COMEX

Why gold? That’s a question I’m asked frequently. It’s usually followed by a comment along the lines of, “I don’t get it. It’s just a shiny rock. People dig it out of the ground and then put it back in the ground. What’s the point?” I usually begin my reply by saying, “It’s not a rock, it’s a metal” and then go from there.

History repeats itself with staggering similarity. The Crises of the 3rd Century and today have much in common. All empires have the seeds of their own destruction within them. So if we look back almost 2000 years to the Roman Empire we will find exactly the same symptoms as today.

The resulting record divergence in gold futures vs spot unleashed a flood of physical gold into the US as a record scramble by traders rushing to take advantage of this arbitrage opportunity by shipping bullion to New York sparked what Bloomberg said "may be one of the largest ever physical transfers of the metal."

Right now, the price of gold is relatively cheap compared to the current money supply. And the price of silver is ridiculously cheap compared to gold. Again, silver has never been cheaper in 5,000 years.

In this interview Egon von Greyerz explains to Paul Eberhart of SilverDoctors that the combination of the Coronavirus and the coming economic depression will change the world forever. We are now going towards a hyperinflationary depression that will eventually lead to a deflationary depression.

To test the value of the printed money, I suggest that the Fed prints $9.5 trillion and buys all the gold in the world, including jewellery, of 170,000 tonnes at the current price of $55.6 million per tonne. If they don’t understand what will happen, I can tell them. They would have real problems getting hold of 1 tonne of physical gold at that price.

This interview starts by Lynette reminding her audience of Egon’s view that financial and economic risk in the world was getting uncomfortably high already 20 years ago.

That the world economy for the last 100 years was totally dependent on credit and printed money is not a new miracle paradigm but a the sign of diseased system. Issuing fake money at zero cost always had to end badly.

Bank of America raised its 18-month gold-price target to $3,000 an ounce, in a report titled “The Fed can’t print gold.”

Mine closures and selling restrictions are causing shortages of precious metals in the retail sector, but ETFs are experiencing large inflows of funds. Where do they get the gold, if at all?