month in a special item on gold's historic performance in June (subscribe here).

Posted on 03 June 2014 Categories: Gold & Silver

Why this top technician recommends buying gold now - CNBC.com

Posted: 24 Mar 2014 09:53 AM PDT

Gold suffered another tough session Monday, dropping nearly 2 percent following a bad week. But one of the most respected technical analysts on Wall Street says it's high time to buy in. Indeed, Sterne Agee chief market technician Carter Worth predicts that gold will rise about 15 percent from current levels.

After a painful 2013, bullion was finally finding some strength in the beginning of 2014. The key, for Worth, was that the metal was able to turn around a grim trend.

"When you're cascading, you make a low and then you violate it. And make a low, and then violate it. Make a low, and then violate it. Low after low," Worth said Friday on CNBC's "Options Action." "But then, we have this massive low in June, as everyone knows, and again, we have a rally. But this time, we don't violate. So we have a well-defined double bottom."

Buying Gold | Gold Will Be the Final Currency Yes or No? | Gold Silver Worlds | News2Gold

Buying Gold | <b>Gold</b> Will Be the Final Currency Yes or No? | <b>Gold</b> Silver Worlds | News2Gold

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