“Not Owning Gold Is A Form of Insanity,” Says Broker To The Queen (GLD, SLV, IAU, SGOL, PHYS, AGOL)

Share This Article
March 9, 2012 1:25pm NYSE:AGOL NYSE:GLD

Dominique de Kevelioc de Bailleul:  If those words sounds familiar, that’s because you may have read it somewhere  on the Web some time in January of 2011.  “Not owning gold  is a form of insanity,” Robin Griffiths of Cazenove Capital (believed to be the  private broker for the British royal family) told

CNBC on Jan. 11. “It may even  show unhealthy masochistic tendencies, which might need medical attention.”

Though Griffith’s apparent flare for offering up salacious soundbites for  financial journalists, his diagnosis directed at investors who worry whether their financial future is intact, yet, don’t hold a meaningful portion of their wealth in gold may not have wandered too far from making a valid point, especially considering that since January 2011 the world’s unresolved issues have only mounted rapidly in  quantity and severity.  Get my next ALERT 100% FREE

Consider the news of just the past two weeks, alone, and never mind the  events that have shaped the world’s radical change in public consciousness since  the fall of Lehman Brothers in 2009.  Griffith’s seemingly flippant remark of more than a year ago appears more and more worthy of repeating as the endgame to the crisis unfolds.

On the Feb. 29, the European Central Bank announced a massive QE program in  the amount of $712 billion for approximately 800 European banks—a move so  audacious that Mr. Gold,  Jim Sinclair, felt compelled to alert investors of the troubling event, underscoring the desperate manner by which the announcement was obviously  camouflaged, obfuscated and provisioned in the hopes of not triggering a panic into the gold  market.

“Today does qualify as one of the biggest injections of liquidity into the  system in the history of the system,” Sinclair told King World News.  “Today was a cover-up by the U.S. Federal Reserve and by the mainstream media of  one of the largest injections of liquidity into the system that has ever  occurred.”

Sinclair continued to explain that, in essence, the Fed has embarked on a course as the buyer-of-last-resort to, not only the U.S. debt market, but Europe’s equally-sized debt market, as well.  In total, the U.S. dollar  and euro represent approximately 88 percent of central bank currency reserves (excluding gold reserves).  These reserves have been debased at a staggering rate, with no end in site.

“This money flows, in order, through these entities—Federal Reserve to the  IMF; IMF to the ECB; ECB to the member banks.  This is pure QE on a global  scale,” he said.

On Thursday, following the decision by the ECB to maintain its member bank rate at one percent, reporters ask ECB president Mario Draghi about contingency plans for the euro in the event of a Troika failure in dealing with the European  sovereign debt crisis.  Draghi said, pointedly, “We have no Plan B. Having a Plan B means to admit defeat.”

Translation: The ECB will print, print and print more money (or get it in a  circuitous way from the Fed)—or die.

Again, on Thursday, in response to the ECB’s latest $712 billion injection of  capital into the European banking system, former ECB executive member Juergen Stark told the Frankfurter Allgemeine “. . . the balance sheet of the euro  system, isn’t only gigantic in size but also shocking in quality.”

In total, the ECB’s balance sheet now stands at more than (euro)3 trillion,  or nearly one-third larger than the Fed’s ‘official’ balance sheet, with more to come, according to some prominent analysts.

On March 8, German newspaper BILD ran with a story about the rumblings in Germany regarding the status of its 3,401 tons of gold reserves.  A growing  mistrust of the United States as the custodian of Germany’s gold has reached critical mass, according to BILD sources. Many Germans wonder if they’ll get their gold back.

According to the article, German politicians are feeling heat from a growing concern among the German people regarding the euro and Germany’s financial obligations to a failed euro experiment.  Germans wants an audit of its gold and repatriation to Frankfurt in the event of a euro collapse and an  emergency reinstatement of a gold-backed deutsche mark.

When elected member of the Bundestag, Phillip Missfelder, made an inquiry of  the Bundesbank as to why Germany’s gold was not audited in 2010 as required by  law, the Bundesbank’s response sent chills throughout Germany’s fiscally  conservative electorate.

“I was shocked,” Missfelder told BILD.  “First they said that there was  no list [of gold bars].  Then there were lists that are secret.  Then  I was told, demands endanger the trust between alliance bank and the Fed.  [Google translation]”

On the heals of the BILD article comes another article about a country and a  people known for prudent fiscal behavior: the Swiss.  They, too, have come  to the realization that the euro is sinking and that a Swiss franc peg to the  euro will take the franc down with it.  They want their gold.

Zerohedge posted on Thursday:

“Gold Initiative”: A Swiss Initiative to Secure the Swiss National Bank’s  Gold Reserves initiative, launched recently by four members of the Swiss  parliament, the Swiss people should have a right to vote on 3 simple things: i)  keeping the Swiss gold physically in Switzerland; ii) forbidding the SNB from  selling any more of its gold reserves, and iii) the SNB has to hold at least 20%  of its assets in gold.

Contrary to propaganda spewed by the Fed, U.S. media and America’s unofficial spokesman and cheerleader for a broken Bretton Woods scheme, Warren Buffett, in  the end, it all comes down to the gold.  How much.  Where it is?

And if the two countries known for their level-headed approach and reputation  for maintaining a strong currency are now lurching for the gold, it’s most  likely that other Western countries will follow suit—and quickly.

While the news turns from the latest scheme to bailout Greece, to gold, why  then would an investor put off acquiring a 3,000-year-old, tried-and-true asset that holds value under the most dire of financial and geopolitical circumstances—such real-time textbook examples of profound currency debauchery from each G-7 nation, imminent war and political upheaval?

Obvious to a long-awakened bunch, crunch time approaches, and, as Swiss  economist and money manager Marc Faber has said in the recent past, it’s also time for each investor to become “your own central bank.” And if investors  cannot or will not see the consequences and market reaction to bizarre policy actions taken by the stewards of 88 percent of the world’s reserve currencies, Cazenove Capital’s Robin Griffiths’ characterization of “masochistic” investors knowingly taking no action in response to this abomination won’t seem so sensationalist after all.

Related ETFs: SPDR Gold Trust (NYSEArca:GLD), iShares Gold Trust (NYSEArca:IAU), ETFS Physical Swiss Gold Shares (NYSEArca:SGOL), Sprott Physical Gold Trust (NYSEArca:PHYS), ETFs Asian Gold Trust (NYSEArca:AGOL), iShares Silver Trust (NYSEArca:SLV).

By Dominique de Kevelioc de Bailleul From Beacon Equity Research

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap  stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock  market today, which have traditionally been shunned by Wall Street.  We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Read Next

Get Free Updates

Join over 50,000 investors who get the latest news from ETFDailyNews.com!

Most Popular

From Our Partners

Explore More from ETFDailyNews.com

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again!

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories