What is The Real Significance of Harrods (London) beginning to retail GOLD?
On 10/16/2009, the prestigious English retailer, Harrods, began selling GOLD. Their product line includes
GOLD bricks (100 oz/brick).
The significance of this move by Harrods did not compute immediately for us.
The question is why would Harrods wish to compete with the established GOLD distribution network?
To enter a business dominated by firms that specialize in precious metals, such as Kitco, does, at first
thought, seem irrational. After all, Harrods has absolutely no experience, or special knowledge, in the GOLD business. Harrods
is not just another retailer, but one of the world's “'prominent” retailers.
Perhaps some of the answer lies in it's ownership. In 1985, Harrods was bought by Mohammed aL-Fayed.
We should be aware that the Gulf Oil States are seeking to divorce their future from the US Dollar.
Since Mohammed aL—Fayed is a very successful (and wealthy) Arab businessman, it's not a stretch to suggest that Mohammed
aL-Fayed has some communication with the prominent Arabs of the Gulf States.
Harrods also may be sick and tired of massive (expensive) inventory write downs. A “'good”'
retailer knows that a big write down can take away the efforts of many prior “good” quarters.
There is one product that is popular at the consumer level that can be efficiently and cheaply hedged against
a big price break.
GOLD is a piece of cake to hedge. Just sell short on the Comex, or buy puts. How does a retailer hedge it's
risk in clothes, toys, computers, and other products? It can't!
The logic works, and that may be the motivation for Harrods. It's also very probable that the owner of Harrods
is very aware both the intent, and the effect of the Gulf Oil States plans to reduce the Dollar's power over Crude Oil pricing.
We do live in “interesting” times, and all “normal” assumptions may be inoperative
at this time.
It might be prudent for the “average” investor to ponder the significance of these facts!
Granted, Harrods is an English firm, and it's general knowledge that the British leadership is completely
incompetent at this time.
But is the USA really any more competently managed? We recently saw the bizarre event that revealed Bernanke
telling the US Congress to stop the spending, and stop fueling inflation!
Perhaps Bernanke doesn't wish to wind up as an American butler in some Oil Sheik's palace!
As much as we distrust the Federal Reserve, we should not forget that the “Tax, and Spend” formula
is the long-standing (since FDR started it in 1932) American political formula, not a policy of the Federal Reserve.
Bernanke's shot across the bow of the US Congress does suggest that the Fed is worried, and 'knows”
that it has no direct power to override the “ Toga Party” that the politicians keep throwing to buy voters support!
Only the voters can get rid of the “Animal House” that we still refer to as the US Congress.
But what if the voters demand a continuation of this insanity?
This is the “big” unknown here.
Should the US voters persist in their demands for more, the “aware' citizens will have to protect
themselves from their “parasitical” government, and perhaps even from their own neighbors.
At some point, anyone with a full tank of gas will be charged with exploiting the other citizens who “need”
that gas. Food hoarding is already illegal, so no pantry is safe now!
That's when a survivor must hide all wealth from scrutiny, or be destroyed by those whose “needs”
justify stealing from their neighbors.
At the moment of Truth, you must be holding Gold or Silver for your survival!
The real dilemma here is that you must have your Gold and Silver before that moment!
This scenario is not a pleasant one, nor one that happens very often. We know that history repeats, and
it has to repeat during someone's lifetime.
All prior empires have collapsed, and this one is running on fumes! We may be dead prior to the engine stopping,
but, we do know that this system has had it! It's just a question of time till the Funeral Service is held without a miracle
of some sort occurring!
Another event of significance occurred on 10/19/2009. The CME (Chicago Mercantile Exchange), and JP Morgan
Chase & Co.'s bank in London have created a new financial option. The CME is now accepting gold stored in this bank to
be used as margin/collateral to meet the performance bonds for futures trading!
This event suggests that Gold is assuming a different position in the world of commerce, and that this event
has been planned in advance!
The question is Why? Perhaps the people with the most information believe that there will be a demand for
Gold, and the CME has just created the mechanism to allow that Gold to be directly used in the world of commodities. Prior
to this, you would have to convert your physical gold into a currency before depositing your margin rerquirements.
So it's not just Harrods that's prepared for “something”!
We should access the situation, and depending on our emotional biases, act accordingly!
After all, you believe in miracles, or you don't!
But both of these strategies have a risk!
The risk of believing in miracles is that a collapse might actually happen here. If this is the outcome,
the unprepared may have signed their death warrants, or placed themselves, and their families, into poverty.
Yet being prepared does have a risk. Should society go into a fast decline, the mobs will be dangerous.
The risk here is that someone has told a member of these hostile mobs that you have something of value.
One solution for this problem is to buy GOLD and or SILVER!
You will need to find a reliable, and trustworthy, source for precious metals.
Can you run the risk of anyone knowing that you have wealth hidden?
That just might make you a target. Locals talk and local suppliers could easily put you at risk.
Perhaps it's just a chatty bookkeeper, or friendly sales clerk, or an auditor who sees your name as a precious metals customer.
Protect yourself. Don't let someone else put a target on your back.
Using a source such as Kitco guarantees that some local Chatty Kathy can't put you at risk.
Key facts about Kitco:
1. First online bullion dealer.
2. Most-visited precious metals site globally.
3. FIVE profitable, diversified divisions. 4. Thirty-two years of excellence in customer service.
5. The foremost purveyor of CUSTODIAL bullion products.
6. Winner of Forbes 'Best of the Web' award and of "Iphone Footprint' award for 2008.
7. Tens of thousands of satisfied clients, worldwide.
8. Offices in Montreal (HQ) Shanghai, Hong Kong, and NY.
9. More than 150 team members worldwide.
Another advantage that Kitco provides is the commentary of Jon Nadler. Jon Nadler will tell you
when something makes no sense at that time.
I've read Jon Nadler's commentaries long enough to know that Jon Nadler does not use every commentary
to say BUY GOLD NOW.
Jon Nadler is an experienced analyst and writer. So you may always go to Kitco's website to find
out what is going on in the world of GOLD/SILVER prices, and read good, timely commentary from Jon Nadler.
Something that we must think about!
Pitagoras Internacional. S.A. @ onlypill.tripod.com
10/24/2009
This writer has no financial relationship with either Kitco, or Jon Nadler.
