There has been an increase in the number
of people writing to me, but still mostly asking
the same two questions, namely "Are you some kind
of idiot?" (Answer: Yes) And "How do I go about
getting some gold?"
I take it from the
increase in email traffic that it is not just me
and them that are running to gold in a panic, as
James Moore, of TheBullionDesk.com, noted that
Tuesday's report of the StreetTRACKS' Gold ETF
(exchange traded fund) says that their
gold
holdings have jumped to "a record 609.33 tons of
gold", which "means that it is 'now eclipsing
China's 600-ton central bank holding ... making it
the 10th single largest holding of gold' in the
world".
If you want something else to show
you that people are starting to get smart about
owning gold and how this new demand is
overwhelming the manipulation of gold by the Fed
and the bullion banks, then a report from GATA.org
is just the thing you need. It reads "Reginald H
Howe, proprietor of Golden Sextant Advisors and
consultant to GATA, has reviewed the Bank for
International Settlements' semi-annual derivatives
report and finds explosive growth in gold
options." The net result is that, "The reported
figures indicate that the mountain of gold options
now almost certainly exceeds 30,000 tonnes - an
amount roughly equal to the world's total claimed
official gold reserves." Yow! What a derivatives
scam!
Mr Howe also notes that
"foreign-owned gold has started to be withdrawn
from the New York branch bank of the Federal
Reserve", which shows that foreigners are not as
stupid as us Americans.
I can see that he
is not comfortable talking about people being
stupid since he is talking to (as I am known
around here) King Stupid, but he says that "Both
the explosion in gold options and the resumed
exports of foreign-earmarked gold suggest that
managing the gold price is becoming an
ever-more-difficult task. No surprise, then, that
gold prices have turned sharply upward during the
second half of the year. However, the price
managers still have one thing operating in their
favor: the apparent willingness of hedge funds and
other supposedly sophisticated large players to
make their bets on gold through paper derivatives,
not the acquisition of physical metal."
This brings up the subject of holding
metal bullion. I have always said that if you are
starting out in accumulating gold because you are
smart enough to see that we are freaking doomed
and you curse yourself for not having found out
about this earlier but you were too, too busy
having a wonderful time with your life to worry
about it, then you should start with taking some
gold bullion in hand. No certificates. No
accounts. No receipts. Just heavy chunks of
gleaming yellow gold in your sweaty little hand.
However, if you are happy to take
someone's word for it that they are holding gold
for you, then I have exciting news for you! In
response to overwhelming demand, the Mogambo Gold
Bullion Storage Service (MGBSS) is now in
operation, and it couldn't be easier!
Just
send me as much cash (no checks!) as you can get
your grubby mitts on, addressed to "Occupant", and
I promise, cross my heart, to use the money to buy
gold and store it for you, instead of using the
money to throw the biggest damned wing-ding this
sleepy little burg has ever seen, for me and my
hoodlum friends!
I can tell by the look on
your face that you are obviously too smart to fall
for another of my Sleazy Mogambo Scams (SMS), so I
will not give you a brochure, and instead
illustrate why the government needs so damned much
money, that prompts the Fed to create it, that
creates disastrous inflation in prices, by quoting
Scott Burns at finance.sympatico.msn.ca, who says,
"Consider the proud trumpeting that came from
Washington at the close of fiscal 2007. The
deficit for the unified budget was, politicians
crowed, down to a mere $162.8 billion. In fact,
the US government is overspending at a far greater
rate. The total federal debt actually increased by
$497.1 billion over the same period."
In
short, the Fed must create the money that the
government needs to borrow. And now you also know
why electing Ron Paul as US president is so
imperative, and who is the only hope this stupid
country has.
Richard Daughty is
general partner and COO for Smith Consultant
Group, serving the financial and medical
communities, and the editor of The Mogambo Guru
economic newsletter - an avocational exercise to
heap disrespect on those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2007, The Daily
Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
