Observations on the market action and the implications of the gold and silver markets.
Monday, December 24, 2007
Goldfinger
The movie Goldfinger, like gold, is known far and wide.
Shirley Bassey singing Goldfinger
Goldfinger
He's the man, the man with the Midas touch
A spider's touch
Such a cold finger
Beckons you to enter his web of sin
But don't go in
Golden words he will pour in your ear
But his lies can't disguise what you fear
For a golden girl knows when he's kissed her
It's the kiss of death ...
From Mister Goldfinger
Pretty girl, beware of his heart of gold
This heart is cold
Golden words he will pour in your ear
But his lies can't disguise what you fear
For a golden girl knows when he's kissed her
It's the kiss of death ...
From Mister Goldfinger
Pretty girl, beware of his heart of gold
This heart is cold
He loves only gold
Only gold
He loves gold
He loves only gold
Only gold
He loves gold
Colonel Smithers to 007:
'The great thing to remember about gold is that it's the most valuable and most easily marketable commodity in the world. You can go to any town in the world, almost to any village, and hand over a piece of gold and get goods or services in exchange. Right?' Colonel Smithers's voice had taken on a new briskness. His eyes were alight. He had his lecture pat. Bond sat back. He was prepared to listen to anyone who was master of his subject, any subject. 'And the next thing to remember,' Colonel Smithers held up his pipe in warning, 'is that gold is virtually untraceable. Sovereigns have no serial numbers. If gold bars have Mint marks stamped on them the marks can be shaved off or the bar can be melted down and made into a new bar. That makes it almost impossible to check on the whereabouts of gold, or its origins, or its movements round the world. In England, for instance, we at the Bank can only count the gold in our own vaults, in the vaults of others banks and at the Mint, and make a rough guess at the amounts held by the jewellery trade and the pawn-roking fraternity.'
'Why are you so anxious to know how much gold there is in England?'
'Because gold and currencies backed by gold are the foundation of our international credit. We can only tell what the true strength of the pound is, and other countries can only tell it, by knowing the amount of valuta we have behind our currency. And my main job, Mr Bond-'Colonel Smithers's bland eyes had become unexpectedly sharp - 'is to watch for any leakage of gold out of England - out of anywhere in the sterling area. And when I spot a leakage, an escape of gold towards some country where it can be exchanged more profitably than at our official buying price, it is my job to put the CID Gold Squad on to the fugitive gold and try get it back into our vaults, plug the leak and arrest the people responsible. And the trouble is, Mr Bond-'Colonel Smithers gave a forlorn shrug of the shoulders-'that gold attracts the biggest, the most ingenious criminals. They are very hard, very hard indeed, to catch.'
'Isn't all this only a temporary phase? Why should this shortage of gold go on? They seem to be digging it out of Africa fast enough. Isn't there enough to go round? Isn't it just like any other black market that disappears when the supplies are stepped up, like the penicillin traffic after the war?'
'I'm afraid not, Mr Bond. It isn't quite as easy as that. The population of the world is increasing at the rate of five thousand four hundred every hour of the day. A small percentage of those people become gold hoarders, people who are frightened of currencies, who like to bury some sovereigns in the garden or under the bed. Another percentage needs gold fillings for their teeth. Others need gold-rimmed spectacles, jewellery, engagement rings. All these new people will be taking tons of gold off the market every year. New industries need gold wire, gold plating, amalgams of gold. Gold has extraordinary properties which are being put to new uses every day. It is brilliant, malleable, ductile, almost unalterable and more dense than any of the common metals except platinum. There's no end to its uses. But it has two defects. It isn't hard enough. It wears out quickly, leaves itself on the linings of our pockets and in the sweat of our skins. Every year, the world's stock is invisibly reduced by friction. I said that gold has two defects.' Colonel Smithers looked sad. 'The other and by far the major defect is that it is the talisman of fear. Fear, Mr Bond, takes gold out of circulation and hoards it against the evil day. In a period of history when every tomorrow may be the evil day, it is fair enough to say that a fat proportion of the gold that is dug out of one corner of the earth is at once buried again in another corner."
"The history of the great events of this world are scarcely more than the history of crime." –Voltaire
Good sources of information:
Grandfather Economic Report http://mwhodges.home.att.net/
Shadow Government Statistics for a second source for a reconstructed M3.
http://www.shadowstats.com/alternate_data
"A world of possible financial futures" http://nowandfutures.com/index.html
Jim Sinclair (Mr. Gold) at jsmineset.com
http://lemetropolecafe.com/
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