Author Archive: Money Metals
By Clint Siegner, Money Metals Exchange Precious metals bulls question why metals prices keep falling in the face of what appears to be strong demand and great fundamental reasons for prices to move higher instead. The bears have some answers of course. You can’t eat gold, it’s basically a pet rock, and modern financial systems are doing just fine without anything as antiquated as bullion gumming up the works. The bears are declaring victory and saying the market has spoken. They ought to look a bit deeper into recent developments. Outside of the price action, there is very little to support claims that gold and silver are relics of the […]
Ben Carson, who currently shares the lead with Donald Trump in the polls, recently questioned the Fed’s role as the great facilitator of metastasizing national debt: “The only reason that we can sustain that kind of debt is because of our artificial ability to print money, to create what we think is wealth, but it is not wealth, because it’s based upon our faith and credit. You know, we decoupled it from the domestic gold standard in 1933, and from the international gold standard in 1971, and since that time, it’s not based on anything. Why would we be continuing to do that?”
The Treasury Department declared a debt ceiling deadline of November 3rd. Outgoing House Speaker John Boehner will try to push through a debt increase before his scheduled departure on Friday (when he’ll likely hand over the gavel to Paul Ryan). If Congress can’t come to an agreement this week, markets could get rattled on the looming possibility of a U.S. default.
Since President Obama’s inauguration in 2009, the federal debt held by the public has soared by 107%, according to recent data published by the Treasury Department. In raw dollars, Obama and his allies in Congress have burdened families with an additional $6.7 trillion in debt. That’s equivalent to more than $57,000 per household. Now the Obama administration is hoping to extract one last debt deal out of the retiring GOP Speaker.
Bottom line: You should soon expect to start paying interest for the “privilege” of lending your savings to a bank! Gold and silver may be down, but after thousands of years of history as a reliable store of value, but they are anything but out
What gold and silver investors want to know above all is when the bull market will resume. In a very real sense, it already has resumed. Futures market prices aside, evidence abounds that a raging bull market in physical precious metals is now underway.
The weekly silver chart now shows an interesting wedge pattern developing. Silver prices briefly touched the bottom of the wedge last week before closing near the top. A solid weekly close above $15.50 would represent a bullish upside breakout, while a decisive break below $14.50 would carry bearish near-term implications.
Assuming the debt ceiling is eventually raised, the move will make the coming debt reckoning that much bigger. Officially, the national debt now comes in at $18.1 trillion – about equal to the nation’s total economic output for a year. Adding in all projected unfunded liabilities brings the total to about $210 trillion, as calculated by economist Lawrence Kotlikoff.
Perhaps the central planners will even start mailing us all checks – early tax rebates or the like – so we go out and spend. Buiter’s call for shoving money down everyone’s throat is representative of the philosophy that pervades the Federal Reserve and Washington DC: There can never be too much stimulus or money creation. If stimulus is failing, it is simply because it is inadequate. It is time to double down. Couple Buiter’s request for “helicopter money” with his recent modest proposal to abolish cash – an idea gaining real traction with policy makers and the major banks – and you have everything you need to know about why it is important to hold physical gold and silver.
The day Washington orders confiscation is the day it broadcasts to the world, including to America’s sworn and powerful enemies, it has lost all control of its disastrous economic policies. That same day would mark widespread chaos throughout international markets and foreign capitals. On that day, for the very reasons you now own gold, you are going to need that gold. My guess is, based on the historical record, not many will give it up.
If you have stocks or other financial assets that you are worried could be vulnerable, then hedge your risk. Gold is one of the very best counter-weights to financial assets you can own, because it exhibits low correlation (and often negative correlation) to stocks and bonds. When they tank, gold can surge.
Gold and silver bullion are free of counterparty risk and provide protection from the ravages of incompetent, untrustworthy financial houses, cynical politicians, and government agencies at all levels. Like the bandit leader in the movie, all they want from you and yours is “Just a little bit more.”
U.S. Investors are on edge following last week’s and today’s sell-off in stocks around the globe. The carnage impacted equity markets in Asia, Europe, and the U.S. Interestingly, the U.S. dollar also weakened. And bonds and gold are getting most of the safe-haven buying.