Buy Gold While You Still Can!
One of our long-running themes here is that the truly historic and massive flows of gold from West to East is (someday) going to stop, for the simple reason that there will be no more physical bullion left to move.
It’s just a basic supply vs. demand issue. At current rates of flow, sooner or later the West will entirely run out of physical gold to sell to China and India. Although long before that hard limit, we suspect that the remaining holders of gold in the West will cease their willingness to part with their gold.
So the date at which “the West runs out of gold to sell” is somewhere between now and whenever the last willing Western seller parts with their last ounce. As each day passes, we get closer and closer to that fateful moment.
This report centers on preponderance of fascinating data revealing the extent of the West’s massive dis-hoarding of physical gold, for the first time, begins to allow us to start estimating the range of end-dates for the flow to the East.
Here’s the punchline: there’s an enormous and growing disconnect between the cash and physical markets for gold. This is exactly what we would expect to precede a major market-shaking event based on a physical gold shortage.
Stopping the Flows
There are only two outcomes that will stop the process of Western gold flowing East, one illegitimate and the other legitimate.
- It becomes illegal to sell gold. This is the favored approach of central planners who prefer to force change by dictate rather than via free markets and free will. Unfortunately, this strain of political intervention is dominant in the West, particularly in the US and EU.
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