Now, when you do the math on a shopping mall "cash for gold" place, you realize they must buy up about a pound of gold a month just to break even...that's an awful lot of gold just from jewelry, so I'm very puzzled. They sell no gold, just buy.
I know, they theoretically sell the gold they buy to refineries, but it just doesn't add up. The mainstream media, as always, seems clueless on the matter.
Take this recent article:
http://www.cnbc.com/id/101163824
The web page title is "India turn from gold to silver" but the original title remains (for now): "India forced to take its eyes off gold". You can't guess that's the real title, as the article makes it sound like people in India aren't buying as much gold as usual. Going against centuries of tradition, the people of India (a country that's real big on following tradition) just up and decided to buy less gold. So, gold must be a bad investment.
What's missing? The fact that, indeed, Indians are being forced to not buy gold. See, the Indian government, in order to protect people from buying shiny rocks as gifts, have banned gold imports:
http://www.zerohedge.com/news/2013-08-15/india-bans-all-gold-coin-imports-increases-capital-controls
Now, CNBC isn't some one-man news operation that might miss a major fact like this, so it's pretty inexplicable.
The comments section, of course, hints at once again a disconnect between reality and mainstream news. Indian citizens aren't just "choosing" not to buy gold...their government is protecting them from buying shiny rocks
Why the disconnect, indeed?
What's going on with gold is interesting. It seems quite a few people are becoming uncomfortable with the system of credit creation that in a sense was the creation of John Law about three centuries back. Arguably the reason for this disquiet is that the system only works when there's real growth to be had -- which in turn means cheap fossil fuel and cheap and abundant resources in general. This seems to be no longer the case (aka "the limits to growth," as indicated by Meadows, et al, about forty years back). An intriguing and complex subject, which I myself am gingerly and tentatively exploring.
ReplyDelete