Paul van Eeden says gold is (still) overvalued


9:38p ET Thursday, November 29, 2012

Dear Friend of GATA and Gold:

Gold is overvalued, market analyst and fund manager Paul van Eeden tells The Gold Report's J.T. Long this week, based on his formula for calculating what he calls "the Actual Money Supply," a measure he created because he found conventional measures of money supply to be inaccurate. By Van Eeden's measure the value of gold is barely half the price reported tonight, $900 per ounce, and gold has been overvalued for five or six years.

Few people in the gold world are likely to argue with van Eeden's criticism of the conventional money supply measures. But there are two problems here.

First is that van Eeden, who for many years wrote a financial letter and market commentaries prior to his retirement from that undertaking in 2008, always argued that gold was overvalued. He has been one of those supposed advocates of gold ownership who, like Kitco's Jon Nadler and CPM Group's Jeff Christian, maintain that everyone should own gold as long as he bought it long ago and that, unlike with real estate, now is never the time to buy.

... Dispatch continues below ...


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Second is that while van Eeden recognizes that the conventional measures of money supply are not reliable, he assumes that the conventional measures of the gold supply are reliable. There's no hint from van Eeden or the others that central banks report gold in their vaults and gold that has been leased and likely to have been sold into the market as the same line item, no hint that there may be substantial unreported and unofficial hoards of gold, and no hint that gold swaps among central banks and the explosion of gold derivatives may have created huge hoards of imaginary gold whose inaccessibility, if discovered, could transform perceptions of value.

That is, gold is the murkiest of markets, if indeed it is a market at all. That's why GATA doesn't bother much with proprietary formulas and technical analysis of what are probably just holograms half the time but instead seeks transparency from the major market participants, particularly central banks and their agents the bullion banks. We're not an investment advisor but rather a civil rights and educational organization, so we don't advocate buying gold for potential profit as much as for the commission of a revolutionary act on behalf of the sovereignty of the individual and the brotherhood of man and against those who make everything murky. In this sense, at least, gold can never be overvalued.

The Gold Report's interview with van Eeden is headlined "Paul van Eeden on Why Gold Is Overvalued" and it's posted here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet
at Wellgreen Project in Yukon Territory: 5.36 g/t

Company Press Release
Tuesday, September 11, 2012

VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel.

The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace.

Prophecy Chairman John Lee commented: “Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly.”

Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs.

For the complete company statement with full tabulation of the drilling results, please visit: