Stacy Summary: Unbelievable, truly unbelievable. Wonder why the BIS is taking the gold as collateral from the European banks rather than just a paper promise? Don’t the BIS know they can’t eat gold?
European commercial banks have begun using their holdings of gold to raise cash with the Bank for International Settlements, in a further sign of strains in the money markets on which many rely for funding.
The BIS, the so-called “central banks’ central bank”, took 346 tonnes of gold in exchange for foreign currency in “swap operations” in the financial year to March 31, according to a note in its latest annual report.
In a gold swap, one counterparty, in this case a bank, sells its gold to the other, in this case the BIS, with an agreement to buy it back at a later date.
In the past the BIS has occasionally engaged in gold swaps.
There has been no mention, though, of any such operation in recent years.. . . .The BIS annual report says the gold received in the swaps was held “at central banks”.
The swaps are being blamed for gold crashing as seen in this gold chart:
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Ah Stacy, dear. Will you play the banker’s game and encourage the use of gold as money? You have a tender heart so know that gold mining recently killed 186 Africans due to lead in their water supply from a nearby gold mine. Also, the Amazon is being damaged by mercury used to extract gold. Can you imagine what further destruction and death $5000/oz gold would cause?
The solution is liberty and the rule of law. Under that, gold and silver could certainly be used as money but so could common stock which shares wealth at the same time it purchases it.
There is a certain seasonality to gold. I wouldn’t say that its crashing, just a price correction. We still have a pending decline in the discount rate, primarily held off by jawboning over the Yuan, and possible declines in the discount rates of the UK and Canada.
Why that would be important is that most mining shares are listed in the UK and Canada, where you can naked short to your heart’s desire. So watching for confirmation in the miners/gold is pretty essential.
@F.Beard – and who shall apply the rule of law in your system? and how is he or she so incorruptible? where can I meet these people?
and why are the banks paying so much for lobbying to prevent any reserve requirements at all; but which gold cannot help but be? so why would they want something that by its very nature is reserve like?
and how many will die this year due to tar sands, oil, natural gas; did not eleven workers die in the Gulf of Mexico and a few weeks before that 25 West Virginians died in a coal mine; and many thousands in China over the past few years; and how many Californians have neurological problems due to the mercury that falls on the state from the coal fired power stations in China? and how many die prematurely due to drunk driving? how many innocent bystanders die after being struck by a drunk driver? how many due to lung cancer? how many due to obesity? how many innocent bystanders are killed each year due to stray bullet or murder or robbery? shall we ban all driving? all alcohol? all self-defense while we also ban a means of exchange, for money, they say, is the root of all evil? indeed, how many hundreds have died in the past two or three years alone due to starvation as a direct result of printing fiat dollars? and how many are deprived of their liberty due to the fact that they cannot compete with someone who gets to print up a dollar and take his food while others have to work to get a dollar to trade with a farmer? and how many have died due to hyperinflation in Zimbabwe? and how many died in Germany due to their hyperinflation?
so many questions
Let me think about that for 934
http://www.youtube.com/watch?v=Txpz7_BCtTg
@Stacy,
Gold as money is barbaric but you make the good point that we may be barbaric.
Still, liberty in money creation, usage and acceptance would satisfy all who are worth satisfying. We both wish to be free of the banksters but I fear that gold is just their fallback position from fiat. Liberty, OTOH, by definition is the antidote to tyranny.
Hi folks
according to jim Sinclair of jmmineset.com the swaps would have no effect on the price of gold, here’s an email from him yesterday (good newsletter, i can recommened for gold fans)
From Jim;
Reports about a large gold swap done by the IMF are being colored by a glib analysis of what a swap is as compared to a lease.
If the IMF was legally able to and leased this gold, I would agree with the fear of market sales as a means of bailing out euro banks or other entities.
Gold swaps are done with monetary authorities. Gold leases are done with “for profit entities” such as gold banks.
Gold Swaps are usually undertaken by monetary authorities. The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed upon price. The IMF will pay interest on the foreign exchange received. Historically swaps occur when entities like the IMF have a need for foreign exchange, but do not wish to sell the gold. In this case gold is a leveraging device for needed currency to meet requirements.
Conclusion:
The many reports today that characterize the large IMF gold swap as a sale of gold into the markets do not understand the difference between a swap and a lease as defined by with whom it is done and why.
All that scary crap written today is just that, crap.
The IMF swap so talked about today is not a threat to the gold price. In retrospect neither was the gold leasing as it was happening $1000 points lower. Certainly the swap is not and the various commentators today are not familiar with the differences.
@Stacy
LOL, gold crashing like you see on this chart here..It is incredible, but they are swaps, so if the deflation siezes they can buy it back. It is disgusting because this draws us into another episode of unnecessary musical chairs
Am I wrong of can the central banks already get the gold back at a profit?
The Boring Dry Index hits its Driest point in its boring history
– and who shall apply the rule of law in your system? and how is he or she so incorruptible? where can I meet these people? Stacy
The pols are probably clueless; it is not so much that they are corrupt but that the system is unworkable in the long run where we now find ourselves. Gold as money would be a return to system that was previously rejected It will be rejected again too if we return to it.
@Stacy,…”you can’t eat gold” LOL,..and I suppose the “SDR” isn’t going to be the next reserve currency,…hahaha,…
As Darwin says,…”adapt or die”,…haha
I bet you were a stubborn child ? : )
@ Max @ Stacy. damn. I never received a call back after my audtion video for the Max & Stacy band. Guess I really sucked. Well then, I would like to refer my friend over to you guys as he rocks HARD! Long live the Fake Ayatollahs!
http://www.youtube.com/watch?v=BdnhtOtXLuc
Well we all know the elites are only partialy responsible for the mass delusions of humanity. They open doors and the majority wade in. Of course those who gambled on buying many thousands of ounces have an angle. Dont they Max? You should declare an interest! You’ve already declared an interest in USA … by leaving.
Look forward to seeing the world cup final
Gold owners Vs Fiat money Cartel
Either way humanity and the planet is fuked.
Stacy: Your questions are “on the money”!! You always see the the big picture. Kudos!
U.S. asset managers worried Obama could confiscate gold
http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=106063&sn=Detail
Maybe history wont repeat itself
Question:
Suppose the gold gets sucked up by the banks before they default and the world comes to an end, and they ban the trade wholesale, is that a plausible scenario and why would this not be attractive in a fait world?
U.S. asset managers worried Obama could confiscate gold fiatmentalist
If we had true liberty in money usage, then gold would soon be reduced to its mere commodity value, IMO. Why? Because gold is a non-performing asset. Also, the whole concept of lending money is obsolete when money can be easily created by anyone. But I could be wrong. Let’s just have liberty and see, shall we?
It seems like every other post on this site is about the price of Gold. OK guys say Gold hits 10k an ounce, describe that society and the cartels reaction. Describe the gold owners response to the cartels reaction!
The following is too easy an answer
http://www.youtube.com/watch?v=37BMplDzJPE
Janet Tavakoli picks up on Max’s analogy to obscenity and Goldman on Huffpost :-
http://www.huffingtonpost.com/janet-tavakoli/should-taxpayers-continue_b_637579.html
All I can say is *ucked over by a *ucking banker !
S&P in gold (price) chart
Whats in your wallet?
http://stockcharts.com/h-sc/ui?s=$SPX:$GOLD&p=W&yr=3&mn=0&dy=0&id=p84881116561
My first impression is that the BIS and the central banks are preparing the way for a partially gold backed international currency.
If your central bank has no gold because it was sold to the IMF, China, the BIS or to Paulson, then you will be forced to accept an international currency.
I think gold went down recently due to market manipulation through derivatives. I just checked the price. Monex has gold at $1,196 which is a great opportunity to buy.
What is really the irritating part of this info is, that we really do not know why they are doing it. We never now the why and always run behind the facts that emerges when it is usually to late to respond: IT IS A CONSPIRACY OF WHICH WE DO NOT KNOW ITS REAL PLAN… But anyway, Stacy, it is always good to know what is happening at the moment (even if we do not know its meaning)!
@Bloke … Hi folks // Jim Sinclair
We know … was posted already !
If you get some really intelligent peeps tey will look @ Gold and laugh tear heads off “What do you use Gold for ? in yor personal life ?”
And if ya see USA’s stratigic move Dollar backed by Oil
tas one of the real reasons USA went after Saddam he wanted to sell in Euros tat pissed off the US fed
I think China is gonna start callin the shots they only worried about the 2 trill but in the End it will hafta write it off
In what Currency does Iran sell its Oil anyone; they should shift to yuan
I wanna see USA’s bitchy reaction ten
lolololololol
ROFL
Hic
@Stacy … LOL
Looks like they chose swaps rather than leasing to get ’round the illegality of gold leasing .
My guess it is a convenient way of “selling gold that doesn’t exist” ( the “Gold Leasing” Contracts ) to the BIS , who gladly accept it , to hide the effectively illegal Gold leasing. In the end , the BIS will settle with the CBs and pretend they got the gold .
Of course, these actions would allow the printing of trillions of more paper money IMO.
With regards obscenity and art; Robert Mapplethorpe usually rises some eyebrows :-
http://en.wikipedia.org/wiki/Robert_Mapplethorpe
He has heavy weight curators to back him up (Robert A Sobieszek was one ) although technically speaking he made very pornographic art photography. And there was one in recent years regarding a female photographer at Saatchi – it seems she was totally naive as to the interpretations of what she was doing. Wonder what heavy weight Goldman would bring on – The Pope – Gods work, a few Saints maybe ?
Gold confiscation is already occurring by pawning jewelry. Jewelry production was an important component to gold production at one time, so there was a lot of gold put into trinkets.
But I think that most people will be priced completely out of the market, thus affecting a confiscation of sorts. Central banks will have already accumulated almost all of the gold in monetary form anyways. If say, the average savings is ~$4000, then likely the gold price will eventually exceed this by a fair margin.
Note that at the Royal Canadian Mint, you are only allowed to buy 2 5-oz coins. 5-oz. coins were, at one time, the $100 bill. There is no restriction to buying quantities of one ounce coins, and no HST applied to coins over a certain purity. This applies equally to silver. So this means that to the Canadian government, gold(and silver) is money.
Its not a far stretch to say that gold employed uselessly as jewelry, and an ignored financial asset is now being converted into money.
Today on the 7th of July 2010 when it comes to day to day transactions gold in your pocket is worth nothing other than a preserver of wealth, backup currency, possible investment and a way of impressing members of the opposite (or even same) sex if you keep it in your crotch (providing you male).
Now then……
What about cash post dollar/euro/pound collapse?
Well again you can stuff it down your crotch or stuff it into your pillows or even use it to light fires with but you will not be able to use it for anything else.
Gold it its physical form however will no longer be the hypothetical solution to trade….. it will be a reality.
Until a global currency comes in that is.
Then gold will be worth nothing…..so timing is of the key.
@RHD …Until a global currency comes in that is.
Then gold will be worth nothing…..so timing is of the key
You mean until they invent a new Ponzi scheme to rip us off !
@ME
Like the Freudian typo “fait” (done, LOL) versus fiat (same thing).
Common stock as money:
1) requires no borrowing or lending; capital and labor are merely bought with new stock issuance.
2) Deflation is not a problem because the money (common stock) does not go out of existence as is the case with fractional reserve lending.
3) Any price inflation is born by the corporation’s owners since all money recipients are by definition part owners of the corporation.
4) The amount of new money to be issued is under the authority of the current money holders since they can vote their money ( common stock).
5) Common stock as money shares wealth as it purchases it thus precluding the social problems associated with wealth disparity (bad) while allowing capital concentration (good).
@Mirror x 2
“You mean until they invent a new Ponzi scheme to rip us off !”…..
Until ‘THEY’ find a new system of trade to keep ‘THEM’ in a manner to which they are accustomed via a global currency.
Which will probably be gold backed I am sure however as has been mentioned before there would probably be gold confiscation at that specific point so sell when the top is reached just after the currencies appear to be collapsing en-mass.
THEN buy something worth something that someone has to use whatever currency system is in place to purchase it.
And try and make it something of value not a an IPad.
Try a cow!….spare car parts even…..anything that is of intrinsic value.
@F. Beard … Common stock as money
Yes, the idea would be nice …
… but the FRAUD would be still there !
The only problems are :
a) “money” as such, is the basis on which “common stock value” is measured.
b) fraud
c) who controls the market , the SEC ? … LOL
Yes, I get what you mean , but it would be jumping into the fire .. from the frying pan.
@Gotee. paper printing is barbaric. gold backed paper is practical. i want to use paper backed by gold.
@RHD …. seems we think alike !
A) sell when the top is reached just after the currencies appear to be collapsing en-mass.
B) THEN buy something worth something that someone has to use whatever currency system is in place to purchase it.
My plans … almost.
On (A) …
Three would be a “gap” between the system collapsing and the new ponzi scheme.
During that period, physical gold would have real value.
One would NOT have to sell ( as in exchange for paper ), as the risk of the NEW ponzi coming in too fast … is great !
My guess is that a direct “on-the-day swap ” of gold->paper->land or whatever would be the way to go.
@Stacy & All,
News item for you: Obama Federal government cancels sensible clean energy program in order to protect over-extended banksters, Fanny & Freddie.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/07/07/MNCI1EA8OI.DTL&tsp=1
How long does Cement and steel last underwater ? :
Gulf Awash in 27,000 Abandoned Oil Wells
http://www.youtube.com/watch?v=BBP2yJo5dP8
“Now” .. they start thinking about it !
..wasn’t it the ‘love’ of money that ‘they’ say is the root of evil, not money itself?
I’m a bit bothered by those who think gold jewellery amounts to trinkets and bling appendage. Gold and Silver smiths are among the highest skilled artisans on earth and the heritage of gold does not diminish our culture of the past. Photo images of our time will fade from corrosion .
Amulet pendant (254 BEC) made from gold lapis lazuli, turquoise and carnelian
http://en.wikipedia.org/wiki/File:Egypte_louvre_091_aigle.jpg
Being obscene usually helps in art. Artists are usually more likely to be shut out of the main stream because they upset of offend/affect/accuse a person with power in the art world or rock the boat in some way. When I informed the local authority of the petty corruption of a person in a position of art power they got a new job as a director and I along with a few others were well and truly shut out ignored and probably black listed.
@brad – your audition was great; once we have the Fake Ayatollahs up and gigging, we’ll give you a call
@Fiatmentalist – every other article here is about fraud; presently the monetary system is corrupt to its core as is the political system, so just as replacing the Democrats with the Republicans is swapping one corrupt party for the other, so is swapping the dollar for euro or yuan or real or SDR, there is so much fraudulent debt behind others, the only currency that has no fraudulent liabilities attached is gold, the stuff you can hold in your hand anyway or look at in your deposit box; not the sort that your government allegedly has
@Goldrxman – thanks
@Mother – yes it’s possible that gold could be confiscated/banned; I don’t believe, however, that ever happened in Europe even during their bout with decades of fascism, insanity, murder, holocaust and police states
@JayD – yes, they could be creating ‘facts on the ground’ via ‘sacrosanct contracts’
@Talcott – yes, I believe you are correct; btw, I like your name
@Stacy and Max,
I’ve been reading Ellen Brown’s book The Web of Debt. It is really good at diagnosing our problems though I probably won’t completely agree with her solutions. However, so far it has put the final nails in the coffin of gold as money as far as I am concerned. Anyway you may disagree but Ellen has quite a following. Oh wait. You guys interviewed her recently, didn’t you?
Pardon the bold, please. I messed up with the html codes.
‘Easy to Make’
“If it’s fixed, an international monetary system would be easy to make, because the dollar-euro area would be 45 to 48 percent of the world economy,” said Mundell.
The dollar was at $1.4795 per euro at 9 a.m. in New York, falling 0.4 percent from late yesterday, when it reached its lowest level in a year. The U.S. currency has dropped as the grip of the crisis loosened, with a return to economic growth in Europe in the second quarter.
The role of the dollar may be discussed in this week’s meetings after policy makers from China to Russia repeatedly called for an alternative to the world’s main currency in foreign-exchange reserves. China’s central bank has advocated greater use of Special Drawing Rights, the International Monetary Fund’s unit of account, and called for a “super- sovereign reserve currency.”
“It’s possible to do it,” Mundell said of establishing a new international reserve currency. “To start off, you have to get the Americans and the Europeans together to stabilize the dollar and the euro exchange rates — that is a big step. If you can do that, all the other things moving into the SDR system would be easy.”
SDR Role
Mundell said that SDRs could be successful if the exchange rates of the basket of currencies were fixed instead of floating, and advocated adding the yuan to the basket of currencies behind the unit.
SDRs are composed 44 percent of dollars, 34 percent of euros, 11 percent of yen and 11 percent of pounds. Central banks hold them as a reserve asset and receive allocations of them from the Washington-based IMF.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aczBO8TH0OpA
the only currency that has no fraudulent liabilities attached is gold….
…until you slap a dollar price tag on the bullion.
Crash? The trend is your friend, a crash would be a drop of much more than this. Manipulation, unethical behavior more likely then reason for a short downturn. Technically it hasn’t broken down just getting close to the bottom channel.
Bernanke in 4 years doubled the amount of money printed since 1776. Crap currency anyone? Problem is perception is reality, people can’t tell the smoke from the mirrors.
@Stacy and Max,
F. Beard has a good point. Janet T. is smart and skeptical about gold. It would be good to have her on the show, perhaps with a pro gold guest too (or Max would do). Its a little boring to hear shows, like the one I heard recently where gold bug King (of King news) interviews J. Turk and they basically say “gold is great, right?” “Yeah”. Personally I suspect the plusses associated with owning gold would come through in such an interview, but it would be good to see the other side.
so many questions Stacy
And I love you for asking them. If I had to decide who the brains behind your duo is, I would pick you though Max is no slouch.
Paper Gold vs the Dollar? Interview with James Rickards
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
China’s Demand
“I expect China’s gold demand to rise by 11 to 12 percent this year to 440 to 450 tons because Chinese investors have shown their willingness to buy more when prices are on the rise,” Hou Huimin, deputy secretary-general at the China Gold Association, said today by phone. “I expect prices will rise over the remainder of this year and next year,” said Hou.
http://www.businessweek.com/news/2010-07-07/china-gold-demand-jumps-as-stocks-fall-exchange-says-update1-.html
I would like to spend a little time on the big story from the BIS.
The BIS is the central banker to the central banks. It monitors all the G10 banks and the banks in Switzerland as to risks that they have undertaken.
On Monday night, it was discovered in a footnote to the BIS quarterly report that the BIS has engaged in a gold swap of about 340 tonnes as of March 31.2010.
It has further engaged in another 40 tonnes of swaps from April until now.
A swap arranged at the BIS level must be with a central bank. Thus it could be with the ECB or it could be with one of its subordinate central bank.
Regardless, a swap of gold with the BIS means that 380 tonnes of physical gold is deposited at a registered facility under title to the BIS in exchange for money or currency.
Interest flows to the receiving central bank.
The swap means that at a given time interval that swap must be unwound, whereby the central bank gets its gold back and the BIS gets its money.
The total dollars of money sent by the BIS totalled a miniscule 14 billion dollars worth of currency. (it probably was in Euros)
However it did not end there.
The BIS reports on its balance sheet that on page 150 of the report, it’s gold and gold loan asset rose 69% to 43.04 billion SDR’s (1825 tonnes of gold) and its “Gold deposits”. rose 39% and equal 32 billion SDR’s
or 1,358 tonnes of gold..
The BIS balance sheet rose only 1.37% so gold bullion banking increased disproportionately!!
http://www.bis.org/publ/arpdf/ar2010e8.pdf
On page 163 of the report, it reveals the following: of the 43.04 billion SDRs of gold and gold loans, 41.597 billion SDRs are gold bars held at central banks and 1.443 billion sdrs are total gold loans.
It then redivides the total 43 billion sdr into the following:
2.8112 billion sdrs called Gold investment assets
and 40.226 billion sdrs ,gold and gold loan banking assets.
The clear implication is that the bulk of what is being reported as gold holdings is in reality market transactions that have already taken place and that gold has been leased out.
No wonder the the BIS and all bankers refused to issue a press release on this. Why? because the entire 380 tonnes of gold was absorbed instantly and no doubt Chinese sovereign entities and/or Russian sovereign entities bought this gold.!!!
.
It looks to me that a call on gold to a central authority was basically called upon and the BIS came to the rescue of the trapped central bank.
Let us say that Portugal had a call placed on it, on gold that it did not own. The ECB would not have the power to intercede on Portugal’s behalf to save it.
They needed the BIS to rescue the ECB or the entire financial world would have caved in.
Looking at the chart, and using a basic interpretation, assuming that gold is going higher, it looks like this:
Gold goes up $200 in the next 2 years, crashes down to $1100 in 2013, and then steps it up to $2000 by 2015.
However, that assumes a lot of global stability, so who knows.
Anyone for hockey?