I've been accused of being anti-gold which says more about the accuser than it does about me.
I couldn't care less whether the price of gold is going up or down, I only care that it be moving.
Here's my deep, dark secret.
I'm a silver bug when silver is cheap.
It's not cheap right now.
I learned quite a bit about the Devil's Metal during the Hunt brother's run-up.
I learned that when the head of one of the largest-in-the-world commodity traders says about two of the top-10 richest American billionaires, "Those Hunt boys don't know what deep pockets are", that one should really, really pay attention.
I learned that having the exchanges go 'liquidation only' on you can be brutal if one is long and margined.
I learned there is only a bit of intrinsic value for silver which stems from its use as an industrial metal.
I also learned there is no intrinsic value for gold, that it is the commodity least susceptible to analysis and as close to a pure greed-n-fear artifact as there is in this world.
Armed with the understanding that psychology trumps all when talking gold here's FT Alphaville's Izabella Kaminska:
The paradox of gold commentary
Compare and contrast the following from a note by GoldMoney’s head of research Alasdair Macleod that landed in the collective hands of FT Alphaville on Friday.
Here’s the original version:
There can be little doubt from these actions that China is preparing herself for the demise of the dollar, at least as the world’s reserve currency. Central to insuring herself and her citizens against this outcome is gold. China has invested heavily in domestic mine production and is now the largest producer at an estimated 440 tonnes annually, and she is also looking to buy up gold mines elsewhere. Little or none of the domestically mined gold is seen in the market, so it is a reasonable assumption the Government is quietly accumulating all her own production without it becoming publicly available.Here’s the same version with the roles reversed (where it stated China, we’ve replaced with the US, and where it said gold, we’ve replaced with dollars.):
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The West selling its stocks of gold has become the biggest strategic gamble in financial history. We are committing ourselves entirely to fiat currencies, which our central banks are now having to issue in accelerating quantities. In the process China and Russia have been handed ultimate economic power on a plate.
There can be little doubt from these actions that the US is preparing herself for the demise of gold, at least as the world’s reserve currency. Central to insuring herself and her citizens against this outcome is the dollar. The US has invested heavily in domestic dollar production and is now the largest producer at an estimated $16.7 trillion, and she is also looking to buy up dollars elsewhere. Little or none of the domestically mined dollars are seen in the market, so it is a reasonable assumption the Government is quietly accumulating all her own production without it becoming publicly available.The point of course is that all the accusations made about the US dollar fiat economy apply in equal measure to what Mr. Macleod alleges China is doing with gold — and to any economy allegedly trying to bolster its system with gold stock, which it too is mining at record sums....MORE
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China selling its stocks of dollars has become the biggest strategic gamble in financial history. They are committing themselves entirely to gold, which their central banks are now having to mine in accelerating quantities. In the process the US and Europe have been handed ultimate economic power on a plate.
