Based on cyclical analysis, technical analysis, fundamental analysis, and portfolio analysis, Petrov says the bottom for gold could be in already, but most likely will be behind us within one to seven months. That’s early to mid-2014, now rapidly approaching.
Tag: debt crisis
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.
In this interview with Dimitri Speck, the gold price suppression scheme of the last 2 decades is discussed. In terms of gold’s outlook, the most likely scenario is one comparable to the current Japan: suppress deflation, stimulate slight inflation while avoiding strong inflation. In this scenario, the velocity of money will increase, savers will step out of the banking system, inflation will occur in asset and consumer prices. Gold is the best hedge in such a scenario.
This is exactly what happens every time when a bubble collapses because the cause of the bubble is bank leverage! When the bubble collapses, the leverage is gone but “it exists in a negative sense”: so much more is owed than ever existed in the first place. This is the black hole of the current economic and monetary system.
This article presents a first insight in the sequel to Currency Wars, the best selling book written by Jim Rickards. The new book is titled “The Death of Money, The Coming Collapse of the International Monetary System.” The book confirms the predictions made in “Currency Wars” and goes deeper in the matter by explaing how the international monetary system might collapse and how the new monetary system could look like.
In this week’s commentary, John Mauldin looks at two highly relevant concepts: easy money (call it QE or money printing) and economic bubbles. Obviously the two are linked to each other. Although in the minds of central bankers there is not necessarily a direct effect between both, we simple human beings all know that the inherent risks are huge. After having studied a lot of the materials, speeches, presentations by the central banking pundits, our key take-away is that central bankers believe they can “manage” the effects of their monetary policies.
The correlation between the gold price, silver price and the debt growth has been amazingly accurate since 2001. It is no coincidence that the gold bull market continued on the waves of debt ceiling rises since then. Surprisingly, the correlation which lasted for 12 full years has been interrupted in the spring of this year. The disconnect is difficult to explain in the midst of an epic rush for physical gold driven by the Eastern hemisphere … apart from the fact there is a disconnect between the needs of institutional investors (which focus on trading in the futures markets) versus the needs of ordinary people and small investors (looking to […]
In this article, contributor Peter De Graaf shows in five charts the long and short term corrections of the gold and silver price. Precious metals remain within their rising trendline, despite the negative sentiment among investors and trader. Moreover, the seriousness of the debt situation and the impact on the dollar “paper currency” is shown in four charts.
In a speech given earlier this week in Mexico, the General Manager of the BIS talked about the increasing pressure from the market on central banks. Even the mother of central banks is aware that the limitations of monetary policy are increasingly being questioned. The question is being asked if indeed those policies have been a “success” or rather a “failure.”
“We have a strong rally form the lows at 1180 to over 1400 and now we are backing off. I think between around 1200 and 1250 it is getting into buying range. The sentiment about gold is very negative, but if you look at everything considered – the monetization of debt, the debt ceiling, which sooner or later will be increased. Both Democrats and Republicans have been big, big spenders because a lot of money flows through the government.”
In the CNN Debate on the Global Economy, leaders from all corners of the world discussed the economic outlook. The interesting thing is to get to know why these leaders think a recovery is underway, given the flood of depressing economic data. There are plenty of quotes which are worth reflecting (mostly in a concerning way though).
One of the latest reports from the IMF discusses a super taxation of 10% on savings in the Eurozone. That would solve the debt problem in most sovereign countries. It would be an alternative of higher taxes or spending cuts.
China warns: “We ask that the United States earnestly takes steps to resolve in a timely way before Oct. 17 the political (issues) around the debt ceiling and prevent a U.S. debt default to ensure safety of Chinese investments in the United States and the global economic recovery.” Meantime, net gold flows into China hit 110.505 tonnes in August, compared with 116.385 tonnes in July.
Most recent news items and analysis miss some key points. Either the consequences of the worst case scenario are overestimated (resulting in doomsday expectations), while in others the seriousness of the debt “ceiling” has been overestimated. The potential outcomes from different scenarios after the events remain rather underexposed. These observations led to a thorough analysis, but one from an Austrian perspective. The implications for gold investors are discussed as well.