Swiss gold vote threatens foundations of global currency system

[mania]

When you go in the mall the gold price is around 18,500 baht. It has been close to there for a while now. If there was a change on the horizon the price would have changed. The people who own the gold stores are more clued in than the story writer.

The gold store owners do not determine price although your right that gold has hovered between 1200-1250/oz in USD for awhile now.

But gold price at stores here is exactly the same as World Spot Price since that is what determines the price

Of course you need to calculate that 2.07 Baht of gold = 1 troy ounce & also convert the currency

But you will find once converted to your currency/weight units, that gold is priced the same or very very close all over the world

Have you checked the price of gold today yet ? Down 550 baht per baht since the open of business yesterday...and it's only 1:00pm now

Yes I watch it daily & actually it has been for short traders in a very good range for months now.

Because when gold fluctuates between two prices like it has been doing

It is a nice short time profit even if you buy only 10-20 baht

[recycler]

In wonder under what pretext the US will than shift the global war on terrorism to Switzerland...

That's just silly, as you know. However, your point is valid, ie that the US will indeed do something drastic. I'm not an economist, so any speculation on my part can probably be pulled apart. I accept that.

My timid guess is that Iran might be the route. Oil, Iranian borse, multiple ME issues.

I would love to hear Herr Naam's thoughts on the entire thing.

Several countries that tried to undermine the position of the US$ have been dealt with under this pretext.

Iraq started selling their oil for Euros, Gaddafi for gold and tried to initiate a common African currency.

Currently Russia and Iran are under attack by indirect means via ISIS, Syria and Ukraine for pushing BRICS and an alternative oil exchange.

If the Swiss push this plan, they are in for a lot of trouble.

[thailiketoo]

In wonder under what pretext the US will than shift the global war on terrorism to Switzerland...

That's just silly, as you know. However, your point is valid, ie that the US will indeed do something drastic. I'm not an economist, so any speculation on my part can probably be pulled apart. I accept that.

My timid guess is that Iran might be the route. Oil, Iranian borse, multiple ME issues.

I would love to hear Herr Naam's thoughts on the entire thing.

Several countries that tried to undermine the position of the US$ have been dealt with under this pretext.

Iraq started selling their oil for Euros, Gaddafi for gold and tried to initiate a common African currency.

Currently Russia and Iran are under attack by indirect means via ISIS, Syria and Ukraine for pushing BRICS and an alternative oil exchange.

If the Swiss push this plan, they are in for a lot of trouble.

1. The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order.

2. ZURICH—Swiss voters are narrowly leaning toward approving an initiative that would force the country’s central bank to increase its holdings of gold, though supporters of the motion don’t have a majority, a poll released Friday shows.

The poll, conducted between Oct. 13 and 18 by the gfs.bern group, shows 44% of respondents in favor of the Save Our Swiss Gold Initiative. A further 39% are against, while 17% are undecided

Edited October 31, 2014 by thailiketoo

[F430murci]

In wonder under what pretext the US will than shift the global war on terrorism to Switzerland...

That's just silly, as you know. However, your point is valid, ie that the US will indeed do something drastic. I'm not an economist, so any speculation on my part can probably be pulled apart. I accept that.

My timid guess is that Iran might be the route. Oil, Iranian borse, multiple ME issues.

I would love to hear Herr Naam's thoughts on the entire thing.

Several countries that tried to undermine the position of the US$ have been dealt with under this pretext.

Iraq started selling their oil for Euros, Gaddafi for gold and tried to initiate a common African currency.

Currently Russia and Iran are under attack by indirect means via ISIS, Syria and Ukraine for pushing BRICS and an alternative oil exchange.

If the Swiss push this plan, they are in for a lot of trouble.

Really? And you know this, but they cannot figure it out. Lol, okay.

Love articles like this. Seems a lot like lame arse marketing companies they announce penny stocks as the next and greatest with 1,000 % returns. They usually have positions or are paid by those with positions to create artificial, albeit, short term demand.

Gold has been a lousy investment for 3 years even with all if the doom and gloomers out there buying up believing that CPI is about to take off due to QEs.

[Timebandit]

This may encourage China to make their announcement sooner than later. With China, Russia, India and Switzerland (half the World) scrambling to buying physical gold at suppressed ETF rates how long will our Zimbabwa Dollars last as king currency. The petrodollar is now circling the drain.The manipulators are running out of ammunition and when the people holding ETF's go to the redemption window the house of cards will collapse. There will be blood in the streets and precious metals will get you through this. Thailand has some gold and at the reset they could declare the baht to be 5% backed and avoid much anguish.

Lets say you owe the bank a round million dollars for your house, car and all of your debts. If the world currencies tank and we have rampant inflation. You now owe the bank 1 billion dollars.

Do you see why this can't happen?

[thailiketoo]

This may encourage China to make their announcement sooner than later. With China, Russia, India and Switzerland (half the World) scrambling to buying physical gold at suppressed ETF rates how long will our Zimbabwa Dollars last as king currency. The petrodollar is now circling the drain.The manipulators are running out of ammunition and when the people holding ETF's go to the redemption window the house of cards will collapse. There will be blood in the streets and precious metals will get you through this. Thailand has some gold and at the reset they could declare the baht to be 5% backed and avoid much anguish.

Lets say you owe the bank a round million dollars for your house, car and all of your debts. If the world currencies tank and we have rampant inflation. You now owe the bank 1 billion dollars.

Do you see why this can't happen?

I guess you don't see that the world would be thrown into chaos and millions starve and technology stopped and countries cease to exist. Since you don't get it you make a joke about it. Try and think for just a second what would happen if you got up one morning and did now own anything and had no money and there were no banks, hospitals, schools, electricity, food and potable water.

[Pakboong]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

[TPI]

The UK would not have fallen apart. Scotland would have fallen apart.

What the hell would a Thai know about the 6th largest economy in the world and the fastest growing in the EU by a country mile????

Brit haters, don't bother trying to educate me. This was all about politics and votes and nothing to do with the economy.

Not only is this far from the point, it's so pedantic it's embarrassing! Please, go back to sleep!

[F430murci]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

So. . . and Russia's economy is in the toilet. Poor Russia is struggling hard right now.

[PungShoeWrote]

Even if the Filipinos allow the Swiss to vote yes on the referendum GOLD is going to $800 USD or less by this time next year.

[mania]

Even if the Filipinos allow the Swiss to vote yes on the referendum GOLD is going to $800 USD or less by this time next year.

555 I do not mean to laugh but....Back in 2008 when I spent 50% of my liquid assets on gold at $730 per ounce folks

thought as I was nuts as 50% was a lot of money

But here I am having sold 80% of it back in 2012 when it was roughly $1775/oz I still smile at my luck.

But I said 555 at your $800 because when I bought at $730 most were saying oh just wait next year it will fall thru $400

As we know it never saw even $730 again

Gold likes fear...........Or I should say fear is good to gold.

I do not see a shortage of it these days although I never re-entered the market since 2008

But I am watching & do not rule it out + I still hold 20% of my original purchase which is basically now considered free gold to me.

Edited October 31, 2014 by mania

[ldnguy]

There was a big fall in the price of gold today, so I guess the OP is completely wrong.

[Publicus]

The OP is out of the mainstream which are talking about the price of gold while the OP jumps to the USD$ as somehow being threatened and thus the U.S. itself. The Swiss referendum is not a threat to the USD$ as the currency of international trade and as the global forex reserve currency.

The Swiss referendum is initiated by a small right wing party of extremists which is going to have to prove it has staying power. The parliament has voted overwhelmingly to oppose the referendum question.

In Switzerland only 10 of the 66 referendum issues of recent times have won approval. Then there's the late surge of the 'no' vote which commonly occurs in these referendum questions.

And if it looks like the 'yes' side might pull this out of the fire speculators will test the Swiss Franc to see how far it will shrink from its present 1.20 to the Euro.

Switzerland has these easy referendum requirements which is fine and it has easy banking requirements which except it from other economies that are bigger and diverse. Switzerland does have the 19th largest economy but it is not a member of the G-20 nor is Switzerland in the EU, Nato, the EMU or like organizations..

The only alternative to the globalized USD$ is a global monetary union run by the Boyz in Moscow and the Boyz in Beijing. Whatever it would be called and whichever institution would run it, that's what it would in fact be.

Edited October 31, 2014 by Publicus

[JacChang]

I am going to go increase my gold holdings. Stocks are high, bonds are high, guess what is good now?

[F430murci]

I am going to go increase my gold holdings. Stocks are high, bonds are high, guess what is good now?

Actually make a little sense, but I think support is around a 1,000. I may jump in if we see a 1,000 as I think other will just for the heck of it driving prices up a bit. I cannot see much movement above 1,200 though for a long time. Based in my purely amatuer guy feel, I see resistance at 1,200 for at least next two years.

[sustento]

Switzerland is not part of the European Union.

He's talking about the UK not Switzerland...

[Thongkorn]

The UK would not have fallen apart. Scotland would have fallen apart.

What the hell would a Thai know about the 6th largest economy in the world and the fastest growing in the EU by a country mile????

Brit haters, don't bother trying to educate me. This was all about politics and votes and nothing to do with the economy.

Thank you, about time people had some facts Vote Ukip

[Thongkorn]

My friend in Bangkok put a couple hundred thousand US dollars into gold back in 2012 when it was 24,200 per baht.

He is down about $50K, but not sweating it. He bought it only as an insurance policy and preservation of wealth.

Things are getting weird all over the world these days and it is good to hold some gold or silver.

China is looking to buy gold in the next few years, gold prices will rise.

[Publicus]

My friend in Bangkok put a couple hundred thousand US dollars into gold back in 2012 when it was 24,200 per baht.

He is down about $50K, but not sweating it. He bought it only as an insurance policy and preservation of wealth.

Things are getting weird all over the world these days and it is good to hold some gold or silver.

China is looking to buy gold in the next few years, gold prices will rise.

Individuals in the PRChina are doing the same thing and it is individual families inside the PRC that account for most of the gold purchased in the PRC since 2010.

The CCP Boyz in Beijing and their personal bank aka the People's Bank of China are buying some gold but not nearly as much as individual PRC families are buying it..As the property and housing bubbles are currently bursting and the bubbles in banking and finance wait for their imminent poping PRChinese families are hedging due to corruption and their loss of faith in the CCP's economic doctrines.

The CCP Boyz recently saw a $100 billion outflow of capital so they've imposed capital controls to keep money inside the PRC. Individuals purchasing gold circumvents the controls so the purchase of gold by families has increased the demand and the inflow of gold to the PRC.

The Boyz are staring at increasing current account deficits with Japan and Asean countries in addition to steadily decreasing trade surpluses against the U.S. and EU. The CCP has begun to sustain losses to its forex reserves so its immediate need is of cash producing assets, the long term insurance people believe gold to be is a distant and secondary consideration of the CCP Boyz.

With all PRC gold exchanges closed by the CCP Boyz except for two in Shanghai, Hong Kong has been the dominant point of entry of gold and the dealers there attest that it is individual families buying the stuff with the CCP central bank being far behind the pace of the PRChinese individual family buyers.

The reality is that despite some loud rhetoric in some quarters the CCP Boyz in Beijing are not attacking the USD$ as they have their hands full managing their CNY monopoly money back home.

Edited November 1, 2014 by Publicus

[MrY]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

Since gold is under $1200/ounce, I guess they haven't tried the world market yet. Do you think I could get a 1% commission if I told them where it is widely available..?

[MrY]

Take a look at history.. 99% of the worlds fiat currency's have collapsed bringing hardship to most of the people.Gold and silver have been used as real

money for nearly 5000 years and has never been worthless.The debt in the world today is so big it can never be repaid..

My choice...gold and silver in my hands and not in banks or bullion dealers..

There are almost 200 currencies in circulation, and all of them are "fiat currencies" or tied to another currency. (Even sizable gold reserves make no difference if the currency cannot be redeemed in gold at any time. It is still a fiat currency)

So [logically] all (not 99%) commodity based currencies (clams, gold, etc.) have failed. Surely eventually all fiat currencies will fail and all the species will become extinct. Eventually.

And please provide a link to a list of those [approximately] 19800 failed currencies. I can only find about 600 and most of those failed due to political turmoil of one sort or another, not simply due to some inherent failure of the fiat currency concept.

Edited November 1, 2014 by MrY

[mania]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

Since gold is under $1200/ounce, I guess they haven't tried the world market yet. Do you think I could get a 1% commission if I told them where it is widely available..?

Actually when countries buy of course they do not buy tiny sales

nor are they looking to buy paper IOU's for supposed gold backed funds,futures contracts, etc which is much of what you see

when you see spot prices

But they buy when folks like the IMF sell 403 metric tons etc

https://www.imf.org/external/np/sec/pr/2009/pr09381.htm

http://www.imf.org/external/np/exr/faq/goldfaqs.htm

As for commission yes you could ask You know in places like the USA when you buy gold...I mean real gold not paper there is always a premium like

now it is at $100usd per ounce & a bit less if buying more

Even now with gold at $1175 an ounce go buy a ounce of real gold ...Here it will cost you $1280

http://www.apmex.com/category/11101/1-oz-gold-eagles

Which is something many do not understand about the gold markets & spot prices & how much is based on paper that exceeds actual gold if

in truth all those buying paper gold went to the Comdex tomorrow to redeem they would get USD instead as is the COMDEX's right to pay in USD

if they so choose.

Which is also why in 2008 when many folks wanted to buy REAL gold in the US they could not as none was available at most outlets

in the form of bullion/coins etc.

Here in Thailand there is no premium to buy

Edited November 1, 2014 by mania

[Publicus]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

Russia will need all the gold it can find because others might start demanding gold instead of the fast declining rubble ruble. The ruble is down at record levels around 42, interest rates are up to 9.5%, inflation is up to 8.5%, food prices are up 11% yoy and oil is down to $80 a barrel.

The Russian Central bank yesterday increased rates by 1.5%, said growth would slow to 0% by the first quarter of next year, and has spent $72 billion of Russia's forex reserves to buy the ruble because no one else is buying it to include inside Russia where the people are buying USD$ and Euros.

No one is buying RMB, Brazilian real, Indian ruphee, SA rand or anything else.

Neil Shearing, chief emerging markets economist at Capital Economics in London, said Russia still has $440 billion to prop up the ruble but that, “history suggests you can get through your reserves very quickly when faced with a crisis like this.”

Russia takes emergency steps to defend ruble, tame inflation

Russia’s central bank went into emergency mode Friday, raising its key interest rate by 1.5 percentage points to 9.5% in an effort to stop an alarming slide in the ruble and tame rising inflation.

The ruble has fallen by 26% against the dollar since the start of July, hitting one record low after another, as a combination of weak oil prices and worsening relations with the E.U. and U.S. have drained confidence from the economy.

http://fortune.com/2014/10/31/russia-takes-emergency-steps-to-defend-ruble-tame-inflation/?xid=yahoo_fortune

So where's all of Putin's gold? And what good is it doing him or Russia? Or the Bricks for that matter?

Gold itself is a fiat currency when used as a medium of exchange. Which means when there are people who find it impractical or worthless to buy a loaf of bread, then it too fails.

Edited November 1, 2014 by Publicus

[Seastallion]

Not many realize that the current holder of the world's 3rd largest gold reserve is the International Monetary Fund. The 5 BRICS countries are buying any gold they can find and Russia has seriously increased its holding by a higher percentage than any country in the past couple of years.

Since gold is under $1200/ounce, I guess they haven't tried the world market yet. Do you think I could get a 1% commission if I told them where it is widely available..?

Actually when countries buy of course they do not buy tiny sales

nor are they looking to buy paper IOU's for supposed gold backed funds,futures contracts, etc which is much of what you see

when you see spot prices

But they buy when folks like the IMF sell 403 metric tons etc

https://www.imf.org/external/np/sec/pr/2009/pr09381.htm

http://www.imf.org/external/np/exr/faq/goldfaqs.htm

As for commission yes you could ask You know in places like the USA when you buy gold...I mean real gold not paper there is always a premium like

now it is at $100usd per ounce & a bit less if buying more

Even now with gold at $1175 an ounce go buy a ounce of real gold ...Here it will cost you $1280

http://www.apmex.com/category/11101/1-oz-gold-eagles

Which is something many do not understand about the gold markets & spot prices & how much is based on paper that exceeds actual gold if

in truth all those buying paper gold went to the Comdex tomorrow to redeem they would get USD instead as is the COMDEX's right to pay in USD

if they so choose.

Which is also why in 2008 when many folks wanted to buy REAL gold in the US they could not as none was available at most outlets

in the form of bullion/coins etc.

Here in Thailand there is no premium to buy

I know nothing about these sorts of things. You sound like an expert to me. Really.

So, if I understand what you wrote, it means that whereas the dollar used to be backed up with gold (the gold standard), now gold is backed up by the dollar?

Who on earth, if that is right, would buy paper gold?

"s the COMDEX's right to pay in USD

if they so choose."

[ripstanley]

Off to the gold shop this morning. Won't hurt to have a few baht sitting under the mattress.

We were in Chinatown Bangkok yesterday. I have not seen so many customers in the 2 shops I observed. They must have read your post

[Publicus]

Gold just aint what it used to be.

Which is why it used to be and is no more.

The gold standard is austere in that it restricts and inherently limits GDP growth whereas monetarism equates with unprecedented prosperity as it expands GDP growth.

Russia has tons of new gold on top of the gold it had yet its economy is going underwater. Same for China. Brazil has its serious headaches. And all they get for it is a gold finger.

[Publicus]

It sounds like some people might have some inside information from Beijing and Moscow that the 99% of the world doesn't have.

I agree. When the US $ finally implodes (and it will when China decides the time is right) then gold becomes King once more. Hold gold and ditch dollars is my call. If only I had some spare pennies.

So when will the time be right or is that a decision that only Beijing can divine...I've said dozens of times here that a gold standard cannot support the 21st century global economy. There isn't enough gold in the universe to support the present global GDP of $100 Trillion, much less global GDP going forward and both Beijing and Moscow know this.

Going to a gold standard would set global GDP back to the world of the 1950s to include not only economic development and capital, but social security programmes as well as education and all else right across the board. The Boyz in Beijing want and need economic development, not a severe austerity or a global economic catastrophe.

This may encourage China to make their announcement sooner than later. With China, Russia, India and Switzerland (half the World) scrambling to buying physical gold at suppressed ETF rates how long will our Zimbabwa Dollars last as king currency. The petrodollar is now circling the drain.The manipulators are running out of ammunition and when the people holding ETF's go to the redemption window the house of cards will collapse. There will be blood in the streets and precious metals will get you through this. Thailand has some gold and at the reset they could declare the baht to be 5% backed and avoid much anguish.

If the U.S. government or the European Central Bank for that matter thought or believed for one moment that China, and Russia were buying gold to screw the United States or the EU into a financial and economic catastrophe then the world would already know about it in no uncertain terms. Furthermore, if the world thought the USD$ were the Zimbabwean dollar then you'd be president of the World Bank and the IMF.

Cheers.

Edited November 1, 2014 by Publicus

[NeverSure]

I am going to go increase my gold holdings. Stocks are high, bonds are high, guess what is good now?

Lead, brass and copper.

[NeverSure]

Actually when countries buy of course they do not buy tiny sales

nor are they looking to buy paper IOU's for supposed gold backed funds,futures contracts, etc which is much of what you see

when you see spot prices

But they buy when folks like the IMF sell 403 metric tons etc

https://www.imf.org/external/np/sec/pr/2009/pr09381.htm

http://www.imf.org/external/np/exr/faq/goldfaqs.htm

As for commission yes you could ask You know in places like the USA when you buy gold...I mean real gold not paper there is always a premium like

now it is at $100usd per ounce & a bit less if buying more

Even now with gold at $1175 an ounce go buy a ounce of real gold ...Here it will cost you $1280

http://www.apmex.com/category/11101/1-oz-gold-eagles

Which is something many do not understand about the gold markets & spot prices & how much is based on paper that exceeds actual gold if

in truth all those buying paper gold went to the Comdex tomorrow to redeem they would get USD instead as is the COMDEX's right to pay in USD

if they so choose.

Which is also why in 2008 when many folks wanted to buy REAL gold in the US they could not as none was available at most outlets

in the form of bullion/coins etc.

Here in Thailand there is no premium to buy

You are linking to Gold Eagles which are actual US currency in gold coins. They have numismatic value above the value of the gold.

You need to be looking at simple bullion, even 1 oz rounds. I can buy that all day long for 1.5% over world spot in person, for cash, at a gold shop.

[NeverSure]

It sounds like some people might have some inside information from Beijing and Moscow that the 99% of the world doesn't have.

I agree. When the US $ finally implodes (and it will when China decides the time is right) then gold becomes King once more. Hold gold and ditch dollars is my call. If only I had some spare pennies.

So when will the time be right or is that a decision that only Beijing can divine...I've said dozens of times here that a gold standard cannot support the 21st century global economy. There isn't enough gold in the universe to support the present global GDP of $100 Trillion, much less global GDP going forward and both Beijing and Moscow know this.

Going to a gold standard would set global GDP back to the world of the 1950s to include not only economic development and capital, but social security programmes as well as education and all else right across the board. The Boyz in Beijing want and need economic development, not a severe austerity or a global economic catastrophe.

This may encourage China to make their announcement sooner than later. With China, Russia, India and Switzerland (half the World) scrambling to buying physical gold at suppressed ETF rates how long will our Zimbabwa Dollars last as king currency. The petrodollar is now circling the drain.The manipulators are running out of ammunition and when the people holding ETF's go to the redemption window the house of cards will collapse. There will be blood in the streets and precious metals will get you through this. Thailand has some gold and at the reset they could declare the baht to be 5% backed and avoid much anguish.

If the U.S. government or the European Central Bank for that matter thought or believed for one moment that China, and Russia were buying gold to screw the United States or the EU into a financial and economic catastrophe then the world would already know about it in no uncertain terms. Furthermore, if the world thought the USD$ were the Zimbabwean dollar then you'd be president of the World Bank and the IMF.

Cheers.

I'm out of likes. "Like."