Tag: economic analysis

Euro to Surge

Euro to Surge

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 […]

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What Can We Infer From the Gold:Dow Ratio?

What Can We Infer From the Gold:Dow Ratio?

There is all the talk of Greece leaving the eurozone and we are already seeing a slow-motion runs on Greek banks. The Financial Times reports that €5 billion has left Greek banks in just the last two weeks and the more that Greek citizens feel it is possible that their country will leave the euro, the more incentive they have for pulling their money out and sending it abroad. There are no rules in place for a country to leave the eurozone and it is anybody’s guess as to how severe the impact of such a move will be. These are uncharted waters and the sailing could get very rough. […]

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So What’s Up with the Gold Price?

What’s up with the Gold Price? asks Adrian Ash at BullionVault. Very little besides Facebook. Gold is down, in fact. So is everything else bar the US Dollar and “safe” sovereign debt. “I think what we can expect is a rate cut from the ECB [European Central Bank],” said Joachim Fels, chief economist at Morgan Stanley, to Bloomberg TV Wednesday morning. “I think they will cut soon, as early as the June meeting… “But unfortunately, a rate-cut alone doesn’t do the trick.” The trick, of course, is holding the Eurozone together by destroying the Euro. Or at least decimating its value. You might expect that to boost the Gold Price, and everything else. But very little […]

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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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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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Keynesian vs Austrian debate hotting up

| May 5, 2012 | Articles: Insights

Last week, an Austrian-School economist, Robert Wenzel, gave a speech to the New York Federal Reserve, and separately Bloomberg hosted a television debate between Ron Paul, who is running for the Republican Presidential nomination, and Professor Paul Krugman, one of the foremost advocates of Keynesian economic policy. The debate between advocates of big government and small government is beginning to move into the media. It is not so much a question of who wins the debate: rather it is that the minority Austrian view is being noted by a few economists at the Fed, and that Krugman, who last year turned down an opportunity to debate economics with Robert Murphy of the […]

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A Weak Economy Remains Gold’s Best Friend

A Weak Economy Remains Gold’s Best Friend

It was Bob Prechter of Elliott Wave fame, likely among others who noted that correlations between all asset classes are quite strong during a Depression. This is true in a cyclical sense but not in a structural sense. Stocks tumbled in the 1929-1941 period while commodities, led by Gold and gold producers, increased in value. We’ve experienced similar phenomena in the past 12 years. Cyclically, there has been a correlation between these asset classes. Structurally, stocks have been in a bear market and resource sector has been in a bull market. The driving force has been a weak economy and bear market which usually leads to more inflationary policy, which […]

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Could we return to a Gold Standard ?

John Butler, author of the new book “The Golden Revolution”, provides an answer to the question if we could return to a Gold Standard. His answer to that question is clearly “yes”; he  thinks that a Gold Standard could be very well in the cards, even remarkably fast. The implications on the gold price would be remarkable as well, as explained below. Mr Butler explains that his view is based on today’s economic situation. In particular, two economic facts could very well lead to a situation with the gold standard as an outcome. In particular, he mentions the decline of the US economy over the past years as well as the […]

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So Long, US Dollar

| April 26, 2012 | Articles: Insights

By Marin Katusa, Casey Research There’s a major shift under way, one the US mainstream media has left largely untouched even though it will send the United States into an economic maelstrom and dramatically reduce the country’s importance in the world: the demise of the US dollar as the world’s reserve currency. For decades the US dollar has been absolutely dominant in international trade, especially in the oil markets. This role has created immense demand for US dollars, and that international demand constitutes a huge part of the dollar’s valuation. Not only did the global-currency role add massive value to the dollar, it also created an almost endless pool of […]

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Currency wars will boost gold

| April 16, 2012 | Articles: Insights

Gold and silver got whacked again on Friday, prompted this time by news that economic growth in China came in at a disappointing 8.1%. This was down from 8.9% in the previous quarter, and the slowest rate for three years. Chinese consumer prices were up 3.6% in March – below the government’s 4% target and considerably off the 6.5% reached last July. The BBC notes that the People’s Bank of China is likely to take further measures to “loosen monetary policy” in response to this disappointing data. At the same time, Spain’s debt woes are creating fresh enthusiasm for the dollar as a “safe haven”. The Dollar Index is back above 80, […]

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Does Gold Investing Pay?

| April 13, 2012 | Articles: Insights
Does Gold Investing Pay?

Gold Investing yields no income. But does it make life cheaper in future…? What’s the point of investing? Plenty of people below 50 today – and a good many older – might well wonder, says Adrian Ash at BullionVault. Two stock market crashes, two recessions and a global house-price slump make the last decade a worse advert for investing than One Direction are for clean-living youth. Yes, silver and Gold Investing stand out in contrast, but they don’t actually yield any interest. Nor do cash, bonds, Treasuries or stocks anymore. But while the point of investing might be hard to see today, its purpose is plain: “Investing [is] the transfer to others of purchasing power now with the reasoned expectation of receiving […]

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Prices to Buy Gold Head for Weekly Gain Despite China Slowdown

EARLIER REPORT Dollar prices to Buy Gold hovered just below $1680 per ounce Friday morning in London – back at levels last seen 10 days ago – as stock markets and industrial commodities ticked lower and government bonds gained. A day earlier, Gold Prices jumped 1.6% during US trading – holding onto most of those gains during Friday’s Asian session despite the release of lower-than-expected Chinese growth figures. “We have now closed well above the short-term bear channel,” reckon technical analysts at bullion bank Scotia Mocatta. “The previous resistance level at $1656 should provide some support,” they add, citing current resistance at $1680. “[Gold] options activity this week suggests something […]

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Gold Hovers as Spain and Italy Face Higher Debt Costs

Prices to Buy Gold hovered just below $1660 per ounce for most of Wednesday morning’s London trading – a 1.5% gain on the week so far – as stocks recovered some ground following yesterday’s losses, commodities were broadly flat and government bond prices fell. Silver meantime held above $31.50 an ounce – though it remains below where it started the week. Gold Prices rallied in yesterday’s US trading, hitting a high of $1663 per ounce. “This lessens the short-term bearish posture,” says the latest technical analysis note from bullion bank Scotia Mocatta. “However, we would like to see another close higher before shifting to bullish.” US stock markets meantime fell in Tuesday’s trading, […]

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