Massive Amounts of Gold Flow East

Do you remember just 18 months ago?  The U.S. Government was threatening to shut down over deficit fights and Congress was throwing out the word "default" when talking about paying interest on Treasury Bonds it has sold.  People were getting fearful wondering HOW the Government was ever going to get solvent again and quit adding $OneThousandBillion dollars to their credit card.

So what ever happened to that massive $18 trillion of IOU's?  Do we still owe it?  Or since we haven't heard ANYTHING about it lately.....maybe Congress paid it off while I was on Spring Break?

"Who knows and who cares Dennis?!  Can't you just enjoy the prosperity?  Go buy a new car!  Get a bigger house! Buy a second home!  Finance it all....cuz interest rates have NEVER been lower!  The good times are rolling once more!  I knew we would come back with both barrels blazing!!....This is AMERICA!"

In what future generations will likely see as a major, potentially catastrophic blunder of monetary policy, the West and particularly the City of London continues to hemorrhage huge volumes of gold which is flowing Eastwards to Singapore, India and China from London via Switzerland.

“Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March”, up from 23.6 tonnes in February” according to Bloomberg. India’s gold imports from Switzerland doubled to 72.5 tonnes in the same period.

The increasingly affluent masses in China and India continue to have a voracious appetite for gold as a store of value.
Policy makers in China and Russia have also made gold a cornerstone of their monetary policy.

Bloomberg reported the following:

“Flows to India rose before this month’s Akshaya Tritiya festival, which is considered a traditional day to buy precious metals.”

Singapore is fast becoming an important gold hub and a favourite location for allocated bullion storage among risk conscious bullion buyers. Hong Kong saw a decline in its share of the market as Chinese investors increasingly opt to use the Shanghai Gold Exchange (SGE) for buying and trading in general.

Bloomberg reports that “Shipments to Hong Kong fell 26 percent to 30 tons”, whereas “Trading volume for bullion … jumped about 60 percent from the previous month to a record in March, Shanghai Gold Exchange data show.”

The SGE deals solely in physical gold bars and not paper contracts or unallocated bullion bank accounts which can be used to divert and reduce actual demand for physical gold and cap gold prices.

Between them China and India and Singapore – who imported almost 29 tonnes from Switzerland – imported almost 150 tonnes of the 223.3 tonne total of gold exported from Switzerland in March which Bloomberg said are “the highest since at least 2013”.

While sentiment towards gold in the West is abysmal – even as gold languishes at record lows when adjusted for inflation – Asian demand remains insatiable.

Here;  http://www.goldcore.com/us/gold-blog/gold-flows-east-china-india-import-massive-quantities-of-gold-from-switzerland/

Did you catch that very first sentence? "In what future generations will likely see as a major, potentially catastrophic blunder of monetary policy..."

Yep!  What's funny about financial collapses is that people always stand around afterwards and say, "How could we have been so dumb?  How could we have honestly believed that the price of our home was going to double every 3-4 years?" or "How could we have been so dumb to believe that Yahoo.com was worth $400 per shared back in 1999 simply because it had ".com" in its name?"

And now as the gold leaves The West headed for the East....one day we will all stand around and say, "How could we have been so stupid to believe that our PAPER MONEY was always going to have value simply based on faith in the U.S. Government?"

Hat tip to Jared F.