15 June 2019

Physical Gold Withdrawals from the Shanghai Gold Exchange and The New Silk Road

"Time is coming when markets search frantically for physical collateral to find that paper far exceeds underlying collateral for several metals and other resources.    I am warning that when markets fall in sustained negative response to bursting bubbles, widespread deleveraging will reveal insufficient hard collateral underlying traded asset-backed securities.  The words rehypothecation and hyper-rehypothecation may be rediscovered or remembered again, forgotten somehow during much of decade since the Great Financial Crisis."

Harald Malmgren

"Gold has 'worked' down from Alexander's time.  When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."  

Bernard M. Baruch

One might wonder why these countries are steadily acquiring such enormous inventories of gold bullion.

And they might even notice that since around 2008 the central banks of the world have become net buyers of gold, after many years of managed selling.

Gold is flowing from West to East, and into strong hands and official vaults as security against a changing monetary landscape.  And except for the occasional use of subtrefuge and force, it will not return to the public markets anywhere near to these current valuations.