Eric Sprott of Sprott Asset Management is one serious player and you would do well to listen to him whenever he speaks.
He was just on Bloomberg TV discussing his recently published paper to which the conclusion is The Western Central Banks cannot possibly have any Gold Bullion left in their vaults.
The explanation is simple — gold supply has remained constant at approximately 4,000 tonnes per year. This has remained constant since the year 2000 — no doubt about that. However the annual amount that is being purchased on the open market is going up, with almost 500 tonnes over the amount mined in a year. So how his this possible? Where is the extra 500 tonnes of Gold coming from?
Sprott alludes to the fact that the central banks are “lending” it out for cash into the market. This should really be called “selling”, because this gold is never coming back. The trick is in their accounts and book-keeping. The banks are entering this as “Gold Reserves and Gold Receivables” — Receivables being code for we sold it, but we still want to keep it on our books.
If we were to try that kind of cheap trick we would be locked-up and they would through away the key…But a central bank? No problem — That’s ok boys!
You need to watch this interview — there are a lot of good nuggets of info in there…
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