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2008-09 financial crisis spawns new kind of gold rush...humans have faith in gold only.......
Posted by Vishva News Reporter on April 2, 2009 |
2009 recession and banking crisis
has set off a rush to invest in gold and
other precious metals
at unprecedented levels |
In 1897, at the height of a major U.S. recession and banking
crisis, a gold discovery on the Klondike River in Yukon Territory
triggered one of the biggest gold rushes ever seen. Now, more than a
century later, history is - sort of - repeating itself in the
western civilization.....
The 2009 recession and banking crisis has set off a rush to
invest in gold and other precious metals at unprecedented levels - a
move that has tightened the global supply/demand picture and helped push
prices to record highs. And increasingly, they are opting for the
tangible comfort of physical gold - actual gold bars and coins that they
can cling to in troubled times.
Experts say the soaring price for gold - up 30 per cent since the end of
October, at the same time the MSCI World stock index has lost almost 20
per cent - has created a bandwagon effect for investment in precious
metals.........
Meanwhile, gold hoarding among non-Western investors and gold coin
purchases from government mints surged 60 per cent and 44 per cent,
respectively, in the year...........
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PVAF is publishing today's news story as part of knowledge-sharing
about wealth preservation and expansion....
This knowledge is very critical in vEDik lifestyle under the aARth
puruSHaaARth of life meaning one of four aims and objectives of life
under which one creates with the rules and regulations of DHARm all the
wealth one needs for one's chosen lifestyle....
PVAF prays that this knowledge sharing will empower YOU to uphold the
gRUHsth-aaSHRm of life and all the other 3 life aaSHRm which depends on
gRUHsth-aaSHRm without bailouts, handouts, bankruptcy shelter and many
illegal means of providing sustenance of life as is being exposed in the
current fiscal crash being experienced in industrialized nations of the
world.....
PVAF prays that with this life knowledge and other life knowledge
sharing to date since 1996 is helping YOU to have
A PROSPEROUS TOMORROW THAN
TODAY.... |
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Please click on the next line to continue to enlighten yourself in the pros
and cons of using gold in protecting your wealth in current times when
investments have lost about 80 percent value on the stock market......and also
to read a short take on the history of gold,,,,,
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PRECIOUS METALS:
Bank crisis spawns new kind of gold rush
Canadian
Globe and Mail: March 20, 2009: David
Parkinson
In 1897, at the height of a major U.S. recession and banking crisis, a
gold discovery on the Klondike River in Yukon Territory triggered one of
the biggest gold rushes ever seen. Now, more than a century later,
history is - sort of - repeating itself.
No, the world's downtrodden aren't beating a frenzied path to a harsh,
remote swath of the Canadian north this time around.
But the 2009 recession and banking crisis has set off a rush to invest
in gold and other precious metals at unprecedented levels - a move that
has tightened the global supply/demand picture and helped push prices to
record highs. And increasingly, they are opting for the tangible comfort
of physical gold - actual gold bars and coins that they can cling to in
troubled times.
"When the banking crisis hit [last fall], we saw an avalanche of
demand," said James DiGeorgia, a Florida-based coin and precious metals
dealer and editor of the Gold & Energy Advisor newsletter. "People are
scared to death that all this debt [being taken on by governments] is
going to debase the [U.S.] dollar and other currencies around the
world."
Data from the World Gold Council show that while demand for gold for
industrial, dental and jewellery purposes fell 10 per cent in 2008, net
purchases of physical gold for investment purposes jumped 64 per cent to
1,091 tonnes.
In the fourth quarter - as the U.S. banking crisis reached new depths -
net gold investment volumes surged 182 per cent from a year earlier. As
a result of the boom in investment demand, overall gold demand rose 4
per cent last year, further widening the annual supply shortfall in the
gold market.
"These dramatic retail investment inflows reflect the extreme
uncertainty that surrounds the global economy and financial system," the
World Gold Council said. "In an environment where investors are more
concerned about the loss of capital than they are about the return on
capital, the absence of default risk or counterparty risk has been a key
attraction for gold."
Experts say the soaring price for gold - up 30 per cent since the end of
October, at the same time the MSCI World stock index has lost almost 20
per cent - has created a bandwagon effect for investment in precious
metals.
But behind that have been some legitimate concerns - about global
economic and financial market instability, and the possible inflationary
ramifications of the rising government debts being incurred to rescue
the world economy - that have sent investors to gold as a stable safe
haven for their money, and a way to diversify their portfolios away from
other more risky asset classes.
On March 17, 2009, gold for April delivery surged $69.70 (U.S.) to settle at
$958.80 an ounce on the New York Mercantile Exchange.
Gold-backed exchange-traded funds - an increasingly popular vehicle for
gold exposure among retail investors - increased their net purchases of
gold by 27 per cent in 2008.
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But the most startling demand growth came from direct purchases of gold
bars and coins by retail investors, especially in Europe and North
America, where holding physical gold has never been nearly as popular as
it is in many Eastern cultures and developing economies.
Western net retail gold purchases totalled 133 tonnes last year - a
sharp reversal from the moderate net sales of gold by Western retail
investors in recent years.
Meanwhile, gold hoarding among non-Western investors and gold coin
purchases from government mints surged 60 per cent and 44 per cent,
respectively, in the year.
"Especially in the industrialized countries, people are now buying
precious metals for portfolio diversification," said Barry Wainstein,
vice-chairman and global head of foreign exchange and precious metals at
Scotia Capital Inc., a long-time provider of precious metals products to
Canadian investors.
Canadian banks have long offered retail clients exposure to gold through
gold-backed certificates, whose value is based on the spot price of gold
(minus administrative fees) and can be exchanged by their holders for
either cash or physical gold. The advantage is that investors don't need
to worry about transport, storage and insurance of physical precious
metals.
Russell Browne, director of retail precious metals products at Scotia
Capital, said volumes of RRSP-eligible gold-backed certificates have
"more than doubled" in the past 18 months.
But in the past year, many clients have been opting against
certificates, in favour of the real thing. Some investors are even
loading up on gold-industry-standard gold bars - 400-ounce blocks valued
at about $400,000 at today's prices.
"We now have retail investors buying multiple bars," Mr. Browne said.
(Scotia sells gold bars ranging from one ounce to the 400-ounce
standard.)
The rising demand for bars has prompted Scotia's precious metals arm,
ScotiaMocatta, to ramp up its offerings of physical precious metals. In
addition to its gold and silver products, ScotiaMocatta earlier this
month introduced one-ounce platinum and palladium bars for retail
clients.
"In some cases, investors are more comfortable with owning physical
precious metals than other financial instruments," Mr. Wainstein said.
The growing desire to hold precious metals in their physical form may be
another side effect of investor distrust in the crisis-riddled global
banking sector.
Newsletter editor Mr. DiGeorgia suggested investors in the United States
have become increasingly nervous about gold-backed investment
certificates and even gold storage services at their banks, for fear
their assets may not be entirely safe in the case of a bank failure.
"I always tell people to take physical possession of their gold," he
said.
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By the
numbers in gold market |
$7.9-billion (U.S.):
Value of net retail investment gold purchases in 2006
$21.1-billion (U.S.):
Value of net retail investment gold purchases in 2008
19%: Share of world
net gold demand that represented investment purchases in 2006
30%: Share in 2008
58%: Jewellery
share of world gold demand in 2008
12%:
Industrial/dental's share of world gold demand in 2008
3,659: Total net
world gold demand in tonnes in 2008
3,468: Total new
supplies in tonnes to hit the world gold market in 2008
SourceSource: World Gold Council |
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Gold has been known and
highly valued since
prehistoric
times. It may have been the first metal used by
humans
and was valued for ornamentation and rituals.
Egyptian hieroglyphs
from as early as
2600 BC
describe gold, which king
Tushratta
of the
Mitanni
claimed was "more plentiful than dirt" in Egypt.[9]
Egypt and especially
Nubia
had the resources to make them major gold-producing areas for
much of history. The earliest known map is known as the
Turin papyrus
and shows the plan of a
gold mine
in Nubia together with indications of the local
geology.
The primitive working methods are described by
Strabo
and included
fire-setting.
Large mines also occurred across the
Red Sea
in what is now
Saudi Arabia.
The legend of the
golden fleece
may refer to the use of fleeces to trap gold dust from
placer deposits
in the ancient world. Gold is mentioned frequently in the
Old Testament,
starting with
Genesis
2:11 (at
Havilah)
and is included with the gifts of the
magi
in the first chapters of Matthew
New Testament.
The
Book of Revelation
21:21 describes the city of
New Jerusalem
as having streets "made of pure gold, clear as crystal". The
south-east corner of the
Black Sea
was famed for its gold. Exploitation is said to date from the
time of
Midas,
and this gold was important in the establishment of what is
probably the world's earliest coinage in
Lydia
between
643 and 630 BC.
From 6th or 5th century
BCE,
Chu (state)
circulated
Ying Yuan,
one kind of square gold coin.
he
Romans
developed new methods for extracting gold on a large scale using
hydraulic mining
methods, especially in Spain from 25 BC onwards and in
Romania
from 150 AD onwards. One of their largest mines was at
Las Medulas
in
León (Spain),
where seven long
aqueducts
enabled them to sluice most of a large alluvial deposit. The
mines at
Rosia Montana
in
Transylvania
were also very large, and until very recently, still mined by
opencast methods. They also exploited smaller deposits in
Britain,
such as placer and hard-rock deposits at
Dolaucothi.
The various methods they used are well described by
Pliny the Elder
in his
encyclopedia
Naturalis Historia
written towards the end of the first century AD.
The
Mali Empire
in Africa was famed throughout the old world for its large
amounts of gold.
Mansa Musa,
ruler of the empire (1312–1337) became famous throughout the old
world for his great
hajj
to
Mecca
in 1324. When he passed through
Cairo
in July of 1324, he was reportedly accompanied by a
camel train
that included thousands of people and nearly a hundred camels.
He gave away so much gold that it depressed the price in Egypt
for over a decade.[10]
A contemporary Arab historian remarked:
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“ |
Gold was at a high price in Egypt until they came in
that year. The mithqal did not go below 25 dirhams and
was generally above, but from that time its value fell
and it cheapened in price and has remained cheap till
now. The mithqal does not exceed 22 dirhams or less.
This has been the state of affairs for about twelve
years until this day by reason of the large amount of
gold which they brought into Egypt and spent there [...] |
” |
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—Chihab
Al-Umari[11]
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The European exploration of
the Americas was fueled in no small part by reports of the gold
ornaments displayed in great profusion by
Native American
peoples, especially in
Central America,
Peru,
Ecuador
and
Colombia.
Although the price of some
platinum group metals can be much higher, gold has long been
considered the most desirable of
precious metals,
and its value has been used as the standard for many
currencies
(known as the
gold standard)
in history. Gold has been used as a symbol for purity, value,
royalty, and particularly roles that combine these properties.
Gold as a sign of wealth and prestige was made fun of by
Thomas More
in his treatise
Utopia.
On that imaginary island, gold is so abundant that it is used to
make chains for slaves, tableware and lavatory-seats. When
ambassadors from other countries arrive, dressed in ostentatious
gold jewels and badges, the Utopians mistake them for menial
servants, paying homage instead to the most modestly-dressed of
their party.
There is an age-old
tradition of biting gold in order to test its authenticity.
Although this is certainly not a professional way of examining
gold, the bite test
should score the gold because gold is a soft metal, as indicated
by its score on the
Mohs' scale of mineral
hardness. The purer
the gold the easier it should be to mark it. Painted lead can
cheat this test because lead is softer than gold (and may invite
a small risk of
lead poisoning
if sufficient lead is absorbed by the biting).
Gold in antiquity was
relatively easy to obtain
geologically;
however, 75% of all gold ever produced has been extracted since
1910.[12]
It has been estimated that all the gold in the world that has
ever been refined would form a single cube 20 m (66 ft) on a
side (equivalent to 8000 m³).[12]
One main goal of the
alchemists
was to produce gold from other substances, such as
lead
— presumably by the interaction with a mythical substance called
the
philosopher's stone.
Although they never succeeded in this attempt, the alchemists
promoted an interest in what can be done with substances, and
this laid a foundation for today's
chemistry.
Their symbol for gold was the
circle with a point at its
center (?), which
was also the
astrological
symbol, and the ancient
Chinese character,
for the
Sun.
For modern creation of artificial gold by
neutron capture,
see
gold synthesis.
During the 19th century,
gold rushes
occurred whenever large gold deposits were discovered. The first
documented discovery of gold in the United States was at the
Reed Gold Mine
near Georgeville, North Carolina in 1803.[13]
The first major gold strike in the United States occurred in a
small north Georgia town called
Dahlonega.[14]
Further gold rushes occurred in
California,
Colorado,
Otago,
Australia,
Witwatersrand,
Black Hills,
and
Klondike.
Because of its historically high
value, much of the gold mined throughout history is still in
circulation in one form or another.
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Gold has been associated
with the extremities of utmost evil and great sanctity
throughout history. In the
Book of Exodus,
the
Golden Calf
is a symbol of
idolatry
and rebellion against God. In popular culture, the golden
pocket watch
and its fastening golden chain were the characteristic
accessories of the capitalists, the rich and the industrial
tycoons.
Credit card
companies associate their product with wealth by naming and
coloring their top-of-the-range cards “gold” although, in an
attempt to out-do each other,
platinum
has now overtaken gold.
In the
Book of Genesis,
Abraham
was said to be rich in gold and
silver,
and Moses was instructed to cover the Mercy Seat of the Ark of
the Covenant with pure gold. Eminent
orators
such as
John Chrysostom
were said to have a “mouth of gold with a silver tongue.” Gold
is associated with notable anniversaries, particularly in a
50-year cycle, such as a golden
wedding anniversary,
golden jubilee,
etc.
Great human achievements
are frequently rewarded with gold, in the form of medals and
decorations. Winners of races and prizes are usually awarded the
gold medal (such as the
Olympic Games
and the
Nobel Prize),
while many award statues are depicted in gold (such as the
Academy Awards,
the
Golden Globe Awards
the
Emmy Awards,
the
Palme d'Or,
and the
British Academy Film Awards).
Medieval kings were
inaugurated under the signs of
sacred oil
and a golden crown, the latter symbolizing the eternal shining
light of heaven and thus a
Christian
king's divinely inspired authority.
Wedding rings
are traditionally made of gold; since it is long-lasting and
unaffected by the passage of time, it is considered a suitable
material for everyday wear as well as a metaphor for the
relationship. In
Orthodox Christianity,,
the wedded couple is adorned with a golden crown during the
ceremony, an amalgamation of symbolic rites.
To read a whole lot more about gold on Wikipedia
please click
here/span>
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