PRECIOUS HOLD?

For those who wonder what's going on with gold here's an interesting read from The Daily Bell.

Some will think it's just hype over an asset that's about as out of favor as an asset can get. Some might even question whether it's even an asset anymore. Much of what you think should be based on your trust in monetary authorities.

Will the precious metal become so precious again only the monetary authorities are allowed to hold it?

Reuters claims, "Financial market transparency has been a major focus for regulators after evidence of price manipulation in lending rates between banks with the LIBOR scandal in 2012." But we would suggest that the real reason for the sudden interest in transparency has to do with the gravity of the gold market migrating to Asia. 

To counteract this trend, the LBMA is proposing an electronic gold-trading platform that will make trading more efficient and "transparent." As there are some "$5 trillion of gold trades estimated to be made over the counter in London," an electronic facility would certainly be significant. Our take remains a cynical one, however. In the money profession, an institutional bias against precious metals is not likely to be reduced by an electronic facility. The forces arrayed against precious metals are enormous and involve the fabric of Western society itself. If London is moving to address some of the issues around gold trading, you can probably bet it is in order to reassert control over world markets. 

The sociopolitical and economic bias against gold remains a fundamental and stubborn fact. Elite institutions, in our view, are ultimately going to make it a good deal more difficult to purchase gold and silver, especially the physical stuff, as the world's economy inevitably unwinds. Prudent investors and savers who understand the reality of precious metals will continue to find holding precious metals to be an important part of a well-balanced portfolio. Even if acquiring and holding precious metals ultimately becomes more difficult – and it probably will sooner or later – the acquisition of yellow and silver metals should not be abandoned. 

Paul Rosenberg carried an interesting article on the subject this week in his Free-man's Perspective entitled "Golden Disobedience." Author Sandy Sandfort relates in this article how his parents practiced determined civil disobedience when it came to FDR's decision to put people in jail for buying and holding gold. A snippet: Back on April 5, 1933, His Majesty, Franklin Delano Roosevelt (FDR), had a pen and a telephone. So he issued Executive Order 6102, which made it a federal crime for Americans to own or trade gold anywhere in the world. There were some minor exceptions for some jewelry, industrial uses, collectors' coins, and dental gold, but the vast majority of the gold had to be turned in. My father instantly understood what was going on and he didn't like it. "They're going to devalue the dollar!" he predicted. ... My parents made the conscious decision to become outlaws. At every possible opportunity for the next three weeks (and substantially longer), my parents followed Gresham's law ("Bad money drives out good."), not federal law. They spent paper and collected gold ....thedailybell.com/news-analysis/36660/Sandy-Sandfort-Michael-Pento-Buy-and-Hold-Gold/