Western central banks are depleting their gold resources

Well, in a gold market that has 4,000 tons of supply, I see 6,000 tons of buyers. You know that the 2,000 tons has to come from somewhere. It has got to come from Western central banks and I think these Western central banks are depleting their gold resources. Someday they’re not going to be able to make the payment when somebody demands the gold.

Of course the guy demanding the gold would be either Indian or Chinese or the US retail coin buyer -- people like that. And all of a sudden people will realize that the demand was always way above supply. And the same thing for silver. I mean look at what India has done in the last two years. They’re buying 30% of the silver market up from 10%. How is that possible?

You could buy an extra 20% of the market and have the price go down. It’s mathematically challenging to come up with that conclusion unless somebody in the paper market just wants to make the price whatever he wants to make it. Somebody who has got deep pockets can make the price do anything he would want as long as nobody asks for the silver. So I’m pretty convinced that the physical argument is a very powerful one.

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