MNeagle
17th April 2013, 08:21 PM
Submitted by Tyler
Durden (http://gold-silver.us/users/tyler-durden) on 04/17/2013 21:23 -0400
High Frequency Trading (http://gold-silver.us/taxonomy_vtn/term/8356)
High Frequency Trading (http://gold-silver.us/taxonomy_vtn/term/140)
New Normal (http://gold-silver.us/taxonomy_vtn/term/11402)
Warren Buffett (http://gold-silver.us/taxonomy_vtn/term/9041)
One of the more curious revelations of the New Normal is the fundamental
dichotomy when investing between paper "investors", or those who chase
returns based on intangible, fiat-based and central bank-backed promises, such
as capital appreciation or cash flow streams, and those who would rather convert
their paper money into hard assets, even if said assets can not be, in the
immortal words of Warren Buffett, fondled, or otherwise generate a
cash-based return. Such as gold.
Today provides perhaps the perfect example of how the former increasingly
trade on nothing but momentum and speculative mania (such as the previously
reported record
inflow (http://www.zerohedge.com/news/2013-04-17/late-party-after-203-annualized-surge-record-number-foreigners-buy-japanese-stocks)of foreign capital into the Japanese stock market well after the bulk
of the easy upside has already been made and at this point there is mostly
downside) and where buying begets only more buying, while rampant selling only
leads to liquidations, while those who invest in hard assets (and thus have
little to no leverage) have become the true value investors, purchasing
more as the price of the underlying asset drops. Yes,
a novel concept to most High Frequency Trading vacuum tubes, and the
momentum-chasing, equity trading "expert" du jour, but nothing new to
Indians (http://www.zerohedge.com/news/2013-04-16/indias-response-gold-sell-buying-frenzy),
Australians (http://www.theage.com.au/business/markets/golden-times-for-perth-mint-20130417-2hzv7.html),
Chinese
(http://www.chinanews.com/shipin/2013/04-17/news202021.shtml)or the Japanese (http://www.reuters.com/article/2013/04/16/us-japan-gold-idUSBRE93F18I20130416).
And apparently to at least some Americans.
According to today's data from the US
Mint (http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013), a record 63,500 ounces, or a whopping 2 tons, of gold were
reported sold on April 17th alone, bringing the total sales for the
month to a whopping 147,000 ounces or more than the previous two months
combined with just half of the month gone.
Punchline number one, as the chart below shows, is that the more the price of
gold fell, the more aggressive the purchases of physical gold through the Mint
became, rising to 96,500 oz in the last two days alone. Buying more
of something you want when the price drops: what a stunning
concept - explain that to the algos who nearly crashed the German
stock market overnight (http://www.zerohedge.com/news/2013-04-17/closer-look-todays-german-stock-market-flash-crash).
Punchline number two, of course, is that the US mint charges a hefty premium
for purchases: much more so than traditional vendors like Apmex or Gainesville
Coins, and is usually the last resort for when nobody else has any physical at a
lower premium to spot (or any metal in inventory).
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/04/Gold%20Mint_0.jpg (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/04/Gold%20Mint.jpg)
So how long until the US mint "runs out" of American Eagles and Buffaloes in
inventory, along with the depletion of all other precious metal vendors? And
what happens if the price of paper gold hits zero (or goes negative) courtesy of
bank and financial institution liquidation selling of paper derivative contracts
nebulously referencing some yellow metal somewhere, even as suddenly there is no
physical to be delivered to anyone, anywhere?
Inquiring minds really want to know.
h/t Alex, source US
Mint (http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013)
http://www.zerohedge.com/news/2013-04-17/us-mint-sells-record-63500-ounces-gold-one-day
Durden (http://gold-silver.us/users/tyler-durden) on 04/17/2013 21:23 -0400
High Frequency Trading (http://gold-silver.us/taxonomy_vtn/term/8356)
High Frequency Trading (http://gold-silver.us/taxonomy_vtn/term/140)
New Normal (http://gold-silver.us/taxonomy_vtn/term/11402)
Warren Buffett (http://gold-silver.us/taxonomy_vtn/term/9041)
One of the more curious revelations of the New Normal is the fundamental
dichotomy when investing between paper "investors", or those who chase
returns based on intangible, fiat-based and central bank-backed promises, such
as capital appreciation or cash flow streams, and those who would rather convert
their paper money into hard assets, even if said assets can not be, in the
immortal words of Warren Buffett, fondled, or otherwise generate a
cash-based return. Such as gold.
Today provides perhaps the perfect example of how the former increasingly
trade on nothing but momentum and speculative mania (such as the previously
reported record
inflow (http://www.zerohedge.com/news/2013-04-17/late-party-after-203-annualized-surge-record-number-foreigners-buy-japanese-stocks)of foreign capital into the Japanese stock market well after the bulk
of the easy upside has already been made and at this point there is mostly
downside) and where buying begets only more buying, while rampant selling only
leads to liquidations, while those who invest in hard assets (and thus have
little to no leverage) have become the true value investors, purchasing
more as the price of the underlying asset drops. Yes,
a novel concept to most High Frequency Trading vacuum tubes, and the
momentum-chasing, equity trading "expert" du jour, but nothing new to
Indians (http://www.zerohedge.com/news/2013-04-16/indias-response-gold-sell-buying-frenzy),
Australians (http://www.theage.com.au/business/markets/golden-times-for-perth-mint-20130417-2hzv7.html),
Chinese
(http://www.chinanews.com/shipin/2013/04-17/news202021.shtml)or the Japanese (http://www.reuters.com/article/2013/04/16/us-japan-gold-idUSBRE93F18I20130416).
And apparently to at least some Americans.
According to today's data from the US
Mint (http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013), a record 63,500 ounces, or a whopping 2 tons, of gold were
reported sold on April 17th alone, bringing the total sales for the
month to a whopping 147,000 ounces or more than the previous two months
combined with just half of the month gone.
Punchline number one, as the chart below shows, is that the more the price of
gold fell, the more aggressive the purchases of physical gold through the Mint
became, rising to 96,500 oz in the last two days alone. Buying more
of something you want when the price drops: what a stunning
concept - explain that to the algos who nearly crashed the German
stock market overnight (http://www.zerohedge.com/news/2013-04-17/closer-look-todays-german-stock-market-flash-crash).
Punchline number two, of course, is that the US mint charges a hefty premium
for purchases: much more so than traditional vendors like Apmex or Gainesville
Coins, and is usually the last resort for when nobody else has any physical at a
lower premium to spot (or any metal in inventory).
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/04/Gold%20Mint_0.jpg (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/04/Gold%20Mint.jpg)
So how long until the US mint "runs out" of American Eagles and Buffaloes in
inventory, along with the depletion of all other precious metal vendors? And
what happens if the price of paper gold hits zero (or goes negative) courtesy of
bank and financial institution liquidation selling of paper derivative contracts
nebulously referencing some yellow metal somewhere, even as suddenly there is no
physical to be delivered to anyone, anywhere?
Inquiring minds really want to know.
h/t Alex, source US
Mint (http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013)
http://www.zerohedge.com/news/2013-04-17/us-mint-sells-record-63500-ounces-gold-one-day