4.8.12 Ambrose Evans-Pritchard: Gold crash on Fed tightening and euro salvation looks premature

by John Galt
April 8, 2012 20:50 ET

And here we all were expecting gold to become a worthless relic and tanking to $100 per ounce if we believed every talking head in the regime, the Fed, and various Bubblevisions.

Ambrose Evans-Pritchard unloads a power salvo in tonight’s commentary in the U.K. Telegraph:

Gold crash on Fed tightening and euro salvation looks premature

(Click on the title above to read the column in full)

Just when everyone assumed the Fed had a clue in controlling economic reality, the forces of what is left of the world’s free markets informed the Arses of Academia that the reality they theorize over has real consequences when macro-economic strategies are implemented that run counter to freedom and reality. The insecurity of the markets is best expressed via the price of gold and despite the efforts of central banksters around the world, nations, corporations, the wealthy, and the common man who can afford it are voting by stashing the yellow metal in larger and larger quantities.

From the commentary linked above:

There are two implications to this: central banks will have to keep printing money for a long time, and the Asian surplus powers – as well as Russia and the Gulf states – will have to find somewhere to park their growing foreign reserves.

“These countries don’t want other peoples’ paper promises any longer,” said Peter Hambro, chair of the Anglo-Russian miner Petrovalovsk. “There is no sign yet that we are returning to a well-balanced and normal financial system. The ECB is accepting bus tickets as collateral and the only way out of this debt and banking crisis will be inflation in the end.”

Russia is raising the gold share of its reserves to 10pc, buying the dips with panache. China is coy, but Wikileaks cables reveal that Beijing is eyeing “large gold reserves” to back the internationalization of the renminbi.

China’s declared gold reserves of 1,054 tonnes are tiny, though it may be accumulating on the sly. Sascha Opel from Orsus Consult expects Beijing to boost its holdings by “several thousand tonnes” over the next five years to match the US stash of 8,000 and the Euro zone’s 11,000.

Perhaps everyone should pocket a little silver or gold because the day the realization of the central banker bubble bursts hits the markets, it will be too late. All of my readers need to click on the link above and read the story in full as Mr. Pritchard has such a way with words to describe the ongoing crisis and why the phrase “too late” is coming all too soon.

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