Email: invest@goldenlionmint.com
Phone: 828-350-1454
“Look Who's Selling Gold and Who's Buying”
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With world markets following the turmoil here at home, banks everywhere are on thin ice. I’m sure you’ve noticed….or maybe it’s you, also, who is strapped for cash to pay your bills. Individuals, like banks and hedge funds, are scrambling to pay their bills or go under.
That’s why you’re seeing violent ups and downs in all investments – folks are trying to raise money. Yesterday, the stock market here in the U.S. traded in a range of 800 points, finally closing up 400 points. However, for lovers of honest money, the gold price suddenly dropped. “What? That just didn’t make sense,” I told myself. That was until I realized that price had little to do with the value of my physical gold.
Why? Because when central banks explosively dump gold onto the market, while it momentarily brings the price down, any real gold disappears into the hands of private investors. The law is that when paper floods the market, real money (gold) goes into hiding.
Consider this: did you suddenly feel an irresistible urge to run down to your local coin dealer and sell your gold? While coin and bullion dealers across the nation would have welcomed you with open arms because of an inventory shortage of gold coins, the only people who came in were those wanting to buy – NOT SELL!
So, who sold gold – next to nobody who wasn’t in dire financial straights or next to bankruptcy? (and I’m not just talking individuals). Let me give you an example: the European Central Bank, according to Barclays Capital, dumped 7.6 tons of gold – yet the contract or “paper gold” market only hiccupped. Likewise, the ETFs (exchange-traded funds), which only track the price of gold, then took a hit in price. But keep in mind this sobering realization: when a central bank needs to raise cash, it doesn’t have to provide it in the “future”.
When a big mining company “forward sells” its gold to a central bank, the gold is still in the ground, and only the paper or contract right to it exchanges hands - likewise when a bank leases gold. In the cases when actual gold is physically borrowed, it must be physically returned. What do you think the eventual outcome will be when every time new physical supplies are available, they’re snatched up by savvy individuals looking for a way to protect their assets? Like I said, when paper floods the markets, real money goes into hiding. When the “paper gold” prices take a hit, people like you and me buy gold, not sell gold. So every time this takes place, there’s actually less gold in the markets, not more gold.
When countries are trying to stave off going bankrupt (like banks across the globe right now) they can follow in the footsteps of countries like Venezuela or Zimbabwe and simply add zeros to their currencies, or run the printing press 24/7 or dump paper gold onto the markets in an attempt to discourage private gold ownership.
Thankfully, intelligent and informed folks don’t fall for the scam. The U.S. government is between a rock and a hard place. If we don’t pay our debt, the nation goes bankrupt, which leaves the only viable option to print more money which creates hyperinflation, which in turn trashes the dollar. This is pretty much like a group of us playing monopoly and, when another player is about to be forced out of the game, they go over to the copy machine and simply print more money to stay in the game. “Unfair!” you protest, and swear you’ll not play with them again. What happens if - or when - foreign nations who have trusted the U.S. and bought our debt instruments say, “Enough!” and dump bonds and U.S. treasuries?
Well, guess what? The game is over and so is the value of our currency. So, what will you have left that will be of any real and honest value? It’s more than food for thought…..so look who’s selling gold and who’s buying. In this game, the buyers will win and the sellers will lose. Which side are you on? Buy gold while you can still find it; when the big storm hits, it will be the only insurance that will actually pay off. Isn’t this the prudent path, or would you rather believe your television’s report of the talking heads in Washington?
Much Love and Success,
-Peter
Tony: invest@goldenlionmint.com
Or Call: 828-350-1454