NAV Premiums of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts - Waiting

"Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that 'all men are created equal.' We now practically read it 'all men are created equal, except negroes.' When the Know-Nothings get control, it will read 'all men are created equal, except negroes, and foreigners, and Catholics.'

When it comes to this I should prefer emigrating to some country where they make no pretence of loving liberty -- to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy."

Abraham Lincoln, Letter to Joshua Speed, 1855


"Indeed I tremble for my country when I reflect that God is just: that his justice cannot sleep for ever."

Thomas Jefferson


"When he says peace, he means war, and when he blasphemously uses the name of the Almighty, he means the power of evil, the fallen angel, Satan. His mouth is the foul maw of Hell, and his power is at bottom accursed. True, we must conduct a struggle against the Nazi terrorist state with rational means; but whoever today still doubts the reality, the existence of demonic powers, has failed by a wide margin to understand the metaphysical background of this struggle."

The White Rose, Fourth Leaflet, Munich 1942

Hysteria, like drugs and alcohol, is a way to escape the pain of thought.   Extremism and hatred have their attractions, as they carry the heady scent of power, especially in times of change and trouble.

And for some simple and innocent ones who may fall prey to sick and unscrupulous people, that attraction may prove to be fatally irresistible.   Because all too often, the attraction is to follow them into the abyss.

Gold and silver gave back a little of their gains from last week in lethargic trade.

There was very little delivery activity at The Bucket Shop.

Nova Scotia delivered 4,300 ounces of gold from their house account to the house of JP Morgan.  This brings the monthly gold total to an underwhelming 9,100 ounces.

A pittance of silver was tossed about.

The dollar gained back a little more of what it lost last week.

Let's see if gold and silver can do something more interesting than just roll over in the face of synthetic paper selling amongst the punters in London and New York.

Next week will be much more interesting with the FOMC meeting followed by the December stock option expiration.

I think the Fed is going to raise 50 basis points in two steps and then wait to see how the real economic numbers are coming in next year.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Eyes Forward

US equities were lackluster in light trading.

Eye are focused largely to the near future, with the FOMC meeting December 15-16, the significant stock options expiration on December 18th, and of course, the traditional 'Santa Claus' rally into year end.

Consumer Credit came in light today.

Have a pleasant evening.

China Understands the Gold Bullion Game - Lars Schall and Koos Jansen

Here is a new interview from Zurich's Lars Schall with Koos Jansen, discussing the Chinese gold market and the patterns of People's Bank of China purchasing for their reserves, both disclosed and otherwise.

You may find a complete transcript of this interview from Lars Schall's site at China Playing the Gold Game Carefully.

The gold bullion game is much broader and more politically charged than most commodity markets, since it cuts into the push and pull between nations and groups of nations and very powerful private groups that seek to use money for their own purposes of power.

Contrary to the very clumsy public relations campaign, gold is hardly a 'pet rock' or something about which the central banks never think.

Related:
Silk Road Gold Demand Taking All New Mine Production and More - A Game of Consquences
Koos Jansen: Renminbi Internationalization and China's Gold Strategy

Silk Road Gold Demand Taking All New Mine Production and More - A Game of Consequences

'Books were the proper remedy: books of vivid human import, forcing upon their minds the issues, pleasures, busyness, importance and immediacy of that life in which they stand; books of smiling or heroic temper, to excite or to console; books of a large design, shadowing the complexity of that game of consequences to which we all sit down, the hanger-back not least.'

Robert Louis Stevenson, Old Mortality


"When an official market or cartel overvalues one type of money or asset and undervalues another with respect to its fair market value and risks, the undervalued money or asset will leave the country as best it can, or will disappear from circulation into hoards, while the overvalued money or assets will flood into circulation."

Murray Rothbard, Gresham's Law


"There is not a crime, there is not a dodge, there is not a trick, there is not a swindle, there is not a vice, that does not live by secrecy."

Joseph Pulitzer

Nick Laird of goldchartsrus.com has provided the latest statistics on the consumption of gold by the 'Silk Road' countries.

The monthly demand from these nations as shown below has grown five-fold compared what it was prior to 2008.

In the latest month their total consumption, that is private purchasing in addition to publicly disclosed official reserves, was 365 tonnes.

Nick has estimated global production as averaging about 260 tonnes per month.

This represents a shortfall of about 105 tonnes per month to be drawn from existing supplies.  This shortfall appears to be growing proportionately with increasing demand, visible on the first chart below.

So this is one reason why we have been seeing the existing stocks of gold around the world drawn down to cover the steadily growing demand from these countries.  And as you may recall, the central banks of the world became net buyers of gold around 2008.

Comex has little available stocks in its domestic warehouses compared to this demand, All of the gold in all the warehouses, whether it is for sale or not, if taken and liquidated is just over 200 tonnes as is shown on the report below.

London is a more substantial source of bullion, but is running down it's supply as we have seen in the 'gold float' analysis also included below.

Interestingly enough, the year over year drawdown in the London free float is about 100 tonnes per month.

There is also supply in ETFs and Trusts.  This too has been drawn down steadily, particularly since 2013.

These are not precise figures, but estimates gleaning from public sources.  I suspect the supply numbers are 'generous' with regard to the free float and the unencumbered nature of gold through multiple claims and leasing, but that is conjecture.

But no wonder the Indian government is so anxious to persuade their people to turn their gold into synthetic paper gold, and allow it to be hypothecated into the markets.  And no wonder that the Fed told the German government that their gold was temporarily inconvenienced until 2019.  And no wonder Venezuela is being leaned on heavily to give back the gold that it so recently repatriated so it may be sold.

I wonder what it would take to increase mine production and bring more gold in as scrap and private sales to meet this growing demand.  Higher prices perhaps?

And if so, then perhaps knocking the price down so aggressively, crippling the precious metals mining industry, is not a fruitful idea for the longer term.  Gold supply is not so easily manageable as a fiat currency's may be.

Given the current rate of growth in demand and the current state of supply, next year could be interesting.  Still, I never like to underestimate the 'resourcefulness' of the central banks, especially when they are operating in relative secrecy. And it never fails to surprise me at how reluctant the various groups of the status quo are to discuss these things except on their own terms, and within their own narrative.

And so such great events can happen slowly, and largely hidden and unremarked, until they seemingly burst upon the scene, speaking unpleasant truths.