The Upshot of the Shoot Up in Gold Demand


"[John Embry] said, 'It's that Mogambo idiot' right before the line went dead. I've arrived!"

John Embry of Sprott Asset Management is one of the really "tuned in" people of the world; he knows so much, he actually knows who I am! I know this because when I called him and said, "Hey! John! What's the poop about gold and can you loan me a few bucks?" I think he said, "It's that Mogambo idiot" right before the line went dead. I've arrived!

Anyway, Embry is "tuned in" to the world of gold, gold mining, gold refining, gold selling, gold buying, and, I assume, all things gold, probably including the gold fillings in your teeth, although I don't know this for sure since I never got a chance to ask him before he, you know, hung up.

Thus it is important when he says, "As inflation rears its ugly head and future demand for gold promises to overwhelm mine supply, gold's price will launch a parabolic rise from current levels in the near future. Gold has much, much further to go," meaning that gold will soar to heights undreamt and, when it does—even better!—people will say, "Hey! That idiot Mogambo was right! He's apparently not as stupid as he looks or sounds!"

So, not only am I happy about the coming cessation of Anti-Mogambo Hostilities (AMH), but I'm also glad he brought up the subject of diminishing gold supply; as it turns out, all the easy gold has been found and mined, and all that's left is in hard-to-get-at and as-yet-undiscovered deposits, assuming the miners can get the permits and successfully fend off the inevitable—expensive—legal challenges to opening a new mine, which doesn't even mention the slimy manipulations and short-selling schemes at the futures exchanges that have added immeasurably to the "supply" of gold by supplying all those years of gold buyers with, not gold, but mere pieces of paper that say, "You own gold, and we're holding it for you, and this piece of paper you are holding in your hand proves it!" even though there ain't (pause) no ( pause) gold backing it up.

The point is there is a massive imbalance between demand (huge) for real gold and supply (small) of real gold, which, according to the immortal supply/demand dynamic, means the current equilibrating price of gold is Too, Too Low (TTL), and by a Long, Long Shot (LLS).

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