Gold Investing: Flesh of the Gods

Pinnacle Digest writes: All investors, whether you hold gold, believe in gold or plan to buy gold know it has been used as currency and cherished throughout all history.

Rick Mills reminds us that in ancient Egypt, gold was considered the skin or flesh of the gods, in particular the Egyptian sun god Ra. Gold was unavailable to anyone except the pharaohs. The history of gold is a long one - the first true coins in Western civilization were issued around 640 B.C., by King Ardys of Sardis.

Flash forward a few thousand years and little has changed. The controllers of the universe or central bankers are hoarding gold and buying it like no tomorrow. The wealthiest among us from Saudi Arabia to India to Hollywood own vast quantities of gold.

In March of 2012 countries continued buying gold at record levels thus reducing the "free-float" available to meet future demand. The International Monetary Fund (IMF) recently reported that at least 12 countries increased their gold reserves in March by buying a total of 58 tonnes.

Significant purchases include:

    * Mexico 16.81 tonnes
    * Russia 16.55 tonnes
    * Turkey 11.48 tonnes
    * Argentina 7 tonnes
    * Bolivia 7 tonnes
    * Kazakhstan 4.3 tonnes
    * Ukraine 1.18 tonnes

These are small time buyers in comparison to the likes of China and India. China in particular has been buying gold at a breakneck pace in recent years and is only accelerating its purchase of the precious metal.

In 2009 China purchased four tonnes of gold bullion from Hong Kong. In 2011 China purchased 46 tonnes of gold bullion.

Michael Lombardi, contributor Profit Confidential stated, “In the first two months of 2012, Hong Kong is reporting that China’s purchase of gold bullion has jumped 600% from last year. At this pace, China will easily surpass the 46 tonnes of gold bullion it purchased from Hong Kong in 2011.”

Why is China doing this? It is the largest creditor nation in the world. Why does it need all of this gold? It sees what the US and every other western nation is doing in respect to ongoing currency war. The devaluing that comes with a prolonged race to debase can crush a countries savings. China wants to protect its sovereign wealth against inflation and be ready for whatever the global economy may come with next.

China is also buying up the production from its own gold mines, as is Russia. As central banks continue to lead the way in purchasing gold our team remains bullish on the precious metal. Central banks are, after all, the ones printing the money and controlling future money supply.

Mills closes by quoting King Ferdinand of Spain who said, in 1511; “Get gold, humanely if possible—but at all hazards, get gold.”

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