Short covering, triggered by rumours of a potential US downgrade from Moody’s, are sending gold and silver prices vertical. The move higher comes after a very suspicious spike this night in which the silver price was pushed 10% lower within the first hour of Asian trading (with a bank holiday in Europe). The charts show the price action in today’s trading sessions. In our own words: folly of the highest degree, or the metals being subject to greediness of traders.
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Columbia Economist Dr. Jeffrey Sachs speaks to the Philadelphia Fed. This is his brief message: We are beyond the macro economics right now. We are to a level of legal accountability, tax regulation, transparency and a basic sense of fairness. We do not have it right now. Wall Street is pretty lawless and unfortunately the regulatory system that we have is nearly broken down.
We first introduced Brazil Resources Inc. in the fall of 2012, when we applied Casey Research’s The Eight P’s of Resource Stock Evaluation to the company. We’ve decided to revisit this company, look at its progress over the past six months and explore some of the upcoming catalysts BRI has in store for the next 12 months.
While we reported earlier this week that Arizona was as good as ready to adopt gold and silver as legal tender, after the Senate voted 18-10, it now appears that Arizone Governor Jan Brewer vetoed. In this short article we publish the letter that the Governor has written in which he explains his veto.
On the question where gold will trade for the rest of this year, Rickards is convinced that gold will go sideways this year and that it will go up next year. He also believes inflation is coming with a lag. On the question what deflation means for gold, Rickards answers that gold traditionally performs well amid deflation, as well as inflation.
Any rational person should question whether long term silver investors are 100% wrong, especially in light of the recent notable decline in the price of silver. Nevertheless, if they ultimately conclude that silver investors are probably not wrong, then prudence would dictatethat at least some allocation of their investment portfolio to properly held precious metals would be appropriate.
ECB President Mario Draghi today cut its benchmark refinancing rate to a record low 0.5%. Based on official inflation rates, holding government bonds in large economies yields a negative return on 2, 5 and 10 years. Based on the unofficial inflation rate, bond holders are literally throwing away their money. So who said that gold is a worthless investment because it does not pay an interest?
This week it is Arizona who is one step away of adopting gold and silver official as currency on a state level. The Senate voted 18-10. It is the governor who needs to sign off (but could refuse as well in extremis). The bill will make gold and silver coins legal tender as of mid-2014.
The Perth Mint in Australia accounts for 300 tonnes of annual output, which equals slightly more than 10% of the world gold production (excl Russia and China). Being one of the largest mints in the world it is worth looking at the facts and figures behind the company. On the Perth Mint blog we have found nine interesting facts and figures.
As history has shown, the government can control the monetary system for a certain time but not endless. As time progresses, the market can take over control. With the global monetary system at risk levels never seen before, Holders of paper money should ask themselves what exactly they are owning … and what would happen if history is about to repeat itself.
Renowned Professor Fekete recently wrote about the current backwardation in gold and explains what effects a prolonged backwardation could have not only on the gold markets, but on the economy as a whole. This is another risk related to paper gold trading which confirm that the only way one should invest in precious metals is by unencumbered physical ownership.
Peter Schiff comments on the latest disappointing US GDP figures and the real inflation rate. Since 2002 the price of a Big Mac is up with 6% while the CPI has increased less than 2%. Besides he discusses the increase of 3.2% in consumer spending, the decrease of earnings and the savings rate (which stands at its lowest points since Q4 2007).
The high demand around the world for physical gold and silver continues its race. In this short update we provide some highlights from different parts of the world, based on the latest reports.
What will the monetary system look like once a collapse occurs, which Rickards expects in the coming 3 to 5 year time frame. In his view, which he describes in great detail in his book Currency Wars, there are four possibilities: multiple reserve currencies, SDR’s, a gold standard, chaos.
Currency controls, confiscation, taxation, … all of these types of measures are about to hit ordinary and hard working people. Yes there is a way out. Smart people can not only diversify their assets and wealth in different types of hard assets, but also internationally. Doug Casey from Casey Research shares some insights in how to do it.