Losing Faith In Cash: Black Friday Style Mobs Scrambling For PHYSICAL Bullion And Pimco’s Bill Gross Warns QE Will Lead To Inflation And A Bond Selloff
First-Hand Account of Gold & Silver Mania in China! Black Friday Style Mobs Scrambling for PHYSICAL Bullion
[Ed. Note: Hmm. Ignoring Europe, the middle east and Japan altogether, there’s more than a billion Chinese folks, and around 320 million Americans. Given that there’s only about 700 million ounces ofphysical silver mined every year, you can see the potential problem.]
from Silver Doctors:
With the recent claims from an Apple contractor that a Chinese silver shortage is the culprit for the production delay in the new I-Macs, an SD reader who has recently moved to China has given SilverDoctors a MUST READ first-hand account of the retail gold and silver mania underway in mainland China.
With the Chinese New Year less than a month away, Ichban describes Chinese demand for gold and silver in Beijing as a tidal wave, and states that the demand for gold and silver is more intense than Thanksgiving/ Black Friday mobs in the US, despite the nearly 60% premiums retail dealers are asking for silver bullion!!
Ichban gives readers a glimpse of what to expect when the mania stage of the gold and silver bull markets finally reaches the US, as he describes the scene at Chinese retail bullion stores:
Despite these high premiums, I have never seen such frenzied buying in my life! I am a young adult male and 40 year old Chinese women are shoving me out of the way because they are trying to buy some gold and silver!
Lassonde: This Gold Mania Will Compare To 1980 Run In Silver
Today a legend in the business, Pierre Lassonde, told King World News this is the calm before we head into the eye of the storm. Lassonde also said additional global turmoil and crisis will propel the gold market into a mania which will be comparable to silver’s historic run to $50 in 1980.
Eric King: “We’ve seen the Indians step in and raise import duties by 50% on gold in an effort to curb demand, Pierre. What did you make of that?
Lassonde: “Well, in the past it has never deterred the Indians from buying gold because they smuggle it. The (Indian) government is very well aware of that. They can increase the taxes by a small amount and the official channel will still work….
Pimco’s Bill Gross warns QE will make discount bonds ‘road kill’
Pimco co-founder Bill Gross is ringing a new alarm about the perils of the Federal Reserve’s monetary exuberance.
Gross’ alarm over discount bonds may be an extension of that notion, that the massive amount of monetary stimulus dumped into the global financial system will lead to inflation and a bond selloff. It stands to reason that higher premium bonds will do better than discount, or sub-par, ones.
An Important Video You Should Watch
By David Schectman
Here is a link to the Money News’ latest report on the collapse of the dollar:
James Dale Davidson, Jim Dines, The Weiss group and others have written about this event. In fact, I published an article by Davidson on this topic last fall. I think you should watch the above video, all of it, and think it through.
Look, everyone is involved in this to make a living and Money News is selling “advice,” but that doesn’t make their message any less valid. Silver (and gold) are the number one and two performing assets over the last 10 years, so owning, or buying gold stands on its own merit. But, you also get the best form of financial insurance possible, in addition to an investment that holds its own against all comers. Here is a chart published by Jim Dines that proves the point.
Germany and Japan have a long tradition of cooperating, at least when it comes to various iterations of world war, generically in the conventional sense (and where they tend to end up on the less than winning side). Which is why it may come as a surprise to some that earlier today German politician Michael Meister launched what is now the third shot across Japan’s bow in what is rapidly escalating as the most dramatic case of global currency warfare between the world’s net exporters (at least legacy net exporters: thanks to Japan’s recent political snafus, it has now become a net importer as it is rapidly losing the Chinese market which accounts for some 20% of its exports) which started as long ago as 2010 when it was quite clear that currency warfare is what the insolvent world can expect, before it devolves into outright protectionism, and finally regular war as Kyle Bass explained recently. To wit: “What can Japan’s competitors do?” Meister said today in a telephone interview. “Either we’re all smart and do nothing, or we follow suit and create a spiral that hurts us all.”
Something tells us the “we will follow suit” is the right answer, as the only option left for the world which has no internal demand (i.e., consumer credit capacity to fund in house purchases of goods and services) and is destined to seek outside trade markets and inbound flows to generate inflation. But then again, none of this should be news, although perhaps it is to the EUR which has seen a rather rapid deterioration now that it is becoming very clear that what we have said, namely that Germany needs a weaker EUR to boost exports, is the only option for Europe.
And, as noted, he is not the first, nor the second, but the third in just one week to warn of what is coming. From Bloomberg: “Meister is the third senior German official to take issue with Abe in a week. Finance Minister Wolfgang Schaeuble attacked Japan’s “false understanding” of monetary policy in a Jan. 16 speech to the lower house, saying it will pump “excessive liquidity” into global financial markets. Bundesbank President Jens Weidmann said in a speech in Frankfurt yesterday that Abe risked “politicizing” the yen’s exchange rate.”
Japan’s response: Open-Yended monetization as reported last night. Certainly everyone will just sit there and watch as Japan does all it can to control an even greater portion of the export market and boost its GDP at the expense of all other trade deficit surplus nations. Certainly. This, naturally, ignores the very “GDP boosting” almost real war that Japan and China are increasingly finding themselves in….
Now, I never suggested that inflation will be purged just because the bond market avoids its date with destiny. And yes, I know that in the past inflation and a bond collapse have gone hand-in-hand.
But what seems to be brewing is the seemingly impossible. That is, the scene is set for inflation, yet no bond blow-up!
Before we consider how this plays out, we need to consider the exact definition of ‘inflation’…
Some say inflation is the increase in official money supply… and by gum, we’ve had plenty of that!
Others say inflation is the increase in retail prices – of course, that’s another can of worms in itself. Which prices do you use? And crucially, which mathematical construction do you use for the index? It’s a debate that’s certainly raging today….