The precious metals have had a very choppy day, with the triggering of downside stops resulting in sharp falls in gold, silver, platinum and palladium. All of the metals have since stabilised and recovered, though palladium is the only metal actually trading higher on the day. Palladium meanwhile continues to garner support from further ETF inflows.
Tag: debt crisis
We must understand what money actually is… and why Gold is money. As J. P. Morgan famously stated, ‘Gold is money… everything else is credit’. To put it bluntly, bank notes, Dollar bills, all forms of Fiat currency are IOU’s; that is, credit (debt)… and circulating debt notes cannot extinguish debt, they simply shuffle debt around. Money and debt are polar opposites.
In this video featuring resource investor Rick Rule and sound money specialist Mike Maloney, both men discuss the high probability scenario in which governments will confiscate our bank accounts (or parts of it).
If a printing machine were to print one 100 US dollar note and one 100 Euro note every second, day and night, Saturdays and Sundays, without interruption, how long would it take to print the current level of debt of America and Germany? USA needs to pay off 67 human lives. Germany needs to pay off 8 human lives.
In the latest Investor’s Digest of Canada, Johny Embry, strategist at Sprott Asset Management, praises one of the latest precious metals book. Obviously, the book he refers to is “The Gold Cartel; Government Intervention in Gold, the Mega-Bubble in Paper and What this Means for your Future” written by Dimitri Speck.
In the era of information overload, people are starving for knowledge. It is one thing to hang on the lips of policy makers of this world, it is another thing to stay unbiased against their words and actions. In that respect, some basic, fundamental questions are too often overlooked (in general, by the mainstream). In that respect, we believe every self respecting individual should at least look for answer on very obvious questions, related to money and policy, like the following ones.
In a week that has been marked by historic mainstream headlines, BFI Capital’s CEO Frank Suess happened to give an outstanding interview about the outlook of global currencies, gold and manipulation in the markets.
Nick Barisheff writes: While there may still be price declines, I feel today’s situation is similar to that of the 1970s, and that we have the second-greatest opportunity to buy gold since 2002. Today many investors are tempted to sell their underperforming precious metal holdings and use the proceeds to purchase U.S. equities. But remember–the old Wall Street saying is “Buy low, sell high” NOT “Sell low, buy high.”
How is gold impacted in this inflation vs deflation war? The key conclusion of the research is that, due to the fractional reserve banking system and the dynamics of the ‘monetary tectonics’, inflationary and deflationary phases will alternate in the foreseeable future. Gold, being a monetary asset in the view of Austrian economics, tends to rise in inflationary periods and decline during times of disinflation. The key take-away for investors is to position themselves accordingly and consider price declines as buying opportunities for the coming inflationary period.
“… the United States had already defaulted on its sovereign debt in April 1933 to domestic and external creditors alike. The abrogation of the gold clause in conjunction with a subsequent 40 percent reduction in the gold content of the U.S. dollar (January 1934) also amounted to a debt haircut amounting to about 16 percent of GDP.”
As we finally arrive in the magic year 2014, in which almost every economic and business cycle is trending down, it seems that the idea of a debt reduction through savings confiscation is gaining traction. If it would have been true that the debt crisis was contained, then there is a huge divergence with what the IMF research lab is producing. In December alone, two working papers appeared in which debt restructuring is mentioned as the most likely way to reduce the untenable debt burden.
With a global competition in currency debasements, with limitless monetary stimulus, with decreasing effects of monetary expansion, with a conscious infringement of the monetary rules, it should be clear that there is hardly a way back for our leaders. Given this outlook, we believe it is a matter of “when,” not “if” the next collapse occurs.
The Irish Times writes today that EU finance ministers have agreed a set of rules that could be used to wind up insolvent banks. In future, banks creditors – including potentially savers – would suffer losses should European financial institutions collapse. That comes after Irish Minister for Finance Michael Noonan said “Bail-in is now the rule” back in June of this year.