Thursday, October 10, 2013
Two charts from Mr. Frisby
Here's two charts I received today.
This first chart here shows that whitey stopped buying gold after the price started going up. That might suggest this chart simply portrays Western asset-allocation; in the traditional asset-allocation model, you sell gold when it goes up.
Asian aggregate demand, however, looks very price-inelastic. Though maybe that's because per-capita wealth creation has run a lot faster in the East?
Interestingly, according to this chart, 2003 world fab & investment demand was 4000T, and now it's only 3600T. Um... those numbers look funny. Please verify with WGC data before believing any of this.
Also, this chart stops in 2011, and it's the 2 years after this that we really need to be concerned about to see if trends have changed.
This other chart is more recent, and explains why gold went down in price. When total holdings goes up, ETFs show up on the demand side, while when total holdings goes down that means the ETFs have moved to the supply side.
Nothing new whatsoever in this second chart, except it provides a perfectly sensible explanation for the price of gold going down that has nothing whatsoever to do with US money supply, QE, or a secret cabal of bankers.