Is The South African Mint Short Of Gold?

In what may be the strangest story I have seen in a while related to the gold market, it appears $982 million worth of gold has left JFK international airport in New York to some undisclosed location in South Africa.  While it remains unclear what purpose this gold serves, it seems the most likely explanation is to fulfill demand for Krugerrands (South Africa’s popular gold bullion coin) to meet elevated demand in the face of constricted mine production.  This story is timely coming on the heels of the article I posted yesterday about how Dubai’s gold demand is running at 10x normal levels.  This is a bizarre story, so if anyone has further color I’d love to hear it.

From Quartz:

Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March.

Why?

It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)

The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.

However, the strikes that rocked South Africa’s mining industry last year briefly caused gold output to fall sharply, around the same time as last autumn’s big gold shipment from JFK. Overall 2012 production declined by a relatively modest 6% (pdf) over the year before, according to a preliminary figure from the US Geological Survey; but those first estimates have sometimes proven wide of the mark. (In 2009 the USGS estimated South Africa’s 2008 production to be 250 tons; it subsequently revised the figure to 213 tons.) So it could be that the strikes dealt a more severe blow to the country’s gold industry than the data show.

Still, even if gold output did fall precipitously, it’s not clear why South Africa would need to start importing it. One possible destination for the gold is the South African Mint, which produces legal-to-own gold coins called Krugerrands; the gold used in them is first refined by the Rand refinery. Calls to the South African embassy in Washington, DC were not returned.

Meanwhile how about this chart, courtesy of the Quartz article.

GoldfromJFK

 Source: http://www.zerohedge.com/news/2013-05-14/south-african-mint-short-gold

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Al Gore’s Golden Years

The house in Nashville is gleaming white, with symmetrical wings and four twenty-foot-high Victorian columns. Under the soaring portico stands Al Gore, dressed in his casual uniform—a button-down blue dress shirt, jeans, and cowboy boots.

This is Gore’s White House, a 10,000-square-foot mansion he and Tipper renovated in 2007. It’s currently uninhabited but for his dog, Bo (by strange coincidence, the name of the dog in the real White House, too), a chow mix, who is barking wildly. “I’ve got the house to myself most of the time,” Gore says.

By mansion standards, the house is modest. The most famous feature of the Gore living room, Tipper’s drum kit, has been moved out since they separated in 2010. Off the living room is Gore’s writing room, with floor-to-ceiling whiteboards, where he spent the better part of two years—nights and weekends included—writing his latest book, The Future: Six Drivers of Global Change, 533 pages, 154 of which are endnotes and bibliography. Shortly after finishing his manuscript, he sold his cable channel, Current TV, in a deal worth $784 million—Al Gore is now richer than Mitt Romney, according to Forbes magazine. Add that to his books, his investment company, his Oscar-winning movie, and his Nobel Prize, and you have a flawless American success story—except, of course, for one little detail.

We pass through the kitchen, where Gore delivers a brief disquisition on the dangers of aspartame in diet drinks, which may cause you to crave sweet things, and thus help make you fat—one of Gore’s concerns, along with saving the planet.

In the backyard, the poplars have just started to bloom, white as teacups. Gore settles us onto cushiony patio furniture not far from a rectangular pool. Bo, finally quiet, has taken up a spot on the well-tended lawn.

It’s perfectly pleasant here in the yard—but wherever Al Gore is, it’s hard not to get the sense that there are dark clouds lurking. This is partly because of his core identity—the man who should have been president. And it’s also because his writings are apocalyptic—like nature hikes through the Book of Revelation, a phrase he sometimes uses in a different context. His environmental writings are replete with biblical images of the destruction that awaits unless we change our ways. His best seller The Assault on Reason laments the fading power of evidence and logic and the disdain with which intellectuals are treated. Even The Future proposes that America has lost its way and that its current course leads to “the possibility that civilization as we know it would come to an end.”

“Your books all seem to be built around a sense of loss and hopelessness,” I begin.

Gore quickly rebuts my premise.

“Oh, gee, it doesn’t come from that place,” he says. “Look, there are some dangers here and some opportunities. And we have to make conscious choices.

“I’m trying to push back against the idea that my writing comes from a place of sadness or lament.”

“Anger?”

“Concern.”

“You’re optimistic, then?”

“Yeah, I’m very optimistic. We’ve faced stormy days in the past. Good things can happen quickly. They can, and they do.”

The image of Albert Gore Jr. as a man for whom the sky is always falling was created in the five weeks after November 7, 2000, a day when he believed he’d won the presidency (and many still believe that he did). The Supreme Court, by one vote (and Sandra Day O’Connor, a retired justice, has just suggested that the court perhaps should not have taken the case), put an end to that dream. “For two and a half decades, he was on a trajectory that was supposed to end in the presidency,” says one of his closest advisers, Carter Eskew. Then it was ripped out of his hands, and that changed everything.

Part of Gore’s gift is that he’s always managed to make light of the situation. He’s developed a big banging laugh and a talent for self-deprecation—“I used to be the next president of the United States,” he likes to say. Or he play-acts.

“How hard was it to be so close?” ­Charlie Rose pressed one recent evening at the 92nd Street Y. How, in other words, could you bear it?

Onstage, Gore, in a suit that looked too small for him, mock-blubbered: “Oh, Charlie, you have no idea.”

In the absence of direct testimony, those close to him have filled it in. “He endured a long night of the soul,” says one aide, echoing the standard view of Gore after 2000.

Gore shifts us inside—it’s gotten a bit cold, and the host is hungry. There are relatively few signs of the wealth he’s lately accumulated. There’s a sideboard with dishes on display, a compact living room facing a flat-screen TV, and a dining area where the table is set for three—we’re joined by a young aide, Betsy ­McManus,­ who addresses her boss as “Sir.”

Source: http://nymag.com/news/features/al-gore-2013-5/

Arizona Becomes 2nd State To Make Gold & Silver Legal Tender

Just under a month ago we raised the prospect of a number of states following Utah (which authorized bullion for currency in 2011) down the path of gold and silver as legal tender. “The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing,” was how this shift was previously described and as Yahoo reports, the Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state, in a response to what backers said was a lack of confidence in the international monetary system. The bill will make gold and silver coins legal tender as of mid-2014 and more than a dozen other states continue to mull the transition. Those against the bill argue somewhat ironically, “anybody who thinks gold or silver is a really safe place to put your money had better think again,” anchored on the last two weeks, but as one supporter of the bill added, a “sound and honest money system such as gold and silver” is needed to bring stability.

Via Yahoo,

The Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state, in a response to what backers said was a lack of confidence in the international monetary system.

The bill calls for Arizona to make gold and silver coins and bullion legal tender beginning in mid-2014, joining existing U.S. currency issued by the federal government.

If signed into law, Arizona would become the second state in the nation to establish these precious metals as legal tender. Utah approved such legislation in 2011.

More than a dozen states have considered similar legislation in recent years, according to the National Conference of State Legislatures.

He also pointed to the recent decline in the value of gold – which sank to $1,321.35 per ounce on April 16, its lowest price in more than two years – noting that “anybody who thinks gold or silver is a really safe place to put your money had better think again.”

The push to establish gold and silver as currency has become increasingly popular in the United States in recent years

… the legislation was needed to counter what he sees as insolvency in the global monetary system.

“The dollar system and all of the other derivative currencies, including the euro, are a recipe for worldwide bankruptcy,” Weiner told lawmakers at an earlier hearing, adding that a “sound and honest money system such as gold and silver” was needed to bring stability.