03 February 2015

NAV Premiums of Precious Metal Trusts and Funds - Why There Is No Recovery

Another 7,285 ounces of gold bullion were redeemed from the Sprott Physical Gold Trust.

My friend Arby had an interesting observation.  I have not checked it out specifically.  I thought Australia was in second place, but I have not looked at the latest figures for 2014.
But if the numbers are generally right, which they seem to be, it gives us some idea of the magnitude of what is going on.

US 52 WEEKS gold mine production 2014 (estimate from Mineweb) ... ...    210 tonnes

China first 3 WEEKS gold imports 2015 (calculated by Koos Jansen)      .... 202 tonnes

The largest producer of gold is China, second Russia, third USA.

The two largest producers are net importers of their world leading mining output.  The third largest producer is a net exporter.
And then there's Australia, but I'm not sure that they even know what they're doing as one of the attendant nations.
No matter what the exact numbers and who makes the most, gold is flowing from West to East. 

Anyone who does not understand this is missing one of the most dramatic monetary phenomena of this century.

I wonder who will blink first in this 'suicide squeeze.'  Because that is what this latest gold pool is becoming.

Speaking of monetary phenomenon, the professor of numbers and all things housing Tony Sanders notes that Mortgage Bonds Have Underperformed the Worst Since 2008 on Refi Risks.
As part of a different discussion, I noticed the other week that the Fed stepped up purchases of agency mortgage debts considerably since they 'ended QE' and own a boatload of them.
Janet and Bill Dudley must be running handcarts up and down Wall and Broad Streets telling the Banks to, 'bring out your dead.'
Fan and Fred buy them, and the Fed buries them.   With nothing going to the people whose homes are being foreclosed.   

And finally,  Zerohedge reminds us this morning that the numbers indicate that the biggest flows of capital into the US equity markets are from.. wait for it... companies using their profits to buy back their own stocks, by far.
So the Fed is using its ability to print money to buy bad debts from the Banks which they created to cheat their customers, and companies are using the outsized profits they are obtaining through government subsidies and underpaying their workers to buy back their own stock and enrich their upper management. 
And as Wall Street On Parade reminds us this morning, the corporatized media, owned by a handful of corporations, is cheerleading all this, and is very much captured by the crony capitalist culture.
And people wonder why there is no recovery.  Who says they want one, when this new normal is paying off for a privileged few so well.  And they get to buy even more of the remaining productive assets on the cheap.
That's trickle down stimulus, par excellence.