Gold: Price Dynamic Could be Explosive to the Upside Video
For the past several years the precious metals mining industry has been severely hampered by the lack of investment. During this same time period the demand for both physical gold and physical silver has been running at, or creating, new record highs. This is especially true in the Eastern world in countries like China, India and Russia, where we have witnessed both the citizens of these countries and the central bank of China and Russia acquire massive amounts of physical gold, on the open market, month after month for several years.
How can one explain demand continually creating or sustaining record high demand while the suppliers have either been holding steady with their supply to market or, in some cases, declining their output? How does that work? If Apple brings to market a igadget and Apple runs out due to production issues doesn’t the price of that new, and in demand, igadget typically begin rising in price? What if Apple’s latest and greatest igadget were to be at record high demand for any product they have ever produced, what would happen to the price? It would directly reflect the massive increase in demand. What about physical gold and physical silver? The exact opposite has happened. While demand has increased at every turn and production has flatlined or declined the acquisition cost of these items has steadily declined.
I sat down with Murray R. Nye, President and CEO of Winston Gold Mining Corporation, to get his thoughts on what is happening in the gold market, the current state of the mining industry and what impact President-Elect Trump could potentially have on the physical precious metals markets as well as the mining industry.
On November 21, 2016 President Elect Trump released a video statement to the American people about his plans for his first 100 days in office. During this message President Elect Trump stated that in order for a member of Congress to introduce a new regulation that member of Congress would have to willing to remove two regulations that are currently on the books. This is a yuge change of direction. It is way beyond a 180 degree turn. If passed, if could effectively begin the process of de-regulating industries. Not only could this be a potential boon for particular industries it has the potential to provide for a growing economy. Fewer regulations, outside the banking industry, could benefit a great many companies, encourage new companies and help slam the door on government intervention.
We are witnessing the exact opposite in some parts of the world, not only more government regulation but in-your-face-tyranny against the people. 2017 is already shaping-up to be the year of the cashless society. With the recent banning of the most circulated bank notes (debt instruments) in India the absolute explosion in gold demand was unforeseen by the government. Another unintended consequence has been commerce coming to a grinding halt. It is now rumored that martial law will soon sweep over India like a plague intended to control every move made by the people. We have it on very good authority that Korea and Thailand, in the every part of 2017, will be implementing a form of currency/capital control when these two countries eliminate physical coins and force the citizens to use a plastic card to capture the change from every sale. This should be less disruptive to the citizens, while at the same time bending the citizens to the governments/banks will.