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.
Tag: currency crisis
The latest participant in the game is Russia. Not coincidentally is it the next country in the BRICS complex, one that was hit particularly because of the measures in Cyprus. The message from the BRICS appears to be very clear: the urgent dismantle of the dollar system.
Gold is 25% up in the last 3 months, but it’s up in Yen, not dollars. This is where currency wars and gold dynamics come together. Gold is always rallying somewhere; right now it is rallying in Yen. Meantime you can always make money in gold, as it is always 5 o’clock somewhere.
The Bank of Japan is committed to win the battle against deflation. In an attempt to stimulate their economy and to guarantee inflation, Japan announced they would pump $ 1.4 trillion in their economy in the next 24 months. As a result of that, the monetary base in Japan would double.
At a certain point in 2011, the Chinese let their currency go up. Amazingly, right after they did it, their inflation, trade surplus and economy “cooled off”. So the exchange rate was pegged at a new level. That’s when the Fed announced QE3, and the same process started all over.
Currency devaluations travel around the world, in cycles, and they are reflected in the gold price in the affected currency. The dollar remains fairly strong because every time there is a panic it goes with a flight to quality. The dollar maintains its value, so will keep on printing, until very suddenly and unexpectedly, there will be a loss of trust in the dollar.
The world currency system is riding down the road to catastrophe. Those were the words from James Rickards during a recent interview on Wall Street Journal. The world already has entered a currency war that began in 2010 on the heels of the Federal Reserve’s massive easing program. Since then, plenty of nations have joined in, including Brazil, Switzerland and Japan.
A new paper published by the Official Monetary and Financial Institutions Forum describes the gold is ready to become officially part of the monetary system … again. In order to stabilize the world monetary system, in the light of a deteriorating global currency war and the lack of a real alternative world reserve currency, gold is the only alternative currency that is ready to take on a leading role. One thing is for sure, it is the ONLY time tested currency as ALL paper based money systems have failed in history. Although the Renminbi is a candidate to play an leading role in the future, it is not ready to take up that role yet. Gold was money and gold continues to be money, although we temporarily somehow “forgot” in it in the West.
In a recent video, Peter Schiff explains the consequences of the increasing deficits to the American economy. Peter Schiff believes that things will play out in the following order: the crisis will first hit in the exchange markets, then in consumer prices (price inflation) and finally in the long term interest rates.
The Eurozone teetering on the edge of a breakup, writes Martin Hutchinson for Money Morning. This begs the question: Can the US economy “de-couple” from the Eurozone debt crisis? Ultimately, the answer comes down to fate of the Euro. It’s the linchpin to everything. From the point of view of one who has travelled fairly frequently in the Eurozone I can tell you I find the Euro very convenient indeed. In my London merchant banking days, when I used to go on marketing trips around continental Europe, I found that while the excellent European train service was a pleasure to use, the proliferation of local currencies made travelling a pain. There was nothing [...]
Regardless of how bad things get this week, just be thankful you’re not the Greek finance minister, writes Dan Denning for the Daily Reckoning Australia. Vassilios Rapanos resigned his post four days after being appointed. He’d been in the hospital after collapsing on Friday, probably after getting his first look at the real state of Greek finances. Greece will be one of the items on the agenda at this week’s European Union summit. The coalition led by new Greek prime minister Antonis Samaras pledged to renegotiate the terms of the previous bailout deal between Greece and the EU. That was the $163 billion deal. As if that wasn’t enough uncertainty for the [...]
After a shocking upset in Greece’s parliamentary elections, the US dollar surged dramatically. Soaring 5.4% in May alone, the world’s reserve currency won legions of fans among traders. “King Dollar” was universally lauded, with everyone jumping on the strong-dollar bandwagon. But this dazzling strength was merely a short-term phenomenon. Zoom out a little, and today’s “strong dollar” is a fallacy. Perspective is everything in the markets. Attaining it is challenging and takes a lot of effort, but the fruits are well worth the toil. We humans naturally tend to extrapolate the present and very recent past out into infinity, expecting short-term situations to continue indefinitely. So when prices surge rapidly [...]
“Currencies are in effect the ocean” that all the fish, including the great white shark, fear, says investment manager and author of Currency Wars, James Rickards. Sometimes the ocean is calm, but in times like ours it becomes a much more hostile and dangerous environment. Find out how currencies interact globally and why governments manipulate them so much, in this video. Listen to James’ entire presentation at the latest Casey Research Summit – and those of 30 other well-known economists, authors, and investment pros – on CD or MP3. Learn more.
The fortunes of Europe’s beleaguered euro currency have been heavily influencing US markets. Both stocks and commodities have been battered down recently by overwhelming euro bearishness. This has proven seriously vexing for traders trying to focus on fundamentals. But the extreme euro pessimism worrying everyone is actually very bullish. This loathed, oversold currency is due to surge again. Today of course the great fear plaguing the euro is centered around Greece. This profligate, unrepentant debtor nation seems hellbent on not honoring its commitments to the rest of Europe which could force its exit from the eurozone. And though Greece’s economy is immaterial relative to greater Europe’s, traders are worried Greece [...]
This is a fantastic conversation between John Embry (Chief Investment Strategist for Sprott Gold & Precious Minerals Fund) by James Turk (founder of GoldMoney.com and the GoldMoney Foundation). Their talk brings about topics like the recent action in the gold price and silver price, gold shares, monetary stimulus worldwide and the coming (hyper)inflation. Their conclusion is that the gold bull market is not over. In fact, both respected men strongly believe that gold and silver are more than ever safe havens and that the gold bull market has a very long way to go. They start they conversation by looking at the recent gold price action. Clearly the fundamentals of [...]