-- Posted Tuesday, 4 June 2013 | | Disqus
By Michael J. Kosares
"It is related of the illustrious Sandy McHoots that when, on the occasion of winning the British Open Championship, he was interviewed by reporters from the leading daily papers as to his views on Tariff Reform, Bimetallism, the Trial by Jury System, and the Modern Crave for Dancing, all they could extract from him was the word 'Mphm!" Having uttered which he shouldered his bag and went home to tea. A great man. I wish there were more like him." - P.G. Wodehouse
Those of you who have kept up with this newsletter over the years will recognize the quote from Wodehouse gracing this issue's masthead. It's been there before -- almost always at summer's start -- and almost always with a reflection that perhaps we can learn something from Mr. McHoots.
It has been an interesting past 60 days or so. Gold cratered and no one seemed to know why. The stock market went higher defying gravity, the fundamentals and, some said, common sense. Bonds headed south because someone whispered a caution to the Wall Street Journal which passed it along to the rest of the world. It was this: The Fed might stop printing money. The Federal Reserve board clarified the matter by saying, it just might do that, but then again it might not. The politicians globally legislated, or failed to legislate, squabbled, pontificated and pandered to a citizenry that did not seem to take much notice.
In other words, not much has changed since the time of the illustrious Mr. McHoots (the 1920s). Nor has the passage of time done much to alter the reasons why the prudent citizen/investor might purchase gold. The fact of the matter, though rarely discussed, is that gold ownership has more to do with personal philosophy than it does finance and economics -- though by that I do not mean to diminish the importance of financial markets, or politics for that matter, in our everyday lives. Things, though, do need to be kept in perspective and gold helps toward that goal -- once one understands its true nature. My guess is that McHoots could afford a healthy disdain for current events because he was a gold owner -- and probably in the form of British sovereigns. A great man indeed. . . . .
This is the time of year when the markets traditionally take a break, but it is also a time when events can take us by surprise. Keep an ear to the rail (or an eye on the screen), but have a pleasant summer.
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What the charts on Eagle coin sales are telling us
The public's motivation for buying gold and silver
Editor's note: Some of you may have caught Wodehouse's casual mention of "bimetallism," a convenient segue into a couple of charts we developed at USAGOLD on American Eagle gold and silver bullion coin demand featured below.
The gold owner can take comfort in knowing that April's price jolt brought out the buyers world wide. The surge in demand came as a surprise to gold critics who see the smallest price correction as cause to take out the hammer and have at it. At the same time, it was sweet vindication for world's gold owners who understood full well why anyone would scramble for the metal at the lower prices.
The charts posted below are important for what they reveal about the public's motivation to buy gold and silver. The precious metals have always been thought of as inflation hedges, but as you can see, the huge surge in volume since 2008 did not occur during inflationary times, but during disinflationary times, when the greatest concern was the stability and viability of the financial system.
Almost completely ignored by the mainstream financial media, physical silver demand is one of the more interesting phenomena to develop in financial markets since the 2008 meltdown. Gold has always had its safe-haven adherents -- those who believe that it will get them through bad economic circumstances no matter how they are labeled. Now, poor man's gold has become the poor man's systemic risk hedge. It hints that the concern over the on-going financial crisis extends beyond the 1% to the middle class in general -- something aspiring politicians might want to take into consideration. Our volumes at USAGOLD for both the silver Eagle and silver Maple Leaf have been off the charts for over two years running.
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-- Posted Tuesday, 4 June 2013 | Digg This Article
| Source: GoldSeek.com
