With global stocks, the US dollar, and gold all surging, today one of the savviest and well connected hedge fund managers in the world sent King World News the most amazing chart concerning what is happening in the gold market. Outspoken Hong Kong hedge fund manager William Kaye also spoke with KWN about what is really going on behind the scenes in the gold war. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in part II of his remarkable interview.
Kaye: “As you and I are talking now, we’re a little bit below $1,250 on gold which is ridiculously low. On the numbers we are looking at that would mean that roughly half of the production of the mining community of the world is unprofitable, which is stunning when you think about it.
What is going on is unprecedented….
“It’s unsustainable, and like anything that is unsustainable it won’t be sustained. So this is a great opportunity for people who do have an interest in possibly adding to or initiating new positions in gold or precious metals. We are at levels that I think are extremely attractive, Eric.”
Eric King: “Bill, what about this chart that you sent me going over the various entities out there that hold gold for retail and institutional investors? Can you talk about that?”
Kaye: “Yes, I’m happy to. Pick up the Wall Street Journal, the Financial Times, watch CNBC if you want to have your brain damaged, you’ll get the same narrative (regarding gold).
And it’s a scary narrative, which is that people are panicked — there is a bear market in gold. And they (the mainstream media) never make a distinction between the paper market in gold and the physical bullion market. That is a very important distinction for your listeners (and readers) to make.
But the narrative is that people are panicked, and because they are panicked they are selling into the market to whoever will buy. And this is why the gold inventories, the Spyder Gold Trust and the other major exchange traded funds (gold holdings) have been so rapidly reduced.