Germans hoarding mountains of gold

Germans are gathering vast quantities of gold - a study showed that the average German owns close to €6,000 worth of the shiny metal.

Even though Europe's largest economy has weathered the world economic crisis relatively well, Germans have still been extra jittery about their savings, a study by the Steinbeis Research Center for Financial Services in Berlin revealed.

Around 32 percent of the gold owned in Germany in the form of bars and coins was accumulated since the financial and economic crises began, the study concluded.

Commissioned by precious metal trading group Heraeus, the study also found that people with surplus cash are becoming gold-greedier. The number of Germans with a net monthly income over €4,000 who say they intend to invest in gold has doubled in the current year.

On average, every German owns around 117 grammes of gold, comprising 55 grammes of jewellery and 62 grammes of bars and coins, the study, which surveyed 2,000 people, found. Taken together with gold securities, the average German owns some €5,750 of gold. Read more >>

With Every Government Printing, $3000 Conservative For Gold

Image by motoyen via Flickr

Joe Weisenthal
This seems to be a very common theme.

In his latest letter to investors, regarding the euro bailout, Kyle Bass revealed that he made a big gold buy on the grounds that everyone from Brussel to Tokyo was now in print-and-debase mode.

In his daily note, David Rosenberg says almost exactly the same thing:

Meanwhile, a new socialist government in Japan wants a weaker yen. Sterling has only one way to go in an environment of heightened political uncertainty and a balance sheet that is at least as extended as Greece. And the ECB just gave notice with its agreement to buy sovereign and corporate debt that it is willing to distort the pricing of risk in the bond market for the greater good of helping profligate countries to avoid either defaulting or certainly help them finance their obligations at a subsidized cost. The Bundesbank, this is not.

So gold is no government’s liability and the shape and shift in its supply curve is the shape would seem to be a little easier to make out than fiat currency. We may end up being overly conservative on our peak gold price forecast of $3,000
an ounce.

It seems hard to argue with the logic of the gold bulls right now, except that when everyone is making the same call, that's not usually a time for bullishness.

What else could be bearish for gold?

Well, if the real economy comes humming back, that could prompt investors to pour money into real assets. And if the world enjoys a shock bout of stability, then at least some of the fear premium could come out.