All around us the world economy is now declining at an alarming rate. The situation in southern Europe is disastrous, and that’s spreading to all of Europe as well as the rest of the world.
The world economy is starting to disintegrate. What we are entering now is the culmination of a Ponzi scheme of printed money and credit that started with the creation of the Fed in 1913...
So for 100 years the world has lived in a dream that printed money creates prosperity.
What we are going to see in the next few years is a hyperinflationary depression of unimaginable proportions. All of us will of course be affected, and many very badly. Only a privileged few, and these are some of the people who are fortunate enough to follow King World News, will be able to preserve their wealth.
Coming back to what is happening in the gold market, it’s extraordinary. The attack on the gold price through the paper market has totally backfired and failed. The $300 drop that we saw, in a few days, has already retraced 50%. That’s nothing compared to what will happen.
The attack in the paper market was always doomed to fail in the light of unprecedented demand and major shortages in the physical market. If you look at the Shanghai gold exchange, deliveries from January are 1,030 tons. That (1,030 tons) is against world gold production for the same period (since the beginning of 2013) of only 934 tons. That is absolutely astonishing volumes (of physical gold demand) you are talking about in China.
If you look at JP Morgan, their eligible gold, which is the stock they can deliver, has been down 65% just in the last couple of days. And COMEX, their stock is also down to about half of what it was over a year ago. Premiums now in Singapore are up $3 per ounce. If we now look at the Swiss refiners, remember Swiss refiners refine 70% of the world’s gold, the Swiss refiners are increasing premiums substantially.
They (Swiss refiners) already increased it (premiums) once, and they are increasing it again, and they can’t keep up with production. They are producing 24 hours a day, 7 days a week. Some refiners have major delays now, up to four weeks, because they can’t keep up with demand.
So what we are experiencing now is a real shortage in physical gold. You can just imagine what will happen when the next crisis starts in earnest.