Thursday, December 01, 2011

Hinde Capital: Future "transfer[s] of gold will take place at much higher prices"

Remember when Anthony 'Tweet My' Weiner was attacking legitimate gold retailers like Goldline?

He said it was because they were allegedly ripping off consumers, but the real reason was to silence popular conservative pundits like Mark Levin and Glenn Beck by intimidating their advertisers. Stalin-esque, eh?

So how's that $700/oz. gold look now, Weiner?

Because gold's tracking over $1,700/oz., there's an argument to be made that it's risen too far, too fast.

That doesn't appear to be Hilde Capital's opinion, however:


Gold investor holdings stands at $2.0 trillion (Nov 2011), 0.96% of Global Financial Assets (GFA). In 2000 gold holdings were worth $227 billion, or 0.2% of GFA, but this isn’t the whole story...

• Today 0.2% would be worth $1.45 trillion ($1800 troy oz. Au) or 0.7% of Global Financial Assets (GFA).
• Therefore new investment gold only provided 0.26% increase in % gold holdings.
• In 1968 to 1970 % gold holdings of GFA = 5%, to attain this % at current values of gold ($1,800), $10.4 trillion dollars need to be invested...
• $10.4 trillion is equivalent to 5.8 billion troy oz at $1,800 or 1.2 x gold ever produced.
• 5.8 billion troy oz. is 3.6 x known gold reserves (based on US Geological Survey).
• Clearly not only is public ownership miniscule, but to return to the 70s % holdings requires too much gold than these prices can handle.
• This transfer of gold will take place at much higher prices.

From their lips to Bernanke's ear.

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