Gold is an investment for people, not fund managers.
What about this Dow! Yesterday, Dow Jones punches through the 15,000 mark, on its way to 16,000 and 17,000. It can happen? Well, the markets are clearly in a melt-up, writes Greg Canavan for daily Reckoning Australia.
But how far can they melt up in front of the chest?
There could be a way out yet. Private equity simply fleeing from gang Federation into safety of blue chips. This is the only place to hide.
What about gold then? It was a safe haven from marauding everything for thousands of years. Yet he gives the impression that it is no longer safe. Just when it is needed most.
Here's an idea worth thinking about. Right now, gold is an investment for the individual. It is not really an option for big, institutional investors. Pension funds choose to invest in much more expensive than government bonds and gold. Of money institutional investors want to buy Dow Jones, not proven wealth protector of nature.
But small investors, not limited by investment mandates and performance quarterly investment, choose to protect their wealth in gold. You saw that last month when it plunged to around us $ 1,320 an ounce. Buying frenzy is unleashed all over the world.
Even before that, the Chinese continue to buy huge amounts of yellow metal, while the West remains fixated on chasing the stock index performance. Bloomberg reports:
' Gold imports into China from Hong Kong more than doubled to all-time high in March as buyers of the largest consumer after India boosted purchases, underscoring demand for bullion in the world's second largest economy.
"Mainland buyers purchased 223,519 pounds (223.52 tons), including scrap, compared to 97,106 kilograms in February, according to the Hong Kong Government yesterday. Net imports by the Mainland, while continuing to flow from China into Hong Kong, there were 130,038 kilograms compared with 60,947 pounds a month earlier, according to Bloomberg calculations.
An important figure is the net imports of pounds 130,038, which tells you how much gold the Chinese mainland is absorbed. So this is 130 tons a month, before the decline in price in April which sparked buying frenzy! Next month a massive data should be.
What happens in China is a reflection of what is happening all over the world. People are defending themselves against the coming financial storm, by buying gold. This is one of the few times you see small investor take a stand before the big money. Usually it is a little late to the party.
When the system begins to crack under the weight of liquidity, financial madness, big silver rush. But the market will be too small to accommodate them, the prices will have to rise significantly to big money.
But that's a story for later this year. In the meantime, we expect global stocks melt-up.
Greg Canavan is the editor publishes a silver tone, sound investments, a weekly devoted to exposing financial statements investments in value between present day money illusion "" fiat currency. The former market-leading finance newsletter editor Australia, Greg was a regular guest on CNBC, ABC, BoardRoomRadio, as well as contributing to publications as diverse as the Sydney Morning Herald, LewRockwell.com.