Nice to know that the euro is in such good hands
By now, presumably the whole world knows that Mario Draghi, President of the European Central Bank, has announced that 'Within our mandate, 'the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough'.
On the face of it, that statement was reassuring enough that 'risk on' trades were on again, world equity markets surged, and gold and silver rose nicely a week ago Thursday.
But what else did Draghi have to say on that occasion? Nickolai Hubble, writing in The Daily Reckoning Australia for Wednesday, August 1, "How the ECB will Print Money, and Buy Bonds" (firstname.lastname@example.org), dissects Draghi's rhetoric and the thoughts they were intended to convey, for our edification and reassurance. I laughed, until I cried, at this.
Also, Bron Suchecki had an interview with Larry Klutz on FinancialSenseNetwork (http://financialsurvivalnetwork.com/2012/07/bron-suchecki-of-the-perth-mint-expect-precious-metals-shortages-during-the-next-crisis/) that has apparently not attracted the audience I think it deserves, as I have not seen it linked elsewhere. The twenty minute interview is well worth the time needed to listen to, as it points out an apparently not very well known factor in why premiums for gold and silver coins were so high when metal prices were so low back in 2008-09. Bron's Gold Chat site (http://goldchat.blogspot.com/, for 25 July 2012) has the above link to the interview, as well as a synopsis that presents his basic point, which is that mints cannot readily increase production of gold and silver coins, even when demand increases greatly, because there is a bottleneck that mints cannot afford to remove. That is not the scarcity of physical metals or their ability to quickly stamp out the coins themselves, but the limited supply of the blanks, or planchets, that feed into the presses. They are made through very complex and expensive processes, and their supply cannot be increased quickly or easily since the major capital investments that would be necessary to do so in future cannot be justified under present circumstances.
A later posting on Bron's Gold Chat answers a number of readers' related comments and questions.
Contributed by Slow Loris Larry