Eric Sprott: Western Central Banks Have No More Gold…Only Gold Receivables!

Bloomberg has released a MUST WATCH interview with our good friend Eric Sprott of Sprott Asset Management discussing his thoughts on gold.  While unable to specifically discuss silver due to the current PSLV follow-on, Sprott simply destroyed the MSM pundits’ anti-gold arguments, stating that gold has beat the Dickens out of every other asset class over the last 12 years, and questioned whether the Western Central Banks have any physical gold left in the vaults, as the gold listed on their balance sheets includes gold receivables, which has been leased out and is gone for good.

The legendary Eric Sprott’s full MUST WATCH interview below:

Bloomberg kicked the interview off by asking Sprott whether he is as much a fan of precious metals today as he once was, ”given the fact that they’ve treated you so poorly over the past 18 months?”  Sprott replied:

A little history is probably important here.  Gold has gone from $250 to over $1700.  It’s beat the Dickens out of every other asset class over the last 12 years…To specifically answer your question, am I more optimistic today than I might otherwise be?  Absolutely.   I wrote an article recently questioning whether the Western Central Banks had any gold left.  We simply did a physical analysis of the people that are coming into the gold market and the changes that have happened since 2000, (and the supply of gold has not changed since 2000 on an annual basis, it’s still 4,000 tons).   When you look at the fact that the central banks used to sell 400 tons annually, now they buy 500 tons.  The ETF didn’t even exist in 2000, now they buy 300 tons a year. 

The Bloomberg host then interrupted Sprott to claim that this sounds like a conspiracy theory and asked for another reason to buy gold.  Sprott responded:

I could probably give you 20 reasons.  How about money printing?  QE1, QE2, QE3, LTRO, OMT’s, people are essentially debasing their currencies.  They’re not holding them in the esteem that they should, and it’s reflected in the fact that the price of gold’s gone up.  One of the issues we have with gold is the fact that it hasn’t performed well in the last 18 months…But People are flocking to goldWhen I look at the US Mint statistics for gold sales.  When I look at what the Chinese are doing in terms of imports of gold from Hong Kong into the mainland, they’re up 500 tons in the last 12 months in a 4,000 ton market!!  Imagine if the Chinese bought an extra 12% of the oil or wheat market this year!  Would they get it?  And who’s supplying the 500 tons?  We already had a market that was in balance!

Gold production is flat, and one might even argue that the gold miners may have trouble increasing production this year.  You’ve seen the disappointments of Barrick and Newmont, and many others are having issues.

The Bloomberg host then asked Sprott why the gold price hasn’t responded to those supply and demand factors.  Sprott responded:

Well, there’s two markets for gold.  There’s the paper market, the COMEX futures.  You can have the annual gold production trade in two days on the paper market.  I focus on the physical market.  I want to see what people are doing with their money physically.  Are they continuing to buy more and more gold, year after year?  Every indication we have is that they continue to buy INCREASING AMOUNTS OF GOLD.  Sooner or later, (and ask Eric asked, how do the central banks sell gold without telling anybody?), they have a very simple way: Central banks have one line on their balance sheets for gold and gold receivables!  If they lease gold to a bullion dealer, that’s a receivable.  That gold has obviously been sold into the market, but we can’t tell what’s real gold and what’s receivable (on the central bank balance sheets).

Comments

  1. Sprott recently announced a follow-on offering to his silver trust of appx 7.5 million ounces.  It will interesting to see how long it takes to fill his order.  http://www.equities.com/news/headline-story?dt=2012-11-09&val=693670&cat=material

  2. Could it also be that a good portion of the gold is actually still there in the CB vaults, but being promised to an ETF as well as a befriended nation’s CB? You could have an audit, ETF and CB’s come to see it. Both are satisfied with what they are shown. Until they compare notes. 1000 units of gold was counted, and each was looking to see at least their 800 to be assured. So still 600 or more is missing.
    Or don’t ETF’s take crepe, and just take physical delivery, always?

    • XC…You’ve got, except it’s probably the other way around meaning the GLD gold has been lent to the Central Banks.  MSNBC did a gold special awhile back and quite by accident their reporter picked up a gold bar with the serial number visible while in the GLD vault.  Later a hedge fund checked their records and announced that they had been sold that particular bar.  Busted.

    • I wonder then how the gold could leave a BC’s vault. There ought to be transactions right?
      I did hear about the 911 WTC gold withdrawals. Although those might actually have been faked, to imply that up till then there was this metal present.

      So much gold, that ought to leave a paper trail when moved from one to the other.
      If fraud was committed, that’s basically high treason, especially at the FED level.

    • XC…Central banks hide their gold transactions on their balance sheets by entering gold on hand and gold receivables on the same line.  Total violation of GAAP but they all do it.   And yes, intentional debasement of the currency is treason.

    • I wonder if tungsen still counts as inventory?

    • @robertsgt40 Tungsten is gold. lol You just need gold colored paint.

  3. Sprott is absolutely great. Wish all billionaires were like him. 

  4. Good interview considering it was Bloomberg.

  5. The game continues.  The CBs pretend to have gold.  The inspectors pretend not to be blind.  The SD Hall of Fame opinion from Harvey Organ that states if when London is out of silver the COMEX will be out in a second. Strott outs the same BS paper folding spinmeisters.  This movie is getting interesting. Sprott can be the lead man.
    Sprott spoke to this problem in his Hall of Fame article June 11.

  6. Were is this vault? It sure is being photograph & filmed a lot. Did anyone see them moving the gold around without struggle? lifting the bars with fingers from the side of the bar in a pinch fashion. Those bars are at least 500 – 1000 oz, take the low side and try lifting 500oz pinching it from the side. I have seen gold moved before and they usually have to slide it to get there fingers under it and then lift it with two hands. These guys are moving this stuff one handed lol..

    Also in the vid at 4:55 min I see 7 bars stamped with numbers, all are 33300 and are the ones they’er stacking. This could be a lot number and I have seen silver done in this fashion like the bar below. California Crown Mint would use lot numbers on there bars to ID them so there is more than one with the same number. If this is the fact here, there is no other Serial Number on the bar witch is weird for gold in this bulk size. since they show a photo of pain staking inventorying of the bars one would think a personal serial number is in order.

      

        

    • Perhaps the reason why are moving the gold bars with one hand especially while pinching them is because they aren’t made entirely with pure gold, they are strong or there are low gravity inside the bullion vaults. LOL! :D

  7. Here is the photo of this room that Doc posted the other day..

     

  8. It must have taken a whole bunch of cans of Rust-o-leum to paint those bricks.  But they’re guaranteed not to rust, flake, chip or peel  Just what I want in my ingots.

  9. The biggest gold heist in history.

  10. re: UglyDog@11:03 a.m., The ceiling in that room needs painting.  But you see, the problem is that they used up all the paint when they painted those bricks.  
    -  -  -  -  -  -
    All kidding aside, there is a reason why the Central Banks do not allocate a gold bars to its owner.  This is because it is not possible to do so when there are multiple owners.     

  11. Here is a superior idea for a business.
    1.  You paint a whole bunch of bricks gold.  Maybe 2-3,000
    2.  Advertise that you are starting a bullion bank and send out pictures of the ‘gold’
    3.  Buy nice little cubicles with locks on them  Used high school lockers are sold for scrap.
    4.  Advertise on FOX and some other DA MSM channels plus Craiglist, the best DA channel in town
    5.  Accept cash, checks, credit cards, BITCOIN.
    6.  Move to Belize when you are done. McAfee is on the run.  His home will be a good buy.

  12. Phyzz in YOUR possession is the only way

    • Sprott schools those two interviewing him. Conspiracy theory after a 12 year bull market?

      Truly laughable.
              

        

    • That is true! Like everyone said, “If you don’t hold it, you don’t own it”! Most of the people holding paper versions of precious metals are only thinking about profits in terms of fiat currencies and they only look on the short term instead of the long term since they don’t know the fundamentals of gold and silver.

  13. How are the gold bars numbered…all the bars shown on the video where with same number 33300…Is this like a production batch number or supposed to be a unique identifier?

    If supposed to be unique, we might have just witnesses a heck of a lot of tungsten being piled up nicely? 

  14. WTB gold bricks. Will pay 1 million funny munny a piece.

  15. Physical gold? You had that here? Read your fine print you gave us the right to lease it out since it was in our storage and it is gone and we are bankrupt…

  16. Finally! Someone who was able to shut up these financial “pundits’” mouth! All they are doing is spread propaganda about precious metals. Physical gold and silver are in short supply and it’s their paper versions who are keeping their values low.

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