Bron Suchecki: Expect Precious Metals Shortages During The Next Crisis

[Ad Orientem]

http://goldchat.blogspot.com/2012/07/ex ... uring.html

[Gosso]

If investors ever got the appetite for physical gold bullion coins then there could be a shortage.

http://www.foxbusiness.com/investing/20 ... ical-gold/

"According to a survey of 1,000 individual investors released this week by Gold Bullion International, 63% of investors would prefer to own a physical asset like gold rather than a non-physical asset like equities or mutual funds.

However, that same poll reveals that just 2% of those surveyed actually own institutional-quality gold."

They must have surveyed a few PPers.

[MediumTex]

What does it mean to have a "shortage"?

Isn't there always a shortage of everything, and that's why we have to pay for things rather than just taking the stuff we want?

[Gosso]

What does it mean to have a "shortage"?

Isn't there always a shortage of everything, and that's why we have to pay for things rather than just taking the stuff we want?

Maybe "shortage" is the wrong word to use, how about "extremely high demand", where the holders of bullion coins are reluctant to sell their gold at ever increasing prices due to increasing fears of a currency/economic collapse.  This would place an additional premium on bullion coins over the ETF's and (un)allocated gold.  Obviously this would create an arbitrage opportunity, but how many holders of bullion coins would be willing to sell for paper gold when society appears to be falling apart.

[MediumTex]

What does it mean to have a "shortage"?

Isn't there always a shortage of everything, and that's why we have to pay for things rather than just taking the stuff we want?

Maybe "shortage" is the wrong word to use, how about "extremely high demand", where the holders of bullion coins are reluctant to sell their gold at ever increasing prices due to increasing fears of a currency/economic collapse.  This would place an additional premium on bullion coins over the ETF's and (un)allocated gold.  Obviously this would create an arbitrage opportunity, but how many holders of bullion coins would be willing to sell for paper gold when society appears to be falling apart.

Isn't demand always a function of perceived shortage?

All I'm saying is that gold will always be in short supply and that's part of why it's expensive.

The only time you will typically ever see a real shortage of an item is when price controls are put in place.

[Ad Orientem]

"In Turkey – I kid you not – premiums are up $35 above spot price,"

OH THE HORROR! At current price that's a tick over 2% above spot. Maybe I should move to Turkey.

[bronsuchecki]

In 2008 we had rationing of coins by the mints, that's what I mean by a shortage.

Keep in mind I'm talking about shortages of coins and bars, not a shortage of the metal itself. That is, the price to buy ETFs and pool allocated type online facilities will not move much, but the price of retail size coins and bars will increase far more.