Comparing gold price to an Index Fund is a delusional construct based on bad data

Lets start off with how inflation is calculated to give a frame of reference.

When calculating CPI, well documented flaws in the calculation methodology compromises the integrity of the data used. Changes in the measurements and values of the basket of goods used to determine pricing has resulted over time in a series of data creep having a cumulative effect of the reported statistics no longer matching with what is observed in reality.

bad-data

 

These changes include Geometric Weighting, Hedonic Adjustment, and Substitution.

Substitution is where a government analyst might remove some item such as salmon, and replace it with say, catfish (hat tip to Chris Martenson). The items in the basket are picked at the pleasure of the person(s) determining the basket to reflect reality in prices for everyone.

This can be compared to the way an Index fund reports its view of value.

An Index fund is trying to match the performance value of a basket of items, however cannot ever accurately achieve this task. The fund manager is performing an iterative task where he is selling and buying instruments in a portfolio with the intention of matching a basket of items based on a spreadsheet decided upon by some analyst. The problem is, that as the Index changes, the fund manager must sell from his portfolio and add the new items in the index. The loss/gain on those trades is the delta from the actual Index performance if no trading were taking place. The cumulative effect over time is substantial creep from a base value measurement. The net result is just garbage data if one is trying to compare an investment in an Index Fund versus gold.

The second problem with trying to measure gold performance versus an Index Fund, is that the index itself is composed of a basket of arbitrarily decided items, it is not measuring a single item such as the USD gold price. Therefore, using it to compare performance with gold is an “apples to oranges” comparison. The comparison that is almost always used (I have never seen otherwise) focuses on USD / Gold as the trading pair. To be a fair comparison, the Index Fund performance, which we already know is questionable data for this purpose, should be compared to an Index of Gold in various currencies. The numbers used would have to be gold across a basket of currencies, and the “Gold Index” would have to allow for substitution of various currency pairs in the trading basket based on the whims of the Index Manager.

So for example, in 2014 I might drop USD/Gold from the basket and add EURO/Gold – this would clearly give a different performance value, and the cumulative effect so much more pronounced.

gold-all-currencies-2016

 

Comparing the USD gold price to an Index Fund is therefore disingenuous at worst, and naïve at best.

So the next time you hear someone parroting up this meme, keep this in mind.

 

 

 

Bitcoin’s value is not as much in the currency as it is the technology of instant value transport and public ledger

Back in Feb. I wrote that “Parking Value” may be the near future of Bitcoin.

Bitcoin is many things to many people, and because it is both currency and technology many are unable to separate the two from each other to understand the difference. I still believe that Bitcoin the technology is the most important invention here. The ability to move value from one party to another, instantly with no intermediaries and have it recorded publicly for the world to see, that record then stored on tens of thousands of computers globally and eventually in a network of low earth orbit geo-stationary satellites has the power to change the way the world transfers money, and even how it does business.

Many of my colleagues in the gold industry do not get my fascination with it. I get ribbed all the time, as many allude to bitcoin never holding value the way gold can. While I agree with this point, it illustrates what I said before, that few can separate the technology from the currency and therefore are unable to see how this technology is already impacting our reality.

My view is that the immediate use of the Bitcoin technology will be to temporarily “Park Value” in things like gold, or USD, or Euro, and use the technology of Bitcoin to transfer value between parties before it is then “Parked” again in gold, USD, or Euro (or any other form the customer wishes).

Apparently James Turk, founder of Goldmoney may think along similar lines, as he just sold Goldmoney to Bitgold, which is a company doing exactly as I described:

http://ir.bitgold.com/files/doc_news/2015/BG-Press-Release-GMY-Purchase-22May2015_v001_f3728r.pdf

Update for clarity:

From my understanding (I am a US person so cant be a customer and test this myself, maybe one of you will tell me how it goes) Bitgold has developed a proprietary protocol for international payments among its own customers spending gold. While this may be similar to Bitcoin (The CEO has said in interviews that Bitgold is fully compatible with the blockchain and ripple), if it is developed in house it is clearly not Bitcoin. From reviews I have read you can apparently use Bitcoin to buy gold with them, and redeem the gold into Bitcoin when you sell it – thus parking the bitcoin in gold for a time.

 

 

China Gold – the show is just starting

During my last trip to China I spoke to the head of one of China’s most influential government agencies. One of the largest concerns the government has is the real estate market and stock markets being overvalued and having few options for Chinese to invest elsewhere. This is part of the huge push in China for gold by the Chinese government, and why there have been government sponsored advertisements encouraging Chinese to own gold.

With Chinese real estate markets popping and capital flooding into stock markets, I suspect the push for diversification into gold within China will only accelerate over the next few years.

I for one, am looking forward to expanding business operations in China and Asia in general, it is an amazing market.

“Parking” value may be the near future of the cryptocurrency ecosystem, at least for now

The power of the technology, for now at least, is not bitcoin as a store of value. The power of the technology is in the transport mechanism and the decentralized ledger, which is revolutionizing payments.

I predict that the ecosystem is going to continue to move in the direction of using Bitcoin to transfer value, and then “parking” it, until it needs to be moved again. I say continue, because this is already happening.

In my last entry, I wrote that Bitcoin has a huge hurdle to overcome. This hurdle is a general lack of trust. This is true for two primary reasons (not including fear of the unknown, and fear of regulatory response):

  • first is that bitcoin is currently volatile,
  • second is that bitcoin is not yet trusted as a form of money.

This is not to say that someday it will not be trusted, but it is going to require a what I am calling a trust-bridge.

Lets back up a bit so I can explain why.

Some cryptocurrency advocates argue that money has value because of its utility (cryptocurrency in particular). The argument stems from the idea that money has value because of the system that grows up around it. For example the USD has value because of banks, internet purchasing, stocks, bonds, credit cards, etc. If you compare this reasoning to the arc of history however, it does not stand up under scrutiny. How exactly is utility the reason Rai stones for example have value as money?

rei stones - yap

If you are not familiar with Rai stones (1), they are huge stone wheels weighing up to 4 tons that have been used by the micronesian people of Yap as money. They were quarried as far as Palau and transported back to Yap, over 2600 kilometers away by primitive sailing vessels. This is hardly good utility, in my opinion.

Some cryptocurrency advocates also argue that “hard money guys”, aka “metallists” declare gold has “intrinsic” value. Although I am probably a hard money guy, I dont think gold has any intrinsic value at all (as money). The reality is, gold, and every other thing from seashells to beads to rare feathers or cows, that have been used as money had value because people believed and agreed they had value.

The question is, why would people agree on this? The founder of Xapo Wences Casares touches on the reason when he says, “Look, what would you prefer — free access to information [which they’re getting now with their phones] or a secure place to store the fruits of your labor and to receive and make payment?”(2)

People want their labor to mean something. People toil, day in, and day out to earn a living, and they do not want it to be for nothing. This is the true essence of freedom, of capitalism, the opposite of slavery. Money is closely tied to mans labor, and every human on the planet, deep in their heart, knows it.

 

Some cryptocurrency advocates deny this, and claim that the “labor theory of money has been generally accepted as being false”(3). Generally accepted as false by whom, I would ask? Cryptocurrency speculators who have a financial stake in it being false? Economists espousing the conventional wisdom? The same economists who have pretty much made a mess of the entire global economy? Certainly not accepted as false by me?

 

To anyone who claims that money does not have value because it is linked to labor, I dare you to go to work tomorrow and tell your boss you will be working for the next five years for free. No, indeed, money is tied to labor, and that is in fact why gold has value, and every other form of money known to man for the last 5000 years. The argument that Warren Buffet uses to claim gold is a horrible investment, is the same reason that gold is actually money. It once took the labor of a man digging in the ground for many hours to produce a single ounce of fine gold. Today, it is done by machines hauling tons of rock and ore, but this is still a form of energy expended, and that energy is equivalent to many human hours of labor if there was no such thing as fossil fuels and the internal combustion engine. It is simply a measurement of stored labor, and thus, we instinctively know it has value. What is more valuable, a hand carved piece of furniture or a particle board item from Ikea? An excellent article which goes into the energy value in gold can be found here: http://srsroccoreport.com/major-factor-for-owning-gold-the-collapse-of-golds-eroi/major-factor-for-owning-gold-the-collapse-of-golds-eroi/ . The common denominator of all forms of money that humans have believed have value, is that they require labor to produce.

 

“But the USD is practically free to make, all they have to do is punch some numbers into a keyboard!”, I am imagining some will say. Yes, this is true. But I would suggest that the USD is still a trusted form of money that most people believe has value. The critical question is, why do people believe it has value? If you were to go out into any-city in the USA and ask 1000 people why the USD has value, likely there will be a large number of them that say it has value because it is backed by gold, even if this has not been true since 1971 when Nixon severed gold convertibility to the dollar. My point is, people trust that the USD has value because gold has acted as a trust bridge. The system that grew up around the dollar inherited its trust from gold. Utility, therefore, had little to do with it. The trust of value was already baked into the cake.

If this is not true, then why does every single argument I have seen for bitcoin make comparisons to gold?

Which brings us to the current dilemma. Even if Bitcoin and related technologies are the money of the future, the fact remains that cryptocurrency is not yet widely trusted. It is going to require a bridge. A trust bridge.

I would argue that some of the sharpest start-ups in the space have already caught on to this fact, because they are allowing users to “park” their value in stores of value other than bitcoin.

Examples:

1. Bitreserve

2. Bitgold

3. Vaultoro

4. Coinapult

And many more. By offering the ability to “park” bitcoin into another form of value storage, whether that be Euro, Dollars, gold, or silver, it mitigates volatility and allows users to feel more secure about where their money is. This is not a bad thing. This will fuel adoption, and when enough people are using it, maybe some day the volatility will reduce and people will feel more secure leaving it in bitcoin, or whatever the cryptocurrency is by then. Maybe this process takes 10 years.

In the mean-time, adopters of Bitcoin will be migrating towards using the tech primarily as a freeway to move money from place to place, but once it is done moving it might just get parked in gold until it needs to drive someplace again.

Bitcoin, for now at least, needs a trust bridge. I think gold fits nicely. So any of you huge startups (Xapo?) that wants to provide parking in gold to your customers, please say hi, I am happy to assist you with a superior turn-key institutional gold custody back-end ;).

 

1. http://en.wikipedia.org/wiki/Rai_stones

2. http://uk.businessinsider.com/how-bitcoin-may-have-more-impact-than-the-internet-2015-2?r=US

3. https://en.bitcoin.it/wiki/Myths#The_value_of_bitcoins_are_based_on_how_much_electricity_and_computing_power_it_takes_to_mine_them

Round Table Interview w Philip Judge, Simon Heapes, Alex Stanczyk

Audio of our recent round table discussion after the most recent trip to Switzerland for the annual gold audits has been posted.

At the PGF website (Flashplayer only): http://bit.ly/1Fcz58L

At the AFE website (downloadable MP3): http://bit.ly/round-table-pgf-dec-2014

Topics covered:

* Summary of physical gold flow 2014
* Chinese gold demand
* Price of gold has dropped below cost of production
* Gold in Backwardation
* Negative Gold Forward Offered Rate
* LBMA will no longer report GOFO as of Jan. 30th 2015
* The refineries are the core of the industry
* Difference in market today vs 90?s
* Potential for mining companies to start shutting in production
* Structual problems with physical gold supply
* Demand by country
* Difference between the physical and paper market
* Swiss refinery running 3 shifts, 24/7
* Currently delivery delays of up to 6 weeks due to physical scarcity
* Mis-match between physical tightness and pricing will result in dramatic price change to clear
* Premiums for rapid delivery
* The mindset of the eastern versus western investor
* New generation of futures traders are unaware of the physical industry
* Focus on the physical as derivative reference indicators may no longer be accurate
* Market narrative and sentiment by demand spheres or regions driving price

Media Spin on Swiss Referendum over Gold Reserves Getting Ridiculous

If you do not know already, the Swiss are voting on a referendum which will force its government to pass legislation to the following effect:

  • Back 20% of its reserves in gold,
  • Repatriate the gold that Switzerland owns from abroad,
  • Prevent the Swiss National Bank from selling off any more gold.

The Swiss have a very interesting form of government, where the people can vote directly to force their government to create legislation. A majority of more than 50% of the Cantons must agree.

The reason this is so important, is that if this measure passes, it will force the Swiss National Bank to purchase gold from the market, which is already stretched thin on the supply side. According to a note from the SNB, they would have to buy roughly 10% of annual mining supply each year through 2019. Some estimate this to be over 1700 tons of gold, over a 5 year period.

This is where it gets dicey. Since gold dropped below the average global cost of production in June ( http://www.cnbc.com/id/100851209 ) , the amount of gold available in the supply pipeline has been getting tighter. To make matters worse, according to the CEO of the worlds largest mining company, because the price has dropped so low mining exploration has taken a huge hit and will result in less gold production moving forward. He claims the industry will hit “Peak Gold” in 2015 ( http://bit.ly/peak-gold ).

I have read a few articles which claim that if the physical supply was tight, then the price would reflect that because as we all know, traders who deal in these markets are efficient, and above all very smart, therefore gold should be priced in a way that reflects its true market value…kind of like triple A rated mortgage backed securities….right?

Just in case anyone has forgotten what financially incentivized traders are willing to do, I present without comment the following recent articles:

1. Regulators in US and UK mete out record fines after finding a ‘free for all culture’ on currency trading floors at RBS, HSBC, Citibank, JP Morgan and UBS http://bit.ly/FX-free-for-all

2. Six Banks to Pay $4.3 Billion in First Wave of Currency-Rigging Penalties  http://bit.ly/FX3bfines

3. Swiss regulator finds “clear attempt to manipulate fixes in the precious metal markethttp://bit.ly/clear-evidence

4. UBS agrees to settle charges in gold and silver manipulation http://bit.ly/ubs-metals-manipulation-settlement

5. Reuters: EU fines JPMorgan, UBS, Credit Suisse for taking part in cartels http://reut.rs/1BN0ajC

6. SEC charges High Frequency Traders with Fraud manipulating prices http://bit.ly/SEC-charges-HFT

There are many more recent examples in this fact freight train, but I am sure you get the point.

Vote Yes Argument

The group that wants this initiative to pass says that if it is not passed, then Switzerland’s economy will be dictated by the EU, the Swiss Franc will (continue to be) tied to a weak Euro, inflation will increase dramatically, the Swiss National Bank will print hundreds of billions of Francs (to maintain the Euro/Franc 1.2  peg), the Swiss Franc will weaken, and the Swiss citizens will be stuck with hundreds of billions of devaluing Euros.

A few comments:

  • Even if the measure passes, the SNB might still print hundreds of billions of Francs to retain the Euro 1.2 peg, it will just have to buy an amount of gold equal to 20% of the Euro’s it buys. This shouldnt be that much of a problem, they do have a printing press, they could just do what my friend Jim Rickards says and print fiat / buy gold. It would of course create other problems, explained below.
  • Yes, if it doesn’t pass, the Franc will weaken, but that is the entire point of currency wars and the reason the SNB (and the government) hates this idea, aside of course from the fact that it destroys the credibility of the Central Bank (not just the SNB, but globally).
  • What will happen if this measure passes is the Swiss Franc will be reinforced as being a safe haven currency with real value, and that will cause a massive inflow into the Swiss Franc in times of fear, which does indeed create problems – the Swiss have experienced this in the 1970’s and were forced to resort to negative interest rates (charging you to hold your money instead of paying you interest) to discourage capital flow into the Franc. The amounts of Euros the Swiss would have to buy to maintain order could end up being …I have no words for it…huge…and therefore also force them to be big buyers of gold. In time, this could erode confidence in the entire system as the pressure could cause the price of gold to skyrocket which would cause people to start asking questions.

Vote No Argument

For this section, I am going to reference an article in Yahoo today which closely reflects the attitude and presentation of other articles I have read regarding this subject.

For starters it says “economists warn a ‘Yes’ vote could wreak havoc in financial markets” – but then conveniently fails to reference those economists or why they think this.

“Industry organisations have also warned that the move would tie the central bank’s hands and damage its credibility” – With the loss of credibility part I agree. After all, if the central bank itself starts buying gold to support its currency as demanded by the citizens, then it messes with their job stability doesn’t it? Are central bankers really needed if all you have to do is buy gold and call it good? This may be why the Fed has tried to convince the world that gold has no monetary use for the last 45 years. It would not, however “tie their hands”. They could still print up all the Francs they wanted and buy Euros to maintain the Euro peg, they would simply have to buy more gold when doing so, which comes back to that destroying their own credibility thing again.

Most observers expect the Swiss to snub the motion, and low global gold prices indicate investors agree – Some facts here would be nice.

According to the Swiss Central Bank Chief Thomas Jordan, if the measure passes then “The central bank’s capacity to take action would be weakened. This would also lead to higher unemployment”. – Not weakened, again it would reduce credibility because actions taken to devalue the currency intentionally by printing and buying other currencies would force them to buy gold.

He has appealed to Swiss voters to pay attention, warning that if the gold initiative passes the consequences could be disastrous. – Yes, for the credibility of the central bank.

However, “if the ‘Yes’ side wins, gold risks reacting strongly, since the market is not expecting that result,” Nannette Hechler-Fayd’herbe of Credit Suisse. – I also think the gold market will react strongly, but not because an affirmative vote is unexpected, further explanation coming up.

Strategists at Commerzbank (Xetra: CBK100 – news) said the ban on selling gold would put the very credibility of SNB at stake. – Near the end of the article, and there we have it. Economists are heralding doom, but cant seem to be found in the article after that. This whole thing about concern over a loss of credibility is pretty consistent though. If people start looking at gold as money, then that paper becomes less important, and if that happens then so does the role of the paper printer.

If SNB’s gold “reserve can no longer be sold in the event of a crisis it no longer constitutes a reserve in the stricter sense,” they said, stressing that “if the gold reserves cannot be sold they are ‘lost’ for the Swiss.” – You can always take one last swing at this issue with a straw man. This is complete non-sense. Central Banks have been using their gold reserves in a leasing capacity for decades, it serves as collateral of the highest caliber bar-none and can be put to use as such without being required to sell it.

Talking to the Swiss

Last night I was having dinner with a Swiss client and the subject of the gold initiative came up. He said that in the early part of the month it did not seem anyone was taking it seriously. Since then, there has been alot of debate, and the issue is gaining more awareness to the point that his feeling is the Swiss Government and SNB are now panicking. They are advertising in the trains to vote no, while the group that wants the measure to pass had its donation accounts frozen.

You have to know a Swiss to understand this. They are a stubborn and fiercely independent people. The idea that they are becoming lackeys to the Euro is disturbing to them. His comment to me was that if the people think the government is panicking, they will vote yes by instinct, even if they do not fully understand the underlying issues.

Gold Physical Supply

Once a year (or more often as needed) AFE travels over to Switzerland to participate in the audits of the gold in custody, as well as handle other administrative work and meet with our strategic partners. Each time we do this we are able to talk to key people within the industry.

One of the gentlemen we regularly meet with is a Director for one of the largest refineries in the world. He has perhaps one of the best views into global physical gold flows from a practical hands on perspective than any other I am aware of, and has more than 30 yrs experience under his belt. The way he puts it, paper trading in gold (on exchanges such as COMEX) is being done by young men who have no interest in the physical fundamentals, and have very little concern nor care about physical movements. My thought is he may be right, after all despite what is happening in physical flows, reservoirs of gold such as COMEX which should act as a gauge on available physical don’t seem to move much, regardless of moves in the price.

We will be doing a round table interview soon with the Board of Directors of AFE where we go into more detail about this, but I will make a few comments about the available physical gold float now.

In October, backwardation re-entered the gold market http://goldmarketmacro.wordpress.com/2014/10/28/backwardation-returns-as-the-gold-market-tightens/

The best explanation of backwardation in gold I have found is this, hat tip to Bron Suchecki of the Perth Mint (from http://goldmarketmacro.wordpress.com/2014/11/07/eastern-physical-demand-versus-western-financial-supply-who-will-win-out/ ) :

Negative gold forward rate (GOFO) is a true backwardation of gold prices.  It means participants can sell physical gold now and instantaneously buy it for delivery in 2 months time at a 0.145% discount.  Not only that, but the entrepreneurial arbitrageur can also invest the proceeds from the spot sale in risk-free securities over the period.  In two months time, they will have their gold back, have banked 14.5 basis points profit, have banked the risk free security return and will have save on 2 months storage and insurance of the physical gold.

This is why backwardation of gold is so fascinating, it just should not happen.  The arbitrageur may not be so smug if the future delivery never occurs (in trying to make 0.145% he has lost 100% of his gold), and that is the risk which backwardation effectively prices in.

It implies a very tight physical gold supply in what we call the “float”, which is gold available for sale. It is important to bear in mind that the amount of gold in the “float” changes, based on the price of gold and if owners of existing gold turn into sellers. Float gold consists of gold from mines, gold outflows from ETF’s such as GLD if they are selling, scrap, and also from an estimated 165,000 tons of gold above ground which was mined since antiquity, all of which can come available for sale if the price is high enough.

A point some of you may find interesting is that the LBMA has decided to stop reporting GOFO as of Jan. 30th 2015, claiming banks do not want to report rates dues to increased regulatory scrutiny ( http://www.ubs.wallst.com/ubs/mkt_story.asp?docKey=1329-L2N0T11GZ-1&first=0 ).

I will not say more on this topic at this time as we are reserving some important information we have to share for the upcoming round table interview, but I will say that if the current situation in the physical float continues and then this referendum passes, it will have a substantial impact on price and it will not be because “it was not expected”, but because the float is so tight right now.

 

 

Great New Words From Egon Von Greyerz

Great New Words From Egon Von Greyerz
by Egon von Greyerz – October 2012

1. Worldwide money printing continues unabated

2. Just In 10 years $120 trillion have been printed making global debt $200 trillion

3. World GDP has gone from $32 trillion to $70 trillion 2001-2011

4. Thus $120 trillion debt is required to produce a $38 trillion annual increase in GDP

5. The marginal return on printed money is negative in real terms

6. Thus the world is living on an illusion of paper that people believe is money

7. This illusionary paper wealth will implode in the next few years

8. The initial trigger will be the collapse of the world’s reserve currency – the US dollar

9. The dollar is backed by $120 trillion of US government debt and probably NO gold

10. All currencies will continue their race to the bottom and lose 100% in real terms against gold

11. This will create a worldwide hyperinflationary depression

12. All assets financed by the credit bubble will go down in real terms

13. This includes stocks, bonds, property and paper money of course

14. The financial system is unlikely to survive in its present form

15. The banking system including derivatives has total liabilities of around $1.2 quadrillion

16. With world GDP of $70 trillion, the world is too small to save a financial system which is 17x greater

17. This is why there will be unlimited money printing and hyperinflation

18. The only asset that will maintain its purchasing power is gold Click here for chart

19. Gold has been money for 5,000 years and will continue to be the only currency with integrity

20. Western countries’ 23,000 tons of gold is probably gone. See recent article by Eric Sprott.

21. The consequence is that most of the gold in the banking system is likely to be encumbered

22. This means that Central Banks one day will claim it back against worthless paper gold IOUs

23. Thus gold and all other assets within the banking system involve an unacceptable counterparty risk

24. Gold should be held in physical form and stored outside the banking system

The Crash Course – Everything you need to know about why the gold price will continue to rise over the long term

We are currently witnessing a broad pull back in markets as well as gold. Many gold investors have experienced 4 months of gold chopping sideways to down, and investor sentiment in gold is reaching new lows. Just when it looks like a bottom may be in, it seems gold once again heads lower. It is important to remember that market sentiment is an excellent indicator, of what to do the complete opposite of.

If you have never watched the Crash Course series of videos, I highly recommend that you do. The creator of the Crash Course is a gentleman named Chris Martenson who is a former international Fortune 300 executive, holds a PHD specializing in neurotoxicology from Duke, and an MBA from Cornell. He is a friend of mine and an outstanding researcher and analyst. He has taken what was for me over 7,000 hours of personal study on economics, geopolitics, monetary policy, energy, and history and condensed it into a series of short, extremely easy to watch and understand videos.

Where Chris truly stands out is in his ability to take vast quantities of data and complex subjects, and explain them in a way that a 10 year old can understand.

Taking the time to watch these videos, and eventually study them to truly absorb the concepts may be one of the most valuable investments you ever make in your lifetime.

Click on the pic below to get started, you will be glad you did.

The Crash Course Video

The Crash Course Video

Duncan Cameron available at Singapore Shorex Wealth Management Forum

AFE’s Duncan Cameron will be available to answer client questions and provide private consultations at the Shorex Wealth Management Forum.

If you would like to speak directly with Duncan during this conference, please contact AFE.

About the Shorex Wealth Management Forum:

http://www.shorexsingapore.com/

For the fourth time, the world’s leading Shorex wealth management forum is coming to Singapore to address the growing need of the Asian market for private banking, asset management and international tax planning solutions and services. The event is an exhibition and conference offering a unique platform where professionals can network to explore new services, products and ideas in wealth management.

Last year, the Shorex Wealth Management Forum attracted 30 exhibitors and sponsors and 1294 participants from Singapore, Hong Kong, India, Indonesia, Malaysia, Thailand, Vietnam, Korea, Taiwan, the Emirates and China. After 10 years of success in Geneva as the most credible European platform for professionals advising HNWIs, Shorex is holding for the fourth year its sister forum in Singapore, the undisputed centre of wealth management excellence in Asia. The event mainly focuses on professional advisors to HNWIs, institutional investors but also welcomes ultra net worth qualified investors invited by our private banking partners. The event is expected in 2012 to attract over 50 exhibitors and 1400 delegates.

International Convention & Exhibition Centre
1 Raffles Boulevard, Suntec City,
Singapore 039593
DATES: Tuesday 22nd & Wednesday 23rd May 2012, VENUE: Suntec Singapore – Level 2 – Ballroom 2 & 3

Anglo Far-East Global Insider #39 – Available for Download

Dear Global Insider reader,

The April 2012 issue #39 of the AFE Global Insider is now available for download free of charge.

In this edition, AFE’s Director of Treasury Simon Heapes addresses the many instances of what we fondly refer to as “leprechan gold deals” that are often circulated through the internet. Simon reveals how many are suckered into these scams, how to identify them, and how to avoid them. I cover current geo-political “Gold Drivers” and we take a hard look at the current environment as well as the factors which will cause gold to rise or fall over the long term.

You can download the AFE Global Insider #39 here free of charge. Please enjoy with our compliments.

Anglo Far-East Global Insider #38 – Available for Download

Dear Reader,

I must admit that AFE’s Duncan Cameron has truly outdone himself in this edition.

On the very first page of his report this month I was rocked by the sheer force of only a few paragraphs in terms of the understanding of what exactly is happening in our economy today and why it is so important to protect ourselves in this financial environment.

For anyone who wants to understand one of the primary reasons why gold is so favorable as a store of wealth, one needs simply read this edition of the GI where Duncan explains over a detailed 13 page report the history of the debasement of currency going back as far as 2600 years and compares it to where we are today.

If ever you wanted to show someone why their paper money is buying less gas, less food, less electricity, less of everything every single year, they need only read this article.

I highly recommend it, and recommend even sending it to your friends and loved ones.

Please enjoy this March edition of the AFE Global Insider with our compliments.

You can download Edition #38 of the AFE Global Insider here

Anglo Far-East Global Insider #37 – Available for Download

Dear Global Insider Reader,

Since our last newsletter our view on the direction gold and silver would go has been borne out. As predicted, earlier this week gold was trading in the $1790 per ounce range, with silver as high as 37.58. This was clearly too frothy, and during the morning hours of Wednesday Feb. 29th gold was hammered down a staggering $80+ per ounce and silver dropped close to $3. Today we have seen gold recover to $1720.90 and silver is back up to $35.09.

Even with this healthy pullback, the fundamentals in the markets have not changed. QE (money printing) on a gargantuan scale continues to be the rule of the day from Central Banks, which guarantees that the value and buying power of paper money will continue to drop, and the price of real things such as food, fuel, and gold will continue to ris throughout 2012.

There has been no solution to the debt problems of western nations aside from printing more money (also known as issuing more debt). This is clearly not a solution, as any thinking person can determine that you cant fix being in too much debt by going deeper into debt.

The result is a gradual erosion of buying power. If cash is making up a large part of a portfolio, it might be prudent to consider that a significant portion of the buying power represented is dwindling away at a constant rate. The only form of money that has proven to negate this effect and actually provide added buying power for the last 12 years is gold (and silver).

In this issue of the Global Insider, Duncan Cameron covers a wide range of issues from sovereign debt to short term technicals. AFE Treasury Director Simon Heapes also provides some astonishing insight into the work ethic, savings, and investment cycles.

You can download Global Insider Issue #37 here

Please enjoy with our compliments,

Alex Stanczyk
Anglo Far-East Bullion Co.

Alex Stanczyk Invited to Speak to Chinese Government

January 6-7, Beijing China

Alex Stanczyk will be speaking at THE 5th ANNUAL CONFERENCE ON ANALYSIS OF INTERNATIONAL FINANCIAL MARKETS

Attendees for this meeting will be ministry level government officials, directors or senior managers from Chinese banks, investment companies and state-owned enterprises.

This is event is by invitation only (P.R.C.)

China’s Policy Choices and Overseas Investment Strategies under Threat of New Global Recession
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Authorized by Development Research Center of the State Council, PRC
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Organized by Financial Research Institute of the Development Research Center
State Council, P. R. China
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Date and Place Jan.7-8, 2012?Presidential Beijing hotel?China
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Language? Chinese/English