World Gold Demand is Off to the Races, as Yellen Chickens Out

from The Wealth Watchman:

Vote of No Confidence

As Greece concludes its meaningless elections, and sends the same powerless “yes-men” back to Athens to rubber stamp whatever schemes of dispossession that Dijsselbloem has crafted for the Greek people, the rest of the world continues to cast the only vote that matters!  For since June, the already high levels of gold and silver purchases have not only continued, but have soared, both in Western retail demand, and in the far East.

Many of those Eastern powers have also escalated the pace at which they’ve bid their US treasury holdings adieu!  It’s one thing however, just to say that the world is now leaving treasuries behind, it’s quite another to show it, as this chart so powerfully does…

As they say, a picture is worth 1,000 words, and these words are full of rejection toward the idea of  furthering their balances anymore, with putrid US debt.  Country after country in that chart is doing precisely the same thing: diversifying out of US treasury securities.  It seems quite possible, in fact, that the world has seen “Peak Treasuries”, and that spells a world of hurt coming for US citizens…

Fleeing Toward Strength

However, it’s not simply enough to sell treasuries.  You cannot be truly diversified and independent of the US, if you simply swap that country’s debt in exchange for its currency(US dollars).  Nor are many of those nations simply deciding to buy a new country’s debt, as they’re continuing to pour tens of billions of dollars each month into gold bullion.

Russia, for starters, has really upped the ante in their gold buying, as they purchased another million ounces of it, in just the month of August!  This is one of the highest one month additions since the records began.  That’s over 31 tonnes in one entry.

See that 2 month blip in the middle of the chart where no gold was added?  That occurred during the height of the US’s attack on the Russian Ruble.  The gold accumulation only stopped briefly, to allow Moscow to deflect that blow…but once the Ruble was stabilized, the gold buying was kicked up a notch to make up for lost time.

Since the year’s beginning, Russia has now stashed away 112 tonnes of gold, bumping their central bank’s reserves to well over 1,300 tonnes, and could conceivably reach 1,400 by year’s end.  Here’s what the healthy climb looks like on the longer chart:

However, the real show-stopper continues to be China, where the average shoppers removed nearly another 74 tonnes of gold from deliverable stockpiles in just one week!

At this rate, Chinese demand will account for more than 2,500 tonnes, and perhaps as much as 2,600(a new record) in 2015, and that’s just through Shanghai!  It’s not just Shanghai where the gigantic demand is reflecting either, as recently there were different days in Hong Kong, where the exchange there delivered over 19 tonnes of kilo bars, each in a single day!

However,  these gold deliveries in China are now clearly affecting the vaults in the City of London. Just have a gander at this excellent chart via Koos Jansen, on the steady outflow of gold toward China:

Hundreds of tonnes of gold(that we know of), are leaving London, and that’s just a crying shame!  What just happened last week however, with Yellen’s interest rate decision will only serve to increase that gold demand higher.  

However…as bad as that was for global confidence, it’s what financial analysts are now pushing for as the next ‘solution’, which will truly blast gold and silver demand into stratospheric heights!

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