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by bks » Thu Aug 25, 2011 9:30 pm
chump wrote:
Another note: One would probably have to pay 100% + a premium for physical gold; as opposed to only having to come up with 12% of the value to secure a certificate for gold that is (supposedly) being stored in a Swiss vault. Is that Correct? I ain't buying, but I'm curious: Which is the better deal?
by SonicG » Thu Aug 25, 2011 9:35 pm
How to get $12 billion of gold to Venezuela
Ever since the news broke last week that Hugo Chávez wanted to transport 211 tons of physical gold from Europe to Caracas, I’ve been wondering how on earth he possibly intends to do such a thing.
There are 99 tons already being held at the Bank of England; according to the FT, the plan is to transfer other gold to the Bank of England from custodians such as Barclays, HSBC, and Standard Chartered; then, once it’s all in one place, um, well, nobody has a clue what might happen. Here’s the best guess from the FT:
Venezuela would need to transport the gold in several trips, traders said, since the high value of gold means it would be impossible to insure a single aircraft carrying 211 tonnes. It could take about 40 shipments to move the gold back to Caracas, traders estimated.
“It’s going to be quite a task. Logistically, I’m not sure if the central bank realises the magnitude of the task ahead of them,” said one senior gold banker.
I put the ever-resourceful Nick Rizzo on the task, but he came up with little more: the market in physical gold is tiny, and largely comprised of nutcases. The last (and only) known case of this kind of quantity of gold being transported across state lines took place almost exactly 75 years ago, in 1936, when the government of Spain removed 560 tons of gold from Madrid to Moscow as the armies of Francisco Franco approached. Most of the gold was exchanged for Russian weaponry, with the Soviet Union keeping 2.1% of the funds in the form of commissions and brokerage, and an additional 1.2% in the form of transport, deposit, melting, and refining expenses.
by chump » Thu Aug 25, 2011 10:16 pm
... There are gold reserves worth $10 billion in Tripoli and Gaddafi could have taken some of that amount, he said.
Bengdara said he believed that Gaddafi had fled Tripoli and could be heading toward the Algerian border.
"Now he is looking to pay and corrupt some tribes and some militia to have protection and to create further chaos," he said.
The former central bank governor, who is a director of Italian bank UniCredit, said Libya needed $5-$7 billion as a bridging loan to get the banking system restarted and to pay for imports.
"We don't need donors. Libya is a rich country. The state activities from the Libyan Investment Authority, the central bank and gold reserves are worth $168 billion. But it is all frozen," Bengdara said.
It will take months and a U.N. Security Council resolution before these sums are freed up, he said.
by Nordic » Mon Aug 29, 2011 4:22 pm
by barracuda » Tue Sep 20, 2011 2:49 pm
by Elihu » Tue Sep 20, 2011 3:41 pm
"A greater result is obtained by producing goods in round-about ways than by producing them directly . . . . That round-about methods lead to greater results than direct methods is one of the most important and fundamental propositions in the whole theory of production."
– Eugen von Bohm-Bawerk
by Nordic » Tue Sep 20, 2011 3:48 pm
by Elihu » Tue Sep 20, 2011 4:11 pm
i think that question answers itselfNordic wrote:Also, how would they make all these debilitating loans to people and nations, and thus force everyone into debt slavery, if they had to actually have the gold to loan, rather than literally creating money simply by the act of loaning it??
for example, if it was real depositor money they were loaning, and they actually ran a risk of loss, who would have loaned me the credit card balances i now carry? doh. who would deposit their gold in that bank? puts things in a different light.by barracuda » Tue Sep 20, 2011 4:31 pm
Elihu wrote: well let the games begin!
free coinage at the national mint for gold and silver,
At the dawn of the 20th century, gold was the world's money. A British Pound was 7.32 grams of gold, and the coin which contained that amount of gold was called the "Sovereign"; it had no numeric value engraved upon it, which is significant: gold was money and the Sovereign did not require a numeric value in terms of something else. A US dollar was the name for a monetary unit that contained 1.505 grams of gold. A Mexican peso was the name for a monetary unit that contained .75 grams of gold. And so on, around the world.
The 20th century saw the birth and growth of the power of the State thanks to the idea that the State is to be responsible for prosperity and the amelioration of the economic condition of the poor - the Welfare State, in other words. The Welfare State requires expenses far beyond the resources of the State which can be provided by taxation.
Banking systems all over the world collaborated in providing their respective States with banking money (deposits) and bank notes created out of nothing.
Initially, it was possible to redeem this bank money by claiming gold against the delivery of bank money, but finally in the 30's, paper calims against gold were so excessive that general bankruptcy took place, and since then, no bank note in the world has been exchangeable for gold upon demand.
The last tenuous link between money and gold which existed in the world was expressed by the Bretton Woods Treaty of 1944. Only foreign Central Banks could claim gold redemption for dollars which they held. Their own monetary systems were based on the trust that their dollar claims upon US gold would be honored.
On August 15, 1971 those claims were dishonored. Nixon "closed the gold window" and the dollar, and with it the whole world, was freed from any constraint upon the increase of debt - debt could be "paid" with more debt, forever and ever, or so it was thought.
The international bankers were delighted. At last, they were free from that pesky limiting factor, gold! Free to expand credit, free to create more money ad libitum. The ensuing decades were a banker's dream!
By and large, the change to irredeemable bank money was enormously successful, if the creation of a world gone mad can be considered a success.
As the decades went by, people eventually forgot about the gold into which their bank notes (paper money) had once been redeemable. They began to think about their bank notes as money itself, when they are not so by any means; they are only a formerly redeemable representation of actual gold money.
The bank notes bear numbers which originally referred to the weight of metal they represented. The world has forgotten this entirely and now people everywhere regard the bank note as money itself and the quantity of money as equivalent to the number on the note.
The population of the globe today thinks of money in terms of numbers which refer to no quantity of anything. The more numbers you can add up, the wealthier you are! The world's money is simply numeric.
A silver coin with no engraved face value can be granted a numeric value by means of an official quote on the part of a State Authority, either by the Central Bank, or preferably by the Treasury itself.
The numeric value will overvalue the silver in the coin, ideally by a small percentage. This numeric value, granted by the Central Bank or Treasury, will increase as the price of silver rises; the rise in the price of silver will be inevitable, due to the constant increase in the volume of numeric paper money and bank deposits.
The overvaluation of the silver coin by the Treasury or other Authority creates a profit for the Treasury or other Authority that mints and grants a virtual monetary value to the coin. This is can be called either a subsidy or a tax paid by the population to the issuing institution. This is a one-time-only cost of furnishing real, tangible silver money for the population, and it will willingly be paid by the population. The cost will not be paid by the Monetary Authority, but paid by the population to the Monetary Authority.
Temporary falls in the price of silver will not be allowed to affect the official numeric value, only rises, just as the value of a dollar bill does not depend upon the value of the paper it's printed on. (Though rises in the price of paper and costs of printing are making the printing of paper dollars uneconomical already, as shown by the attempts to introduce metallic dollars into circulation in the U.S.) A fall in the price of silver would mean greater profit for the Monetary Authority, and a larger over-valuation of the silver in the coin, regarding which the public will be totally indifferent. Absolutely no one will wish to turn in his over-valued silver coins for paper bills.
This coin will never disappear from circulation, as it bears no engraved value which cannot be modified when the intrinsic value of the silver in the coin begins to approach its engraved value.
This coin, due to its superior quality as incorporating a quantity of silver, will immediately be snapped up by the population and retained as savings. Daily expenses will be met with numeric money but silver will be kept back as savings, useable in emergencies directly as money in daily transactions.
The creation of this silver coin, now become money with a virtual numeric value, makes its use possible in numeric economic calculation and in daily needs in case of pressing circumstances. It can co-exist with numeric money. Whoever pays with the coin, the recipient of the coin will probably retain it in savings. It can be deposited for credit in a bank at its numeric value, in which case the bank manager will probably keep it for himself, by substituting an equivalent amount of paper money out of his own pocket for the silver coin.
This plan for monetizing silver is not a plan for "free coinage of silver". The Mint will coin such quantities of silver coins as demanded by the public. If the coin is scarce, a premium will be paid by savers anxious to own this coin. The Monetary Authority will be charged with the task of minting quantities of this coin sufficient to satisfy popular demand. If the coin is so abundant that its quantity exceeds the capacity for savings of the population, the excess will return, via the banking system, to the Central Bank, until the desire for saving on the part of the population once more manifests itself in further demand for the coin.
Thus, silver will come once again into use as money, with the help of a virtual numeric value granted by a Monetary Authority.
It is foreseeable that masses of this silver money, put away in savings, will be in the hands of the people as numeric money destroys itself, as it appears to be doing through its issuance in astronomic quantities. When the pernicious numeric money destroys itself, silver will remain in the field! When the Central Banks collapse through their own actions, silver will once again take its rightful and reasonable place in the lives of people, by default.
World demand for this coin, ideal for savings, will be so great as to drive industrial use of silver into second place in the determination of the price of silver. As silver is sought as a monetary refuge, minting of coins will become so great that demand for silver as money will determine limits to its industrial use and drive the price so high that the old ratio of 16:1 might become a reality once again. But, that would be far in the future.
The fixed ratios between silver and gold which existed in the past were actually mistakes of policy and theoretically, it is unsound to look for such a fixed ration, because of the difference between gold and silver. Gold does not have a diminishing marginal utility, while silver does have such a diminishing marginal utility. This indicates that the ratio between silver and gold must be a fluctuating ratio, where it is the value of silver with relation to gold that fluctuates.
It is important to place monetized silver in the hands of people once again so that the idea of silver as money does not totally disappear from the memory of mankind.
Our very civilization depends upon the use of real, physical money. We cannot have an industrial civilization along with the use of numeric money which is now either paper, or in bank accounts nothing more than imaginary money.
Man cannot deal with reality with what is the stuff of numbers of no substance.
Silver must be first in circulation, before gold, because silver is for use by the masses and gold is much more special. The way back to gold, which is so vitally important, is through silver as money in the hands of the people.
by IanEye » Tue Sep 20, 2011 5:02 pm
Man cannot deal with reality with what is the stuff of numbers of no substance.
by Elihu » Tue Sep 20, 2011 5:55 pm
no, just standardized as to design, weight and purity. there are alot of coins out there but the coin sanctioned by the national or state gov would be the standard. people could reasonably rely on it and the other coins would be measured by it. other coins are also freely spendable but the idea being the standard coin would be the most efficient. the mint is there to coin other gold and silver into the standard at the people's option.would these coins be denominated?
imo, the situation sets up wonderfully because, initially, not knowing how to value goods and services in ounces, people will first do a conversion of a frn numeric price into ounces before transacting. i would be fascinated to see if, eventually and perhaps quickly, prices would be quoted in ounces instead of frn #'s. paper revolves around gold and not the other way round. i think people would embrace the chance to negotiate with both mediums in hand. they would quickly determine which gives them the most bargaining power and which they prefer. that choice thingy. it's a good thing. imo.The world has forgotten this entirely and now people everywhere regard the bank note as money itself and the quantity of money as equivalent to the number on the note.
by JackRiddler » Tue Sep 20, 2011 6:28 pm
http://financialedge.investopedia.com/f ... z1YX977O11
Who Holds The Largest Gold Reserves?
Posted: September 6, 2011 11:06AM by Michael Sanibel
The chemical element Au with atomic number 79 "has never been worth zero." King Tutankhamen and the Incas had at least one thing in common - they understood the value and scarcity of gold and used it as a symbol of wealth and power. Nothing has changed since.
Even though gold is no longer used to back currencies like the dollar, it is still stockpiled by countries around the world. Since the price of gold has fluctuated dramatically, the holdings are expressed in metric tons (or tonne = 1000 kg) as documented by the World Gold Council in August 2011. One U.S. ton is approximately 0.9 tonnes. Here's a look at who holds the largest gold reserves and the amount of holdings.
TUTORIAL: The Industry Handbook: Precious Metals
United States - 8,133.5
While the U.S. permanently abandoned the gold standard in 1971, it has the largest holdings of any country by a wide margin. While most of the gold is held at Fort Knox in Kentucky, gold is also held by the U.S. Mints in Philadelphia and Denver and several other locations.
Germany - 3,401.0
Germany's central bank, the Deutsche Bundesbank in Frankfurt, is the manager of the country's reserves. However, reports have surfaced that the bulk of Germany's gold is in the physical custody of the New York Federal Reserve. Two years ago, international journalist, Max Keiser received an acknowledgment of these holdings in the U.S. directly from the Bundesbank. (The policies of these banks affect the currency market like nothing else. For more, see Get To Know The Major Central Banks.)
International Monetary Fund (IMF) - 2,846.7
The IMF overseas the economic activity of its 187 member countries around the globe. While its gold policies have changed over time, the reserves are intended to aid national economies and stabilize international markets. Depending on market conditions, it will buy or sell portions of its reserves in support of specific economic initiatives.
Italy - 2,451.8
Italy's reserves are held and managed by the Banca D'Italia. Italy is one of the PIIGS nations (along with Portugal, Ireland, Greece and Spain), all of which are suffering financial woes that threaten the entire eurozone. Parliament approved austerity measures in exchange for financial assistance, but the country is also embroiled in a political crisis that centers on Prime Minister Silvio Berlusconi. In addition to being charged with paying for sex with a minor, his government is under investigation for influence peddling and corruption.
France - 2,435.4
The Banque de France is the central depository for France's gold reserves.
After World War II, the Bretton Woods Agreement established a standard that pegged the dollar at the gold exchange rate of $35 (USD) per ounce. Subsequently, President Charles de Gaulle reduced French dollar reserves by exchanging them for gold from Fort Knox. As a result of this action and other economic considerations, President Richard Nixon ended the convertibility of dollars to gold in 1971. (For related reading, see The Midas Touch For Gold Investors.)
China - 1,054.1
While the world's most populous country is sixth on the list of total holdings, gold accounts for only 1.6% of China's foreign reserves. It is the largest foreign holder of U.S. Treasuries with a total investment of $1.166 trillion as of June 30, 2011.
China is the world's largest producer of gold and can buy gold from its own mines without reporting those transactions publicly. It has reasons to buy gold off the open market since open market transactions would push the price even higher and devalue its U.S. Treasury holdings.
The Wall Street Journal has reported that China dramatically increased its gold purchases in response to inflation fears. Because of possible stealth transactions, China's total gold holdings and the prices it pays are uncertain.
Switzerland - 1,040.1
Switzerland's seventh place rank on this list is notable considering its economy is the 38th largest and its population is the 95th largest in the world.
The Swiss National Bank is charged with managing the gold reserves and the country's monetary policy.
Russia - 775.2
Russia's gold reserves are in the custody of the Central Bank of the Russian Federation. The country has been on a buying spree, increasing its holdings by 21% in 2009 as it opened several new mines, and another 24% in 2010. The Wall Street Journal has reported that Russia plans to buy an additional 90 tonnes per year to replenish its reserves.
Japan - 765.2
Gold accounts for only 3.3% of Japan's total foreign reserves which are managed by the Bank of Japan.
Netherlands - 615.5
The gold reserves and national finances are managed by the Netherland Bank. (For related reading, see The Currency Board: Understanding The Government's Bank.)
TUTORIAL: Commodities: Gold
The Bottom line
The biggest holders of gold are governments, central banks and international entities that currently account for 30,500 of the world's estimated 160,000 tonnes. The current rate of new production from mining is about 2,497 tonnes per year. As the price has risen, more mines have become economically feasible to open or reopen.
Gold has gotten much attention lately as the price has risen to new highs, although it is still well below the January 1980 inflation-adjusted high of about $2,400 per ounce. Unlike money, you can't print more gold, so it's likely to continue to be a safe haven investment during uncertain economic times. (For related reading, see Gold: The Other Currency.)
by 2012 Countdown » Tue Sep 20, 2011 6:39 pm
by eyeno » Tue Sep 20, 2011 7:24 pm
by freemason9 » Tue Sep 20, 2011 9:11 pm
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