Monthly Archives: February 2019
“The U.S. and China are on the cusp of an ‘historic’ agreement that would commit Beijing to cut subsidies for state-owned companies and disclose when its central bank intervenes in currency markets, a top White House adviser said.”
USAGOLD note: The details are beginning to come out on the deal apparently being struck between the U.S. and China on trade. Many gold market analysts believe that a settlement would be good for gold. One that includes formalities to keep the yuan relatively strong against the dollar could be even better. . . . .
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“Politique magazine in Paris this week published a report by Edouard Freval about the Banque de France’s new interest in lending and swapping gold through JPMorganChase & Co. even as credit and currency risks are rising and other central banks are acquiring the monetary metal to guard against those risks. The report quotes former French central bankers criticizing the scheme. It also quotes your secretary/treasurer at some length. Even when read in English through Google Translator the report does very well casting suspicion on the Banque de France’s scheme and reminding readers that gold is the ultimate money, not to be trifled with. The article is headlined ‘La France Est-Elle en Train d’Hypothequer Son Stock d’Or?’ — ‘Is France Mortgaging Its Gold Stock?'”
USAGOLD note: France would like to pick up at least a portion of London’s huge gold business both in physical and paper forms. If putting the nation’s gold reserve at risk is part and parcel of that effort, the French people are likely to react negatively given their long attachment to the yellow metal – a bond that grew from two destructive bouts of hyperinflation in the 18th century.
Few know that Napoleon Bonaparte, who was the founder of the Bank of France, was a staunch advocate of gold over paper money. In Fiat Money Inflation in France, Andrew Dickson White tells the story of Napoleon’s founding of France’s central bank:
“[The assignat inflation] ended in the complete financial, moral and political prostration of France – a prostration from which only a Napoleon could raise it. . .at [his] first cabinet council Bonaparte was asked what he intended to do. He replied, ‘I will pay cash or pay nothing.’ . . .[Later] when the first great European coalition was hard pressed financially, and it was proposed to resort to paper money; he wrote to his minister, ‘I will never resort to irredeemable paper money.’ He never did, and France, under this determination, commanded all the gold she needed.” With the gold swap program, current management appears determined to put the French gold reserve at risk – a program Napoleon likely would have opposed as undermining the financial stability of the nation.
Repost from 2/7/2019
“What this 40-year gold price chart learns for 2019 and 2020 is that there is a fair chance that gold’s price will rise to the top of this channel provided that 1200 holds strong as a monthly close. That’s also what we have been repeating recently: the importance of $1200. As gold is getting a bid now we expect gold to rise to $1650 at a certain point where it will meet heavy resistance. This might happen in 2019 already but, for this, we need the lower time frames.”
USAGOLD note: In this short, but fundamentally sound, study from Taki Tsaklanos, he makes a point we have emphasized for many years here at USAGOLD: “First, market-wise, the gold price started trading ‘freely’ with an open market in 1971, on August 15th. That’s when President Nixon took the U.S. off the gold standard. So any historic gold price chart should be after that date, as before it was not really relevant.” That is why most of our work on the long-term outlook for gold includes charts beginning in 1970-1971.
Economic analysis should be split into two eras – BDL and ADL, before and after the 1971 delinking of the dollar and gold. (In a recent seminar, Grant Williams of Things That Make You Go. . ‘hmmm’ fame used a series of our long-term gold charts to make the same point.) Nixon commented at the time: “We are all Keynesians now.” The full implementation of Keynesian thought dreamed by academics had become an economic reality, and in the process and inadvertently cemented gold’s role as a long-term portfolio hedge.
Repost from 12-31-2019
(USAGOLD – February 28, 2019) – Gold made a fairly strong move to the upside in overnight trading on the announcement that talks had broken down between the United States and North Korea reaching the $1327 level. It then ran into a wall of selling at the New York open (once again) and fell back to $1320 where it is trading as we post this report. Silver is down 5¢ at $15.70. The sharp drop in gold is coincident with an equally sharp rise in the dollar giving credence to the notion that geopolitical events in Asia – trade and military – are pushing capital in the greenback’s direction. The better than expected GDP number announced this morning is also playing a role in gold’s pricing in that it puts interest rate increases back into the mix.
On a more fundamental note, Bloomberg reports Romania is contemplating repatriation of 61 tonnes of gold deposited at the Bank of England. If the relocation proceeds, Romania will join a list of countries that have decided to repatriate their gold reserves which includes Germany, Austria and Hungary – among others. The rehabilitation of gold as a national asset has become one of the primary factors underlying gold’s price resurgence since 2016.
Quote of the Day
“The ‘threat’ is best seen through the emergence of exchange-traded funds (ETFs), which allow investors to get a proxy physical gold exposure through an investment via their stockbroker. In truth, these products are, in many cases, more expensive than trading and storing physical gold (especially for larger investors with a long-term investment time frame), have less trading flexibility, and are less secure than owning real physical gold.” – Jordan Eliseo, ABC Bullion/Australia
Chart of the Day
Chart note 1: Sometimes the facts just get in the way. Though China might be tempted to choose devaluation as a tactic in the trade war, it creates other problems for the country that it has tried to avoid in the past – most notably capital flight. The fact of the matter is that China has chosen to do just the opposite. It has kept the yuan in a tight band against the U.S. dollar and sold from its pool of U.S. Treasuries as a means to stabilizing its currency. Since 2014 China’s foreign exchange reserves, as a result, went from nearly $4 trillion to just above $3 trillion since 2014. Meanwhile, the yuan has traded in a narrow channel between 14.5¢ and 16.5¢.
Chart note 2: PBoC governor Yi Gang has stated repeatedly and unambiguously that China “will not engage in competitive devaluation, and will not use the exchange rate as a tool to deal with trade frictions.” Part of the narrative behind the dollar’s strong showing of late has been concern that China would ‘weaponize’ the yuan in the trade war. If China is successful in keeping the yuan within a band, it will indirectly offer a helping hand to gold.
“U.S. President Donald Trump said on Thursday he had walked away from a nuclear deal at his summit with Kim Jong Un because of unacceptable demands from the North Korean leader to lift punishing U.S.-led sanctions.”
USAGOLD note: The U.S. also surprised Kim Jung Un with U.S. knowledge of previously unpublicized nuclear weapon facilities in North Korea. At first blush, it seems a considerably larger gap exists between the two parties than commonly understood before today’s developments. The financial markets will be concerned with the possibility of a return to the tense situation before the Singapore summit.
“It was only a matter of time before the fragility of the current US political and economic situation was laid bare; a situation that has translated directly into the recovery of the gold price. Speculation around the health of the US bull market, the future path of interest rates, international trade, and the future of Trump himself, have seen gold surge by more than $100/oz since mid-August.
USAGOLD note: A solid overview on gold for the rest of 2019 –
“Jay Powell has said the US Federal Reserve is close to agreeing a plan to complete the process of reducing its multitrillion-dollar balance sheet by the end of 2019, teeing up an announcement as soon as its meeting next month.”
USAGOLD note: Zero Hedge passes along a Goldman Sachs report specifying the third quarter of 2019 as the end date for the Fed’s balance sheet run0ff.
“Another headline which encouraged investors to buy gold was the news that the Bank of Japan (BoJ) is considering additional easing of its monetary policy. Gold demand was in evidence after this statement as many traders regarded this as a sign that global weakness is a serious enough threat to warrant central bank stimulus.”
USAGOLD note: Droke’s latest ties into the post immediately below. Gold has finished higher for six straight days. On most of those days, the uptrend began during Asian trading hours and carried over to European and U.S. trading. As indicated in the post below, most Asian countries are experiencing disinflation. Droke makes some good points about gold in this respect at the link above.
Repost from 2-20-2019
“There’s nothing magical about gold. It’s just uniquely well-suited among the 98 naturally occurring elements for use as money… in the same way aluminum is good for airplanes or uranium is good for nuclear power. There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.”
USAGOLD note: Casey delivers the essential argument for gold as money in the age of paper currency.
Image: Aristotle as depicted by the German artist Johann Jakob Dorner the Elder (1741-1813)
Repost from 12/5/2019
“In this kind of fiscal forcing or debt monetisation scenario aimed at bringing down the economy’s leverage while keeping unemployment low, gold could quickly play its role as something that retains its value relative to other assets. Certainly, the risks given the likely eventual policy response look asymmetric to the upside.”
USAGOLD note: A brief, well-written look at what steps central banks might take in the event of a new recession and what it might mean for gold.
Repost from 2-21-2019
(USAGOLD – February 27, 2019) – Gold climbed back toward the $1330 mark in Asia overnight on a sudden escalation of tension between India and Pakistan. It then leveled off during European trading hours and is now trading at $1327 – down $2.50 on the day. Silver is trading at $15.89 – down 10¢ on the day. Gold held up well yesterday in the face of February options expiration and Congressional testimony from a “patient” and “watchful” Fed Chair Jerome Powell. The metals’ market, in our view, is likely to read the market’s response to yesterday’s center-stage events as reinforcing the underlying, longer-term upward bias.
As it is, the gold market continues to move sideways within a tight range – biding its time and awaiting the next turn of events. It too is being patient and watchful. Along these lines, International Adviser published an interesting quote from Merion Global Investors fund manager Ned Naylor-Leyland. “[N]ormalisation in rate hikes and the unwinding of central bank balance sheets,” he says, “has really gone the way of the dodo recently and that is very significant for gold because gold is about hedging your forward-looking purchasing power issues, and generally these things shift in very secular ways . . . But because everybody is a momentum investor now, I think that when it happens it will happen rather quickly because of this herd-like behaviour that you see now in respect to all assets.”
Quote of the Day
“We have found that gold typically thrives amid deeper, longer-lasting and fundamentally driven bear markets, which are usually associated with a deteriorating macroeconomic outlook. Alternatively, gold’s performance is usually tepid when equities rise. A good analogy is home insurance: homeowners pay an insurance premium each year hoping the house doesn’t burn down, but if it does you redeem the policy. Here, we see gold’s “insurance characteristics” as becoming increasingly relevant for investors. But even if the insurance is not needed, gold could still offer value. If the US dollar slides (which we expect), emerging economies become wealthier while mining costs increase. Prices could therefore advance irrespective of US inflation, making gold more than just an insurance asset.” – Wayne Gordon, UBS Wealth Management
Chart of the Day
Chart note: When the United States abandoned the gold standard in 1971 and freed currencies to float against one another, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold backed the dollar, and the era from 1971 to present when it did not. Gold has had its ups and down since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard.
“So far the selling pressure has been relatively mild compared to what has happened in some option expiries that we have seen over the past few years. And I think that is an important observation, Eric, because their ability to hold current levels reflects underlying strength in the precious metals that continues to build.”
USAGOLD note: Yesterday, on options expiration day, gold managed to finish the day on the upside – something, as James Turk mentions in this interview with Eric King (King World News), that has not happened all that often over the past several years.
“‘It’s beyond even consideration. The idea that the U.S. would not honor all of its obligations and pay them when due is something that can’t even be considered,’ the central bank leader says.”
USAGOLD note: Powell’s statement ties into the upcoming vote in March to raise the debt ceiling. The chairman had to be thinking about the 2011 shutdown when Standard & Poor’s downgraded the U.S. credit rating.
What money ought to be
“Oresme wrote that it is ‘disgraceful and everywhere foreign to the nobility of a prince to prohibit the circulation of good money in his country, and, for the sake of gain, to order and even compel his subjects to use his own which is poorer, as if to say that good is bad and his bad is good.’ He was flexible in case of emergencies, such as during periods of war, or to pay ransoms with ‘bad’ or debased money, or to help liberate a kidnapped king. But the bishop added, ‘If the community should in any way make such an alteration, the money ought to be restored to its proper basis as soon as possible, and the making of gain in that way should cease.’” – Alejandro Chaufen, Forbes
Dr. MoneyWise says. . . This essay cites notables on the subject of money – Aristotle, Thomas Aquinas and Copernicus – to name a few. All had similar views. It talks about what money ought to be, the right and wrong of it, and ends up with a couple words on Bitcoin – caveat emptor. We academics do love our Latin.
“Even if the investor remains upbeat about the financial architecture’s future stability, gold commends itself as an excellent alternative for time – and savings deposits. Because in an environment of negative real short-term interest rates, the purchasing power of time – and savings deposits will melt like ice in the sunshine, while gold stands a good chance to not only retain its purchasing power but to even increase it – as it has done since the early 1970s, when the world was put on an unbacked paper money standard.”
USAGOLD note: We spend a great of time at USAGOLD emphasizing this very same point. Gold’s principal contribution to the realm of finance is twofold – first, as a vehicle for long-term asset preservation under a variety of negative economic circumstances (deflation through hyperinflation) and, second, as a stable alternative to currency-based savings.
Repost from 2-19-2019
“‘Great news’ as it should ease fears over who is going to finance the budget deficits,’ says Stephen Gallagher of Societe Generale. . .’Switching from shrinking its Treasury holdings by roughly $200 billion per year to being a net buyer of nearly the same amount could significantly support the Treasury financing trillion-dollar deficits and a weakening economy,’ he said.”
USAGOLD note: Wondering how the U.S. might finance those $1 trillion plus deficits over the next decade? Here’s one suggestion: Just have the Fed print up a mountain of money and buy Treasuries. What could be simpler?
“For example, EMEs’ share of global activity is now 60%, but their share of global financial assets lags behind at around one-third. And half of international trade is currently invoiced in US dollars, even though the US has a much lower 10% share of international trade. As the world re-orders, this disconnect between the real and financial is likely to reduce, and in the process other reserve currencies may emerge. In the first instance, I would expect these will be existing national currencies, such as the RMB. However, history suggests these transitions will not happen overnight. The US economy overtook Britain’s in the second half of the 19th century, but it took until the 1920s before it became a dominant currency in international trade.”
USAGOLD note: Remarkably candid and detailed assessment from the Governor of the Bank of England throughout this Q&A with the public. He covers a wide-range of topics and states what he has to say without the usual central bank-speak we get as a matter of course. His comments on China’s yuan though will take many by surprise. He does not see much of future for cryptocurrencies, at one point stating that they “currently are not promising even as a form of money let alone as a global currency.” In response to a question about banking the IMF’s SDR with gold, he makes the following comment:
“It would be undesirable to base the value of a global currency on gold. Under the Bretton Woods system – the international system of linking exchange rates to the US dollar which was pegged to gold existing from 1944 to 1971 – there was a fundamental tension in that the global supply of gold did not grow in line with the global demand for money. This tension peaked in the early 1970s and the system collapsed. Since then, major economies have moved towards a system of floating exchange rates, and the basis for the SDR’s valuation has also been switched from gold to the more stable arrangement of valuation based on a basket of currencies.”
Such thinking underscores the flaw in the SDR as a store of value, and why it will never replace gold as the primary asset of last resort on central bank balance sheets. The great mistake made by the Bank of England, or better put the British government, was to encourage and sponsor the sale of a good portion of UK’s gold reserve at the turn of the century. In the throes of Brexit, there are many within Britain, no doubt, who would rather see that gold sitting on the BoE’s balance sheet rather than someone else’s.
Repost from 1-11-2019
(USAGOLD – February 26, 2019) – Gold is stubbornly holding its ground just below the $1300 level this morning – down $1.50 at $1326. Silver is down 2¢ at $15.88. Technical factors are keeping the downside at bay for gold while uncertainty about the outcome on a bevy of economic and geopolitical concerns keep a check on the upside. The markets at this juncture, including gold, would be best described as taking a wait and see approach though that might not last. Fed chairman Powell will testify before Congress today. The Trump-Kim summit in Viet Nam begins tomorrow. The United States Mint surprised the gold and silver markets once again with another shutdown of silver American Eagle production late last week – a problem that seems to occur whenever we get a ramp-up in investor demand. We have options expiration today on the COMEX February contract for both gold and silver, so we could see more downside as the trading session progresses.
Quote of the Day
“While there will always be some standouts, it’s not clear why so many managers can claim sustained superior performance. The basic technology, data and expertise is readily available. Logically, the anomalies that the strategies rely on should dissipate. There is an inherent contradiction in that the approach exploits inefficiencies, but requires market efficiency to realign prices to generate returns. The reality is that any fund managers possessing a magic investment formula guaranteeing low risk and high returns would have no incentive to share the secret. Successful firms such as Renaissance Technologies LLC have closed some funds to outside investors, preferring to capture the returns for themselves. As legendary investor Paul Tudor Jones once noted, if there was a single easy formula to follow, then all investors would already be rich.” – Satyajit Das, Bloomberg opinion columnist
Chart of the Day
Chart courtesy of World Gold CouncilHUB
Chart note: “Tactically,” says the World Gold Council, “gold presents an interesting opportunity. Gold speculative positioning in futures markets remains low by historical standards. While CME-managed money net long positions increased in December 2018, they were at record lows, since data was first broken down by investor type in 2006, earlier in the year. Net combined speculative positions, which go back further, were at their lowest for the first time since December 2001. And in recent years, a large increase in short positions has been followed by a sharp rally in gold as we started to witness towards the end of 2018.”
“The idea behind inflation expectations is that if consumers think prices will go down, they will hold off purchases and the economy will collapse. The corollary is that is consumers think inflation will rise, they will rush out and buy things causing the economy to overheat. Let’s test the theory out with a set of practical questions regarding the CPI and spending habits.”
USAGOLD note: Common sense and down-home humor from Mish Shedlock. . . .
One for the history buffs:
730 years of a strong British pound ends
in 1931 with gold standard exit
Sources: Bank of England, ICE Benchmark Administration Limited, St. Louis Federal Reserve [FRED]
The St. Louis Federal Reserve recently released this interesting chart on consumer prices from 1209 to present. We added the price of gold to show the direct relationship between declining purchasing power in the British pound and the sterling price of gold after 1931, the year Britain departed the gold standard. Prior to 1931, there was an occasional minor bump higher in the price of gold, but for the most part, it followed along the same flat line as consumer prices. It was only after Britain separated the pound from gold in 1931 that the price began to move radically higher in terms of the currency. It gained significant momentum after 1971 when the Bretton Woods agreement was abolished. Currencies and gold were then allowed to move freely in international markets. Though interesting from a historical perspective, the real lesson in this chart is that when a nation-state goes from gold-backed to fiat money, gold coins and bullion become a logical and worthwhile alternative for citizen-investors – even after 730 years of relative price stability.
“For most of this frigid weekend, I have been pondering over the longer term implications of the Powell Policy shift in late December. The more I think about it, the more convinced I am of the likelihood of a sustained advance in gold and silver, mirroring their behaviors in the 2009-2011 period, which was the last time the bankers bailed out stocks.”
USAGOLD note: Recently, we reposted Michael Ballanger’s Back up the Truck alert from late August 2018 when gold hit its interim bottom at $1167 per ounce. Here is what he has to say about gold and silver now at $1340. . . . .
Repost from 2-19-2019
“The success of Berkshire teaches us a couple of lessons: First, you must have a process for deploying capital in which you have a high degree of justified confidence; and second, you must be comfortable holding onto a position that isn’t working and possibly looking stupid, perhaps for years, as you wait for the cycle to turn. That’s enough to humble any mere mortal.”
USAGOLD note: In other words, successful investing amounts to a leap of faith combined with good amount of patience. . . . .
“To summarise the point; far from there being a dollar shortage, as market participants believe, the world is awash with dollars to an extraordinary degree. The great dollar unwind is now overhanging markets, which will remove the principal depressant on the gold price. And when it begins, as a source of supply these hot-money dollars will be seen as the continuation of escalating supply, with the prospect of future US trade and budget deficits to be discounted. These dynamics are a duplication of those that led to the failure of the London gold pool in the late-sixties, which led to the abandonment of the Bretton Woods gold-dollar relationship in 1971. And as I argue later in this article, the supply of physical liquidity in bullion markets to satisfy demand arising from dollar liquidation is extremely tight.”
USAGOLD note: Alasdair Macleod covers much ground in this important essay. For those who would like to establish solid intellectual footing in a contemporary context for what many believe will be the next leg in gold’s secular bull market, Gold – A perfect storm for 2019 is a good place to start. His allusions to the late 1960s struck a chord with me – a time when an upward revaluation of gold was roiling under the placid surface of the global monetary scene. Only a handful noticed. According to Macleod, the revaluation process is scheduled to begin in 2019. His essay is highly recommended. . . . .
Repost from 12-23-2018
“The Federal Reserve’s San Francisco outpost recently released a report caroling the virtues of negative interest rates. Now its president — a certain Mary C. Daly — suggests the Federal Reserve could put quantitative easing on permanent market duty. That is, quantitative easing would attain general status — not restricted to emergency use only.”
USAGOLD note: We recommend reading Maher’s article as a complement to Edward Chancellor’s just below. Money printing may have become to financial markets and the economy what drugs are to the addict – a dependency difficult to reverse.
Repost from 2/12/2019
“The trouble is that modern central bankers have failed to heed the lessons of the Mississippi bubble. As one of Law’s biographers, Antoin Murphy, writes: ‘What central bankers are doing now is exactly what Law recommended … From this perspective, it may be argued that, notwithstanding the failure of the Mississippi System, Law’s banking successors have been Ben Bernanke, Janet Yellen and Mario Draghi.’”
USAGOLD note: A little over a week ago, we compared Modern Monetary Theory to John Law’s failed fiat money experiment in France 300 years ago saying MMT was neither modern nor a theory. In this Reuters’ opinion piece, Edward Chancellor says we do not have to wait for MMT as John Law’s second coming. Chancellor warns “conjuring up limitless quantities of money” is one thing but returning to “normalcy” is quite another – an assessment borne out by the Fed’s current struggle with unwinding the great monetary experiment launched to counter the 2008 financial crisis.
Repost from 2-18-2019
“Every three months, they come to the nation’s capital to gather at the iconic Hay-Adams hotel, just steps from the White House. Here, 12 men and five women, representing Wall Street’s most influential dealers and debt investors — names like JPMorgan Chase, BlackRock and Citadel — meet with Treasury Department officials behind closed doors with one important purpose: to tell them how to manage America’s finances.”
USAGOLD note: Zero Hedge this morning reports “the lowest purchase by foreigners in the auction going back to December 2016 . . . ” making domestic buyers, i.e., the group listed above, that much more important. This Bloomberg article offers some interesting insights for those who would like to better understand the intricacies of the bond market.
Recent Better Business Bureau Client Review
“Before investing in gold I really didn’t have a clue about what or how much to invest in. I came across the USAGOLD website and found an excellent resource for both first time and seasoned buyers. My representative has always provided me with useful and trustworthy analysis related to the markets and trends that has further informed my purchase decisions. Transactions are timely and handled with a high degree of professionalism and integrity. I cannot recommend this company highly enough.” – Y.O., 5-14-2018
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USAGOLD Recommendation: The precious metals industry is unique in the financial industry in that it is not subject to oversight or regulation by third-party government entities like the SEC or CFTC. As such, marketplace forums and feedback sites often serve as a replacement for investors attempting due diligence. While several options can be found, by far the most impartial and least susceptible to vested influence is the Better Business Bureau. When looking at a company’s BBB profile, don’t focus solely on the rating. To be honest, pretty much everybody has an ‘A’ or ‘A+’ rating. What is far more important to assess is the number and nature of complaints, number and caliber of positive and negative reviews, longevity with the BBB, as well as the number of ‘stars’ given a company through the actual customer review system.
(USAGOLD – February 25, 2019) – Gold steadied in overnight trading then gained enough momentum at the New York open to push back over the $1330 mark – up $4 at $1331.50. Silver is up 6¢ at $15.96. The White House decision to hold off on additional tariffs is probably the principal influence in gold’s pricing this morning (The Shanghai Composite Index closed up 5.6%), but underlying that is the solid technical picture that has unfolded over the past several months. All in all, we are off to a relatively quiet start for the week with little in the way of news other than the China trade developments. We will update later if anything of interest develops.
Quote of the Day
“This flagrant abuse of property rights and the rule of law sent the economy into a deep dive. From 2000 to 2008, real G.D.P. per capita contracted on average by 8.29% per year. During this period, Zimbabwe ran large fiscal deficits financed by printing money and experienced the second most severe case of hyperinflation in history. On November 14, 2008, the annual inflation rate peaked at 89.7 sextillion percent every day, making Zimbabwe’s 100 trillion dollar notes worthless. In the end, the government was forced to scrap the Zimbabwean dollar, because Zimbabweans simply refused to use it.” – Steven Hanke, Zimbabwe’s Monetary Death Spiral, 1-1-2019
Chart[s] of the Day
The price of gold in four of the world’s most troubled currencies
“They like gold on the idea that the Fed will erode real yields to spur the economy, undermining the dollar. . . ‘While we may continue to hold various trades that benefit from the broader macro and policy context, the ones less likely to be unwound until much later in the inflation cycle are these two,’ JPMorgan said, referring to gold and TIPS.”
USAGOLD note: JP Morgan looks to be on the gold bandwagon for the long term.