Author Archive: GoldMoney

rss feed

Author's Website

Gold is real, central planning is fiction

| July 5, 2012 | Articles: Insights
Gold is real, central planning is fiction

The dream of developing a science that would allow wise philosopher kings to rule humanity from ivory towers is as old as Plato, but it received a significant boost during the 20th Century as “scientific” socialism searched for the tools to replace the market economy and the price system with a centrally planned “ideal” world. John Maynard Keynes’ equation-rich General Theory of Employment, Interest and Money gave many aspiring central planners what looked like the mathematical tools to do so, and they rushed to build both statistical and mechanical extensions that would bring practical policy applications to economic theory. Unfortunately when logic is absent and the theoretical foundations are a mish-mash of […]

Continue Reading

Monetary stimulus chatter helps gold

Monetary stimulus chatter helps gold

US markets are of course closed today for the 4th of July, but elsewhere in the world traders are still going about their merry business. Gold and silver posted strong performances yesterday on the back of – yes, you guessed it – market excitement about the prospect of more cheap money from central banks. Weak manufacturing data from America on Monday, combined with growing expectations of a rate cut from the European Central Bank and the belief that China will ease have all given growth assets a leg-up. Meanwhile in the UK, amid the Libor drama, the Bank of England is said to be gearing up for more money printing. […]

Continue Reading

EU bank moves lift precious metals

EU bank moves lift precious metals

Gold and silver prices surged on Friday on market hopes of a “breakthrough moment” in the eurozone debt crisis, following the conclusion of the latest European Council meeting in Brussels. Though the European Union is taking concrete steps to move the eurozone towards a banking union – with the new $634 billion European Stability Mechanism to be up and running shortly, which will supply funding for bank rescues – EU leaders are still stalling on the question of “Eurobonds” and other moves towards full fiscal union. The bank plans still needs to be approved by national parliaments. On top of this, the Spanish bank bailout is expected to cost $125bn, […]

Continue Reading

Where was the gold?

| July 1, 2012 | Articles: Insights
Where was the gold?

I am an avid reader of monetary history. Of late I have been focusing on the monetary events of the 1920s and 1930s. By learning from the maelstrom that riled the global financial scene during those two tumultuous decades, I aim to better understand present circumstances because there are many similarities between then and now. I’ve just finished a fascinating book published in 1955 entitled Confessions of The Old Wizard. It is the autobiography of Hjalmar Horace Greeley Schacht, whose improbable name reflects his North Schleswig ancestry and his father’s admiration of an American newspaper editor. For those not familiar with him, Schacht is generally given credit for ending in 1923 […]

Continue Reading

Gold and silver: you ain’t seen nothing yet

| June 28, 2012 | Articles: Insights
Gold and silver: you ain’t seen nothing yet

More so-so price action in precious metals over the last two days, with gold and silver still struggling for near-term direction in the face of continuing European political uncertainty. Trading volume in Comex gold futures continues to decline, as often happens during the summer months. On top of this – though it will come soon – the US Federal Reserve is still sitting on its hands with regards further monetary stimulus. In combination, all of these factors are causing the continuing consolidation in precious metals. How long such consolidation will last is the million-dollar question – and if this author could answer it, he’d be sitting on his yacht in […]

Continue Reading

Silver buying support below $27

Silver buying support below $27

We saw divergence yesterday between stocks and precious metals – with the former struggling as a result of more euro fears, while the latter rallied higher; the gold and silver selling at the end of last week once again tempting bargain hunters into precious metals. The US dollar also gained as a result of “safe haven” bids – with the EURUSD dropping to a low of $1.247 before recovering. The Dollar Index gained 0.29% to settle at 82.50. PIIGS debt again sold off following Spain’s formal request for a bank bailout, with strong bids for German Bunds, US Treasuries, and to a lesser extent UK gilts. Today is expiration day […]

Continue Reading

Fear Index update: June 2012

| June 23, 2012 | Articles: Insights
Fear Index update: June 2012

The constant talk about gold’s lack of yield, which in many analysts’ opinion disqualifies it as a desirable asset, ignores the very important and extremely valuable function that gold performs as an independent and reliable store of value. Savings and liquidity have value, especially in times of uncertainty, and so does insurance. Gold is money and it is also insurance against the failure of fiat currency. How much is it worth to protect your hard earned wealth from the arbitrary decisions and regime uncertainty that permeates the world of monetary policy? The simple fact is that people around the world – particularly in Asia – are willing, as many have […]

Continue Reading

Waiting for the other shoe to drop

Waiting for the other shoe to drop

All was sunshine and happiness for a few short hours earlier this morning, following news that Greece’s conservative New Democracy party had won yesterday’s election, and will attempt to form a pro-bailout government with other parties. The radical left’s threat to the country’s euro membership has subsided. The euro initially rallied over $1.272, but has now fallen back sharply on the back of a continuing rise in Spanish bond yields, which reached as high as 7.1% earlier. The Italian 10-year bond is creeping back towards the 6% mark. Gold and silver came under selling pressure when news of the election results first broke, though both have recovered and remain basically […]

Continue Reading

UK Treasury and Bank of England liquor up banks again

UK Treasury and Bank of England liquor up banks again

Stocks and commodities have rallied this morning on rumours that central banks are about to launch a coordinated market intervention following Sunday’s Greek election. Government bond yields have fallen (relief for the Spanish and Italians), while the euro reached a four-day high at $1.2685 earlier. Gold continues to face resistance at $1,630, while $28.50 still exerts a magnetic pull on silver. However, talk from G20 officials that “central banks are preparing for coordinated action to provide liquidity” in the event that the Greek election results upset the markets is raising bullish hopes. Meanwhile in the UK, bank shares have risen after Chancellor George Osborne announced last night that HM Treasury […]

Continue Reading

Physical silver demand heading higher

Physical silver demand heading higher

The silver price is depressed compared with its historical relationship to gold, one ounce being worth about 55 of silver, against the historical rate of 15 or 16. The reason, perhaps, has to do with silver’s demonetisation and its role as an industrial metal. However, with global supply from mines and recycling running at about one billion ounces and demand at only a hundred million less, it does not take much investment demand to create a severe shortage. For now, pricing is managed for industrial use, and industry has a vested interest in keeping the price low. For clues of future prices, we need to look at market data, and the graph […]

Continue Reading

Silver correction putting miners under pressure

Silver correction putting miners under pressure

After weeks of sailing on troubled waters, the silver market is giving mixed signals. Analysts are struggling to discern whether or not the metal will be able to consolidate above resistance at $28.50, or whether silver is still in danger of further sell-offs. Much will depend on developments in the US dollar market and the global economy – a view shared by Randy Smallwood, president and CEO at Silver Wheaton, a Vancouver-based silver-streaming company. The euro crisis has been a big depressing influence on commodity markets in recent months. With the continent’s debt crisis getting worse by the day, many investors are being drawn to the dollar. Most are confident […]

Continue Reading

US money supply data hints at trouble ahead

US money supply data hints at trouble ahead

Confirmation over the weekend that the Spanish government will receive €100 billion from eurozone rescue funds to help shore up Spain’s fragile banking system has lifted stocks and commodities this morning. Spain’s benchmark IBEX-35 index surged 4.5%, with strong gains seen on British, French and German exchanges. However, though the euro bounced early in trading it has started sinking again, though it remains above last week’s low of $1.241. Gold and silver have also been lifted following the Spanish news, with some traders looking to lighten up on their US dollar/Treasury positions. Gold broke back above $1,600 briefly during Asian trading – suitably so given the strength of sovereign demand […]

Continue Reading

Only buy from trustworthy bullion dealers

| June 9, 2012 | Articles: Insights
Only buy from trustworthy bullion dealers

Another precious metals scam has been uncovered in America. Sterling Precious Metals of Boca Raton, Florida, is being investigated by the feds and stands accused of bilking clients out of approximately $10 million. According to a lawsuit filed by the Federal Trade Commission (FTC), the company placed special emphasis on targeting senior citizens, who had to pay disproportionate commissions and storage fees. In an effort to recover part of customers’ investments, next week the FTC will request a federal judge freezes Sterling Precious Metals’ bank accounts and have an escrow holder take care of the company. This is not an isolated case. There are unfortunately an increasing number of unscrupulous gold […]

Continue Reading

Ben Bernanke’s mission impossible

Ben Bernanke’s mission impossible

Stocks and commodities performed strongly yesterday, helped by chatter about plans for a eurozone “banking union”, whereby the European Commission in Brussels would take the lead on banking legislation from European Union member states. European stocks had one of their strongest up days of the year in response, while the Dow recorded its strongest session of the year – up nearly 2.5% to 12,414. The euro gained 1% against the dollar, moving back above $1.255. Crude oil and gold also put in strong showings – at one stage gold moving just above $1,640 – though the yellow metal lost ground later in the session following unexpectedly optimistic Federal Reserve comments […]

Continue Reading