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: monetary policy
This piece seeks to make the economic case for savers to allocate wealth to physical gold (in proper form) and for investors to allocate capital to precious metal miners. Our argument orients readers with our economic and market predispositions, seeks to explain current macroeconomic events within that context and outlines gold’s fundamental valuation framework.
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.
Switzerland, which is often referred to as the most gold friendly country in the world, made its democracy work. A right-wing party succeeded in collecting some 106,000 signatures. This referendum was submitted to the federal authorities with the aim to stop the sale of gold reserves by the Swiss National Bank and to repatriate the gold that is stored in the US.
The trend towards political influence is not restricted to the euro area. It is a global phenomenon. The central banks have taken on fire-fighting tasks in the crisis and in the process have also blurred the boundary between monetary policy and government fiscal policy.
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.
This article does an outstanding job in pointing to the fundamental reasons of owning and buying PHYSICAL gold and silver, from a monetary point of view. The fundamentals behind the debt crisis are explained, a matter that remains underexposed in mainstream media and education.
The recent decision of the Japanese to inflate their economic growth is not an isolated decision. Japan is a closed market but they are not operating in a vacuum. The “unintended consequences” of their decision could reach to a global scale. In particular, the currency devaluation which is the result of the inflationary policy, is not exactly the type of outcome that the other economic powerhouses wished for. This brings the global currency war front stage globally.
Obviously, the Trillion Dollar Coin idea is a political ploy with a targeted mission: to rid the US Treasury of its debt ceiling, which is an increasingly frequent and embarrassing public reminder of government ineptitude. Everyone knows government-led de-levering is not a serious threat. However, the irony of the scheme and its MMT / liberal Keynesian promoters could not be more delicious. The scheme exposes the forty year-old charade, otherwise known as the global monetary system, better than any mind-exercise we have been able to come up with.
In his weekly update, Michael Pento analyzed some important macro economic data globally. He came to the well known conclusion that economic conditions worldwide are deteriorating. In this article, you will read the latest macro economic data with Michael Pento’s interpretation.
The author does a terrific job again, this time in summarizing the most important thoughts about the current economic effects on the monetary policy of the US government (in casu QE3). Although a lot has been written about QE3, it can be difficult for people with no economic background, to connect the dots between monetary actions, economic effects, personal risks. Furthermore, with a limited understanding of monetary matters, it can be difficult to distinguish the benefits that are argued by policymakers versus the real benefits / risks. From that point of the view, the following article succeeds in bringing an understandable summary of what really is happening in our economy as [...]
There is an ongoing three way debate between those who believe the Fed should do more to strengthen the recovery, those who believe that the recovery is strong enough to continue on its own, and those who believe that the economy has been so fundamentally altered by the recession that no amount of stimulus can succeed in pushing unemployment down to pre-crash levels. As usual, they all have it wrong (although some are more wrong than others). The false conclusions are being made by the likes of bond king Bill Gross, who has suggested that the economic fundamentals have changed. They argue that a “new normal” is now in place [...]
Finally, we have a break to the upside in both gold and silver, something that many precious metals investors have been patiently waiting for, but expected to happen. The price of gold is now a tad away from breaching the $1700 an ounce level, after smashing through the key resistance levels at $1625 an ounce and $1650 an ounce. AsUS Federal Reserve Chairman, Ben Bernanke, began his eagerly awaited speech at the annual symposium at Jackson Hole, Wyoming, the price of gold dropped sharply. After trading above $1660 an ounce last Friday, the price of spot gold suddenly dropped to an intra-day low of $1644 an ounce. Afterwards, the price [...]