Grant Williams was one of our guests recently, as we had the honour to conduct an interview about his views on QE and the prospects of gold. He is the editor of the newsletter Things That Make You Go Hmmm …, an electronic magazine that is full of economic insights (the true ones, not the ones that are manipulated or created by one or another propaganda machine). In the latest edition, he writes an exclusive and in-depth section about the role of the central bank in the gold market. It is linked to one of the articles we published ealier about the “dusty” situation of the central banks’ real gold reserves and their involvement in the gold price manipulation.
The section contains an in-depth analysis (20 pages), purely based on facts and the following unique charts:
- official central bank gold holdings vs spot gold price
- East vs West world gold reserves
- East vs West gold demand
- Chinese annual gold production
- annual Chinese gold net importers from Hong Kong
- Chinese gold production plus net imports
It goes without saying that the systematic physical gold transfer from the West to the East is one of the key conclusions, as proven by the statistics (previously mentioned charts). Most of the charts are provided by ShareLynx, the most comprehensible and trusted source of statistics about the gold market. The following quote summarizes what’s happening in the gold market at this very moment:
“The West sees gold as a means to hide the existence of inflation while the East sees it as protection from inflation. That means the West is selling gold whilst the East is buying it. The longer the price of gold is kept as low as possible by Western central banks, the more bullion will flow from West to East, and the more gold emerging nations accumulate, the more they are likely to want custody of that gold. The more central banks ask for audits and repatriation of their gold, the faster that trend will accelerate; and the faster that trend accelerates, the less gold will be left in the “safe” confines of the Federal Reserve and the Bank of England.”
Furthermore, based on evidence, Grant Williams concludes just like Eric Sprott did earlier in August, that central banks are suppressing the gold price by providing supply to the market in an artificial way. Leasing of central banks’ gold by their bullion bank dealers is the obvious means to that end. When looking into the supply / demand figures, it’s the only possible conclusion.
The conclusion of the editor? Very simple, the more the price of an asset is suppressed, the higher the spike once the suppression scheme ends. Yes the gold price manipulation will end, despite efforts to keep this whole act silent (just like in the movie “The Mousetrap”) it simply doesn’t last.
Some additional notes:
- Grant Williams gives credits to the Gold Anti-Trust Action Committee, citing GATA’s work in his research and drawing similar conclusions
- A podcast with Grant Williams appeared on Mineweb – it’s worth listening to “China’s new leadership, gold and central bank buying“
- We highly recommend to subscribe to Grant Williams his newsletter to read his latest edition “The Mousetrap“