The conclusion to be drawn is respect for the trend, clearly down. Where we have shown a positive “spin” on the character of price behavior at the current lows, that is still where price is, at the lows. One can not be bullish here by any stretch of the imagination. As to buying physical silver, we are likely looking at a price level that will not be revisited in the next few generations. Price may still go lower, to some degree, but what the Federal Reserve is doing to destroy the fiat currency and the economy makes asking the question of to buy physical or not a superfluous one.
Tag: money printing
Interlocking complicity produces a degree of stability as it helps maintain the status quo, which is very important to the powers-that-be. Interlocking complicity ensures that accountability, oversight, and ethical practices are low priorities, while payoffs and no-bid contracts will maintain their important role in government operations. Interlocking complicity ensures that little change will occur until it is forced upon us.
The ZIRP and QE are causing the retirement funds for many governments and corporations to be more underfunded each year. If your retirement comes from a government pension, it is less secure each year. It can’t remain underfunded forever. Corporate pension systems invest similarly. If your retirement comes from a corporate pension, it is less secure each year.
Apart from the fact that Mr. Faber did expect a formal confirmation of tapering, he said he was not surprised because “we are in QE unlimited.” He points out that the Fed is run by academics who never worked a single day of their life in a business. They don’t understand that if you print money, it benefits basically a handful of people maybe 3% or 5% of the population.
The focus on this imminent FOMC meeting is so hyper-intense that its impact should be considerable no matter what the Fed decides. The QE3 taper (or lack thereof), its size, and what the FOMC implies for future tapering will almost certainly spark sharp price reactions in the bond markets, currency markets, stock markets, and precious metals. All have moved violently this year on mere QE3-taper anticipation.
Marc Faber explains in this interview the consequences of tapering and the potential motives of the US Fed. First, however, he expresses his concerns about the stock market. He compares the situation in Asia with the one in the US. The Asian markets were up some 20% between the beginning of the year and May but came down sharply since. On the other hand, the S&P500 reached its peak on August 2nd. Meantime many emerging markets are down 50% since their 2009 highs. Where would asset allocators put their money in: the S&P (which is in the sky) or the emerging markets (which are in the dumps)? If a decision is made […]
I think the money trading by central banks is the problem and the expected debt growth, credit growth by governments and also on the household sector level and the unfunded liability. So, essentially, one of the solutions to the problem. When you look at gold, well, gold is very safe. It often has a high return in the long run, per se based provided and this is the proviso, the governments don’t take it away.
The weak prices for silver and gold during the past three years are a correction to the massive run-up in prices from October 2008 – mid 2011. During that time silver increased from a low of $8.53 to a high of nearly $50.00. Gold increased from a low under $700 to a high over $1,900. They have been correcting since then. The correction is, I expect, over.
When somebody takes out a loan, banks create new money electronically, by typing numbers into their account. 97% of all the money in our economy is created in this way, as people take out loans from banks. The more loans people take, the more debt there is, and the more money there is. The shocking fact is that if nobody went into debt, there would be almost no money in the economy.
Politicians and bankers work together to benefit themselves at the expense of the people actually producing something of value. Politicians increase their power and influence by spending ever-increasing amounts of paper currencies. The bankers enable the process by creating paper currencies (from nothing), loaning out this money. This process succeeds until the debts must be paid.
The price of the yellow metal increased by almost 5% on the week following the release of some rather confusing FOMC minutes and a statement by US Fed chairman Bernanke that the central bank will maintain its accommodative policies for the foreseeable future. Signs of some physical supply tightness in gold, as reflected by high premiums and record volume in the Shanghai Futures Exchange, declining inventories on Comex and a surge in gold lease rates all indicate some strong buying of the physical metal.
I think traders, especially in the futures realm, are missing the forest for the trees. They are so worried about what Bernanke had for breakfast that they’ve totally lost sight of the big picture. It doesn’t matter one bit what the Fed says, but what the Fed does. And throughout this entire raucous 2013 “debate” about what the FOMC is planning for QE3, it has continued to aggressively monetize debt without respite.
There are many more insanities in our financial and political systems than have been mentioned here. The consequences will be unpleasant, but we expect no material systemic change without a major crisis. This suggests a crisis is inevitable. When? It will occur when some event destabilizes the system and interrelated cascading failures occur. Cyprus was the warning! Cyprus was the “Mayday!” and the “SOS” to the world. Are you prepared?
We have two things going on at once right now. You have deflation which is perfectly natural and what you would expect in a depression. Against that, we have inflation from the Fed money printing. In rough numbers we might have 4% deflation and 5% inflation at the same time which net out to about 1% inflation in the CPI. That is not a stable series; that is actually two forces pushing against each other.
In a short educational video message, Professor White answers the question “why isn’t there any more in the US?” The truth of the matter is that the fate of the dollar rests with a handful of political appointees. Mr. White asks the question under which system the quantity and purchasing power of money are more stable. The answer to that question: gold and silver standards have dramatically outperformed fiat standards around the world in providing stable currency.