With gold production working at full capacity, combined with the massive outstanding paper gold position, increased demand for physical gold can only be satisfied at much higher prices, which we are likely to see in the next few months.
If the paper gold market continues to sell off while physical acquisition continues to accelerate, this is a strong warning about the economic recovery and a leading indicator that could set the stage for a new bull market in precious metals.
FORBES: Why Are Small Investors Still Buying Gold? A Psychology Lesson
In addition to all of these tax issues, the U.S. in the early 1930s was on a gold standard where paper currency was legally convertible into gold.
WSJ: Arthur B. Laffer: Taxes, Depression, and Our Current Troubles
The recent paper losses on gold are unlikely to have a big impact on the universities.
At the outset of the Great Depression people distrusted banks but trusted paper currency and gold.
WSJ: Arthur B. Laffer: Taxes, Depression, and Our Current Troubles
The increase in the demand for paper currency and gold not only had a quantity effect on the money supply but it also put upward pressure on the price of gold, which meant that dollar prices of all goods and services had to fall for the relative price of gold to rise.
WSJ: Arthur B. Laffer: Taxes, Depression, and Our Current Troubles
This was then placed in a pencil and used to scribble on paper imprinted with broken gold stripes.
Ideally, you could trade your fiat paper currencies for these gold-linked currencies at any bank that offers foreign exchange services.
The US government then attempted to pay this last bond at a fraction of the face value and not in gold but paper.
FORBES: Can Obama Really Use The 14th Amendment To Raise The Debt Limit?
The move to fiat money (paper not backed by gold) created the huge expansion in global money supply that the pessimists had predicted.
ECONOMIST: The link between exchange rates and asset markets
At first, they might seem like mostly a precious metals investment product, a speculative vehicle, sort of like trading paper shares in a gold ETF.
They dabble in conspiracy theories and talk of the collapse of civilisation and the need for investors to sell all paper assets, buy gold and retreat to Idaho.
Commercial banks would put up gold or commercial paper and get cash in return.
Your money used to be backed by real things like gold and commercial paper.
It is this expectation of global paper currency debasement which makes gold an attractive long-term investment.
Nations would settle international payment deficits and surpluses in gold rather than paper-based currencies.
By the end of next year, I would like to see the introduction of gold-linked paper currencies.
It is this expectation of paper currency debasement which makes gold an attractive long-term investment for us.
Thus, there might be times when they are reluctant to take paper currency when exiting their gold investment.
FORBES: FOCUS: Proposed Van Eck Gold, Silver ETFs Would Allow Redemptions Of Metal
There is abundant empirical evidence that the world economy will create many more jobs with its currencies convertible into gold than with paper money.
FORBES: The Grave Economic Consequences Of Money For Nothing
However, euros are paper and to increase the gold supply you have to go to much greater lengths than switch on a printing press.
Those banknotes from the New York Fed or the Philadelphia Fed or the other ten banks had to be backed by solid collateral: gold and commercial paper.
Last summer, when it seemed that the ads about turning your paper IRA into a solid gold IRA hit a fever pitch, gold began to go vertical.
FORBES: Apple: Good As Gold . . . Down 20 Percent Then Flat?
The United States outgrew it as early as 1810 or so, as dozens and then hundreds of commercial banks began issuing gold-linked paper banknotes as an alternative to metal coins.
Because it is impossible to manufacture and traditionally difficult to extract and process from the ground, gold served as a stable peg for coinage and paper money issuance--but no nation operates on a "gold standard" today, as most abandoned it during the 20th century after major powers suspended it periodically during times of costly military adventures during the 19th century.
And that crisis in the value of paper money makes physical possession of gold a no brainer.
FORBES: The Germans Want Their Gold Reserves Back in Germany
Now with gold over valued, silver coins disappeared from circulation and gold coins (and paper money) dominated the currency.
FORBES: 2012: Good Money And Jobs vs. Easy Money And Stagnation
Before allowing that tendril of delicately battered calamari to hit the tongue, a diner should first admire the artistic manner in which the tempura was arranged upon the gold-flecked Japanese paper lining its woven bamboo dish.
In other words, these countries wanted to confiscate gold in exchange for superfluous paper.
FORBES: Trashing The Gold Standard is Now The Stuff Of Amateurs
应用推荐