First-Hand Account of Gold & Silver Mania in China- Black Friday Style Mobs Scrambling for Bullion

imagesWith the recent claims from an Apple contractor that a Chinese silver shortage is the culprit for the production delay in the new I-Macs, an SD reader who has recently moved to China has given SilverDoctors a MUST READ first-hand account of the retail gold and silver mania underway in mainland China. 

With the Chinese New Year less than a month away, Ichban describes Chinese demand for gold and silver in Beijing as a tidal wave, and states that the demand for gold and silver is more intense than Thanksgiving/ Black Friday mobs in the US, despite the nearly 60% premiums retail dealers are asking for silver bullion!!

Ichban gives readers a glimpse of what to expect when the mania stage of the gold and silver bull markets finally reaches the US, as he describes the scene at Chinese retail bullion stores: 
Despite these high premiums, I have never seen such frenzied buying in my life!  I am a young adult male and 40 year old Chinese women are shoving me out of the way because they are trying to buy some gold and silver!

Ichban’s full first-hand account of China’s gold and silver mania below:

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Doc,

I have been in China for the past few months and I have been witnessing the silver and gold demand first hand at ground zero. Let me tell you. At first, I was quite stunned to see the small silver and gold shops that sell everything but the bullion rounds we are used to seeing back in the states like ASEs, Maples, Krugerrands, and even Chinese Pandas (these are only legally sold at the National Chinese Banks like Bank of China, ICBC, etc).

The reason I was stunned is that I did not witness the typical scene described back in Western websites about the massive PM demand in China when I first arrived in October. Of course there is a lot of retail demand in China for silver and gold but the bulk of this retail demand appears to comes around the Chinese new year (which is Feb 9 this year).  The typical scene at a silver/gold store did not impress me. This changed very quickly as the Chinese buying habits according to a Western mind (me) are not very predictable and appear to be lemming like or Giffen-good esque. In other words, if they see that something will increase their prestige or esteem and people are catching on, then all of a sudden like a tidal wave, everyone will start buying it, wearing it, or doing whatever “it” is. This is a common trait in South Korea, where 1 product or musician can become very popular out of no where. One has to keep in mind that in general, Asia, which is not based on Judeo-Christian norms, is an area all about perception, prestige, and not losing face.
I just wanted to tell you that the last couple weeks, these retail shops which are often found around big box stores like Carrefour or Wal-Mart in China, have been absolutely swamped with buyers. I was not impressed with the traffic a couple months ago but there is a lot of money flowing to gold and silver the last couple weeks here and it isn’t showing any signs of abating soon. I have never witnessed anything like it before, and this is comparing it to Thanksgiving shopping in the US, where people get stabbed over the newest Iphone that is released on Thanksgiving.
For a little background: The Chinese New Year is the biggest holiday celebration in China of the year and it is based of the Lunar calendar (but it is usually sometime in February or early March according to the Gregorian calendar). This is the only time of the year that every Chinese person has some time off to visit with family, similar to our Christmas but even bigger in my opinion because of the magnitude of people moving around in China and the amount of time off (usually 1 month). With that in mind, gift giving is a very important thing in China because of something called guanxi (pronounced gwan she) and mianzi (pronounced meon zuh).
The Chinese are the ultimate source when it comes to presentation and perception. Because of this, the children will buy the parents a gift of something that they can wear, and it is almost always in the form of Gold and/or Silver. Silver and Gold signify money and wealth to all Chinese and this is just a basic concept to them. Anyways, instead of buying your mother a vacuum cleaner for Christmas a typical Chinese son or daughter would prioritize spending 500-1500 yuan on gold/silver for their parents (focusing on the mother first). This is $80 to $240 in USD.But the buying doesn’t stop with the children. Usually the mother and father will go out and buy gold and silver on their own in addition to their son or daughter buying them gold and silver. Just today while I was at Carrefour, I saw multiple grandmas, fathers, and mothers wearing gold necklaces that were 20 karat  or above and weighed around 70-85 grams. One such necklace I saw was $5000. I took a good notice at what clothes the man was wearing. He had some old tennis shoes, and just a t-shirt with some basic jeans. I know judging a book by its cover is wrong but he did not appear to be ultra wealthy. You would not see this sort of buying back home in the states which is why this is absolutely stunning to any Westerner. I also saw numerous older women wearing traditional silk Chinese shirts with similar necklaces that looked to have cost around $2500, as I would look at their necklace and compare it to the one in the shop (as they are all pretty easy to look at and compare because they are sort of standardized here).
Next time I go, I will take photos for you and you can post them on SilverDoctors… Furthermore, I was shoved numerous times out of the way by 40 year old women who wanted to get a gander at the newest necklaces and bracelets….. I am not a big guy but I am a young adult male nonetheless and these are women that are shoving me out of the way because they are trying to buy some gold and silver. This just gives you the idea the sort of frenzy that is going on over here. I won’t make price predictions, but I do expect silver and gold to go higher from here over the next 3 weeks, with a small correction by the end of February.
Here is a breakdown on the prices:
The gold at most of these small silver gold stores were selling anywhere between 388-420 yuan per gram (or $62.47 to $67.63 per gram, using a 6.21 exchange rate). With a current gold spot of $1685, the per gram cost is $54.18. China’s retail precious metals scene is currently putting only a 15% to 25% premium above spot prices. This of course is higher than premiums in the west but relative to Chinese premiums, this is pretty cheap. All of the PM retail shops in China lower the premiums significantly leading up to the Chinese New Year (Feb 9) in order to attract more buyers. I’ve witnessed premiums well above 50% a couple months ago for gold.
The silver was anywhere between 8.8 yuan to 20 yuan per gram (depending on the significance of the artwork, and other factors). However, there were .999 50 gram art bars that were selling for 10 yuan per gram or 500 yuan per bar. These art bars have each of the 12 zodiac animals on them. So, one 50 gram art bar is $80.51 or $1.61 per gram…. whereas at the current spot price of $32 equals $1.02 per gram. So in other words, China has a street silver premium of 57% on a typical art bars…. If this 50 gram Chinese Zodiac art bar were to only weigh a troy ounce (31.1 gram) it would cost $50.07…. a much higher premium than the art bars you can buy at your local dealer, SD Bullion, retail shop, or on eBay.
Anyways, despite these high premiums, I have never seen such frenzied buying in my life before. I must take pictures and/or a video next time I go to the Carrefour in Beijing just to show everyone in the West what the mania stage will look like when it finally arrives in the states. In the meantime, I am going to take care of those bruises I received today from the 40+ year old women who shoved me out of their way. Cheers from Beijing.

SD Bullion

Comments

  1. WOW! Just called my german coin dealer about the 2013 silver Pandas I had ordered in the beginning of december. They were supposed to get Pandas in the first week of january, but are still waiting for the delivery..

  2. I don’t know but I doubt I’m the only one who has the feeling that something big is about to happen in silver and soon. I’ve also been looking at the price of kevlar lately!

  3. “Anyways, despite these high premiums, I have never seen such frenzied buying in my life before.”
    Yeah, and those brainless banksters in New York and London allow them to buy at a discount everyday. Here’s a news flash to TPTB retards. Asia is not going to stop buying precious metals. When the Chinese are ready to back the Yuan with gold it is game over for the US dollar.

  4. JP Morgan was unavailable for comment…

    • Maybe Jamie and Blythe were too busy dropping loads of paper silver to suppress silver prices so Asia can get all that they want?
       
      Makes me wonder if these paper-pushers aren’t also buying up loads of phyzz at bargain basement prices.
       

    • Wonder? Maybe not the bank itself but the big shots are I guarantee it!

  5. and you didn’t take any pictures for us to see? wow

    • His cell phone must not have a camera.  And he sure likes to write a lot, about the “long lines” subject.  I’ll take it with a grain of salt until I see better evidence than some personal e-mail.

  6. This guy could be real, but he could also be a fake. There’s no way to tell really. But, China is a huge promotion, and has been for several years. No criticism of the Doc intended, but I just get the smell of a rat here.

    • @Chief lol, thanks for the laugh.  I know Ichban well, and he is legitimate. 

    • @The Doc …. it’s a pity you cannot seem to show respect when respect is shown for you, but it’s good to get this point clarified anyway, which could have helpfully been mentioned in the original article to show authenticity.

    • Chief…

      It’s not only the Doc that you are ‘criticizing’ but me. I have been on here for quite a while now. I think you should have searched and read my posts before you made that comment.

    • @ich1baN … I’m not criticising anybody. Jeez, you and the Doc are sensitive today. I am just giving my thoughts. Should we all just shut up and accept all things published here, and everything YOU say, as 100% truth? That would be unrealistic, and surely you and all of us would accept that. None of us here are able to see truth all the time, and that is why we all congregate to discuss things, so that we can come to a better understanding of where we are at. And, in these times, TRUTH is actually the most valuable commodity, and the truth is that NONE of us knows it all.
       
      Why do you pick on me? There are several others who feel that this article is suspicious and hyped up (take a look at all the comments before singling me out). This is precisely the type of hype one sees in the MSM, which is why I pointed that out.
       
      But, despite the hype, the strange comparison to Black Friday, hyped picture and the several others who have their doubts, I have already accepted that your story is legitimate, as you will see above, if you had taken the time to read my reply to the Doc, before you made your comment.

    • @Chief  … agreed %100

    • QUESTION EVERYTHING!  That is the only way that we will ever find the truth.  Hopefully, we can do that nicely and without making others uncomfortable.  But, if not, then so be it.

    • @Ed_B @Silvaschmiegel @chief

      I did not mean to appear to single you out, that is not my intention. I only replied to your post because it was the first negative one I saw.

      There is no problem with questioning if what I did was real or not…. The problem was when this was stated “ I just get the smell of a rat here”. It can really cast a lot of doubt on all the effort I just did to write this and how long it took me to gather all of this intelligence. How would you feel if you just spent your entire Saturday or Sunday travelling to a destination that takes 1.5 hours to get to because the city you live in has 20 million people. Then you arrive and you have to have someone help you interpret all of the idiosyncrasies because they don’t speak English (and I don’t speak Mandarin well enough) which takes a long time. I spent my whole day compiling this information for the benefit of SD readers to have someone call all my work (getting the premiums and prices and specifics, getting shoved around, etc) the work of a rat. Maybe you can understand why I have this abrasive tone to someone that dismissed what I wrote when I do it all for free.

      Also, I do not think the comparison to Black Friday is strange, but is actually logical. It is a way to show the Western Mind what people in China do before the New Years and how frenzied it can be…. it is not just 1 day of demand here, it lasts weeks leading up to the New Year, but there is no holiday as big in the West, so that’s why I made that comparison, to give people a close resemblance of concrete images. 

    • @ich1baN … I didn’t say the ‘work of a rat’ .. instead I said ‘I smell a rat’, which is a euphemism for ‘this might be fake’. But, now I believe it! Once you state your opinion, people say everything about you .. you have to get used to that, it’s just life. I hate that when it happens to me, but it does all the time regardless.
       
      There is SO much BS out there, that being skeptical becomes a way of life. Eg. the story that HSBC just bought $800 million worth of silver from Poland (to give the impression of no shortage, just at the time there is a shortage).
       
      Take it easy and thanks for your interesting article, which certainly fits with all the others just out about a global silver shortage. Apologies for getting it wrong about your work.

  7. Ichban, thank you for taking the time to write and share your experience in china with us US folks.  Hopefully, you are wearing a gas-mask or have other appropriate breathing prtection.
     
    With all the FAKES coming out of china, I would be suspicious of buying any PM’s there even from a govt. bank there, let alone from a ‘mom & pop’ type shop.  That beautiful chinese ‘silver’ coin you just bought from them might not give that high ringing sound when you drop it onto the table, but instead a dull “thud” which sounds a lot like the word, SUCKER!”

    • Yes, the gas mask would have been helpful 2 weekends ago. I don’t know how to upload pictures, but I took one on my phone while riding the bus on my way to church and you can barely see 20 meters out.

    • @ich1BaN: I was reading a story last week about the air quality in China as of late. Get a mask just in case. You don’t want to go home with more limbs than when you left and certainly not less! :-)

    • @ich1BaN Hey brother so that’s where you’ve been hiding, welcome back to posting, I think. LMAO
      A lot of people on here didn’t realize who you where and that you have a lot of friends on here and it was your way of saying Hello!!
      Now don’t go and hide again, I for one enjoyed your article and you’ve got me envious of you being in China. Stay safe my friend.
      P.S. The picture on the article that Doc posted was a little over the top. First thing I thought was starvation. Then again starvation for PM’S Lol

    • @RocketsRedGlare
       
      I have taken your advice. I wear one of those cloth masks that you will see on TV and the internet, however I think I need something more substantial. The average pollution level according to the US Embassy is somewhere in the 350 range per day. 2 weekends ago it was 900. The average for LA is in the 130 range. It makes me think LA is a conservationist paradise :)
       
      @Marchas45 @chief
       
      Ha, yes, I have been here the last 4 months now. I have been reading most articles and comments but have not been able to post as much as I used to. I appreciate the kind words.
       
      I consider all of you my friends. If you do ever come to China, perhaps after the blow-off top in Gold and silver, you can live very comfortably for a fraction of the price.  It is at least worth an L-Visa visit :) .

  8. @Chief, actually, we are about to enter the year of the Snake, not the Rat.
    (Same thing, actually.)

  9. Hey Stackers, look at my post just yesterday on SDs article on the silver shortage, where I say that PREMIUMS are the KEY to buying, not the price of silver. Paying 57% premium is nothing!  Wait until silver passes the $50 mark, you will see premiums rise proportionately.
    If you can find it, buy “junk” silver, where the premiums are non-existant at the moment.  I just bought FORTY-FOUR ounces of junk yesterday for $1012!  That is silver at spot!  Dont get all caught up in the bullion market, because it is quite simply a unnecessary drain on your pocket.  Silver is silver, period.  So you pay a premium for eagles, pandas, dragons, etc.  Big deal!  When the SHTF, it won’t matter what you have so long as you have silver. Why?  Because the scale the buyer has doesn’t differentiate between what kind of silver is on it, just so long as its silver.  Capeech.  That’s my rant for today.  Keep buying, and remember, one measures one’s wealth in OUNCES, not DOLLARS!  God Bless you all!

    • Yep Silverrrrr…..Almost got laughed out of here and other places for suggesting we might soon see ASE premiums at $10 per unit a few weeks back…..

    • The Mint controls the release of ASEs to ensure and maximize profitability.  Dealers buy their yearly inventories now as well, straining the controlled supply.  Thats why ASEs are in short supply.  China’s demand has increased because of Chinese New Year.  The Doc isn’t passing on fake news, he and Ichiban are giving us first hand info (that most other bullion sites do not) to help us make informed decisions – if one cannot see through a stock photo, then I have some tungsten to sell you.
      Simplified, silver is silver, but all silver products are not created equally.  I buy silver for a variety of reasons and typically try to keep my premiums low or non existent.
      Yesterday, I bought 15 oz of junk dimes from my LCS for 96% of spot, as always.  I buy twice a month.  If my LCS has junk, sterling rounds, irregular stuff, casino tokens, etc, when I make my scheduled purchase, I buy from him under spot.  Sometimes he is out, then I buy from SD Bullion, whatever is the lowest premium.  The deal of the day gives me some flexibility.  
      In a liquidation scenario, the sealed tubes, packages, sleeves of certain bullion products will fetch a higher price to the right buyer.  Junk silver will not command as high of a premium.  Just like diversifying investments, its probably good to diversify your silver, IF you intend to liquidate it in the future.
      Ultimately, silver is silver, but if you want to order online and have it shipped to your door, you will pay a premium for the convenience.  You can pay less if you truck it to your LCS, but good deals are found everywhere.

    • One major problem with junk silver, it takes up room. Unless you can get it melted down into squares for easy stacking. I got into Silver Bullion because of the fact that silver takes up too much space. So in the last couple of years, I buy numismatic silver, sell it for higher than I bought it, basic economics, then use the percentage that I get from the difference to counter the effects of premiums over spot and buy nice clean solid silver bars of 250 gram size or 500 grams. This works out cheaper than asking someone to melt the scrap down.
      As soon as the SHTF and silver shoots up, I will be cashing it in for gold. Silver is great at the moment because of the ratio of gold to silver, but as soon as this gets squished, buy gold, its saves space. :)

    • Rejoice that you can buy junk silver in your area at spot.  I have one pawn shop that sells at spot but has virtually no inventory.  He only has inventory when locals are selling and almost no one is selling now.  Other shops that have junk silver are asking and getting a 3-4% over spot premium for it.  Even at that, their inventory is not that great.  Maybe this is like real estate and much depends on location?  I have noticed that the on-line vendors have raised their premiums on all forms of silver, including junk.  They also show “out of stock” on many products that have been commonly available.  Not sure what is happening here but, clearly, SOMETHING is happening in the silver market that is not at all usual.

  10. @Chief I felt the same way about the article as you when I read it.  It doesn’t help when a ridiculous photo like this is shown with the article.  Maybe Doc could have stated in the opening of the article that he knew the writer well and he vouches for him.  The author’s little story about being pushed about by old women seems a little much. That said, I think there is a little hype here.

    • @Stacksmack3000  … the thing is that this SAE shortage in US is not mirrored in Europe, which is quite strange. And, China has been promoted as some sort of miracle for a long time. But (see above) the Doc knows the guy, so it seems legit despite the hype.

    • @Stacksmack3000

      There is no hype here. I don’t know if you have been to China or any Asian country for that matter…. but if you know anything about China it is not so easy to pull out a phone and start taking pictures with it. I have already been hassled one time in downtown Beijing near the US Embassy when I took my phone out to record a video of a homeless guy playing the Erhu (pronounced Are who), simply because I loved the sound he was making…. nonetheless, the guy yelling at me in Mandarin had no clue that I just bought the homeless man a sandwich and a drink. 

      Another quick fact for those unfamiliar about China (and Asia in general)…. They don’t really open the door for you if you know what I mean. In China there is no such thing as charity. They don’t care for strangers nearly as much as one would in the West, where it is common courtesy to open the door for the person walking behind you, which is why it is easy for them in crowded situations to just push other people out of their way.
      Ever hear stories about friends or relatives traveling through Beijing, Tokyo, and Shanghai subways? Once you have come and actually witnessed for yourself what China and Asia are like you will know what I am talking about. I find it that one thing in the West can be said about China but it is totally different once you actually step foot here.

      Edit:

      Also, I don’t consider women aged 40, old. I think you may have misread what I wrote.

    • Anyone who doesn’t think that women can be aggressive AND physical has obviously never been in a store with a big sale going on and a couple of hundred women who don’t want to miss out on the goodies!  They can and WILL run right over anyone in their way. lol
       

  11. @ich1ban    Ignore the naysayers.  I for one truly covet eyewitness reports from trusted sources.  

    • Thanks UglyDog.

    • @ich1ban
       
      I’m with UD, great to get “boots on the ground” reporting. 
      I think maybe the Doc edited the taglines, or these other guys just missed it. 
      I have always felt that Doc only listed stories from trusted sources. But I do 
      understand healthy skepticism. Helps keep us safe sometimes. I just stack 
      as much as I can afford, anyway. 
       
      THANKS

  12. @ich1baN, yes I have been to china (Xiamen), very interesting place.  Everywhere I went, it was crowded but I do not recall being shoved.  But you are correct in saying that in the Asian cultures (at least Russia & china) people don’t give a sh!t about strangers and common courtesy is lacking.  In this respect, we are more civilized here in the West.
     
    I remember after returning home from china, somebody asked me where I’d been.  When I told her I’d been to Banging Gong, Hanging Dong, and Upper Yinyang, and she kinda said, “Oh.”
    Bwaha ha ha ha! 

    • In Russia, people do not smoke in public transport like in China.
      In Russia, people have a much higher level of politeness than in China. Of course you can not compare the level of politeness people in Russia and in Europe. Russia according to this criterion is about midway between Europe and China.
      My personal opinion and observation: People in Russia have some politeness  and courtesy, but very angry. I mean, the average estimate.

    • @Silvermail
      The smoking on public transit has changed dramatically since the 2008 Beijing Olympics. Since the olympics was hosted here, it brought a lot of scrutiny about “standards”. No one smokes on the subway but I guess if you mean the other forms of public transit, it happens rarely now, post 2008 Olympics. I bet the level of politeness is higher, but I know that Russians and Eastern Europeans can be skeptical of people in terms of trusting other people, considering the last 100 years of their history, this makes sense. I do agree that they are more polite (and I think this is largely due to the elements of Judeo/Christian influence in Russia from Orthodox churches). I have many Eastern European friends, and it takes much longer to be their friend compared to an American. (of course this is my experience on average, not everyone is like this)
      The thing about getting politeness in China is an art. You can find politeness if you use the right psychological and “face-saving” techniques… This usually means you have to show in Chinese terms that you are not as superior as them…. For instance, when I open the door for people behind me at a store in China, everyone literally thinks the world of it. But to the Chinese, when you do something like this, they are thinking in their mind that “you must be thinking you are not as superior.” 
      People that think there is racism in America should come to Beijing and ask how Japan is doing across the sea. No one really notices this back home because they aren’t on the ground level. For example one time I was in a taxi and I had a Chinese friend with me and the taxi driver went on a whole spiel about how China will win a war against Japan. (This is probably true if the US doesn’t back Japan, b/c China spends the most on the military behind the US). 

      There will likely be a small skirmish over the Diaoyu Islands (Senkaku to the Japanese), because of the tensions over the mineral rights. I just happen to be living right in the middle of this powder keg that could go off anytime. Prime Minister Abe of Japan has been increasing his nationalistic rhetoric and is just the guy who might send Japan into a small war with China because of his tone and extreme want to hoist Japan back onto the world Economic stage and out of the Lost Trecade.
      @Mammoth
      It is going to be funny explaining some things to my family and friends back home when I tell them where I have been. I went to Chong Chong on that day…. Chong Chong?! Yes, the Great Wall :)

  13. Doc, do you have any reporters in other countries?  India, Middle East, Russia, etc.

  14. @ich1baN   Thanks for the first hand account. I look forward to seeing some pic’s or video.
    Cheers!

  15. We have lots of people from Europe, the UK,  South and Central America posting here with first hand personal experiences of their situation, taxes and the market for phyzz.  Pollokeeper, Tawnyard and XC Skater are good resources.
    My question is kind of singular.  What happens if the spread between spot and sales prices are $10.  How do you liquidate PMs if that is your preference.  Some of us, me included, will need to sell some phyzz if personal FIAT stocks get too low or a bank run/ATMholiday takes place.  It’s is happening in Europe with currency controls of 300 euros cash or transactions in debit or electronic cards force disclosure of buys and sales of anything. No privacy there IMO. Bank shut downs were commonplace last year in Ireland, Scotland and England.
    If the spread is $10 or more since the paper prices no longer represent the prices demanded by sellers, how does one sell without taking a real hit to their phyzz values when selling.
    LCSs and dealers are going to want to make the spread for themselves.  Any chance of there being a bullion exchange for the purposes of  creating a reasonable market for the buyers and sellers without a major haircut in the transaction hut assuring the facilitator of a reasonable profit to help with the exchange

    • Bank shutdowns commonplace in Scotland last year?  I must be walking around in a bubble. Didn’t happen.

    • @AGXIIK … there was a problem with Nat West (I believe) in England last summer I think, in which their outgoing payments were made ok, but incoming payments were not (I think that was it), and they had to shut for a week or so. Significantly, there were ALOT of reports of ‘cyber attacks’ on UK banks last summer, at the same time as that first thing, but I believe these were BS, as my bank accounts were unaffected. I believe these reports and others from US and Europe are predictive programming for a future cyber attack. I mean the same bunch of good ole boys (you can guess their race) runs the banks as runs the MSM, so they can say what they want about it, and how would we know the difference anyway??

  16. IE 999  I have one word for you.  Getting laid by Ann Margaret on graduation day    LOL. 
      Silvermail  Any intel from top to bottom in Russia would be helpful  From what I’ve heard, Russia is working with China to develop a partialgold backed currency amongst other things.  Putin is one crafty guy, smart and with a long view.

  17. @Ichiban,
     
    Thank you for sharing your experience with us.  Please don’t hesitate to come back and share more.
     
    I can vouch for getting pushed out of the way by the Chinese.  When my wife and I were in Hong Kong, we were constantly getting pushed aside when trying to get onto the MTR, or in a crowded area.  I was pissed at the time but now that I know a little more about the culture, I can understand why it happened.

    • @FelixWankel

      Yes, I have not been to HK yet, but that is pretty much what I understand it to be. I have learned to accept the fact that there are 1.3 billion people here and understand that questions they sometimes ask me are not meant to be offensive but actually endearing. For instance, I know they will tell people that are overweight “hey you are a little fat” straight to their face. It is actually considered a loving act to say that because the person is taking the time to say “Hey I am concerned about your health, you should lose a little weight.”

      Things here are diametrically different in many ways, and I learn something new every time I go out in the city. Beijing is similar to New York City (and maybe London) in many ways. New Yorker Cab drivers love talking about anything and everything…. Beijing Cab drivers will do the same. People are generally on a shorter temper here and time is literally at a breakneck pace. It seems like the dimensionality of time is working at an exponential rate, meaning I feel like the day goes by as quickly as a summer storm passes in Florida.

      One funny thing is that since China is so homogeneous, they tend to think of everyone in America as white and Christian. “Everyone in America is christian, right?”, they ask me. Then when they see a black person, they will always say, “He must be from Africa”. They have poor concepts of other ethnically diverse countries because theirs’ is so homogeneous. China is also embarking on a multi-year campaign that helps increase the cooperation among African nations and Chinese relations…. it is actually pretty comical. Not comical in the sense of being racist but comical in the sense that they are only doing it because of the vast oil resources in Africa. There are multiple TV programs played throughout the day on CCTV stations that will show Chinese doctors going to remote villages in Africa and giving them vaccinations and what not, which is great, but the motive behind it is just for natural resources. Also, at the local natural history museum, they have displays of some tribes in Africa (which are all poorly crafted). It is all a perception and cross-national “gift-giving” in order for hoping that they can have better access to the natural resources in Africa.

      I could go on for days about the motivations and psychological mindset of the Chinese, but I know that would be boring. The root of all of it is that China was isolated from all other countries for close to a 1000 years and the country is not based on Judeo/Christian norms, but rather economically efficient norms and survival of only your closest family members and good friends. This is all part of the guanxi and mianzi social networks that I referenced in my article.

  18. Great story and first-hand account!  Some say Hong Kong restaurant service, especially those that cater to local clientele, is notorious for the ‘rudeness’ compared to Western standards.  But that is just part of their culture.  Maybe it’s because tipping for good services is not a custom there, as they just add a 10% service charge to everything (bought at the restaurant).  But I think it boils down to time and practicality, because doing something quickly is seen as harsh and abrupt by most people.
     
    It is probably safe to say that, because the population of China is so large, and India is in the same boat in regards to their strong affinity for the precious metals Gold and Silver, demand from these two countries alone is enough to drive prices higher much more quickly than anyone can anticipate.  It must be remembered that nowadays, practically everyone has access to information on the Internet (re: the manipulations, the merits of saving money in physical Silver and Gold, the massive printing of fiat money by central banks, etc, etc), and this is what triggers the kind of action being witnessed by this reader and contributor called ich1baN.  As a form of savings, Gold and Silver have always been better than paper money to the Asians.

    • @Plebian
       
      Thank you for the kind words. I remember the first time I tried to tip at a Korean Bar the first night I landed in Asia, before my flight to Beijing…. they looked at me more confused than a baby wallaby roaming the White House.

  19. Great report from China.  Thanx for that.  I lived in S Korea for 13 months from 1998 to 1999.  I remember being pushed and shoved around.  I also remember people walking in front of me in line in the store.  Usually older men do this.  The elderly believe they should be respected and allowed to be first.  It is so over crowded in Korea.  The way they deal with this is that they do not see you.  If they do not know you you do not exist in their mind so they will literally push you around and think nothing of it.  I learned not to be offended by this.  They also do not view you as their equal.  S Korea is one of the most ethnically homogenous areas on earth.  If you are not Korean you are not worthy of being treated as their equal.  Koreans do look down on white folk but even more so they look down on black folk.  I learned to not take that personally either.  Its just a different culture.  As far as the silver scene goes I have a comment about the panamanian metals scene.  Very thinly traded here.  I called a dealer this morning to inquire about a gold purchase.  He had none in stock.  He asked me to wait until the end of the month to check back.  He also told me he would not trade in silver because there was no demand for silver.  Not even silver eagles.  There are very few shops that deal in precious metals here.  There are a few.  There is a bank here that sells gold and silver.  They do not buy back. They also have very high premiums.  Premiums here are over 20% here on silver right now, if you can find it.  Gold can be bought for 5% over spot when it can be found.  I have a neighbor coming over this evening with some Panamanian gold coins that he wants to sell.  I will look at them but most likely will not have the courage to buy them.  Too much fraud goes on here.  Anyway, thats all I got for now.

    • “If you are not Korean you are not worthy of being treated as their equal.”
       
      This seems to be true in many cultures… until you kick their @$$, of course.  Then you get respect.  
       
      I used to have a pet cat that was like this.  She only understood two relationships… slave an master.  lol   OK, that was a bit over the top but WTH?  It’s been a day like that and I am on my 2nd scotch… Cheers!
       
       

    • @pollokeeper

      Thank you Pollo for your insight into Korea. I landed there for a day before I went to Beijing. I stayed the night in Busan and then left the next morning. I went out that night and witnessed for the first time of my life a grown man peeing in the middle of the sidewalk with no attempt at hiding himself. I thought that was a one off aberrant scene, but then I came to find this is quite common. 

      Also, I have seen more babies go potty in a public trash can (which are rare here), then I can remember. I don’t know what the deal is but it appears Johnson & Johnson has not made great strides with selling baby diapers in the Middle Kingdom yet. 

      @silvermail
       
      I also wanted to say since you are Russian, I have noticed many Chinese men wearing the Russian Winter hat, I believed called the Ushanka? It is interesting to see the influence the Soviet Union had on China at one time… it tends to appear in more ways than one. Don’t know what you do with that piece of information, but wanted to tell you that observation.

    • Ich1bon.  Yes, I remember the potty story’s well in Korea.  In fact, they use untreated human waste to fertilize the fields there and the smell will knock you down during the spring and summer months.  You sort of get used to the way things are done when you live somewhere like that.  I remember visiting Ghana back a couple of years.  In W Africa.  They speak english there.  I noticed on many of the buildings signs that politely asked,”please do not urinate on my building”.  Very common.  People don’t think anything of it.  On the other hand, there are almost no public rest rooms in the third world so folks are between a rock and a hard place.  Even here in Panama there are very few public bathrooms so you see the same thing.   

  20. Pollokeeper, so you moved to Panama in order to be away from the US and all the insecurity here, yet you do not trust your neighbor?  I can do that right here where I live, without leaving my country.

    • Mammoth, I did not say you should leave your country?  Have you ever been outside the US?  I doubt it.  There are good and bad points about living in a third world country.  You have to decide whether the good points out weigh the bad.  One of the bad points of living in a third world country is that the people have no honor and integrity.  I try and avoid this problem by doing as little business with the locals as possible.  Overall, living here is quiet and tranquil.  And, very safe.  But, there are bad points.  I would say that for the most part Americans are not cut out for Xpat life.  To each his own, my father used to say.  I like it here because the citizens are already trained for austerity.   Americans still need the training and its hard to teach old dogs new tricks.

  21. SilverScotter  there were twolarge banks in the UK that had 2 week shutdowns on their ATMs plus large processing problems on auto debit billings etc. Choice of words poor in my case.  On the Euro continent and UK banks were having some bank runs, a major shut down of one of the largest Italian banks.  The thought was this was a cyber attack but some thought it was a sanctioned dry run on some of the weaker banks in the UK.  A couple of our major TBTF US banks had large denial of service shutdowns due to cyber attacks. These could have been false flags but the TBTF banks are asking help of the US government against massive cyber attacks from Iran. Once again, maybe false flag attacks but with the Stuxnet and Flame virus potentiall being reengineed by theIranian government in response to being shut out of SWIFT and blackballed from all western currency markets, this might make sense.  There was alot of chatter on the web regarding bank runs and shut downs   We have had SNAP and EBT cards fail here too.  That means the electronic welfare stamp system has problems. 
    I’ll be more careful of my phrasing next time.

    • Correct AGXIIK My sister was locked out of the Bank of Scotland for a week and after listening to me over the phone for over a year she got the message and is now a Stacker after that episode. In fact I believe I mentioned that in an earlier post away last year.

    • Charlie… funny how it only takes ONE real world incident like this to convince people that we’re right about money and stacking after all.  A million words won’t do it but one event sure can.  lol
       

  22. @Mammoth
    Mam, there’s only one human being I trust….My Dog! And also you know from my previous posts, just waiting for the Homgenized Horse Apples to go away….Still waiting on “WHEN” to happen!

  23. Avatar of IndenturedServant says:

    How does predictable, traditional, Chinese gift giving at Chinese New Year equate to a bullion frenzy? These people seem a bit thick to be buying in frenzy mode, paying big premiums for a known, upcoming expense but to each his own I guess.
    The story gives me the impression that all of this frenzied buying is more for giving away than keeping for investment. Either way, it takes more of the shiny stuff out of the hands of TPTB which can’t be a bad thing. I just can’t figure out why everyone is so damn eager to get to the frenzy stage here. I like stacking at these low prices. Frenzy prices get in the way of that.

    Remember kids>>>>Frenzy prices bad, >>>>non-frenzy prices good.
    I_S

    • “I like stacking at these low prices. Frenzy prices get in the way of that.”
       
      Agree 100%, IS.  Been buying and loving the reasonable prices.  Hope that it continues for the next year or so.  If it does, I may very well reach my PM goals.  If so, I can then sit back and watch the fun from an aloof position.  ;-) 

    • @indenturedServant
       
      You have to understand the mind of an Asian to understand the cost that they will be paying. They don’t care about costs. It is the same in India. It is all about the wealth preservation, display and image perception one gets when they buy gold and silver. They buy gold and silver in small quantities but as a whole this adds up to a stunning amount of demand. 

      Could you imagine if people in the US bought a 1 ounce Silver Eagle for every man, woman, and child every year during the Thanksgiving Holiday? That would be an absolute thresher in terms of demand. 315 million ounces of silver into the hands of the people every year in a short amount of time. Now, imagine 1.3 billion (the population of china) ounces of silver in the hands of the people every year. (the measurements aren’t exact, but you get the idea) Now you can see how this equates to physical bullion demand. Price is a temporal thing, especially when it has such great future economic benefits in terms of stability and wealth presentation (the wealth presentation is a large part of what they prefer, which is why they tend to buy their gold and silver in forms of jewelry, just as the Indians do).

    • Avatar of IndenturedServant says:

      Since this is an annual tradition, I just fail to see how it means anything. The yuan is in no danger of collapse. Now if it happened in the US at Christmas at Black Friday levels, that would be significant because it is not an annual tradition here in the US. However, it sounds like a tradition we should begin! Americans are not smart enough to preserve wealth but I could easily see shallow Americans buying PM’s to impress each other.
      I too would like to trade some PM’s for land at some point but property values still have a decade or so to bottom out. The MSM news about rising property values in BS. To wish for frenzy level PM prices is to wish for unaffordable prices of everything along with the unprecedented levels of misery and suffering in a former 1st world nation. I doubt that most *informed* readers have a real idea of how bad things will likely get.
      I_S
       

  24. IS  I’ll be completely up front on why I would like to see frenzy.  Being a selfish SOB who’s stacked for 3 years, with 95% of my net worth in PMs, 3% in lead futures and means to thrown them and 2% in FIAT, I would like to see $100 oz silver and $3,500 in gold. 
    I want to buy my boat, G29 and  a McManse. 
    Just kidding on the last 3. 
    Having some vindication of being on the right side of the PM purchases,I would like to buy some farm land out east of Fallon NV and maybe a small ranchette to grow some greens and raise some animals.

    • I am not in a hurry to reach the manic stage because it will come at too high a price.  At least for the moment, I can afford to pay my bills on the income I am receiving.  We are not going to see 100 dollar silver until the fed loses control of the markets and inflation begins to go out of control.  Terrible times are in front of us when this manic phase arrives.  Fear is going to be a major driver. 

    • Fear and greed… the 2 classic drivers in all financial matters.

  25. Now that we have settled the fact of all the niceties of other countries, which personally I really don’t give a Rat’s Ass about because I don’t plan on attending them anyway.
    My question is with Silver Spot trading around $32.00, does anyone have any idea when we may be looking at $33.00?
    Okay, You in the back row speak up!

    • lol Ranger….It’s just my guess…but I said spot to $34 by Feb 1 last week……your guess as good as mine what peeps will be paying for premiums though…was thrilled to get more 2013 ASE today for Spot  +$3.

  26. @Pollokeeper, you asked, “Have you ever been outside the US? I doubt it.”
     
    Actually, I have been to:
    - Afghanistan (2 times)
    - Iran
    - Pakistan
    - Russia (6 times)
    - China
    - Taiwan
    - Denmark
    - New Zealand
    - Canada (2 times)
     
    So yes, I have seen a little bit of how the rest of the world lives – and views things.

    • An impressive list, Mammoth.  I am feeling rather provincial at the moment.  Haven’t been out of the US for a decade but have been to Germany, France, Canada, Mexico, and Alaska… well, Alaska is sort of out there, right?  lol
       

  27. Just some mental notes while reading:
    - It’s shopping frenzy season just ahead of Chinese New Year
    - Pushing and shoving is a norm there
    - Prices listed in shops are high as customers are always expected to haggle
    - What Ichban experienced happens on a yearly basis

  28. @ Apple, @ AGXIIK,
    I certainly can not know about the secret affairs between Putin and the Chinese leadership. But I do know that the Russian public does not invest in gold and silver. Only a very small part of the population of Russia understands the situation in the world economy. Russian media say very little about gold and silver. The bulk of the Russian population is very illiterate in economics. Some of the Russian people are very smart and educated, but they do not understand macroeconomics. They can surprise his large knowledge of higher mathematics and quantum physics. But they are stupid and naive as children, when conversation turns to the market area and the economy.

    In Russia, there are only six dealers who trade PMs. And all of them are located in Moscow. My English is at the level of the child. But I’m fluent in Russian. My partner asked me to build a business in Russia to sell coins. But after studying the local market and the law, we were forced to abandon the project.

    In Russia, there is no legal ban on the possession of gold and silver for individuals. But premium to the spot price in Russia are so high, that people to see any investing in physical metal as very unprofitable.
    Legislation in Russia is so constructed that, the population do not sees sense to invest to gold and silver, with the exception of  in paper gold and silver.

    Russian legislation it is economic valve for blocks any attempt of the population to invest in bullion. I do not know why Putin does it.
    VAT 0% on the trade in precious metals in Russia – this is just an empty declaration. Laws in Russia contain many different revisions, additions and clarifications. As a result, you are forced to pay 18% VAT on almost any silver coins, all silver and gold bullion and on the many types of gold coins.
    In order not to overload the interlocutors extra information, I will give just one example, a dealer in Russia:
    http://www.mosdragmet.ru/

    Pay attention to the price level. You can easily count them price at the current rate.
    Also pay attention to the pricing mechanism.
    They do not do directly dependent price from the spot price at the time of the transaction.

    Their coins prices always rigidly fixed with huge spreads. They change all prices only on days when the market is experiencing very significant fluctuations. And after that they again do not change the prices a next week or a month.
    I can confidently say that in Russia there is no real mass market and investment in physical gold and silver.
    Russia have and stores its gold reserves only at the state level, but not at the population level.
    Oops. I’m sorry if this information about Russia, will ruin mood for someone.

    • Not a bit.  Thank you for your firsthand knowledge of another part of the world.  It is much appreciated.

    • @silvermail

      No your comments have not ruined the mood for me. I think it is very informative and I thank you for writing about it. 

    • you answered below, thanks.

    • Silvermail.  Thanx for sharing the market info for gold and silver in Russia. Fascinating.  I think that in the future, things will change in Russia and the market may open up some.  One never knows why a government does some things.  It is the same way sort of here in Panama.  There are almost no dealers and the premiums are rediculous.  It is frustrating.  So I sort of know how it is.  Here in Panama it is expensive to bring metals in.  And, also a pain in the butte.  They have a 7% tarriff right off the bat to bring metals in.  Then, they want to charge a sales tax also of another 7% if they can get away with that.  The cost for gold jewelry here is unbelieveably expensive.  Its one of the pitfalls of living where I live.  On the other hand, I understand you can go into a bank and buy gold in Mexico and the premiums are very low.

  29. Hey Ed B  I’m ‘aloof’ ‘on the roof’  Busting at the seams with lead, gold and silver.  No patience.  Wifey says I cant buy a damn thing more.  Wow.  Need to sell some silver. Need $100 an ounce. Of course, I can wish in one hand and poop in the other  I know which will get full first.  Slow down on the Scotch  I gotta catch up.  PS   Dogs have owners.  Cats have staff.

    • “Slow down on the Scotch  I gotta catch up.”
       
      Heh heh… catch me if you can!  ;-)
       
      “Dogs have owners.  Cats have staff.”
       
      One cat we had discovered that SHE was the staff and I was THE MAN.  I refused to trip over her as she would sprawl right in front of where I was walking, just to make me step over her.  Nope.  Not happening.  She soon found it expedient to move her furry butt out of the road when something about 50x her size was coming though.
       
      I’ve had both cats and dogs as pets.  The difference is night and day.  If your house catches fire in the middle of the night, a dog barks to awaken us because he is genuinely concerned about his people.  A cat, on the other hand, meows real loud so that you can get the hell up and let HER out of there!  If a cat could open a door on their own, they would not even bother to meow a warning as they bailed out and left the people to cook.  Now, it’s not that I don’t like cats.  It’s that I UNDERSTAND them and they are ALL about self-interest.
       
      Best cat we ever had was named “Whiskey”.  Black and while female of about 4 lbs.  Very nice friendly cat.  She would follow me all over the place like most dogs would, keeping me company.  She would watch while I worked around the house and yard.  One day, I needed to replace a headlight in my old pickup.  I took out the burned out light, leaving a good sized hole.  I was down on one knee doing the job.  Then, I felt something touch my leg, looked down, and there was Whiskey with one paw on my knee and her head stuck into the empty light hole.  Then, she pulled back, turned, and looked right into my face as if to say, “Hey, what are you doing in there?”.  It was pretty comical.  We ended up giving her to a very nice lady friend of ours who lived out in the country.  Her cat had died a couple of months before and we needed a break from pets, so sent her to a new home.  She loved being out in the country and made a good pet for our friend.
       

  30. Silvermail   Thank you for the good information about physical metals in the street and the state.  Your English is first rate  A child should wish to write as well.  Dobry Dyen

  31. Do you recognise this man?
     

  32. Hope all you people are through, JUST TELL ME when “WHEN” is going to Hapen?
    Oh and by the way, Silver Futures are now soaring at one cent an ounce
    since the rampage in China!

    http://www.investing.com/commodities/real-time-futures

    • @ranger

      I agree a lot of these reports will sound sensationalistic and reactionary but keep in mind it takes time for these supply/demand inequalities to take effect in the spot market…. this is my favorite quote from Jim Rogers (a lot of people dislike him, but he is the king of commodities trading).
      “Markets have an ability to stay irrational far longer than an investor can stay solvent”.
       
      I think we all know if silver wasn’t capped by the banks, it would have reached at a bare minimum its inflation adjusted high of $131.49 from the January 1980 peak of $49.45 by now. Silver has just barely scratched its nominal high where as Gold has at least more than doubled its nominal high in 2011.

  33. @ Apple,
    Inflation in Russia is very high, much higher than in Europe. This is especially noticeable if you count inflation, on the minimum consumption basket, or a living wage. I think the real inflation rate in Russia of 12-14% per year.

    Also, I can not call “the economy” is what happens in Russia. It’s not the economy. It is a struggle between the right arm and left hand.
    Russian legislation – is a collection of idiocy. These legislation are killing small and medium business, and they strangle the economy as a whole.

    Whereas in Europe, one accountant serves five companies, in Russia five accountants serve one company.
    Whereas in Europe, one inspector checks the five companies in Russia five inspectors check one company.

    By its nature, the work in Russia it is the slave work and therefore ineffective. People do not want to work well only for food and clothing. In Russia no there is free labor. (Free labor – is a labor, remuneration for which is directly related to the results of this labor). But in Russia there is no such labor, it is excluded by Russian federal laws.

    If I wanted to block the development of any State, and then destroy it, I would use for this purpose the Russian legislation.
    When using such a legislation, any country will be destroyed after five years.
    Russia exists only because they have large reserves of natural resources. Please note – the world do not know a single Russian product brand. I do not mean weapons or resources (commodities), I’m talking about consumer product brands.
    Slave labor does not create any product brands.

    But the market for gold and silver in Russia still slow growing. Three years ago, there were only two dealers coins. Today in Russia already 6 such dealers.
    I read in the Russian media that they want to sell gold coins “Olympics 2014″ from vending machines. If they do, they will be forced to mitigate the laws of gold. Otherwise, the cost of buying gold ATMs will not pay off. At such high gold prices, people will not buy gold. In this case, vending machines will be idle and bring losses.

  34. @ich1baN
    Hey nothing at all against what you say at all. My circumstance is 72 years old, retired and on mostly fixed income. I have a fair stack of Silver and Gold and have been on board with physical now for a little more than two years. I view and post alot on The Doc and read almost every article, some of which clash with others. The burr in my butt is that the can keeps getting kicked down the road. As I mentioned in one of my posts many weeks ago, all the named Gurus’s (experts in PM’s) stated that Silver would finish out at $36.50 spot by the end of 2012. Nasa, didn’t happen. Maybe you and Doc are experts in the field, but we posters are surely not and hunger for information to connect the dots for a positive forecast in the “Because” category. Yes, I have read Jim Rogers and he too has been wrong and yes sometimes right. It just seems to me that all is always up in the air and we should sit tight. Quite frankly my butt has gone to sleep with those recommendations.
    The U S Government cannot be trusted any longer and with planned destruction of our monetary system as well as the Central Planners of other Sovereign countries, articles should be written concerning, “Okay the dollar just collapsed, now how do I go out and buy a loaf of bread and get Silver change back?” The Federal Reserve has been responsible for starting wars, arbitrarily drowning  countries causing the demise of their currencies. In my mind a methodical time clock should be established save all unknown possible unexpected “Black Swan” events that would guide all physical holders of precious metals a map to the prosperity that Silver and Gold will provide. I have seen estimates of 2013, 2017, and upwards of 2020. In other words predicability of, “If this event happens, this will happen, etc.” I really don’t place a lot of faith in what happened yesteryear nor charts, forcasting. World events and the market dictate, experts can only hope that they are right.
    Best Regards, stay safe and keep well,
    Ranger
     

    • @Ranger
      I appreciate your response. I intend for my article to just be a report and not one that is making price predictions. I consider the article I wrote like the 1950s TV show Dragnet, where Detective Joe Friday came up with the popular catchphrase “Just the facts ma’am”. I also wanted to give people back home an inside view of what Chinese psychology is like when it comes to PMs even though they don’t view it the same as you and I, they nonetheless use it in the same application. They buy and never sell it. They inherently know that it is wealth as it was a common form of money in China (both silver and gold) for thousands of years. Today, they look at it as a form of wealth and a way to show their prosperous image to others around them. This is why when a country like China will go from a nominal per-capita GDP of around $5000 in 2010 to $10,000 in 2020, this will spur PM investment because there is a direct correlation between growing chinese incomes, and growing chinese demand for PMs. If the US were to follow this same philosophy silver would be double what it is today…. I think news like this is exciting because I know one likely event that will make US investors buy silver and gold will be the mean reversion of US interest rates on treasuries. Because at this point it will be glaringly obvious to the person cutting your hair at the barber shop that something is terribly wrong. Not that the person at the barber shop pays attention to interest rates, but the symptoms that result from an increase in interest rates will be detectable even to the most financially illiterate. 
       
      On the otherhand, I agree there is a lot of hype in the silver and gold world at times. Martenson and others like him  say Gold could likely go to $15,500 and silver to $550.
       
      The thing with people like Jim Rogers is that they actually publicly say in their books that they are horrible at picking dates and times. That is why when they come out with a time prediction we have to take it with a grain of salt because they are most likely just trying to bring some hype to their recent acquisition. People like Rogers and Martenson are macrotrend experts (just like you and I). WE both know that silver and gold will go higher, and like you ask the most pertinent question. “When will this happen?” If you do research on the last bull market in silver and gold in the 1980s, you will find that silver seemed to take off later than what everyone expected. Another great reminder is that history can help us determine how things can play out, but it shouldn’t be used as the only guiding principle. One thing I take from history are cycles (this cycle is different and imo will multiply the effects due to the rarity of the large public debts, toxic derivatives, impressive demand, etc).
       
      This cycle I talk about is the average time a bull commodity cycle has lasted the last 100 years. On average, bull commodity cycles have lasted 20 years. This bull commodity cycle started back in 2000. Rogers and everyone alike note that commodity bulls end in blow off tops… that is why we know this one is no where near over yet. Could gold go to $5,000 an ounce? Will silver follow suit to its parabolic move? It is likely possible that both will in the end move to their blow-off tops.  The reason these guys come off as sensationalistic is because there has never in the history of a bull commodity cycle been the underlying fundamentals as we have today. That is why people like Martenson probably come off as crazy when they predict we will see gold at $15,500. Their reasoning is sound, however we keep hearing these price predictions when gold and silver have been range-bound for 12 months. It took silver 48 months of range bound trading after its initial high in the 1970s to reach its blow-off top of $48.45 an ounce. That is why I believe most analysts are playing the safe conservative estimate of the next 3-5 years for silver/gold reaching their inflation adjust-highs.
       
      Could it happen this year? Possibly. All I know is that we are literally sitting on a powder keg of possibility. All it takes is one spark, and the whole thing blows up. As long as central banks are there to print and buy up sovereigns, gross derivatives remain in the order of 1.2 Quadrillion or 600 Trillion according to the IMF (at that scale it is still large), debt-GDP ratios in Western countries continue their march higher, and future costs of unpaid liabilities stand at $100 Trillion, PM holders stand to gain in a number of scenarios within in the next few years as these above macrotrends point to a cataclysmic failing somewhere in the system. One of the greatest investors I know always says: 
      “No matter how much manipulation there is. Markets are always bigger than Government.”
       
      One day we shall be reconciled to those very words. Thanks for reading and I hope you continue your steadfast patience and ability to persevere through all the “shake-out” periods. There will likely be many more but as I see it the low base for silver is $28-30 an ounce.
      P.S. All of the major analysts were also wrong in predicting Gold at $1900 an ounce by the end of 2012. These analysts were from Citi, BoA, Goldman, and JPM. That is why the futures game is terribly difficult to make a lot of money in and why we as physical holders don’t have to worry about the time element as much. We can sit tight and hold it without the risk of expiration. Thanks again and stay healthy and safe this year!

    • So, Ranger, if I can boil down your comments… all you want to know is the future, right?  Hell, if any of us knew that, we would be spending ALL of our time in the betting emporiums and not here on SD!  lol
       
      Also, it is the inherent nature of a financial collapse that it takes decades to ferment, years to age, and hours to blow all over the walls. By the time we KNOW that it is here, it will be too frackin’ late to do a damned thing about it except be run over by it.  This is why those who are into PMs and who are VERY nervous about the slow-motion financial train wreck we see happening all around us, urge others to BE PREPARED for an economic SHTF situation.  We really only have 2 choices here.  Be prepared or not.  Most of us probably see being prepared as better than not being prepared, so we buy silver and maybe some gold too, and hold it as our financial insurance against possible disaster.  Note that I did not say GUARANTEED disaster.  Other than death, taxes, and the increase in world BS levels, there ARE NO GUARANTEES.  Nope.  Sorry.  None!
       
      Because of all this, it may very well be unwise to be “all in” with ANY investment, even our beloved PMs.  But then, we do not need to be all in to do VERY well if the SHTF.  Anyone who has a substantial amount of savings and holds 10-20% of that in PMs will be FAR better off than those who have everything they own in a paper investment when the SHTF.  In terms of buying power, gold and silver will do very well in a situation where both currencies and bonds are imploding.  OTOH, if the S does not HTF relatively soon, what have we really lost by having some money in PMs?  Not much.  In fact, it is likely that inflation will continue to rise and that we will be able to sell our PMs to buy food and other useful things and not have our purchasing power robbed by inflation.  REAL inflation is 3-4x what the Gov and Fed are telling us because they quit counting things that rise in price too quickly to suit them.  In the case of food and fuel, we MUST buy these things.  We are not air plants that can survive without food or at any temperature that the weather cares to send our way.
       
      I am not saying here that we have to listen and react to all the day to day chatter about PMs.  Much of that is just filling space in blogs and newsletters.  Just buy the dips, hold a reasonable amount, stay diversified, and let the chips fall where they may.  Above all else, maintain a sense of humor.  That’ll help us deal with most of life’s problems.  :-D

  35. Can someone find a youtube video with these Chinese bullion mobs in action?

  36. I’m dreaming of a big fat Silver bubble.  

  37. @Silvermail said… “please note – the world do not know a single Russian product brand.”
     
    How about Stolichnaya and Aeroflot?
    Also, your statement that ‘Russian legislation – is a collection of idiocy,’ is 100% correct.  Just look at the recent Russian ban on Americans adopting orphans from there!  Because the Russian govt. offers financial incentives for Russians to adopt, most of the normal, healthy orphans are now adopted domestically.  This leaves the orphans with health or psychological issues – those who are most likely to benefit from being raised by two loving parents – guaranteed to instead spend their childhood in the miserable Russian orphanages.
     
    This is SHAMEFUL, period.

    • @ Mammoth
      You said it so, like it was said to me from side of many Russian. But Stolichnaya and Aeroflot – it is not Russian brands. I mean, it’s not a brands of Russia. It is a brands, that Russia inherited a legacy from the Soviet Union. I do not see any role and achievements of Russia in the presence of these brands from the USSR. These brands was created in the different country, which is not on the political map of the world today.

      I am convinced that the law Magnitsky – it was a big mistake on the part of the United States. But the law of the orphans, it was more a big mistake on the part of Russia. Russia has been, and have right now a lot of other opportunities to respond to the law of Magnitsky. But they have chosen to answer via speculation on the orphans. Sometimes I think, that the people in the Russian government did not want to think. Probably, they are very preoccupied with stealing from the budget and they do not have time to think about any other issues.
       

  38. @ED_B
    No Ed, not looking for future predictions by speculation, just a roadmap of possible or evident events that would most likely cause solid action with no two steps backward.
    Regards,
    Ranger
     

    • I agree, Ranger, that would make things MUCH easier for us but simply cannot see it as being even remotely possible.  The world is just far to complex to be reduced to a chart such as that.  Would I like it if it was?  OH, YEAH!!  That would be a fantastic Plan A!  IMO, there will always be a step or two forward followed by a step back as something that was considered likely shifts to being just remotely possible.  Something else that was considered as remotely possible comes to the front burner.  Things are doing this constantly with us fallible humans in charge of the place.  Chains of cause and effect are constantly being created, destroyed, and moved throughout the hierarchy of the possible and the not so possible.
       
      On the other hand… perhaps there are a few things that we can put on paper that can guide us in the right direction, even if it cannot map out every exact step we need to take and when we need to take it.  If I were to do this, I would include some things like the following:
       
      1.  We know that US Gov spending is out of control and that more and more money is being printed by the Fed.  Because of this, inflation is occurring (but is not seen by the Fed / Gov) and it is likely to get worse before it gets better.  Because of this, converting some of our wealth to gold and silver is sensible because that money is far less likely to feel the ravages of inflation than is paper money.  This answers the question of “Should we own gold and silver?” pretty neatly.  At least, it does for me.
       
      2.  We also know that interest rates are far too low and are being held here for too long a time period.  While this is helping the US Gov finance its over-spending at lower interest rates, it is also doing great damage to the economy via misallocation of resources and to those of us who have managed to save some money for our “golden years”.  CD, savings accounts, and money market accounts have long been a primary part of older folks savings.  They did not pay a lot but in the days when we could get a 5-year CD that paid 4-5% interest, that was money that we used to fill the gaps left by savings, pension plans, and social security.  If one were sufficiently hard working, dedicated to saving money, and lucky enough, one could amass $200,000 in savings that would pay $8-10k per year in interest.  This would be taxed down to $6-8k per year but it was still a useful amount of money.  Now that Bernanke has cut interest rates to 0.25%, that same $200k is now paying only $1500 or so on 0.75% CDs.  At this same time, gold and silver have been returning quite a lot better than this.  This tapered off last year but was still in the range of a 5-7% annual gain.
       
      3.  The stock market can be a very fickle place in which to put one’s trust and savings.  Good money can and has been made there, of course, but a vicious bear market can also take a lot of that back in a hurry.  The Decade of 2000-2009 saw not one but TWO vicious bear markets that literally crushed the hopes of many small investors.  A lot of them have left the market permanently and will not return.  While I surely sympathize with this sentiment, I also know that a small investor has a terrific advantage over the big boys and that is one of nimbleness.  Like tiny fish that can safely dart around feeding sharks, we gather what we can when we can.  Even so, it is difficult to make money in the stock market these days.  As a portion of one’s investments, gold and silver can be a stabilizing influence as stocks rise and fall chaotically.
       
      4.  The US Congress is hopelessly gridlocked these days and this is unlikely to change anytime soon.  Politicians have used the divide and conquer strategy to get themselves elected, apparently not caring what this strategy does to the nation as a whole.  Well, it divides us at a time when we need to be united, that’s what.  The infighting has been so rancorous that it will take quite some time to heal again, if it ever does.  This does not bode well for the future of the country because our problems are huge just at the time when massive commitment to solving them is desperately needed… and seems impossible to achieve.  As individuals, there is little that we can do to influence what happens to our country.  There are a few things and most of us are doing them, hoping that our collective voice will be heard in DC.  But that amounts to hope and hope is not a plan.  If we cannot have a large effect on the US or our state governments, we next turn to the thing that we can have a major effect on and that is our own lives.  Here, again, owning some gold and silver is a wise move, as it costs very little, yet could be invaluable if financial disaster is not averted.  Remember… money is not spent on gold or silver, it is merely converted from one form to another.  It can always be converted back again and probably at minimal cost to us.  While we own it, though, it does serve us well as insurance against a collapsed or wildly inflated dollar.
       
      Predictions… any one of us can imagine multiple future scenarios and I am no more or less immune to pondering that than anyone else.  I believe that we will continue to stumble forward, lurching from one crisis to another throughout 2013.  This will not be an especially good year for the stock market, although it is likely to eke out a small gain of maybe 4-5%.  2014, however, will be a much different year.  That year will likely see some very nasty things happening in the US and around the world.  Food shortages, riots, civil unrest verging on and collapsing into civil war, even in countries that we would not think would ever have such problems.  Watch the EU very closely, as I believe that this is where the financial world will unravel first.  Soon thereafter, this will also occur in the UK and that is the trip wire to which we should all pay great attention.  The US and the UK are joined at the financial hip, so whatever happens there is likely to repeat here.  When the UK starts to collapse, the immediate removal of all wealth from the US financial system is warranted.  Anything left in the paper system will be lost.  This includes cash in banks, stocks, bonds, and anything else that is not a tangible asset.  This will most likely play out as a process over time and not as any one spectacular event, although a spectacular single event cannot be ruled out completely.  Economies and currencies will become much weaker at this time and both gold and silver will be in great demand.  It will not be until 2015 that the genuine collapse occurs, however.  By then, even the Lame Stream Media will be tut-tutting about economic collapse as a real possibility.  Of course, it will be happening by the time they decide to mention it and anyone waiting for them to point it out will be well and truly screwed financially.  Paper assets will collapse and be worth a penny or two on the dollar, should anyone be sufficiently brave or foolish enough to actually buy them.  The bond markets will implode and national currencies along with them.  We will be in for a period of probably 2-3 years before some semblance of economic order will be restored and a new currency created; an extremely dangerous time physically.  Economies will shrink and become local or perhaps regional at best thanks to the shortage of energy for refrigeration and transportation.  Farmers markets will be where people shop for “groceries”.  Silver will be the money, not just of choice but of necessity.  Those who have silver, especially US 90% silver coins will be able to buy the best of whatever is available.  Those who do not will be reduced to trading their work or goods that will still be useful at that time for food.  Government will also collapse and become minimal.  Look to the county sheriffs and citizen deputies as the primary LEOs in this country.  Many of them will be mounted on horseback because fuel will be precious and dedicated primarily to whatever military and emergency vehicles remain.  If in 2015, a new currency is floated, watch to see if it is backed by anything tangible.  If it is not, avoid it, because it will no doubt go the same route as the former currency, inflated to very little real value.  A currency backed by something tangible, however, will likely survive and may even prosper.  As with many other Gov choices, this will be the very last thing they try and it will work.  The Great Depression lasted from 1929 to 1940.  The coming collapse will be similar to this and will be extended for the very same reason:  incompetent Gov meddling in what should have been a FREE market.  It will take a decade or more before things return to any semblance of “normal” that any of us can recognize.  It will be during that time than the ownership of gold and silver plus the means to protect them will be of paramount importance.
       
      OK, there you have it.  Yet another view of a possible future.  Nasty and brutish for sure but unfortunately not especially short.  The part about all this that REALLY worries me is that I tend to be a happy and optimistic person… and this is what I see for the future based upon all the crap that is happening now plus the things that SHOULD be happening but are not.  I can only imagine what others who are less optimistic will see in the future.
       
       
       

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