Founder and Chief Markets Commentator, TheStreet
Jim Cramer is one of America's most recognized and respected investment pros and media personalities. In 1996, Jim founded TheStreet, one of the most visited financial media websites for individual...Read More
Founder and Chairman,
Eric Sprott has more than 40 years of experience in the investment industry. After earning his designation as a chartered accountant, Eric entered the investment industry as a research analyst at Merrill Lynch...Read More
Chairman, Casey Research
Doug Casey is a highly respected author, publisher, and professional investor who graduated from Georgetown University in 1968. Doug literally wrote the book on profiting from periods of economic turmoil: his book Crisis Investing spent...Read More
Co-founder and CEO, Gold Bullion International
Before cofounding Gold Bullion International (GBI), a leading institutional precious metals provider, Steven Feldman was a partner at Goldman Sachs. There, he was the founder and head of the global infrastructure fund...Read More
Chairman and CEO of McEwen Mining Inc.
Rob has been associated with the mining industry for 29 years. His career began in the investment industry, and then in 1990 he stepped into the mining sector. Rob is the founder of Goldcorp Inc., where he took the company...Read More
Senior Editor, BIG GOLD
The son of an award-winning gold panner, Jeff helped work his family's placer claims in California, Nevada, and Arizona from a young age. Gold is never far from his mind or his heart. While working as a psychological counselor... Read More
Is it possible they know something the traders and analysts on Wall Street don't?
Read on to discover 3 overlooked yet "fundamental" factors creating what could be the single greatest gold-buying opportunity of our lifetime... and the exact steps that will ensure you don't miss out.
On Monday, April 15, gold prices tumbled 9.3% in just one day – the sharpest drop in 30 years.
Then, just two days later – on April 17 – the US Mint reported that a record 63,000 ounces was sold in a single day.
Of course, gold has always been volatile. Ron Paul says it's just "part of its tradition."
Still, this extreme 12-month volatility, coupled with this year's crash, may have you worried or even sitting on the sidelines.
If you're hesitant, even confused, it's only natural given all the volatility and polarized opinions about gold and its future. For every bullish analyst screaming "Buy gold!," you have another saying the "bubble has burst" and it's "done."
Yet, do you know who's not confused nor ambivalent about the future of gold?
Countries like China and Russia.
These former "enemies" simply cannot get enough, and they're buying gold at faster rates and higher quantities than at any point in history.
Indeed, China is buying so much gold it's hard to know just how much it is currently holding. More on this in a moment.
Let's focus first on what we think we know about China's gold buying:
Clearly, the Chinese are not shying away from gold. Even as the price has risen from April's drop, they've continued to buy. Meanwhile...
While a major news source incorrectly reported that Russia had overtaken China in gold buying, there's no doubt that the country has become a big player.
In fact, Putin has personally pushed for the purchase of over 20 million ounces in the last decade.
"The more gold a country has, the more sovereignty it will have if there's a cataclysm with the dollar, the euro, the pound or any other reserve currency," said Evgeny Fedorov, a lawmaker for Putin's United Russia party.
In April alone, Russia added over 296,000 ounces, taking the nation's total holdings to just under 35 million ounces.
Up until this year, India has been the world's leading consumer of gold. And the country may continue to be, though it's expected to duel with China for the number-one spot throughout this year.
Indeed, India reported a 27% increase in gold demand for the first quarter of this year, surpassing China's reported demand growth of 20%.
In fact, experts at Bloomberg predict India will have imported between and 10 million and 14 million ounces in the second quarter of this year. That's almost half as much as all its previous shipments for last year!
And it's not just these countries that are getting the gold bug, either.
China, Russia, and India aren't alone, of course. Central banks all over the world have been leading net buyers of gold for at least two years now. Record-breaking levels, in fact.
The following table lists the countries that have added to their gold reserves in 2012, while the second one tallies those that have been selling. You'll see how recently each country has reported, along with its percentage increase.
|Changes in Central Bank Gold Reserves in 2012
(Million Troy Ounces)
|Year-End 2011||YTD 2012||Last Reported||Net Change||Percent Change|
|Countries Increasing Reserves|
|Bank for International Settlements||15.6||16.71||Dec||1.114||7.1%|
|Subtotal Gross Increases||15.2|
|Countries Decreasing Reserves|
|Subtotal Gross Decreases||-0.39|
|Total Net Change||14.8|
|Sources: IMF, CPM Group. Data as of 1-31-13.|
Based on current data, the net increase in central bank gold buying for 2012 was 14.8 million troy ounces – and that's before the final 2012 figures are in for all countries!
To put that into perspective, on a net basis, central banks added more to their reserves last year than any year since 1964.
Here's a picture of total central bank reserves since the financial crisis hit.
It's clear that, whatever gold's price movements, positive or negative, central bank officials have continued to buy en masse.
Central banks bought 18.8 million ounces of gold last year, the most since 1964, and may add as much as 19.4 million ounces in 2013, the World Gold Council estimates.
All this gold buying by central banks is very ominous, especially when you consider that we don't even know how much gold China is really holding.
You see, most of the data we just covered excludes China, as well as a few other small countries. China last officially reported gold reserves in 2009, so the totals in the chart since then exclude whatever its purchases might have been.
Jim Rickards, a highly respected author and hedge fund manager, said last month that China has probably already accumulated between 70.5 and 105.8 million troy ounces of additional gold reserves.
In fact, Jim thinks the next big catalyst for gold will be an announcement from China about its reserve position. Here's what he told BIG GOLD editor Jeff Clark in late December:
"The catalyst for a spike into the $2,500 to $3,000 price range for gold will be an announcement by China, probably in late 2013 or 2014, that they have acquired 4,000 tonnes or more in their official reserve position. This will put China on an equal footing with the US in terms of a gold-to-GDP ratio, and validate gold as the real foundation of the international monetary system. Once that position is validated, gold will move to the $7,000 range in 2015 and beyond."
Even if Jim's estimate is high or China doesn't make an announcement until later, it's clear that central banks around the world are buying gold in record quantities.
To answer that question, let's look to those who have more intimate knowledge of our government's real fiscal state and the true health of the dollar.
President Vladimir Putin told his central bank not to "shy away" from the metal, adding, "After all, they're called gold and currency reserves for a reason."
And Hu Jintao, General Secretary of the Communist Party of China, says: "The current international currency system is the product of the past."
Others have provided clues as well.
"We're in the midst of an international currency war," said Guido Mantega, finance minister of Brazil.
"Quantitative easing also works through exchange rates… The Fed could engage in much more aggressive quantitative easing, to further lower the dollar," said Christina Romer, former chair of the Council of Economic Advisors.
Economist Kyle Bass recently spoke to a senior member of the Obama administration about its planned solutions for fixing the US economy and trade deficit. When he asked, "How are we going to grow exports if we won't allow nominal wage deflation?", the answer he got was, "We're just going to kill the dollar."
Perhaps some investors have gotten complacent about the risks to the world's reserve currency – but not central bankers.
They recognize the real enemy in all this: our own government, with its reckless, historic money printing and runaway federal debt. The $16.8 trillion we owe as of March, 2013? That number is expected to grow by at least another $7 trillion in the next 10 years, maybe more.
Of course, central bankers see this and fundamentally know the consequences of running the printing presses the way the US has since 2008, even if price inflation is not immediately obvious.
It's no surprise they want to hedge their bets, moving more reserves into something with actual value... something that can't be debased by Helicopter Ben revving up the printing press at will.
Just because the US dollar has been the world's reserve currency since the 1940s doesn't mean it will stay that way.
Given the radical debasing that's occurring now, the dollar's days could truly be numbered. Indeed, the movement into gold is just one facet of that change.
The massive buying by central banks is exactly what one would expect to see as we approach the end of the dollar's worldwide reign.
The message from central banks is clear: they expect the dollar to move painfully lower.
It doesn't matter that it's been holding up against other currencies or that the economy "might" be getting better. They're buying gold in record amounts because they see a significant shift coming with the status of the dollar, and they need to protect themselves against that risk.
This leads to a fundamental truth: Gold is not overpriced, in spite of its over 500% increase since 2001. Indeed, with the recent correction, central banks are likely buying more, precisely because it's undervalued.
Now, before you run out and buy as much gold as possible – wait. It's not as easy as it sounds...
With long lines and lengthy delays, it's easy to see the soaring demand for gold on a retail level. But what about wholesale?
One of our esteemed editors, Jeff Clark, decided to talk to the wholesalers directly, including the bullion banks, traders, and refiners. These entities typically deal in wholesale trades only, exclusively in large amounts, and solely with major entities that include dealers and investment funds.
Here's a summary of what they told Jeff occurred during the week of April 15-19 (the fifteenth was gold's 9.3% selloff)…
Bullion Banks: As a group, there were roughly four times as many buy orders as normal.
Bullion Traders: There were twice as many trades placed as usual – and the buy/sell ratio was a whopping 95:1. Plus, volumes were significantly higher, showing this was not a fluke.
Precious-Metals Refiners: These entities deal in large trades only. None would reveal the quantities of their orders, but two stated they had no sell orders. A third told Jeff they had one sell order out of 100 transactions.
Overall, there was across-the-board purchasing, and on significantly increased volumes. Jeff and his team heard more than once that, "We've never seen anything like this." And that includes the 2008-2009 period.
Seeing all this, it's natural to wonder why the price of gold isn't through the roof right now...
Well, if enough consumers and investors believe the reports of a recovering, albeit anemic US economy, that's what counts in the short term for gold's price.
Those who sold their gold have moved into the broader stock market because that's where the action is.
Much of what the Wall Street crowd buys is based on momentum, and it's no secret that stocks have been going up.
The fact that they believe in the recovery and act accordingly has positively affected the market, while adversely affecting the price of gold.
But that's only temporary – no free lunch lasts forever. As we're forced to face the consequences of our government's money printing, debt, and corresponding inflation, gold will inevitably rebound.
It could – in the face of the right catalyst – soar to new highs beyond anything we've ever seen... and as soon as this year, or 2014. Here's why:
Earlier this year, it was announced that the EU unemployment had risen into record territory, up to 12.2%.
Of course, it won't adopt widespread austerity (pulling back of government spending), any more than the US will. In fact, the Fed is spending $85 million a month to lower long-term interest rates and artificially stimulate the economy.
Yet, what happens when the Fed stops spending $85 billion per month?
The answer: Massive currency devaluation and a corresponding surge in gold prices.
Despite the fact that gold prices have more than quadrupled over the past decade, gold mine production has peaked and is actually trending down.
Indeed, even countries like Chile are showing strong opposition to mining projects.
Prospective gold miners are often treated no differently than those wanting to start a nuclear power plant. And with less and less fertile territory for mining, it will clearly be difficult for gold production to grow far beyond where it is now.
As you've seen throughout this page, there is undeniable, record physical demand for gold right now from central banks, wholesalers, and consumers – and it shows little sign of slowing. All that demand will inevitably drive the price higher.
Sadly, the US and the rest of the world are about to become even more financially shaky. Just look at these facts:
Eventually, the party must end. We must face reality. And those with carefully calculated positions will be ready – just as they have always been throughout history.
How do we know gold will turn around? How high can it go? How long will it take?
One way to estimate is by looking at how it typically behaves after prior big corrections.
The following chart shows gold's three largest corrections since 2001, and calculates the time it took the price to return to the old high and stay above that level:
It took significant time for gold to return to old highs after big selloffs. And the bigger the correction, the longer it took.
Given the economic and geopolitical storm clouds on the horizon and the potential upswing we just outlined, doesn't it make sense to create or add to a core gold position in your portfolio?
There's simply too much money to be made going forward. It's possible gold could soar to well over $2,000.... $3,000... even $5,000 in the years ahead. Yes, it could take years – particularly as the sovereign debt crisis edges closer and closer to Washington.
It should be clear that this pullback in gold is setting up what may be the greatest buying opportunity any of us has seen in years – especially now, with the Fed doubling up on its QE-infinity money-printing schemes.
Do not be fooled by the "recovery." Nothing has changed: Over $3 trillion unbacked paper dollars will have to meet their day of reckoning – and when they do, gold investors are likely to reap incredible rewards.
Seeing all this, you'd think more investors would be stockpiling this precious metal… but they often don't.
Gold trading aside, one big problem with trying to buy physical gold is that the way it's priced is not all that transparent, and dealers aren't really regulated. Often, they are free to charge whatever markups they want.
This just one reason why many investors are reluctant to buy bullion.
Also, many dealers will try to sell you high-margin specialty coins, rare coins, commemoratives, etc., instead of established sovereign bullion coins or ingots and bars.
You end up paying more – way more – for product that is often worth much less.
And you still have all those other worries – about getting prompt delivery, about where and how to store your precious metals... and when it comes time to sell, how to go about it – whom do you sell to and at what price?
Face it, lugging around bullion isn't fun.
And now, with Europe and Washington going broke... with politicians and tax collectors on both sides of the Atlantic hunting down every penny of money they can find to tax... concerns about confiscation and where to store your metals have never been more important.
That's one reason why we're sending you – free of charge – a powerful new report called...
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With the Bargain Buyer's Guide and our close relationships with elite hard asset providers, you'll have access to America's most reputable dealers – wholesalers and refiners you can depend on for every gold purchase you make.
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The bottom line is, if you're interested in owning hard gold, there's no better tool or resource than BIG GOLD for guiding you through the process... connecting you with the right dealers... all while helping you time your purchases perfectly.
There are actually two considerations here.
First, the simple fact is, as I said earlier, there is never a bad time to build a solid core position in precious metals.
Will there be better buying opportunities in the future? Sure. Like all markets, gold certainly fluctuates.
But exposing yourself to the catastrophic, immediate dangers posed by unrestrained Fed money printing and the disappearing dollar as you wait for a better time to buy metals for your core holdings is an extremely dangerous game.
So right off the bat when you join BIG GOLD, editor Jeff Clark will send you the latest issue filled with the information you need to begin building or strengthening your gold position.
Then, once your basic core position is established, the service will help you time additional purchases of gold to increase your protection at the most favorable prices on market dips.
Then, you'll also learn how to balance your holdings of gold with other metals for maximum risk reduction and profit potential.
The secret to maximizing your precious-metals profit potential is to balance your portfolio in ways that let you harness the greatest profit opportunity while managing your risk.
Jeff and his entire team will be there to help you do just that, every step of the way.
It's no secret that gold prices have taken a hit, just as we've covered here and in the webinar.
The real question is, what does it mean? Is this bull market for gold over?
Is it time to take our money off the table and simply go home?
Or is it time to double down – to take advantage of this correction to harness the next explosive run higher?
As you consider those questions, consider these as well:
Did the US's $17 trillion national debt miraculously vanish overnight?
No. In fact, although it seems like only yesterday that we broke through the $17 trillion barrier, we're already on our way to $18 trillion!
Have our $1 trillion-plus annual deficits suddenly disappeared?
No. In fact, by all accounts, we're now looking at deficits of more than $1.6 trillion in the current fiscal year.
Have the nearly 3 trillion unbacked paper dollars the Fed printed so far inexplicably disappeared?
No. In fact, they're still contained on bank balance sheets, potentially ready to crush the dollar and drive gold and silver through the roof at virtually any moment.
Has the Fed abandoned its unlimited money-printing schemes?
No. Actually, the Fed just doubled the amount it's printing each month and also raised its own inflation targets!
Has the world suddenly become a safe, stable place? Are the Israelis, Palestinians, and the rest of the Middle East anywhere near peace?
Of course not.
Make no mistake: Any weakness we see in gold prices here is nothing more than short-term froth; a perfect buying opportunity over the medium to long term.
In fact, all the fundamental indicators we trust are now growing strongly bullish.
There's never been a better time to invest in gold, and there's no better resource than BIG GOLD's newsletter and all its accompanying membership benefits.
We look forward to welcoming you aboard and can't wait to help you build a strong gold position that helps insulate you and your money, while setting you up for tremendous potential profits.
Chief Executive Officer
Casey Research, LLC
P.S. The information you'll be getting, along with the exclusive hard asset service you'll be accessing, puts you on the same footing as some of the most elite gold investors in the world.
It's critical that you take advantage of this opportunity to get in on gold – the right way – before it rebounds following the recent correction.
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