Alex’s Notes: Boy, it sure seems to me like history repeats.
Gold (and silver) bullion is under siege in terms of demand, and shortage is starting to appear not just in the US, but all over North America and now Europe as well.
Anyone who studies history could have predicted this, its not rocket science.
All through history, every time major confidence is lost in fiat based economies, when those economies face massive corrections in terms of either hyperinflation or deflation, people flock to gold and silver bullion.
Is it any wonder that we are seeing that happen again today?
I have said many times we will again see lines of people waiting outside of gold shops to buy gold in the upcoming financial correction, just as they did in the past when mirror image events resulted in the exact same actions by people.
People are predictable in two ways:
1. They do the same things when certain events in the economy unfold, such as storming into gold when confidence is lost in fiat currency and equities. This will only accelerate until the market stabilizes.
2. People do not study history and learn from it.
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Royal Canadian Mint under ’strain’ to meet demand for gold
Posted: October 03, 2008, 2:37 PM by Eric Lam
The plunging stock market in Canada has led to a spike in gold purchases, and gold brokers may soon have trouble keeping up with demand.
A teller at Scotiabank’s precious metals exchange desk in the Scotia Plaza said Thursday that nervous investors had already purchased all of Scotia’s one-ounce gold bullion bars, which are slightly cheaper than the Scotia one-ounce gold coins. The bars, which are emblazoned with the Scotiabank logo, are expected to be in stock by the end of October or early November.
“It’s been crazy here,” the teller said.
All other denominations, including the one-ounce gold maple leaves produced by the Royal Canadian Mint, are readily available at the moment.
Michael Levy, a gold broker based in Surrey, B.C., said the volume of people purchasing gold is at its highest since the inflation scare of 1979. “People were buying then because of inflation, now because of a growing distrust in paper currency,” he said. “It’s a different mentality but the same rush.”
Mr. Levy said that the Royal Canadian Mint had stretched its delivery schedule from the usual two to four days to as much as a week. He suspects the increased demand from worldwide gold investors after the U.S. Mint ran out of one-ounce American Eagle coins in August and one-ounce American Buffalo coins at the end of September is putting an increased strain on the RCM.
“Their ability to produce is finite. You can’t just buy another press. If this demand keeps up, keeps expanding, well there will be a supply problem,” he said.
Alex Reeves, a spokesperson with the mint, said they are on pace to exceed their 2007 totals of 278,000 ounces of gold bullion coins, bars and wafers produced. The mint’s Ottawa facility is running at maximum capacity, he said.
“[Distributors] would like more gold than we can produce but we’re supplying the best we can. Look at that as good news,” he said. “We’re able to keep producing gold while the U.S. Mint has to throw up their hands and say, ‘we’re out.’”
http://network.nationalpost.com/np/blogs/fpposted/archive/2008/10/03/roy...
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Financial Crisis: Rush for gold as savers queue for bullion
Savers have been queuing in the street to buy gold bars and coins, as they search for a safe place to invest their money.
By Harry Wallop, Consumer Affairs Editor
Last Updated: 6:26PM BST 02 Oct 2008
London’s two leading bullion dealers, ATS Bullion and Baird & Co, have reported a rush of interest from savers, many of whom have hundreds of thousands of pounds worth of savings they want to convert into the precious metal.
At least two customers have invested the entire proceeds from selling their houses into gold, each buying up more than £500,000-worth of gold bars, according to one dealer.
Savers have been queuing in the street at ATS Bullion, whose offices are just off the Strand in London’s west end.
Sandra Conway, the company’s managing director, said: “We’ve had to turn people away. The queues have been right out of the door and it’s been really hectic at times.
“Ever since Lehman Brothers went bankrupt, the phones have been going off the hook.”
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3123775...
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This isnt a “fad” and it isnt going away anytime soon.
I highly recommend protecting yourself from losses in equities and retirement funds as soon as possible.
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