Tuesday, January 15, 2013

Big News & Little News

In less than 24 hours I see a lot has happened.

One item of little news is that platinum (at least as of writing this post today) has caught up with gold and just passed it, albeit by a tiny amount.  Historically platinum has been higher than gold although the ratio (or premiums/discounts) have varied widely.  I have seen a couple of reports that say that platinum's price is up (rather sharply over the past week or two) vs. gold because the automotive industry is recovering nicely (including in China) and that production problems continue in South Africa.

Prices of gold, silver and platinum can always be found at the top of my blog (when wroking right anyway).


The Big News, of course, is the report that Germany's Bundesbank (their central bank) wants most of their gold back that is held outside of Germany.

Germany is (by official figures) the world's second largest governmental holder of gold, a bit over 3000 tonnes (metric tons).  (There ARE persistent reports that China, now officially reporting just over 1000 tonnes may have much more -- maybe 4000 tonnes -- but no one really knows)  Most of Germany's gold is held outside of Germany itself, a large percentage at the Federal Reserve Bank of New York (which holds some 7000 tonnes of mostly "other people's" (non-USA) gold).  Smaller amounts of Germany's gold is held at the central banks of England and France as well.

The reports (zerohedge.com is following this closely) seem to indicate that Germany may take its holdings down to ZERO in France and take a lot from the FRBNY.  One report (comment section) at Zero Hedge is that the Germans may hold a press conference on this matter tomorrow.

If it is true that Germany will take its gold back, this may be the biggest financial story of the year.  

In the 1960s, France took its gold back from the FRBNY, and there are reports that it was difficult to come up with the gold and that there were worries about that act causing damage to the financial system (which, looking back on it, appear not to have happened, damage that is).  A year or so, Hugo Chavez (Jefe of Venezuela, now in a coma in Cuba and perhaps near death) took his country's 400 or so tonnes back home.

And now Germany.  Just three months ago, a spokesperson at their central bank said they had no worries about the security of their gold being held outside of Germany.  Has something changed?


Little news, really an anecdote about our economy.  For years now there has been debate about whether or not we really are growing our way out of the hole we fell into during the Great Recession.  Many of us have had our doubts, but almost all of the official figures and MSM reports are that we ARE advancing, and I have heard some reports (anecdotal again) from small businesspeople (local and out of state) that things are getting better, very slowly, but better.

WELL, maybe.  But, today I took my wife and her parents to a nearby attraction while I went to find a bookstore and quiet place to write an article...  Since Border's (the bookstore chain) went under a couple or so years ago, my only convenient alternative has been Barnes & Noble.  So, in this part of our city, I dropped them off and went to the B & N I normally have gone to before.  No!  They are gone at that location (and the property is vacant).  B & N has been shutting down bookstores even since Border's went down.

So, no bookstore, no calm coffee shop to write this article.  So I came to the nearby mall to eat lunch and write this piece.  And what did I just see?  J C Penney (where I had bought lots of casual clothing, I liked buying clothes there) looked terrible!  Signs all over saying "Clearance 30% - 60% Off".  And the selection of merchandise available is less than before...

So, what to make of this anecdotal evidence?  Well, I do not see much that brings me cheer re our local economy, although housing prices are up a bit, sales are up a bit and unemployment is down a bit.  So the FIGURES are better, but what I SEE, well not so much.

Retail may be a lagging indicator, and my anecdotal evidence is just that (and so not worth much).


Be watching tomorrow if the Bundesbank holds that news conference about bringing their gold home...

1 comment:

  1. "...unemployment is down a bit..."

    You need to be careful with that - as you know, the BLS figures, with the seasonal adjustments and definitions that exclude the 'dropped off the end' chronic unemployed, and other statistical make believe stuff make the employment numbers suspect (to be kind); and the *quality* of jobs that are being created/filled is declining (less salary/fewer hours/fewer benefits), which is not reflected in the headline employment number, or much of anywhere else. Our unemployment numbers are better than most of Europe, but that is damning with faint praise, and I don't see these numbers being significant to any 'recovery' that is happening. Some parts of the country are recovering, and some still are not. By and large, the middle working class is still pretty screwed, and the raise in payroll taxes is not going to help.


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