RSSCategory: Articles: Insights

Gold’s Contrarian Moment

Gold’s Contrarian Moment

By David Galland, Casey Research Glancing at the news most days, it’s hard not to feel like Bill Murray’s character in Groundhog Day. In the event you are unfamiliar with the movie, in it Murray’s character becomes trapped in the same day… day after day. In the current circular condition, we have the powers-that-be assuring us that the next high-level meeting will finally produce a permanent fix to the broken economy, essentially solving the sovereign debt crisis. Then, in no more than a few days, or at most a couple of weeks, the fix is revealed to be flawed and the crisis again sparks into flames… followed shortly thereafter by […]

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Paper gold pitfalls

| May 29, 2012 | Articles: Insights

Last year’s disastrous collapse of MF Global has impacted financial markets around the world in many ways. Given that it was one of the largest brokers of leveraged products, it is no surprise that this area has felt the full force of MF Global’s collapse. For example, futures trading volume on US exchanges has dropped noticeably, mainly for two reasons. First, MF Global customers who are still waiting for their money to be returned are not trading. Second, customers of other brokers have understandably become worried about the safety of their money and withdrawn funds from those firms, which has reduced their capacity to trade. Gold has not been spared […]

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Currency collapse dynamics

| May 20, 2012 | Articles: Insights

The reason we accept paper money as a store of value is habit. This habit has its origins in history, when banks took our gold as deposit and issued paper receipts for it. The gold has gone, but the paper with its habitual value remains, and we accept it without question. The only backing is a vague government promise. There is no sound theoretical basis for why unbacked government-issued money should retain a store of value: it depends for its value on a market-based acceptance of financial credibility. So it follows that if a government loses all financial credibility in markets, its paper becomes worthless. This is confirmed by experience […]

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The truth about gold : it can not lie

The past years have characterized the financial markets as volatile, leveraged but also intransparent. Complex financial instruments have flooded the markets. At the same time, the impression we get from governments is they are doing their utter best to “hide” some facts, surely if it comes to economic related matters. This is our perception, as observers of markets. Let’s review some recent examples where service providers or governements mastered intransparency but where they failed to hide the truth. First and most recent, JP Morgan announced initially 2 billion losses on some “trades”. Only a week after their first announcement, it appears their loss increased already to 5 billion. Well, that’s more than their […]

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Precious Metals Market Manipulation?

By Doug Casey, Casey Research For many years now, a meme has been floating around that the prices of gold and silver are being manipulated, which is to say suppressed, by various powers of darkness. This is not an unreasonable assertion. After all, the last thing the monetary powers-that-be want is to see is the price of gold skyrocketing. That would serve as an alarm bell, possibly panicking people all over the world, telling them to get out of the dollar. It’s assumed, by those who believe in the theory, that the US Treasury is behind the suppression scheme, in complicity with a half-dozen or so large bullion banks that […]

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The All-Important Question

By David Galland, Casey Research For pretty much everyone, no matter where they are located in the economic strata, few if any questions are more germane to making plans for the future than whether the US and other major global economies are in recovery. Getting the answer to that question right is of special importance to investors and businesses. Stating the obvious, if the broader economy really is in recovery, then investors would be well served by investing in the equities of solid companies positioned to take advantage. Similarly, those very same solid companies would be rewarded by increasing their productive capacity through investments in the plants and people necessary […]

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Gold Investment Demand in Asia

| May 14, 2012 | Articles: Insights

Contrary to many Western views, emerging-world demand for gold ‘jewelry’ sits on the border of decoration and investment, writes Julian Phillips at the GoldForecaster. We prefer to look at it as Gold Investment demand, and to relegate Western jewelry demand – the source of the confusion – to one that is reactive to the state of the developed world’s economic states. Emerging world demand in these nations where economic growth is such a powerhouse that it is enriching their entire societies. Consequently, the number of middle class members in those societies has rocketed. Eventually the middle class of China’s population of 1.3 billion people will reach 400 million or so. This equals the population […]

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How does a Gold Bull Climax look like

How does a Gold Bull Climax look like

Gold has had a rough time lately, grinding relentlessly lower. Such technical weakness has naturally spawned increasingly bearish psychology. This has led to a fringe view growing in popularity that gold’s mighty secular bull has already given up its ghost. If these new-bear arguments are correct, gold’s secular bull had to peak last August. But was that latest topping gold-bull-climax worthy? Not even close. As the word describes, “secular” bull markets last a long time. In the stock markets, secular bulls and bears tend to run for an incredible 17 years each! Gold’s latest bull was born way back in April 2001, over a decade before its alleged climax in […]

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The Great Crash of 2012?

| May 12, 2012 | Articles: Insights

Deflation fears are once again becoming the dominant emotion in the minds of traders, with banking difficulties on both sides of the Atlantic and continuing weakness in precious metals and commodities. News that the China Investment Corporation – China’s biggest sovereign wealth fund – no longer wants to buy European sovereign debt has only added to the sense of unease. The euro continued losing ground against the dollar yesterday, and though it has rallied this morning, looks like it could test the $1.29 mark sooner rather than later. Corn, copper and Brent crude also sustained further losses, with news of a boost in OPEC production adding to the downward pressure […]

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The case for gold is still strong

| May 12, 2012 | Articles: Insights

With another sell-off in precious metals leaving gold below $1,600, there is of course much talk in the media about the “death of the gold bull market”. But have the fundamentals really changed? Or is this now a chance to buy gold at a more attractive price? The truth is that no recent news supports the case for the end of the gold bull market, and little evidence to support the idea that the financial system is on the mend. The elections in France and Greece have increased eurozone instability, and will likely encourage further efforts from the European Central Bank to weaken the euro, in an effort to appease socialist critics […]

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Gold Price Demand Drivers

| May 11, 2012 | Articles: Insights

Central bank old demand is a relatively price-insensitive force that’s strong day-to-day, clearing the market of stock when available. It enters the market in a way that leaves the market relatively undisturbed, writes Julian Phillips of GoldForecaster. But the rest of demand is very different. It’s this other demand that will drive the Gold Price. Some of it is price sensitive, some not. Some is price sensitive in a surprising way. Some simply takes tonnage without being in itself a driving force. There are some forces that have no intention of holding gold for longer than their short-term view persists and then will sell it again. Within the above parameters, it’s extremely difficult to […]

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Casey Research Summit Special Report: Reality Check or Checkmate?

Source: Karen Roche and JT Long of The Gold Report (5/9/12). One special session at the April 27–29 Casey Research Recovery Reality Check Summit wasn’t on the agenda—a private panel for The Gold Report readers with three of the premier summit speakers: Global Resource Investments Founder and Chairman Rick Rule, Casey Research Senior Editor Louis James and Casey Energy Opportunities Senior Editor Marin Katusa. You won’t pin them down to a timeframe, but they’re looking forward to a buyer’s market, as equity prices fall and volatility increases. As Rule puts it, “When the luster is off the sector, it’s off all parts of the sector, so in bad markets the […]

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Why gold money?

| May 7, 2012 | Articles: Insights

Recently Rob McEwen of McEwen Mining Co. and Michael Crofton of Philadelphia Trust discussed the pros and cons of the gold standard. In this debate, Mr McEwen made an excellent case for gold as “the ultimate currency”. He argued that using gold as currency could help restore fiscal discipline in governments; and that, in essence, it already is the world’s reserve currency. Conversely, Mr Crofton stated all the typical arguments against the gold standard: that there is not enough gold in the world for everyone; that it would prevent the authorities from controlling the monetary system; that it would hinder the government’s debt financing, etc. Here are some of my responses to […]

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Is an Economic Deluge Nigh?

Is an Economic Deluge Nigh?

By David Galland, Casey Research If history has taught one certain lesson, it is that the less fettered an economy, the better humankind is able to do what it does best: run from trouble and run toward opportunity. In this way mistakes are quickly resolved and progress assured. Conversely, the deeper the muck of regulation, mandates, taxes, subsidies and other bureaucratic meddling, the slower we humans are in following our natural instincts until the point that progress is slowed or even stopped. It is said that history doesn’t repeat itself, but it often rhymes. In the current circumstances, it appears that enough time has passed that current generations have completely […]

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