Everybody in the Industry Knows the US Doesn't Have the Gold

Dollar Colapse ^ | Janurary 31, 2013 | John Rubino

[Diana in Wisconsin]

In this week’s talk with National Numismatics’ Tom Cloud, he explains why Germany’s gold repatriation is just the beginning, the US Mint’s silver shortage will continue, and the big money is right about precious metals.

DollarCollapse: Hi Tom. It’s been an eventful few weeks in precious metals, though you wouldn’t know from the price action alone. Hit the high points for us.

Tom Cloud: Germany’s gold repatriation is obviously a game changer. They got all their gold back from France right away. But the US government put them off for 7 years, probably by offering them some kind of premium to take their gold back slowly. More gold, Treasuries, no one knows what exactly but clearly it was a big inducement. It’s also clear that Germany won’t be the last country to bring its gold home. The Netherlands is next and then probably Switzerland. It’s become a game of musical chairs. No one wants to be caught when the music stops. And make no mistake, it will stop. Everybody in the industry knows the US doesn’t have the gold and can’t deliver it. They’ve leased it all out.

It’s important to understand that there are two big stashes of gold in the US. Fort Knox supposedly holds the gold that belongs to us. And the New York Fed holds gold that has been deposited by other countries for safe keeping. That’s where Germany’s gold would be if the US hadn’t leased it out.

DC: Then there’s the US Mint running out of silver eagles.

[Diana in Wisconsin]

Ping-a-Roony!

[blam]

Marc Faber "You Don't Own Gold And You Are In Great Danger"

[Farmer Dean]

So our government leased out other countries gold without their knowledge or consent?Who’s going to prison over this?
Better question would be,who’s gonna get killed in car accidents,etc.....

[Diana in Wisconsin]

You both know where MY gold is...

...in my bug-out bunker...

...guarded by my Pitt Bull, aptly named, ‘Dick Cheney’!

:)

[Lazamataz]

Yes, I’m observing right now through binoculars....

[bk1000]

Why would gold be ‘leased out’?

[agere_contra]

Don’t rock the boat Germany! Give the rest of us time to buy physical at these ludicrously cheap prices!

I am up to a paltry 50 Kg of bullion silver now; hidden away in my volcano fortress. I need a few years to catch up with your colossal pile of treasure :0)

[agere_contra]

To make a short-term return on it.

[ClearCase_guy]

Why would gold be ‘leased out’?

I think that ‘leased out’ is a technical term used in high finance that means "we gave it to China".

[Diana in Wisconsin]

In all seriousness, silver is where it’s going to be at! My gold will eventually be traded in for silver.

And lead. ;)

[Diana in Wisconsin]

I thought I felt a cold finger down my back...*SHIVER*

And if you’re within range of the kitchen, make yourself useful and go make me a sandwich!

[agere_contra]

In all seriousness, silver is where it’s going to be at!

Absolutely agree. I expect a price of at least 300 GBP/450 USD per troy oz of Silver before we are through. That's in today's currency, unadjusted for inflation.

I imagine that the likely trigger-event that will finally launch the PMs towards their true values will be one of the following:

Countries like Germany asking for their re-hypothecated Gold back

Basel III being fully adopted with Gold as a tier I asset.

A crippling shortage of physical silver for industrial use.

Japan's citizenry and pension funds putting 1% of their assets in physical precious metals

My guess is that the Japanese trigger will be the one that does it. In the 3rd quarter of this year Japan's current account balance will go negative, according to Kyle Bass.

[Lazamataz]

And if you’re within range of the kitchen, make yourself useful and go make me a sandwich!

[Diana in Wisconsin]

Nicely played! :)

[Lazamataz]

Thanks. It’s a Lazamataz Original, inspired by our exchange. I’m working on a best-copy version, watermarked with my name, and hope it recieves wide distribution.

[coloradan]

The Mint's silver shortage could be as simple as having no US-made material at the moment (which is required by law) or having some sort of bottleneck on production of acceptable planchettes. Or it could be that a real shortage is actually at hand. But not having hundreds of tons of gold is heart-stoppingly huge. (To say nothing of not having several thousand tons of gold.) The repatriation rate for Germany's gold corresponds to having a single Cessna 152 flight per day, loaded to capacity (but making an allowance for the weight of the pilot). I'd love to tag along on one of the flights - but of course I weigh enough that hardly any gold could come on that flight, the '152 being a rather small 2-seater aircraft.

[COBOL2Java]

[Georgia Girl 2]

There hasn’t been any gold in Ft. Knox in 25 years. This country is broke and heading for a total collapse. If you don’t have gold or silver and plenty of food your life is going to be difficult.

[KarlInOhio]

Why would gold be ‘leased out’?

To sell it short. I borrow gold from you, sell it and at a later time I have to buy it on the open market and return it to you. If the price goes down I make money from selling high and buying low.

The tricky part is when I just borrow it from your broker/storage company without your permission based on the idea that the broker has enough gold in his possession where if you want it back he can always give you some. Now if more people want their gold than he physically has anymore you might get a run on the bank. That is the house of cards of fractional reserve banking.