Foreign Gold Demand Grows While Mine Supply Decreases – This is the Real Story
Foreign Gold Demand Grows While Mine Supply Decreases – This is the Real Story by Adem Tumerkan – Palisade Research
These are some of the same issues we have brought to the table, most notably the fact the USGS has stated at current prices and rate of production gold will run be exhausted from the earths crust by 2034 – 90% of us reading this will see that date.
Emerging markets are starting to get restless with the U.S. about gold and the dollar’s hegemony.
Just last week, Turkey announced that during 2017 they had withdrawn about 27 tonnes of gold from the New York Federal Reserve’s vault.
The Turkish Central Bank also reported that their gold holdings increased by 83 tonnes during 2017.
And adding salt to the wound, the Turkish Dictator President (Erdogan) said that all International Monetary Fund (the IMF) loans should be paid in gold – not dollars.
“What I’m saying is that these debts should be in gold. Because at this point the karat of gold is unlike anything else. The world is continually putting us under currency pressure with the dollar… We need to save states and nations from this currency pressure.”
I’ve written about Turkey and their worsening currency crisis, so gold for them is important.
But these kinds of comments are publicly discouraging to the U.S. and the dollar.
Countries understand the free-lunch the U.S. has. . .
If all debts are in dollars, the U.S. can print up as much as they want to pay off their own debt. But other countries can’t do that. They’re subjected to the dollar and its inflation or deflation; the Fed’s rate hikes and rate cuts.
If it was just Turkey, no one would care.
But it’s not. . .
Here are just some of the countries moving to secure their own gold and avoid the ‘dollar dominance’.
Russia is aggressively adding gold to their vaults.
In March they added 300,000 ounces of gold. Their gold reserves are about to eclipse 2,000 tonnes.
This is more gold than what China officially reports.
Mentioning China, it is difficult to gauge how much gold they have and are continuing to buy.
Just in-case you didn’t know, China is also the world’s largest producer of gold.
If you look at the physical gold withdrawals from the Shanghai Gold Exchange (SGE) – the best measure of the Chinese gold market – the demand is growing.
China also launched the Petro-Yuan last month which allows them to bypass the U.S. Dollar and trade gold for oil.
There is a growing list of countries publicly pulling their gold out from the U.S. Vaults.
Germany, Netherlands, Austria, Belgium, Russia, China, Turkey…
They all want their gold back – at least out of the U.S.
It’s not hard to see that the price of gold is setting up for a huge run.
Not only is global demand strong, but the supply side is what I’m really excited about.
For instance, take a look at the collapsing gold output from Barrick Gold (NYSE: ABX) – one of the world’s largest producers. It’s been in steep decline for years – down nearly 50% since 2012.