Q1. If you say that gold "is an asset that people want to hold when they’re very fearful about potential financial market catastrophe or economic troubles" or that gold is an "asset that people hold as a sort of disaster insurance" and someone points out that you hold around 70% of your reserves in gold, you should:
A. say that you are not fearful at all because "under the wise and skillful leadership of Chairman Bernanke, the Fed helped stabilize the financial system, arrest the steep fall in the economy, and restart growth."
B. say "does 70% allocation to gold sound like I think everything is peachy pie, you moron?"
C. just say that "it is tradition, a long-term tradition" to hold gold as "a form of reserves" and tell them to keep calm and carry on doing what you say and not what you do.
D. Note the person's name and forward it to the NSA.
Q2. If you say that "nobody really understands gold prices and I don’t pretend to understand them either" or that you "don’t think anybody has a very good model of what makes gold prices go up or down" and someone points out that it isn't very smart to invest 70% of your reserves in an asset you don't understand, you should:
A. say that when you have "a lock on the economics world" and don't allow "room for other views", you don't need to understand anything nor does it matter if you get it wrong.
B. say "that was just to scare people off investing in gold, because do you really think we don't understand gold when we employ over 300 Ph.D. economists and have written hundreds of papers on gold, you moron?"
C. just say that "it is tradition, a long-term tradition" to hold gold as "a form of reserves" and tell them to keep calm and carry on doing what you say and not what you do.
D. Note the person's name and forward it to the NSA.
Answer key: anything exept B.
Hi Bron,
ReplyDeletewhat I am wondering: Who is selling to the Perth Mint? I mean where do you get your physical from in percentages roughly?
Another thing is the pricing. How does the PM price their physical products? Do you stand up in the morning, look at the "official" fixing and therefore sell it at, let's say $200/oz? Sure not, but how does it really work?
Greets, AD
Frigging Ace this, Bron!
ReplyDeleteand, that's a good question, AD, on mint pricing. I want to know too
SK
What's so difficult to understand? If you apply Ockham's razor then gold is the highest quality, so most valuable of all. What is a simpler explanation?
ReplyDeleteGold is the standard, not a central banker's obligation.
Central bankers may, or may not, understand gold but the fact is they don't have to as long as gold 'experts' espouse endless reams of bullshit about quantity, manipulation, basis.....
We refine all of Australia's gold production as well as from surrounding countries so that is where most of our physical comes from. We also do some scrap gold from Asia.
ReplyDeleteThe London Fix is only for a point in time, we don't "look" at it when we wake up because it has passed.
We base our prices on what miners and bullion banks will trade at in the over the counter wholesale market. See these posts for more info
http://goldchat.blogspot.com.au/2008/07/gold-value-chain-part-iv-trading-prices.html
http://goldchat.blogspot.com.au/2008/07/gold-value-chain-part-v-trading-loco.html
On further thought, spew might be a better description. Spew endless reams of bullshit.
ReplyDeleteHi Bron,
ReplyDeletethank you so much for your insights and efforts, guess I have to "RRTFB" more ;)
Keep up the great educational work.
Greets, AD