By all accounts, Central Banks including countries considered emerging markets are net purchasers of Gold lately.
Russia has been spockpiling to the tune of $500M per month.
China has been stockpiling.
Yet, the prices of PMs haven't yet gone parabolic.
Understanding why bankers,autocrats, oligarcs etc are accumulating is critical to seeing where this is a ll headed.
Although every country wants you to believe they believe in the full faith of the US Govt. China is a net seller of our binds. Russia is a net seller of our bonds.
If not for the QE programs, interest rates would be considerably higher. Remember, WE are buying our own bonds with the sole purpose of keeping irates at zero. Our banking system depends on it.
But all at the expense of the consumer who cannot use this low cost money other than becoming a serial refier.
The playing field already expanded, and is now about to contract.
Ben's wealth effect program will not last forever.
I give it 3 months or so.
Enjoy it while you canand make the most out of it.
In keeping with full disclosure, I want to clarify my intent and my position.
I believe all of the above to be true.
But how will these actions impact us as investors?
1-I am 90% certain PM swill continue their long term ascent AND as the free markets get their grips into it,prices will not be artificially held down much longer.
2-The 90% certainty is based on a continuation of easing and printing by the US, shortly Europe and China.
3-It's also based on the incumbant O'Bama being re-elected.
4-I believe miners (and our streamers) will participate even outperform the physical for a while.
5-My crystal ball gets murky 4 months out, not for physical, but for equity markets.
On one hand, the market requires juiced which, by all accounts it will get. BUT,that's too easy. And we allMUST know by now, nothing is easy and Mr. Market will kick your butt if you believe that.
6-So, part of me sees PMs continue to rise and the rest of the market has a bad day at Black Rock.and the other part of me sees the markets going to 16,000 as folks start to pile in to the only game that will keep their inflated tank of gas, or deflated fiat dollars in line with the cost of veal chops.
But any way I cut into it, if theur continue to print, we continue to shine our coins.