Demand for physical gold is collapsing

It is instructive to know the difference between the price of physical gold vs. the price of paper gold, the latter being a highly leveraged financial asset.

https://www.sovereignman.com/trends/demand-for-physical-gold-is-collapsing-21192/

"Tremendous Ripple Effects" - Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade

This could be the black swan that causes commerce to collapse, earnings to nose dive, and markets to plummet.  At the very least, it will be painted as a disaster, justifying an imminent bursting of the bubble.

http://www.zerohedge.com/news/2016-09-02/ripple-effect-could-be-tremendous-retailers-demand-government-bailout-after-hanjin-c

Demand for food stamps soars as cuts sink in and shelves empty

America, home of the poor and hungry...but hey, it's all good as the prices of trophy real estate, rare art, diamonds, and stock markets are all soaring, right?

What Americans don't realize is the Fed's "stimulative" policies are enriching only the rich, while the rest of the economy is suffering.  Printing money out of thin air doesn't stimulate the economy.  It only deepens our country's debt problems.

http://www.theguardian.com/world/2013/dec/24/food-stamps-programmes-cuts-working-americans-texas

Staggering Physical Gold Demand Now Overrunning Shorts

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/24_Staggering_Physical_Gold_Demand_Now_Overrunning_Shorts.html

Kerry Tells Lavrov Chemical Disarmament Demand Was "Rhetorical", Not Meant To Be Proposal

http://www.zerohedge.com/news/2013-09-09/kerry-tells-lavrov-chemical-disarmament-demand-was-rhetorical-not-meant-be-proposal

Gold futures hiccup indicates demand outpacing supply

Mainstream financial media outlet Reuters is going rogue, touting the shortage of physical gold.  lol

http://www.reuters.com/article/2013/07/19/derivatives-gold-idUSL1N0FP1CB20130719

The New Law of Supply and Demand

http://www.silverseek.com/commentary/new-law-supply-and-demand-12264

Here Comes The Next Major Leg Of Gold Demand In China

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/11_Here_Comes_The_Next_Major_Leg_Of_Gold_Demand_In_China.html

U.S. bullion coin demand still at 'unprecedented' levels : Mint

Straight from the horse's mouth.

http://www.reuters.com/article/2013/06/05/us-gold-mint-coin-idUSBRE95417Q20130605

"Demand right now is unprecedented. We are buying all the coin (blanks) they can make," Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint's suppliers.

Demand for gold at record high in Q1

http://www.chinadaily.com.cn/business/2013-05/17/content_16505390_2.htm

Gold Coin, Bar Demand Remains Strong A Week After Price Rout

http://www.kitco.com/reports/KitcoNews20130423_coin.html

Refiners Can’t Keep Up With Massive Global Gold Demand

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/19_Refiners_Cant_Keep_Up_With_Massive_Global_Gold_Demand.html

Gold Supply and Demand Dynamics and the Potential Dollar Endgame

http://www.bullioninternational.com/blog/entry/gold_supply_and_demand_dynamics_and_the_potential_dollar_endgame

Global Demand for Gold & Silver at Unprecedented Levels

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/9_Global_Demand_for_Gold_%26_Silver_at_Unprecedented_Levels.html

Global silver supply and demand

Click on image to enlarge.

I blogged about the US Mint depleting their inventory of Gold Buffalo coins a couple days ago:

http://gregnguyen.blogspot.com/2010/09/us-mint-has-run-out-on-buffalo-gold.html

Last month, they had depleted their inventory of the more popular Gold Eagle coins.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKIgT9DddcYY

The Silver Gold Eagle coins have at times been sold out as well. This is not supposed to happen when an asset is in the throes of a long-running bull market. Higher prices should invite more production.

For instance, if wheat prices soar (like they have been due to drought in Russia), more farmers will allocate their acreage to production of wheat in order to increase profits, eventually bringing prices down to equilibrium. Gold was priced at $35 an ounce until President Nixon took us off the gold standard in 1971. It is now priced at approximately $1300. A much higher price should yield much higher production, as mining companies are motivated to produce higher quantities at inflated prices.

The problem is that an increase in supply has not accompanied gold's price increase, because there is no easy gold to find. Miners have to look far and wide for new deposits, and they have to dig deeper to find smaller amounts of gold (lower grade deposits). Higher gold prices have not fueled increased supply, despite incentive to increase production. Simply put, there is not enough supply to meet increased invesstment demand. Extrapolate that scenario out as you must.

Contrarian natural gas call

http://www.theglobeandmail.com/globe-investor/investment-ideas/features/taking-stock/a-contrarian-makes-another-call-this-time-natural-gas/article1538686/

Disclosure: long shares of natural gas pipeline MLP's

The law of big numbers

As an engineering student, I understood the concepts of linear growth vs. exponential growth. But even I underestimated the practical applications of calculating exponential growth when it comes to energy consumption. Here's a primer on exponential growth and the future impact it will have in our consumption habits in a world of finite natural resources.



Lesson learned? Demand for energy, base metals, commodities, and precious metals will continue to outstrip supply, as world population and the standard of living in emerging countries grow. I'll let readers come up with their own conclusions.

John Embry on gold

John Embry of Sprott Asset Management on the supply/demand dynamics of gold:

http://www.sprott.com/Docs/InvestorsDigest/2009/12_24_2009%20Gold%20bull%20has%20many%20years,%20thousands%20of%20dollars%20to%20go.pdf

Precious metals as an asset class

Relative to other asset classes, the gold and silver sectors are minuscule. If and when precious metals and resource mining companies become popular, the rush into these tiny sectors will drive up prices, as supply won't be able to keep up with demand.

http://dailyreckoning.com/how-to-invest-in-gold-mania/

Disclosure: long gold and silver mining shares.