Category: Today’s top gold news and opinion

Theresa May’s Brexit plan falls by 230 votes

Financial Times/George Parker, Laura Hughes and Michael Peel/1-15-2019

“Mrs May’s crushing loss by 230 votes, the biggest defeat inflicted on any government, sees the prime minister in a race against time to revamp and resuscitate her deal before Britain’s scheduled departure from the EU on March 29. Some 118 out of 317 Conservative MPs voted against the deal and Jeremy Corbyn, Labour leader, immediately tabled a vote of no confidence in the government. He said the defeat of the deal had been ‘absolutely decisive’.”

USAGOLD note:  It is difficult to know where we go from here. . . .There may be some fireworks overnight but, as of this posting, the markets are relatively quiet.  The important reaction will be the one that comes from Europe and the UK itself.

Posted in Today's top gold news and opinion |

Atlas Pulse upgrades gold to bull market for first time since 2012

Atlas Plus/Charlie Morris

“The six-month, or 26-week, momentum signal could be struck anytime now. All gold needs to do is touch $1,270, which is a few dollars away, or stay at current levels while that six-month high keeps on dropping. Either way, the bears will have their shorts pulled down.”

USAGOLD note:  Morris goes through a well-conceived checklist – his first advisory in over a year – why we might be on the verge of a new bull market in gold. “$1776 anyone?” he asks.

Repost from 12/20/2018

Posted in Today's top gold news and opinion |


The road to confetti is long and winding

“Does the deployment of helicopter money not entail some meaningful risk of the loss of confidence in a currency that is, after all, undefined, uncollateralized and infinitely replicable at exactly zero cost? Might trust be shattered by the visible act of infusing the government with invisible monetary pixels and by the subsequent exchange of those images for real goods and services? . . .  To us, it is the great question. Pondering it, as we say, we are bearish on the money of overextended governments. We are bullish on the alternatives enumerated in the Periodic table. It would be nice to know when the rest of the world will come around to the gold-friendly view that central bankers have lost their marbles. We have no such timetable. The road to confetti is long and winding.” – James Grant, Grant’s Interest Rate Observer

Dr. MoneyWise says. . . .Some think it takes an advanced degree in economics to understand the merits of a diversification in gold and silver when all it takes is a little common sense.  Common sense ownership of unencumbered metal saved the skeptical saver in the time of the French assignat inflation in 1789, the nightmare German inflation in 1923, the global bank collapses in 1932, the American stagflationary breakdown in the 1974 and Venezuela’s inflation in 2018 – even though those episodes span almost 250 years.  As old Ben Franklin once said: “A change of fortune hurts a wise Man no more than a change of the Moon.”


Posted in Dr. Moneywise, Today's top gold news and opinion | Tagged |

‘No one questions its value. . .’ – Alan Greenspan

“No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counter-party. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.” – Alan Greenspan, former chairman of the Federal Reserve

Image courtesy of the British Museum Collection/Lydia, croesid, ca 550 BC

Repost from 10/15/2018

Posted in RepostKeepers, Today's top gold news and opinion |

Fiat currency always ends in collapse

The Gold Telegraph/Tom Lewis

“When the fiat currency in your wallet collapses in value, gold will remain a hedge against inflation and other economic chaos. Today’s central banks have created unprecedented global debts that do not bode well for future economic health. Many countries, including the US, are at the brink of financial disaster. These governments will attempt to solve the problem by printing more fiat currency and devaluing it even more.”

Repost from 6/18/2018

Posted in Today's top gold news and opinion |

DMR–Gold inches higher ahead of vote on Brexit plan


Gold inched higher in early U.S. trading after a relatively quiet night overseas – up $1.50 at $1293 –  as the world’s attention shifted to the United Kingdom and today’s vote on Brexit. Silver is down 1¢ at $15.67.  A House of Commons’ vote is scheduled for later this afternoon.  A firmer U.S. dollar is helping to keep gold constrained this morning.

The major news services are predicting a defeat for the current plan for Britain’s departure from the European Union leaving it a guessing game as to what might happen next in the world’s fifth largest economy.  We have seen estimates of up to $1 trillion in capital flight from Britain as a result of that departure.  Safe haven demand for gold on both sides of the English Channel has been one of the hallmarks of the departure wrangling.

U.S. Global Investors’ Frank Holmes offers the following summation of the current gold market: “Gold, meanwhile, is set for its fourth weekly gain, marking its longest rally since October. Traders surveyed by Bloomberg are bullish on the yellow metal for a ninth straight week. . .ETFs backed by gold saw 10 straight days of inflows, adding 37,174 troy ounces on Thursday alone. This year’s net purchases so far are 762,975 troy ounces, according to data compiled by Bloomberg.”

Quote of the Day
“But the same analysis applies to debased or light-weight coins driving out full-bodied coins. Examples abound in the ancient literature of the consequences of coinage debasement. From the very beginning of coinage, generally assumed, on the authority of Herodotus, to originate with 7th century Lydia, coinage was overvalued. The earliest coins were made of electrum, a natural alloy of about 70 percent gold and 30 percent silver. But hoards of the earliest coins found in the Temple of Artemis at Ephesus in 1904 contained ;artificial’ electrum coins with much lower gold contents. The weights of the stater coins (or its fractions) were uniform but the gold contents were as low as 30 percent. The Lydians and Greeks had not only learned how to use ancient Egyptian techniques of metallurgy, but also how to overvalue coins by using less of the more expensive metal and exploit the monetary prerogative as a fiscal device.” – Robert Mundell, Uses and Abuses of Gresham’s Law in the History of Money

Chart of the Day

Chart and note courtesy of the World Gold Council/GoldHub

Chart note:  “Large net short positions,” says the World Gold Council, “are often prone to covering, creating buying opportunities for investors.  In addition, gold speculative positioning in futures markets remains low by historical standards after hitting record lows in the final months of 2018. CME managed money net long positions stand near record low since 2006 – when data was first broken down by investor type. Furthermore, net combined speculative positions, which go back further, are negative for the first time since December 2001. And large net short positions have historically created buying opportunities for strategic investors, as such positions are prone to short-covering adding momentum to rallies in the gold price.”

Posted in Daily Market Report, Today's top gold news and opinion |

Separating truth from fiction in China’s golden game of Poker

Bullion Star/Ronan Manly/1-12-2019

“We will have to wait until the next SAFE reserve asset report in early February to see whether the PBoC decides to announce any gold purchases for January. If so, it could mark the beginning of a trend of regular monthly reporting by the Chinese state. If not, then the 10 tonnes gold purchase in December 2018 will go down as a strange anomaly, perhaps as a warning shot to economic adversaries such as the US that it can at any time announce gold reserve updates which could impact foreign exchange markets.”

USAGOLD note: This detailed analysis from gold market researcher Ronan Manly dissects the role the Chinese government and central bank are playing in the gold market. He reiterates the standard argument among top-drawer gold market analysts that what we are getting from Chinese sources might not be the full story on Chinese official sector gold ownership.  It includes some interest research as to the gold market professionals think might be the real levels of Chinese official sector gold ownership.

Chart courtesy of GoldChartsRUs/Nick Laird

Posted in Today's top gold news and opinion |

The world’s biggest economies are moving deeper into a slowdown

Bloomberg/William Horobin/1-14-2019

“Momentum is easing across the world’s major economies, according to a gauge that the Organization for Economic Co-Operation and Development uses to predict turning points. The Composite Leading Indicator is the latest sign of a synchronized slowdown in global growth, adding to recession warnings sparked by industrial figures in Germany last week and slumping trade figures for China earlier on Monday.”

USAGOLD note:  Does it seem to you that the situation has gone from good to bad almost overnight?  If so, you are not alone. . . . . . .With headlines like the one above becoming more commonplace, the “patient and flexible” comment from Fed chair Powell last week begins to make more sense.

Posted in Today's top gold news and opinion |

The $4.5 trillion force that’s helping to fuel market swings

CNN/Matt Egan/1-10-2019

“Still, it’s sensible policy for the Fed to try to shrink its holdings. Historically low rates and a huge balance sheet give the central bank limited ammo to fight the next recession, which investors increasingly fear is around the corner.  The market’s sensitivity to the Fed’s balance sheet is a fresh reminder that this is all a grand experiment. No one really knows how it will turn out.”

USAGOLD note:  All of which elevates the importance of gold as a safe-haven hedge against the unknown – a consideration driving much of the demand for physical gold globally these days.


Posted in Today's top gold news and opinion |

Gold is back in a bull market – it’s time to buy

MoneyWeek/Charlie Morris/1-14-2019

“My official signal hasn’t yet been given, but this is my editorial, so I’m reserving the right to override it. If like me, you believe the post-2009 bull market in equities has hit a wall, then why wait to buy gold? To recap, an Atlas Pulse Bull market requires a score of three out of three on these simple tests: 1. Easy money (defined as US cash real – ie, after inflation – interest rates below 1.8%). 2. The long-term gold trend in non-dollar terms must be positive. 3. Gold must be beating the stockmarket.”

USAGOLD  note:  We will let Mr. Morris run through those three “simple tests” available at the link above. . . . . .



Posted in Today's top gold news and opinion |

Story of a gold coin

Mexican Civic Association/Hugo Salinas Price

“As I was shuffling papers in some old files, I came across a slip of paper on which I had written down the price I had paid for a Mexican $50 gold peso coin: $717 Mexican pesos.”

USAGOLD note: An interesting story about a gold coin a good many of our clients own – the beautiful Mexican 50 peso pictured above. We think you will enjoy Hugo Salinas Price’s story at the link above.

Repost from 12/4/2019/edited note

Posted in Today's top gold news and opinion |

Why gold is money

Casey Research/Doug Casey

“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

Posted in Today's top gold news and opinion |

Weakest Treasuries demand since 2008 send bond-market warning

Bloomberg/Katherine Greifeld

“As the U.S. government kicks off its debt sales this year, here’s one potentially worrisome sign for traders to keep in mind: the steep decline in demand at its bond auctions.”

USAGOLD note:  It is a lingering concern in the bond market that, as U.S. government needs elevate, the supply will exceed demand.  We have reported here in the past of China and Japan’s withdrawal from the market as buyers.  In the absence of new buyers, the responsibility for financing the U.S. sovereign debt will likely fall principally on American buyers.  It is difficult to know now what happens if the “steep decline” in buyers’ interest continues and/or deepens.  The chart below details the additions to the U.S. quarterly year over year.  As you can see, as of the third quarter of last year, the numbers, though climbing, had not reached levels comparable to the 2008 financial crisis.  What preoccupies bond traders is what happens if/when they do?

Repost from 1/10/2019

Posted in Today's top gold news and opinion |

Favorite web pages


What you need to know before you buy
your first ounce of gold

Some initial guidelines from one of America’s top gold experts

New to the idea of including gold in your investment portfolio?
If so, you might have questions.

This page is for you.

If you are new to the concept of gold ownership, you might be looking for a little guidance. We, at USAGOLD, have been in the gold business for a good many years and the one thing that stands out to us in working with so many over the years is how often investors, for one reason or another, get off to a bad start.

That is why we developed a question and answer page many years ago that delves into the subject of GETTING OFF TO THE RIGHT START. We update it regularly as things can change rapidly in the gold and silver markets. The page is linked above and we recommend that newcomers spend the few minutes it takes to get through it. . . .

This page receives considerably high-ranking from Google on a number of important searches and we like to think it’s because of the cause it serves – providing some positive direction to investors trying to get off to a solid start in their pursuit of gold ownership.

If you would like to talk with a real, live gold expert about your needs, try this phone number or drop us an e-mail:

Extension #100

– or–


Posted in Favorite web pages, Today's top gold news and opinion | Tagged |

CFTC COT reporting

still shelved due to the federal government shutdown.

Posted in Today's top gold news and opinion |

DMR–Gold lays groundwork for solid start to the week, hits a wall in early NY trading


Gold was in the process of laying some groundwork for a very good start to the week – trading up to the $1296 level in Asian and European markets overnight – until it hit a wall of what looked to be programmed trading at the open in New York and dropped almost $8 in a matter of minutes.  It has retraced some of those losses since and is now priced at $1292 and up $5 on the day.  Silver is up 6¢ on the day at $15.64.

Much of the gold’s gain overseas can be tracked to a stronger yuan and concerns about a less than inspiring earnings period ahead of us.  Adding to the stock market’s woes is a report out of China this morning that its trade deficit with the United States grew 17% despite the imposition of tariffs. Lurking in the shadows, and not getting a great deal of attention in the United States, UK’s parliament votes on Brexit this week and that could be a catalyst for surprise capital rearrangements that few anticipated.

Quote of the Day
“I think we’re getting to the point now where the breakout is going to be on the inflation upside. The only question is when.” – Alan Greenspan, February 2018

Chart of the Day

(Interactive chart)

Chart note: This interactive chart compares price appreciation for gold and the dollar index. Gold has consistently outperformed the dollar in twelve of the last eighteen years – a formidable record. Even if one were to add in average yields on dollar-based investments, gold still comes out the clear winner in those twelve years. Gold had an off-year in 2018 – down 1% while the dollar was up almost 7%. Given the performance record, though, contrarian investors might see the present disparity as a buying opportunity.

Posted in Daily Market Report, Today's top gold news and opinion |

"Going bananas"

Tocqueville Asset Management/John Hathaway/1-10-2019

“Many factors could lead to higher precious-metals prices, including (but not limited to) a fundamental change in investor psychology due to a bear market; loss of confidence in public policy; sweeping political change; possible loss of the dollar’s status as the world’s principal reserve currency; favorable supply-and-demand factors; and unwelcome geopolitical developments. However, these factors are speculative, debatable, hard to predict, uncertain as to timing, and might require analysis too esoteric for most to bother to tackle. That is not the case for the relationship between US debt and GDP. Here we have an easy-to-understand, highly visible metric that in our opinion makes the likelihood of much higher gold prices seem inescapable.”

USAGOLD note:  Hathaway does a good job of laying out the funamental drivers for gold in 2019.

Posted in Today's top gold news and opinion |

Europe likely in recession now: Germany, France, Italy production collapse

MishTalk/Mish Shedlock/1-11-2019

“These are not only horrid numbers, they are unexpectedly and shockingly horrid numbers.”

USAGOLD note:  Before you dismiss the notion of a the economy in Europe cratering consider that Financial Times issued a similar warning in lead editorial in its weekend edition. . . . . .And we should not forget that on top of it Brexit comes for a parliamentary vote this week.

Posted in Today's top gold news and opinion |

Credit Bubble Bulletin’s Noland warns of QE4


CreditBubbleBulleting/Doug Noland/1-12-2019

“Bubbles are mechanism of wealth redistribution and destruction. This reality has been at the foundation of my ongoing deep worries for the consequences of history’s greatest global Bubble. We’ve witnessed the social angst, a deeply divided country and waning confidence in U.S. institutions following the collapse of the mortgage finance Bubble. I fear that the Bubble over the past decade has greatly increased the likelihood of geopolitical tensions and conflict. Aspects of this risk began to manifest in 2018, as fissures developed in the global Bubble. Geopolitical conflict is a critical Issue 2019. Trade relations are clearly front and center. Going forward, I don’t believe we can disregard escalating risks of military confrontation.”

USAGOLD note:  Noland says the “U.S. dollar has serious fundamental issues” and that the Fed will be forced “resort to QE when global markets “seize up.”

Posted in Today's top gold news and opinion |

The White House reportedly asked the Pentagon for military plans to strike Iran

CNBC/Natasha Turk/1-13-2019

“The request, reportedly made the National Security Council which is led by national security advisor John Bolton, alarmed Pentagon and State Department officials, the [Wall Street] Journal wrote on Sunday. The Council made the move after an Iranian-aligned group fired missiles into Baghdad’s diplomatic quarter, which hosts the U.S. embassy in Iraq. No one was harmed.”

USAGOLD note:  It is not probably necessary to alert our readers as to the potential ramifications of a strike on Iran beginning with the impact on the oil market. . . . . .That said there are a number of qualifiers in this story beginning with the fact that the request came last September and extending through a disclosure that the the newspaper did not know if the president was the source of the request.

Posted in Today's top gold news and opinion |

Gundlach warns U.S. economy is floating on ‘an ocean of debt’

Bloomberg/Hailey Waller and James Ludden/1-12-2019

“Echoing many of the themes from his annual “Just Markets” webcast on Tuesday, Gundlach took part in a round-table of 10 of Wall Street’s smartest investors for Barron’s. He highlighted the dangers especially posed by the U.S. corporate bond market. Prolific sales of junk bonds and significant growth in investment grade corporate debt, coupled with the Federal Reserve weaning the market off quantitative easing, have resulted in what the DoubleLine Capital LP boss called ‘an ocean of debt.’”

USAGOLD note:  Gundlach echoes warnings issued by Janet Yellen several weeks ago.  He says stocks “are now in a bear market.”

Posted in Today's top gold news and opinion |

No DMR today. . .

but please check back.  We will update if anything of interest develops.

Posted in Today's top gold news and opinion |

Russia buys quarter of world’s yuan reserves in shift from dollar

Bloomberg/Natasha Doff and Anna Andrianova/1-9-2019

“Russia’s central bank dumped $101 billion in U.S. holdings from its huge reserves, shifting into euros and yuan last spring amid a new round of U.S. sanctions. The central bank moved the equivalent of $44 billion each into the European and Chinese currencies in the second quarter, according to a report published on late Wednesday by the Bank of Russia, which discloses the data with a six-month lag. Another $21 billion was invested in the Japanese yen.”

USAGOLD note:   We should not forget that Russian, the third largest gold miner in the world, is channeling its gold production into central bank reserves as well.  “We aren’t ditching the dollar,” Bloomberg quotes Russian President Vladimir Putin. “The dollar is ditching us.”

Posted in Today's top gold news and opinion |

Fed Chairman Powell says he is ‘very worried’ about growing amount of U.S. debt

CNBC/Thomas Franck/1-10-2019

“‘I’m very worried about it,’ Powell said at The Economic Club of Washington, D.C. ‘From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions. ‘However, ‘it’s a long-run issue that we definitely need to face, and ultimately, will have no choice but to face,’ he added.”

USAGOLD note:  The forgotten crisis. . . .


The National Debt and Gold
Here’s why the two have risen together since the 1970s
and why the correlation is likely to continue


“It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society, and that kind of threat ultimately has a national security consequence for it.” – John Bolton, U.S. National Security Adviser to President Trump

“Last month, as the US midterm elections approached, Deutsche Bank analysts released a calculation that should have made American voters wince. It shows that the US government currently pays $1.43bn each day (yes, day) to service its public debt — 10 times more than any other G7 country (Italy is a distant second in this grim league).” – Gillian Tett, Financial Times



Posted in Today's top gold news and opinion |

Don’t be so sure hyperinflation can’t hit the U.S.

BloombergOpinion/Noah Smith/1-10-2019

“What happens if the government keeps trying to pay for things with printed money after the economy has employed every available worker? No one really knows. One common theory is that hyperinflation would result. This is a disastrous spiral in which prices rise so quickly, and so unpredictably, that a country’s entire economy grinds to a halt and the nation collapses into poverty. For a look at how hyperinflation can immiserate a nation, simply examine the stories coming out of Venezuela.”

USAGOLD note:  An interesting excursion into where we might end up if socialist economists get their way under the new “modern monetary theory” (MMT).

Related:  Please see – Gold as a hedge against hyperinflation

Posted in Today's top gold news and opinion |

Volatility: How ‘algos’ changed the rhythm of the market

Financial Times/Robin Wigglesworth/1-8-2019

“Philippe Jabre was the quintessential swashbuckling trader, slicing his way through markets first at GLG Partners and then an eponymous hedge fund he founded in 2007 — at the time one of the industry’s biggest-ever launches. But in December he fell on his sword, closing Jabre Capital after racking up huge losses. The fault, he said, was machines.”

USAGOLD note:  The number of financial market heavyweights who have publicly voiced concerns similar to those of Philippe Jabre is long and growing longer by the day.  Many state they are simply at a loss on the future direction of markets as the participation of non-silicon based entities shrinks.   “These ‘algos’ have taken all the rhythm out of the market, and have become extremely confusing to me,” famed hedge fund manager Stanley Druckenmiller stated recently.  Wigglesworth cites JP Morgan as pointing out that “less than 10 per cent of US equity trading is now done by traditional investors.

One of principles of portfolio management likely to enjoy a resurgence under the stresses of computer-generated volatility is the utilization of gold’s as a safe-haven asset.  In fact, many of the professional money managers who have spoken out about algo-risks, like Ray Dalio for example, recommend owning gold for diversification purposes. The chart below shows how gold lags volatility and where we stand today. . . . . .


Posted in Today's top gold news and opinion |

Ask the Governor about the future of money

Bank of England/Mark Carney/1-9-2019

“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.

Posted in Today's top gold news and opinion |

Germany repatriates about half of its gold reserves

But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.” – Reuters, 2-9-2017

“Germany has a stronger relationship with gold than most nations. The country’s experience with hyperinflation between 1919 and 1923, during the years of the Weimar Republic, is ingrained in the national consciousness. Gold, above all, stands for stability” – Financial Times, 11-10-2017

Germany this year (2017) completed its scheduled transfer of national gold reserves from the New York Fed and the Bank of France.  Germany will now leave 1236 tonnes at the New York Fed and another 432 tonnes in London.  The remainder of its 3378 tonne national holding will be stored in Frankfurt.  The repatriation transfers to Frankfurt were completed three years ahead of schedule.

With respect to the gold left at the Fed, Bundesbank’s Carl-Ludwig Thiele told reporters: “We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.”

Thiele’s confidence in the Federal Reserve, brings to mind an old story about Germany’s relationship with the Federal Reserve and the storage of its gold reserves. When Hjalmar Schacht, head of Germany’s central bank in the 1920s, visited the New York Fed he asked to see Germany’s gold stored in its vaults.

“Strong**,” wrote Schacht in a 1955 autobiography, “was proud to be able to show us the vaults which were situated in the deepest cellar of the building and remarked: ‘Now, Herr Schacht, you shall see where the Reichsbank gold is kept.’ ” Storage staff went off to retrieve the gold.  “At length,” Schacht goes on, “we were told: ‘Mr. Strong, we can’t find the Reichsbank gold.’ ”  To which Schacht replied: “Never mind; I believe you when you say the gold is there. Even if it weren’t you are good for its replacement.”One need presume that nearly 100 years later, the level of trust conveyed by Schacht remains in place.

It is unlikely that Germany would depart the euro anytime soon and back a new Deutschmark with gold.  Having an asset set aside, though, that is detached from erratic national currencies in this day and age is a wise move for the prudent nation state – just as it is for prudent the private investor.


** New York Fed president at the time, Benjamin Strong

Repost from 2/10/2017, updated October, 2018. The Financial Times article linked at the top of the page tells the fascinating inside story of Germany’s gold repatriation.

Posted in MK, RepostKeepers, Today's top gold news and opinion |

The Fed is losing its ability to control interest rates, former Senate banking chief says

CNBC/Jeff Cox/1-2-2019

“The Fed is both raising rates and reducing bonds it holds on its balance sheet, and in 2018 ran into an issue in which the benchmark funds rate veered close to and eventually matched the same level as the interest the Fed pays on excess bank reserves. Gramm pointed out that should the market rate banks can make on loans exceeds the level the Fed pays on reserves, it could result in an explosion in the money supply that would drive inflation.”

USAGOLD note: Having written about the latent power of excess reserves for years, the editorial by Phil Gramm and Thomas R. Saving yesterday morning caught my interest.  They do a good job explaining the situation for those who would like to learn about this arcane, but important, aspect of contemporary Fed monetary policy.  Cox lays out the essence of that Wall Street Journal editorial in the piece linked above.

Repost from 1/3/2019

Posted in Today's top gold news and opinion |

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USAGOLD specializes in gold and silver coins and bullion delivered to our client’s safekeeping. For over 45 years, we have resolutely advocated owning precious metals for asset preservation purposes rather than speculation. Admittedly, this philosophy does not resonate with all prospective gold and silver owners, but if it does with you, we think you will find our firm a kindred spirit.

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Posted in ClientInsights, Today's top gold news and opinion |