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This page archives the August 2009 links to gold articles featured in our popular NewsGroup e-mail service.

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USAGOLD NewsGroup Archive

August 28th NewsGroup -- The Myth of Declining Gold Demand

Greeting clients and friends,

Our latest VideoBrief entitled, "The Myth of Declining Gold Demand" is now available.

Discussion topics: Central bank gold activity, wherein sales have dropped significantly and purchases has risen, putting the banks into a position of net demand, despite misleading headlines and statistical sleight-of-hand regarding the categorization of said activity. While a recessionary economic environment will curb gold demand from the jewelry and industrial sector, investment demand tends to be counter-cyclical and therefore tends to mitigate the impact on the physical market. Accordingly, a gold ETF has recently reported its biggest-ever one-day inflow, also registering inflows over the period of week (up 18%,) larger than any other time since the fund's inception. Seasonally strong demand during this year's autumn and winter months will likely be confronted by tighter supplies, particularly in light of the changing attitudes of the central banks. Featuring Pete Grant and Jonathan Kosares.

August 20th NewsGroup -- Gold poised for a chart-pattern breakout

Greeting clients and friends,

Our Senior Metals Analyst, Pete Grant, demonstrates a quickly culminating chart pattern that portends ripe potential for a significant break upward in continuation of gold's overall bullish trend.

These symmetrical triangle chart patterns can be quite exciting when they develop, and Pete writes, "The last time we had such a nicely formed triangle in the gold market was during the 2006/2007 consolidative period. When the breakout eventually came, it resulted in a 50% gain (more than $300) to new all-time highs at $1032."

Review these important charts and associated commentary from Pete's News & Views post at the following URL.

http://www.usagold.com/cpmforum/?p=172880

Gold appears well poised to be propelled higher by robust physical demand in anticipation of a further faltering (and eventual dethroning) of the world's primary reserve currency, the U.S. Dollar. Discussion of the fate of the dollar certainly isn't a party-starting topic, yet the managers at PIMCO, the world's largest bond fund, know the topic well and haven't shied away from making their gloomy assessments in recent news. Read on...

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Pimco says Dollar to weaken as reserve status erodes
By Garfield Reynolds and Wes Goodman, Bloomberg; August 19, 2009

Pacific Investment Management Co., the world's biggest manager of bond funds, said the dollar will weaken as the U.S. pumps "massive" amounts of money into the economy.

Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company's Web site [that] the greenback is losing its status as the world's reserve currency... "Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure."

Bill Gross, who runs the $169 billion Pimco Total Return Fund, is also warning the U.S. currency will fall. Holders of dollars should diversify before central banks and sovereign wealth funds do the same because of concern government budget deficits will deepen, Gross said in June...

USAGOLD Comment: Another monetary giant, namely Warren Buffett, has also chimed in with similar thoughts on the matter in a recent New York Times Op-Ed piece called The Greenback Effect. Read it here...

http://www.nytimes.com/2009/08/19/opinion/19buffett.html?_r=2&sq=buffett&pagewanted=all

And while Buffett and Pimco occupy front row seats for the spectacle of our own government's dalliance in "massive" dollar creation, no-one knows better the cause and devastating effect of massive monetary creation than those dealing with the national currency disaster in Zimbabwe...

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Zimbabwe central bank wants gold-backed local currency
By Nelson Banya, Reuters; August 20, 2009

Zimbabwe's central bank governor Gideon Gono on Thursday proposed the introduction of a gold-backed local currency, which was destroyed by hyperinflation and replaced by multiple foreign currencies in January. ...[He] said this was not a call for 'a blind return to the money printing press'. 'Rather, what I am calling for is the guarded reintroduction of the Zimbabwe dollar where such a new currency will be fully backed by credible, tangible and locally available assets, such as gold...'

USAGOLD Comment: Given that it was the general situation of government "overprinting" which led to the Zimbabwe dollar becoming worthless, it should be quite clear why the selection of CB reserves for the backing of a new Zimbabwe currency simply must not center around use of U.S. dollars -- because they, too, ultimately face a similar vulnerability. As Pete Grant explained in a recent podcast, Zimbabwe simply can't afford to make the mistake of jumping out of the fire (of their own hyperinflation) and into the frying pan (of inflationary U.S. monetary emissions).

Only through the use of gold -- as a core form of reserves and savings among both public and private sectors, employed in a freely-floating (mark-to-market accounting) structure -- can a nation's monetary authorities and its citizens mitigate the pitfalls typically encountered in a fiat-centric monetary system. Consider making your move into gold -- before gold makes its own move out of the aforementioned chart pattern.

As always, feel free to share this NewsGroup newsletter with your friends, and stay in touch with your broker at USAGOLD for prices, availability, and reliable delivery of gold coins and bullion right to your door!

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August 11th NewsGroup -- The 2009 Survey of Investments

Greeting clients and friends,

Here's the link to this year's USAGOLD Annual Survey of Investments. Gold is up 113.8% over the past five years!

http://www.usagold.com/amk/abcs-2009-survey-investments.html

We think you will gain from this important report.

August 3rd NewsGroup -- What causes gold prices to decline?

Greeting clients and friends,

Our latest VideoBrief entitled, "What causes gold prices to decline?" is now available.

Discussion topics: The economic and financial drivers of the gold price. Government monetary policy features prominently as shifts in interest rates, especially as it effects government bonds, can alter public perception about the favorability of debt securities as a competing class of assets. The contracting economy and high unemployment rate, however, argues that there is no political will in the current climate to allow higher interest rates as a matter of policy. The availability of gold supply is also discussed, with minimal scrap supply dismissed outright even as new mining supply has fallen into decline, a situation further exacerbated by growing environmental constraints. The potential for central bank or IMF gold sales can also weigh on the gold price, but the trend of declining sales among European banks coupled with the growth of gold reserves by other central banks, notably China, trivializes this avenue as a net negative potentiality. The impact of deflation is also discussed for its general and relative impact on asset prices. Featuring Pete Grant and Jonathan Kosares.

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Also, thanks to Ed Stein for his latest contribution to USAGOLD: "Cash for Clunkers"

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