Tag: debt crisis

Part III – Did You Get These Warnings? Gold?

| October 30, 2012 | Articles: Insights

Bernanke announced on September 13, 2012 a massive “money printing” program – QE3 – that will increase the money supply, help the large banks, create more commodity price inflation, and lower the standard of living of most of the middle class in the United States. Read what other authors had to say about QE3: We Have Been Warned! – Part 2 It is relatively easy to predict further commodity price inflation and that hard assets, not paper assets, will help protect purchasing power. But it is much more difficult to project where else this money printing leads and to what extent a crash is inevitable. What is the endgame? Will it […]

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Darryl Schoon’s Five Favorite Books

We had the honour this weekend to do a Q&A with Darryl Schoon. What was intended to be a short talk about a limited number of specific questions, became a long and in-depth conversation about the fundamentals of modern life (economy, money and currency, precious metals, psychology, history). The world through the lens of Gold as Darryl sees it … that’s how we would describe the unique conversation. We would like to thank Darryl for the time he spent with us and the timely knowledge and wisdom he shared. Of course, readers will benefit from his insights as well, as we’ll publish several resumes in the coming weeks, starting with Darryl’s […]

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One Chart Explains Why Government Debt Is Dragging on the Economy

| October 25, 2012 | Articles: General
One Chart Explains Why Government Debt Is Dragging on the Economy

By Dan Steinhart, Casey Research The US has too much debt. This is no longer a controversial statement. Some may believe other problems are more urgent, or that we need to grow our way out rather than slash spending. But even the most spendthrift pundits acknowledge that the debt-to-GDP ratio of the US must decrease if we are to have a stable, prosperous economy. The private sector has reacted to this over-indebted reality as you would expect: by deleveraging. Since 2008, households and businesses have extinguished of 67% of their debt when measured against GDP. Some paid debt down purposefully, and others defaulted. For our purposes, it doesn’t matter how […]

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The End of Austerity

| October 11, 2012 | Articles: Insights
The End of Austerity

It’s a common myth that the Labour government in power when the Great Depression went global in 1931 was forced to resign by a banker’s ramp, writes Adrian Ash at BullionVault. The British prime minister, Ramsay Macdonald, denied it at the time. Close academic study has since found evidence lacking, too. But the idea of millionaires in top hats conspiring to weaken both the Pound and British debt (then consuls, now gilts) still lingers. By demanding gold for their paper at the Bank of England, these interwar illuminati effectively handed a direct demand to London, ordering a cut in welfare payments so severe that Labour politicians – elected by the “working man” – had no […]

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Egon Von Greyerz: Money Printing vs Allocated Physical Gold

Egon Von Greyerz: Money Printing vs Allocated Physical Gold

Things don’t always need to be complex, they simply need to be clear. From that point of view, we really like the simplicity  which Egon Von Greyerz uses to describe the dynamics of the debt crisis. It all starts with excessive money printing and the absence of a currency backed by any hard asset. That’s the trigger for a distorted economic system in which the value of money decreases, real rates become negative, the currency devalues and price inflation increases (possibly ending up in hyperinflation). Some traditional thinkers will probably argue that “economic growth” can be the result of money printing. Some even believe that the more money is printed, the […]

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Crossing The Line In The Sand

| October 3, 2012 | Articles: Insights
Crossing The Line In The Sand

The bankers have drawn a line in the sand at $1900 for gold. The sand, however, is far more important than the line. In 1949, in his classic treatise, Human Action, Ludwig von Mises, the noted Austrian economist wrote: All present-day governments are fanatically committed to an easy money policy. As has been mentioned already, the British Government has asserted that credit expansion has performed “the miracle…of turning a stone into bread.” The British government’s belief that credit expansion can produce the economic equivalent of turning stone into bread is similar to heroin’s amazing ability to turn pain into pleasure; and, while both may do so, the use of such […]

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Euro Gold Prices Hit Record as Debt Crisis Escalates

Gold Prices hovered near seven-month highs above $1780 per ounce for most of Friday morning in London – a few Dollars up on where they started the week – while stocks failed to hold early gains after a analysts interpreted Spain’s budget as “laying the groundwork” for a formal bailout. Silver Prices eased to $34.73 per ounce after failing to breach $35, while other commodities were broadly flat and US Treasury bonds gained. Euro Gold Prices meantime remained close to all-time highs hit yesterday. “The debt crisis in the Eurozone has escalated again,” says today’s commodities note from Commerzbank. “Gold should therefore remain in high demand as a store of value and alternative currency. […]

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Jim Sinclair Explains How QE3 Will Lead To The End Game

We read an excellent set of insights from Mr Gold (Jim Sinclair), who is known famous for his generosity in sharing his wisdom. In one of his latest articles, he explains how we got to the point where the last round of Quantitative Easing (QE3) was inevitable. With a high degree of accuracy, he explains the situation in the derivatives market and the manipulation of regulators as being one of the root causes of the huge financial problems we are facing. These kinds of facts are not reported in the media, for sure not the mainstream media. We appreciate Jim Sinclair for his honesty, integrity and generosity. Mr Sinclair points to […]

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Stagflation in extremis & the explosive rise of gold

| September 18, 2012 | Articles: Insights
Stagflation in extremis & the explosive rise of gold

Stagflation’s appearance in the 1970s was like an outbreak of three-headed children. It wasn’t supposed to happen. Prevailing wisdom—an oxymoron among economists—held that high employment and rising prices were economic handmaidens; and that, conversely, slowing economies and inflation were mutually exclusive In the 1970s, for the first time in capitalism’s history stagflation appeared, i.e. prices rose and economic growth stagnated; and, while economists would search for reasons to explain the apparently inexplicable, it was only because they avoided the obvious that they did not find the answer. In August 1971, President Nixon upon the advice of Milton Friedman—the same Milton Friedman who erroneously taught Ben Bernanke economic contractions can be […]

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Well I Didn’t See THAT Coming

| September 12, 2012 | Articles: Insights
Well I Didn’t See THAT Coming

Why didn’t anyone see it coming? asks Adrian Ash at BullionVault. That was the Queen’s famous question, 14 months into this now 5-year old crisis, when she visited the London School of Economics. Well, replied Professor Luis Garicano, showing Her Majesty the LSE’s new £71 million ($140m) faculty building in November 2008, “At every stage, someone was relying on somebody else and everyone thought they were doing the right thing.” Hnh? The British press guffawed and harrumphed at this lame excuse for an answer. But given a few days – and then a few months, and then a few years – the economics profession got its full reply down pat. “The simple response […]

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German court ruling pushes euro higher

| September 12, 2012 | Articles: Gold Silver Prices
German court ruling pushes euro higher

Stocks, commodities and the euro have all risen this morning following the German Constitutional Court ruling in favour of German participation in the European Union’s new “European Stability Mechanism” (ESM) fund. The €500 billion ESM is designed to help eurozone countries stave off sovereign default. The court stated that the €190bn “ceiling” on German contributions can be only raised by lawmakers, which implies that the bill for German taxpayers could easily run higher. The EURUSD briefly nudged above $1.29 this morning, and looks like it could be in the early stages of a move that takes it back up to around $1.50. Similarly, the Dollar Index has fallen below 80.00 […]

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Why globally coordinated QE and higher gold prices are unavoidable

| September 10, 2012 | Articles: Insights

This article is part of the series “Question for the Expert” on GoldSilverWorlds. We have the honour today to get the view of Grant Williams, author of the respected newsletter Things That Make You Go Hmm. Question: You described in a recent newsletter article, that the next round of Quantitative Easing will be massive and that it will be globally coordinated. Why are you so convinced? What to expect from the gold price in the light of all of this? Answer from Grant Williams: We have reached the point now where the Europeans (in particular Mario Draghi, head of the ECB) have realized that the only solution to the problem […]

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Why Don’t Germans Believe the ECB’s Supra Mario?

| September 7, 2012 | Articles: Insights
Why Don’t Germans Believe the ECB’s Supra Mario?

So for at least the second time in four months, today’s Handelsblatt newspaper in Germany carries a big picture of Edvard Munch’s The Scream, writes Adrian Ash at BullionVault. This time, the picture doesn’t replace the painter’s tortured self-portrait with chancellor Angela Merkel’s head. The headline is now “Angst of the Germans“. But the subject is the same. “Nothing frightens the German people so much as the Euro debt crisis,” says the newspaper. The most over-insured people in the world, Germany naturally shares its fears in a survey conducted for an insurance company’s PR department – and at 73%, fear of the Eurozone crisis now tops even its reading 12 months ago, when the crisis tipped […]

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Gold spikes on nonfarm payroll disappointment

| September 7, 2012 | Articles: Gold Silver Prices
Gold spikes on nonfarm payroll disappointment

“Draghi Day” yesterday was something of an anti-climax as far as precious metals were concerned: though the European Central Bank is now prepared to buy unlimited amounts of troubled eurozone governments’ short-term debt, these purchases will be “sterilized”. This is similar to what the Fed has been doing with its “Operation Twist” – offsetting new bond purchases with asset sales. So the total euro money supply is not increased by this scheme. What this does do is prop up troubled periphery governments, and help boost inflation in countries like Spain. At the same time, it is offering savers in countries like Germany bonds and/or savings deposits, which exerts a deflationary […]

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