Jim’s Mailbox

Posted at 4:01 PM (CST) by & filed under Jim's Mailbox.

Kevin,

The manipulators of paper gold can temporarily do anything. The operative word there in being temporarily.

The equation is gold versus run away insane debt levels, plus now we see QE in its true GLOBAL form as to INFINITY.

YOU NEED TO MAKE YOUR DECISION AND NOT OVER-INTELLECTUALIZE IT.

Do you really believe that fiat paper will maintain, and therefore store the value of what you have? Sorry, it simply will not.

As such GOLD is your savings account.

End of story!

Jim

Jim,

With this capital adjustment coming for gold on March 29, I have been wondering if we will see another April 2013 swoon or whether. as everyone is hoping. that maybe a floor will be established on the gold market. I fear the floor may be manipulated much lower on the “financial” instrument that they call gold.

What do you think?

The BIS ruling states that Central banks and commercial banks will necessarily value their “financial” and real gold at market price. Is this just a way to increase the collateral value of paper or physical gold even as market value declines?

Unless the March 29 ruling has an immediate effect on auditing of physical gold held by CB’s, I fear it is another scheme to push gold prices lower. And so far I am not hearing anything with regards to a global gold audit of CB’s. And China continues to sleep.

As Ronan Manly pointed out, the reason the Fed values its gold on its asset side at only $42 per ounce is because the gold is valued at book value by the Treasury and the Fed’s gold is actually only gold certificates valued at no more than the statutory price of their issuance in 1934 which matches the book value of the Treasury gold. Will the Treasury revalue its physical gold at FRBNY and Fort Knox? Will the Treasury allow the Fed’s gold certificates to be valued at market? What are the implications if they don’t?

https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm
Article 21-
https://www.bis.org/about/statutes-en.pdf

https://www.bis.org/bcbs/publ/d457.pdf

Instruments comprise financial instruments, foreign exchange (FX), and commodities. A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments include primary financial instruments (or cash instruments) and derivative financial instruments. A financial asset is any asset that is cash, the right to receive cash or another financial asset or a commodity, or an equity instrument. A financial liability is the contractual obligation to deliver cash or another financial asset or a commodity. Commodities also include non-tangible (ie non-physical) goods such as electric power.

Kevin

 

Jay Taylor refers to you here Jim.

Bill

Jay Taylor: Under “Basel III” Rules, Gold Becomes Money!
March 17, 2019

Excepted from Jay Taylor’s latest newsletter,

. . .

This also raises the question with regard to how much gold the U.S. actually holds as opposed to what it claims to hold. James Sinclair has always argued that the only way the world can overcome the debt that is strangling the global economy is to remonetize gold on the balance sheets of central banks at a price in many thousands of dollars higher. This would mean a major change in the global monetary system away from the dollar, as China has been pushing for the last decade or so.

If banks own and possess gold bullion, they can use that asset as equity and thus this will enable them to print more money. It may be no coincidence that as March 29th has been approaching banks around the world have been buying huge amounts of physical gold and taking delivery. For the first time in 50 years, central banks bought over 640 tons of gold bars last year, almost twice as much as in 2017 and the highest level raised since 1971, when President Nixon closed the gold window and forced the world onto a floating rate currency system.

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