Live Blog: Lets Get Physical. This is a liveblog of a talk at the 2. Data Literacy Conference, hosted by Fing. We used clay to represent numbers even before we had language. Then the Sumerians started making marks, units, on a tablet. Suddenly they were comparing between lines and columns and such. Let's Get Physical: Fitness Beats Dance Fitness, Ibiza Fitness Music Workout, Workout Club. Now there is an open source kit for doing this yourself. Pauline Gourlet continues with a discussion of more than just the physical for representing data. Sometimes we talk about data we have, but other times we have to go and collect the data we need. What will the choice of the material we use induce in the story? They started with colors on fabric, because the way it spread on the fabric looked a bit diffused. They did it again with graduate students in a design university. The process was a bit more systematized, with a star plot diagram with axis for things like stress. They wanted to explore how people would appropriate the physicalization. They proposed basic tools and materials, selected materials. Wires, LEGO bricks, tokens, etc. The groups created physical manifestations of the data, liek a string that one would tie to a peg and pull to record the data. Let's Get Physical: Dance Fitness Dance Fitness, Ibiza Fitness Music Workout, The Workout Crew.Let's Get Physical: gold bullion and Bitcoin. Money printing by world central banks, it would seem, has propelled the prices of all things rare. The list includes fine art, vintage wines and antique sports cars. It is front page news that the flood of paper money has enhanced the quotation of almost any tangible asset perceived to be in scarce supply.
In a 1. 1/2. 3/1. The Economist reports: “Evermore wealth is being parked in fancy storage facilities. Bitcoin, as almost everyone knows, is a liquid transactional medium of strictly limited supply. The parallel breaks down, of course, when it comes to price behavior of these two otherwise similar alternative currencies. The price of a Bitcoin has increased to $9. Mt. Gox 1. 2/1. 0/1. May 2. 01. 1. At the end of May 2. As an increment to the existing stock of above ground gold, the percentage works out to about 1. In the meantime, the US monetary base increased 1. There are 1. 1. 5 million in circulation. Mining new Bitcoins requires incrementally more massive upgrades in computing power. According to Raoul Pal’s Global Macro Newsletter of 1/1. Zero Hedge, Bitcoin’s success is due to the fact that “the man in the street understands that central banks and governments are going to take their money via confiscation or default or devaluation and it (Bitcoin) is their way of voting against it and them.”. The man in the street has apparently overlooked the similarities between gold and Bitcoin. The future supply of newly mined gold would seem to be in jeopardy if current pricing holds. The same cannot be said for US dollars. While mine output may continue for a year or two at the current pace, production post 2. Discovery of new gold bearing ore bodies is down sharply. Miners are challenged by declining grades, poor investment returns, worsening access to capital, and increasing risks due to political instability in gold producing countries, rising tax burdens and growing permitting challenges. At current prices, most gold mining companies are barely breaking even on an “all- in” cost accounting basis. There is (as yet) no Bitcoin futures exchange, no Bitcoin derivatives, no Bitcoin hypothecation or rehypothecation. In 2. 00. 0, gold expert Jeff Christian of the CPM Group wrote. Imagine, if you will, that the (bullion) bank can line up three or more producers and others who want to borrow this gold. All of a sudden, that one ounce of gold is now involved in half a dozen transactions. The physical volume has not changed, but the turnover has multiplied. This is the basic building block of bullion banking.” (Bullion Banking Explained – February 2. He went on to say that “many banks use factor loadings of 5 to 1. One dealer we know uses a leverage factor of 4. It is the core of how business is conducted in the world of gold. Gold miners mine and concentrate gold ore. They send concentrates from the mine site to refiners who purify the ore into bars that are 9. Refiners remit cash to the mining companies crediting them for gold content in the ore minus impurities. Refiners sell their gold bars, typically to bullion banks in London, where the physical gold is received for deposit in allocated or unallocated pools and held for distribution to users such as the jewelry trade, industry or mints. The physical gold that remains in London as unallocated bars is the foundation for leveraged paper gold trades. This chain of events is perfectly ordinary and in keeping with time honored custom. In its 2. 01. 3 study related to gold, the Reserve Bank of India (RBI) commented: “In the Financial Markets, the traded amount of “paper linked to gold” exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA of which the RBI is a member) OTC market and the other major Futures and Options Exchanges was over 9. Physical Market.”. The LBMA reported that average daily volume of gold cleared in June 2. The LBMA estimated in 2. Assuming this ratio has held over the past two years, trading volume is the equivalent of 9. For example, the central banks of Finland and Sweden announced last month that approximately half of their gold was somewhere in London earning something. Reassuring language from the Bank of Finland suggested that “the risks associated with gold investments are controlled using limits, investment diversification and limitations regarding run times.”. It would not be surprising if “run times” on leasing arrangements of central bank gold span decades. Volcker, Kissinger, Arthur Burns and others expressing various concerns over the implications of a rising gold price. The policy objective in those days was to establish the SDR and the US dollar as the foundation of a “durable, stable (international financial) system”, an objective which was deemed “incompatible with a continued important role for gold as a reserve asset.” It was therefore resolved to “encourage and facilitate the eventual demonetization of gold . They noted that the Commission was not allowed to initiate an audit of the Fort Knox gold depository. Paul stated from the podium that no member of Congress has any real information on the status of that gold. He believed that the gold was still physically located at Fort Knox but most likely encumbered by complex derivative transactions. A return of physical gold that could be easily accomplished in two trans- Atlantic cargo flights must be stretched out over seven years, Germany was informed by the custodian of their gold, the New York Fed. However, the Germans were cordially invited to view their gold bars in the meantime. The reasons for the stretched out delivery schedule are not given by government officials, but we surmise that the difficulty relates to the unwinding of a web of leasing arrangements in which specific bars have been re- hypothecated, perhaps hundreds of times, over many decades. Who knows what counter parties were involved, not to mention their obligations or responsibilities? For those of us who have cheered the withdrawl of physical collateral from the system because of its potential tightening effect on derivative transactions, the short term effect may have been to depress the price of paper gold because there is less physical to support the frenetic trading of paper reported in the financial media. The shrinkage of collateral availability may be analogous to a contraction of credit which in a general sense drives down asset prices. At the end of credit liquidation cycles, however, collateral seems to wind up in the strongest hands. While most of the trading in paper gold nominally takes place on Comex, there is a parallel and much larger over the counter and derivatives market based in London where physical trades are also settled. The LBMA vets refiners, dealers, bar purity and other technical matters. It is a trade organization consisting of 1. LBMA reports the results of the two daily London Gold Fixes but otherwise has no substantive input, supervisory or regulatory. According to a 1. Bloomberg dispatch, the fix is controlled by London Gold Market Fixing Ltd, an entity owned by five bullion banks. While the process is unregulated, one of the member banks went on the record for Bloomberg stating that the company has a “deeply rooted compliance culture and a drive to continually look toward ways to improve our existing processes and practices.”. From a regulatory point of view, the City of London is an entity unto itself, with a peculiar and special status, incorporated separately from greater London. It is the birthplace of the offshore banking industry and, as described by Nicholas Shaxson, author of Treasure Islands, the city “provides endless loopholes for U. S. It would be hard to imagine that the culture of the City did not extend to gold. In fact, the intersection of the shadow banking system and the pool of unallocated bullion does much to explain the proliferation of paper gold supply. Made possible by lax oversight, weak accounting systems and otherwise dubious connections to underlying physical, the paper gold market offers substantial capacity for money flows wishing to take a stance on the expected shift in Fed policy. Unlike the physical gold market, which is not amenable to absorbing large capital flows, the paper market through nearly infinite rehypothecation is ideal for hyperactive trading activity, especially in conjunction with related bets on FX, equity indices, and interest rates. As is usually the case in a temporarily successful momentum trade where almost the entire universe is aboard, the answer is probably not. The precipitous 2. Comex warehouse stocks and ETP holdings has been widely reported. It is also well known that physical gold is showing up in record amounts in China. The manager of one of the largest Swiss refiners stated (1. In Gold We Trust website) that after almost doubling capacity this year, “they put on three shifts, they’re working 2. In some cases, they are recasting good delivery bars from the 1. He added that there is no evidence of any return of these massive import flows back into Western hands. There are eight refineries in mainland China converting 4. London good delivery bars into Kilo bars, the preferred format in Asia. An increasing flow of physical is bypassing London and going straight to China. China has not shown its hand in the official sector. At last report (five years ago), China holds only 1. Current market weakness certainly benefits large buyers of physical as well as their fiscal agents in Western financial markets. China may be attempting to help their cause by understating import levels and by overstating domestic production. The CEO of a major Canadian mining company, whose research group has done due diligence on every existing producing mine of significance in the world, including China (over 2. Chinese production is less than half of what is reported officially.
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