Business

Assessing The Latest Bank Participation Report 

Posted with permission and written by Craig Hemke, TF Metals Report (CLICK HERE FOR ORIGINAL)

by Keith Weiner

The popular belief is that gold is a good hedge against inflation. Owning gold will protect you from rising prices. Is that true?

Most people define inflation as rising prices. Economists will quibble and say technically it’s the increase in the quantity of money, however Milton Friedman expressed the popular belief well. He said, “Inflation is always and everywhere a monetary phenomenon.”

Central banks have begun panic buying gold as statistics show that the cost of gold has risen by 19% in the last 15 months.  The price of gold recently crossed the $1,300 per ounce price for the first time, due to the sudden surge of demand from banks. Businessinsider.com reports: Buyers have come back into the market in India, the world’s largest buyer of gold, after a strike by the country’s jewelers associations brought business to standstill. In the US, demand for bullion is the strongest it’s been in 30 years.

With the frenzied speculation that drove levels and volumes in Chinese commodities off the charts having dawned on everyone from Cramer to Chinese Securities regulators as 'not real', it appears everyone is scrambling to not be the bagholder for this bubble as authorities crackdown on Chinese asset managers pooling retail investor funds, warning of the rise of "ponzi schemes." While nobody knows for sure how much of the trading surge has been driven by individuals, but the evidence suggests retail punters are playing a big role, and as Bloomberg reports, the average

Submitted by Michael Snyder via The Economic Collapse blog,