This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

An Age of Gold, Not a Golden Age

While the western currencies weaken due to heretofore unthinkable worldwide money-creation policies, China and countries in Asia that have "over saved" now sit on "massive monetary reserves." The level of such reserves has "become the most potent factor behind reserve diversification into other assets including gold," says Desai.

That is, the holders of these reserves are beginning to shun the dollar and the euro and are looking for safe havens. Sooner or later, China's renminbi will play a major international role. But as of today the Chinese financial system is very immature, riddled with huge asset problems, and is not capable of taking on more than a minor role in international trade.

As a result, as the world loses confidence in the dollar, euro, yen and sterling, safe havens will be sought as a hedge against currency devaluations. No doubt gold will be a major player.

We Want Our Gold Now

In mid-2011, Hugo Chavez's Venezuela demanded that 160 tons of its gold bullion kept by the Bank of England, JPMorgan Chase (JPM), Barclays (BCS) and Standard Chartered (SCBFF) be shipped back to Caracas. It took several months to deliver, with the last shipment arriving on Jan. 31, 2012.

Because delivery took so long there was some speculation the gold was not really in the vaults, and that it had been loaned out or was being used as collateral during the euro crisis. It had to be purchased on the open market and that is why it took so long to ship.

Not much was made of this at the time considering the source of the demand and the relatively small amount involved.

Soon after, however, the central bank of Germany's governing body demanded an audit of the gold reserves it had stored at the Federal Reserve Bank of New York. The N.Y. Fed had, historically, been uncooperative with any inspection requests regarding the gold bullion it supposedly held deep in its vaults in Manhattan.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.03 -0.71%
FB $105.41 -0.31%
GOOG $748.15 -0.02%
TSLA $229.64 5.22%
YHOO $33.16 0.61%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs