The WGC RealityI very much agree with this article as it was the big producers who first sparked the downward slide in this sector with their huge cost/oz increases and acquisitions that only begin to make sense with gold above $2000. Most of the major producers have failed to properly run their companies and thus imo will continue to get punished as more realize they do not operate on behalf of their shareholders' best interest. Either they smarten up or investors will pursue the junior to mid-tier producers whose main objective is economic gold production without any opposing interest.
VIT imo should buy back a few million dollars worth of shares because first it makes sense at these levels and secondly it would show that the company respects it's shareholders - I'm not holding my breath as that type of management is harder to come by these days.
Written by Jeff Nielson Thursday, 13 June 2013 13:19
When I labeled the World Gold Council as the “World Paper Council” in a recent commentary; who knew that the WGC was about to add its own exclamation point to that title? But that is precisely what this sham-organization has done.
As a reminder (since it’s so easy to forget): the WGC is an industry trade-group representing the world’s gold-mining industry, or more specifically, most of its large gold-mining companies. In turn, these gold mining companies (and gold-mining executives) have a direct, fiduciary interest in promoting (and protecting) the interests of their shareholders.
What this means is that while the WGC itself has no direct fiduciary duty to the shareholders of these mining companies; the WGC members do have such a legal duty. This in turn means that in order for any action (or statement) by the WGC to be legitimate it must at least be neutral toward the interests of those shareholders – and preferably in their best interests.
This is not what we see today with the shameless pandering in which the WGC is engaged in India. Why is the WGC in India at all, engaged in openly cooperating with the Indian government about its supposed “current account deficit”? It went to the world’s largest gold market to try to trick its best customers into buying paper-called-gold instead of real gold.
There is no possible, legitimate basis for the WGC’s recent activities in India at all. It claims it is in India to provide some short-term economic assistance to the government of India. What possible valid function could the World Gold Council (a gold-mining trade group) be performing in India – a nation without any gold-mining industry of its own? What possible expertise could it have to offer?
Further proof of the illegitimacy of the WGC’s conduct is that this entire “issue” here is a fraud. There is no “current account deficit” in India; it is nothing but an accounting sham. For those lacking a background in economics; a current account deficit is ultimately a currency deficit. And this is what proves the issue is a fraud.
Supposedly, India is incurring a huge currency deficit in swapping the bankers’ paper “money” (one form of currency) for gold (another currency). This is literally like Indians engaging in swapping apples for oranges – and then the propaganda machine begins writing about India’s supposed “fruit deficit.” It is logically perverse.
It is the bankers who are claiming that India has a current account deficit. These are the same bankers who have always treated gold as a currency with all of their own rules/regulations. This was true even during all the years when the bankers were lying to the public and referring to gold as “a barbarous relic.” Thus it is impossible for the bankers themselves to actually believe that India has a “current account deficit.”
When bankers talk about gold; we expect them to lie. At the same time that the bankers try to dupe Victims into buying/holding paper instead of gold; the central banks themselves are swapping their paper for gold at the fastest rate in history.
Yet here we have the WGC prostituting itself in India to serve not the interests of the shareholders of gold-mining companies; but to serve the interests of their real Masters – the bankers. As I noted in my prior commentary; all one needs to do is to look around the WGC website to see who it really serves: there is only two years of data on gold-mining and the gold market; but more than 15 years of bankers’ essays telling us how they want to use our gold.
Now we have the WGC declaring it wants to “work with” the central bank of India – to con Indians into buying less gold. Naturally, the propaganda machine lacks the integrity to state this openly. Instead we get the usual Weasel Words:
Mumbai: World Gold Council (WGC), the premier organization that promotes the use of gold globally, has approached the Reserve Bank of India to work with it so that yellow metal could be promoted as a financial asset, rather than just a physical asset… [emphasis mine]
And lest he have any doubt about what that nebulous statement means; its actual intent is clarified in the following sentence:
…The move comes close on the heels of a series of steps taken by the government as well as the central bank, aimed at reining in gold imports which is directly contributing to the rising current account deficit. [emphasis mine]
Regular readers are entirely familiar with what all of these “efforts” have been all about: duping Indians into buying paper-called-gold instead of real gold. Understand that fraud is explicitly implied here. How can you “solve” a gold deficit by selling Indians “paper gold” instead of physical bullion? Only if the “paper gold” is simply paper called gold.
Here the bankers have an unblemished track-record of more than 2,000 years (ever since they were known as the “money-changers”). They always pass-off “paper gold” on their Victims – backed by nothing.
Understand the chronology here. For more than six months the Indian bankers (and its puppet-government) have waged a propaganda-war on their own population attempting to trick Indians into buying paper-called-gold instead of real gold. It has failed. Apparently no one in India trusts bankers selling paper and calling it “gold.” What a surprise!
So now the bankers have called in their flunkies from the WGC. Get these gold-mining executives to stand in front of the bankers – and have them tell Indians to buy paper-called-gold instead of real gold. What’s next for the WGC? Presumably sending these mining executives out to stand on the street-corners of large, Indian cities, flogging units of GLD.
With the actions of the WGC leaving absolutely no doubt as to where its real loyalties lie; one question begs to be answered. Why would anyone hold shares in gold-mining companies belonging to an industry trade-group trying to persuade the world’s largest gold-buyers to buy less gold?
Would anyone be silly enough to hold shares in a bank, if the executives of that bank went around encouraging people to hold their wealth in physical gold instead of keeping that wealth in paper and depositing it in a bank? The dynamics with the gold-mining companies belonging to the WGC are identical – just reversed.
There is one notable difference. Following the Cyprus Steal (i.e. government theft of private bank deposits), and with most Western governments having already crafted their own “bail-in” guidelines; we know that no form of paper accounts are safe. No reputable entity would recommend holding paper instead of gold.
Indeed, this is precisely what is behind the current, unprecedented liquidation of paper-called-gold. The same Big Money which was warned to take their money out of Cyprus months before the rest of the world was surprised with this crime also began selling all their paper-called-gold at precisely the same time. Holdings in the SPDR Gold Trust have plummeted by more than 25%.
Meanwhile, gold inventories have also plummeted – around the world – as an unprecedented accumulation of physical gold is taking place. Is the WGC cheering this development? No, it’s too busy allowing itself to be pimped-out by the bankers, as they desperately try to find new Victims for their paper-called-gold scams.
Not only is their no valid pretext for all the moves by the government of India to “restrict gold imports”; but even the propaganda machine itself was forced to acknowledge this would immediately create smuggling problems – which was precisely why India’s government “liberalized” gold import rules 15 years ago.
If the WGC was a legitimate organization; it would be fighting moves by the Indian government to restrict gold imports. Instead, it is inside India serving bankers. It’s promoting the lie about India’s mythical “current account deficit” (something of no possible relevance to a gold-mining trade group); and it’s (indirectly) participating in the world’s oldest fraud: selling paper, but calling it “gold.”
Those investors interested in holding shares in gold-mining companies have an obvious choice. Sell all your holdings in large mining companies which have proven (time after time) that they couldn’t care less about their own shareholders.
Instead, invest in legitimate gold-mining companies: the junior miners. Not only have these companies offered far superior growth profiles in comparison to the banker-serving, gold-hedging senior miners; but they also have far superior track records when it comes to being good corporate citizens.
With the valuations of these companies at all-time lows in comparison to the price of bullion (and the share-prices of the senior miners); there will never be a more economically advantageous time to move from the seniors to the juniors – and feel good about doing so. Invest in gold-mining companies which are more interested in gold than banking.
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