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VideoBrief 11 minutes
1.9 Trillion Dollar Hike to the Debt Ceiling
(January 29th, 2010) -- Discussing the Congressional expansion of the U.S. national debt ceiling by 15% ($1.9 trillion), an arguably significant event that was not even covered by The Financial Times. We are now in the realm where the national debt could soon exceed GDP, and reversal of that trend is not easily foreseeable. The financing of this debt becomes problematic, with Greece cited as an current example of sovereign debt-financing woes. Any attempt to generate the needed revenue by exporting our way out of the problem almost certainly requires a devaluation of the dollar, but international competitive currency devaluations almost ensure that all paper is in a "race to the bottom" thus making gold more attractive and hence, any pullback in price should be deemed a buying opportunity. Featuring Pete Grant and Jonathan Kosares. |
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Roundtable 19 minutes
Gold was the Best Performing Asset of the Last Decade...
Could This Decade be Even Better?
(January 15th, 2010) -- Discussing investments in gold which outperformed every other asset class for the past decade. Stocks, meanwhile, experienced their worst-ever decade. While most investors have been woefully overweight in traditional stocks and bonds, less than 5 percent of investors have had gold in their portfolio. Looking forward, a natural and rational desire among the population at large to have a more truly diversified portfolio suggests that there remains great scope to increase the number of participants in the gold market; however, even a modest level of participation would swamp the limited supply in light of declining annual production from mines. The outcome is higher prices as necessary to reconcile higher demand with available supply. The long-term downtrend in the dollar is likely to continue, especially in light of the ponderous U.S. national debt, thus arguing for further diversification into gold among both foreign and domestic dollar-holders as a preemptive means to preserve their wealth. The investment fundamentals from many angles converge to illuminate a bright future for gold. Featuring Pete Grant, Jonathan Kosares and George Cooper. |
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Roundtable 20 minutes
Gold Prices: Bubble or Buying Opportunity?
(December 11th, 2009) -- A discussion of the technicals and fundamentals behind gold's powerful month-long rally to a new record high ($1,225) reached last week, and the subsequent $100 pullback in price to the 50-day moving average. The seven percent pullback is in the range of a technically healthy and therefore welcome market correction rather than indicative of a market reversal. The lower price point has in fact been met with robust buying interest. Fundamentally, the prolonged low interest rate environment does not bode well for the U.S. dollar, and the currency's chronic weakness should remain supportive of gold. Additionally, rising federal budget woes shall require Congress to act to raise the current $12.1 trillion debt ceiling that is soon to be breached -- a politically sensitive yet inevitable public admission of fiscal failure which is also supportive of gold as an alternative to endless streams of government bonds. Not surprising in this context is the rising interest among hedge funds for investment positions in physical metal. Featuring Pete Grant, Jonathan Kosares and George Cooper. |
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Roundtable 17 minutes
India's gold purchase; Main St. vs Wall St.; Japan's bleak future
(November 6th, 2009) -- A discussion of the current gold market and the economy both at home and abroad. As the price escalates to new 'psychologically important' round numbers (i.e., $1000, $1100, etc.) investors' main concern has become focused upon getting out of dollars and into gold -- with less regard for price. In past years the mere threat/rumor of central bank or IMF gold sales would drive the gold price downward, but in the wake of the latest IMF sale of 200 tonnes to India, the price has actually risen -- to new record highs! Further, because the purchase was made by the official sector of traditionally price-sensitive Indians, the psychological signal has been sent that gold remains a good value even at this price level. The motivation for the move into gold is that the remaining strength of the dollar is on a limited timeline. China is diversifying into gold, too, but with an emphasis on procurement of supply through mining. Meanwhile closer to home (U.S.), many financial institutions are registering record profits and paying record bonuses on the back of government stimulus programs, whereas the general public on Main Street have only inflation to look forward to as a consequence of the government's massive money pumping. Japan's record debt-to-GDP ratio is driving market speculation of an increased likelihood of default on their government bonds within five years, providing a poor outlook for systemic financial risks going forward. Featuring Pete Grant, Jonathan Kosares and George Cooper. |
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VideoBrief 13 minutes
Policy vs. Language
(October 16th, 2009) -- A discussion of the government's so-called "strong dollar" policy. The Treasury Department under the Clinton, Bush, and now Obama administrations have all paid lip service to a "strong dollar" policy, albeit with varying/diminishing credibility, especially in the current era of ultra low interest rates and a massive Federal Reserve balance sheet. On the other hand, the European politicians have been expressing concern over the euro currency being comparatively too strong, and yet it isn't being followed up by by a policy of lower interest rates. Bearing in mind the foreign exchange intervention mechanisms of competitive currency devaluations that have been particularly evident among the Southeast Asian countries (as an unspoken matter of policy to maintain trade advantages), the dollar's residual strength (such as it is) and its fate to this point has depended largely upon a continuation of the status quo, including its international reserve currency status. At risk, in addition to a loss of currency purchasing power, is the credibility of the political entities who talk about "strong dollars" or, more recently, of "economic recovery", when there is no evidence to back up the hollow words. Perhaps worse yet is the likelihood of an imminent dollar freefall should those words (hollow though they be) cease to be earnestly articulated by the sitting U.S. administration. Managing a gradual decline of the dollar seems to be the general goal shared all around, but as the world of currencies nevertheless remain essentially in concert drifting lower together, gold becomes the natural and universal choice for savings that people everywhere can rely on. Featuring Pete Grant
and Jonathan Kosares. |
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VideoBrief 10 minutes
The myth of declining gold demand
(August 28th, 2009) -- A discussion of 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. |
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VideoBrief 17 minutes
What causes gold prices to decline?
(August 3rd, 2009) -- A discussion of 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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VideoBrief 15 minutes
A mid-Summer review
(July 22nd, 2009) -- A review of the slow 'Summer Doldrums' which
has been the prevailing characteristic of the gold market in
mid-Summer. Also discussed is the Erste Group research paper,
and a general trend, observable in both the public and private
sectors, in which portfolios are being shifted toward physical
gold to avoid the counter-party risk which is inherent in all
paper assets and financial contracts, a dubious class rife with
the potential for default, among which even gold derivatives
and ETFs are not immune. Featuring Pete Grant and Jonathan Kosares. |
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VideoBrief 12 minutes
Is the DJIA a viable economic indicator?
(June 10th, 2009) -- As the Dow Jones Industrial Average experiences
ongoing reconfigurations to remove weak or bankrupt components
such as AIG or, most recently, the replacement of GM and Citigroup
with Cisco Systems and Travelers Group, it becomes increasingly
evident that this stock index is not truly representative of
economic and market realities. The unemployment rate, now at
9.4% (and arguably under-reported) is likely a better economic
barometer. And with PE ratios now at record highs due to the
plunge in corporate earnings, the high unemployment rate (as
a harbinger of weak domestic consumption) does not bode well
for an imminent recovery in earnings to justify current prices
or an additional climb in stock value. Featuring Pete Grant and
Jonathan Kosares. |
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VideoBrief 10 minutes
Save dollars or save gold?
(May 19th, 2009) -- Stress tests suggest that many small- to
mid-sized banks are at risk of failure. Meanwhile, the FDIC looks
to increase allocations to bolster its insurance fund in a classic
example of the government attempting to create confidence without
creating value. Due to the financial crisis, the typical negative
savings rate among the American population has turned positive
as people are now trying to build up a cushion of savings against
an uncertain future. However, low to negative real yields (when
factored against inflation) argues against traditional monetary
savings, pointing the way for a growing flight into gold. Featuring
Pete Grant and Jonathan Kosares. |
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RoundTable 18 minutes
Recovery, What Recovery?
(Apr. 23rd, 2009) -- Infusions of government money and a suspension
of fair mark-to-market accounting on balance sheets has given
a boost the to financial sector in what may be nothing more than
a false dawn with regard to a wider economic recovery. And a
primary concern in either case is the threat of (hyper)inflation
as there seems no plausible avenue through which the monetary
injections can be reversed with the same ease by which they were
created. Forward-looking investors will likely benefit by using
this time to revisit their diversification strategy with an appropriate
weighting of physical gold. Panelists are P. Grant, J. Kosares
and G. Cooper. |
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VideoBrief 13 minutes
Global currency backed by gold?
(Apr. 2nd, 2009) -- A discussion of the London G20 summit and
the proposals for a structural redesign of the international
monetary system to unseat the dollar as the primary reserve currency.
A "basket of currencies" concept is considered along
the lines of the IMF's Special Drawing Rights (SDR) as is the
prospect of a gold component. Also discussed is the Federal Reserve's
implementation of a program of quantitative easing -- effectively
a monetization of U.S. debt through the outright purchase of
Treasury bonds. Featuring Pete Grant and Jonathan Kosares. |
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RoundTable 18 minutes
Not getting your TARP? Buy gold (while you can!)
(Mar. 12th, 2008) -- A discussion of the hyperinflationary potential
of the seemingly endless global government bailouts. With the
Swiss National Bank now intervening to devalue the Swiss franc,
clearly, there is nowhere else in the world to go during a flight
to financial safety except gold. As a result, we are experiencing
a worldwide shortage in the availability of gold coins. Panelists
are P. Grant, J. Kosares and G. Cooper. |
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VideoBrief 12 minutes
Answering viewers' questions
(Feb. 4th, 2009) -- A discussion of the economic factors contributing
to the previous 20-year (1980-2000) bear market in gold, and
the modern market conditions that make a repeat unlikely. Also
discussed is the merit of holding mortgage debt in an inflationary
environment, with useful insights and guidance provided by the
hyperinflationary precedent in 1923 Weimar Germany. Featuring
Pete Grant and Jonathan Kosares. |
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VideoBrief 10 minutes
Currency manipulation?
(Jan. 26th, 2009) -- As new U.S. Treasury Secretary Timothy Geithner
calls China a currency manipulator, the gold market responded
almost immediately, climbing $50 in price. While domestic economic
concerns in both the U.S. and China present a scenario of competitive
currency devaluation, price inflation becomes the single most
likely feature regardless of the exchange-rate outcome. If Asia
plays its "trump card" in reversing its pattern of
buying U.S. Treasuries, a worst-case inflation scenario would
involve the Federal Reserve attempting to pick up the slack through
its own program of purchasing those bonds -- thereby directly
monetizing the U.S. Government debt. Pete and Jonathan also answer
a viewer's question about gold bullion. |
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VideoBrief 10 minutes
Citigroup's recent $2000 gold price forecast is analyzed.
(Dec. 3rd, 2008) -- Citigroup has forecasted gold to reach $2000
in the coming year, a figure that compares closely with the inflation-adjusted
high of 1980. Further comparison of the dollar-denominated price
is made against gold as priced in many foreign currencies by
which gold is currently testing all time highs. Low interest
rate policy by the Fed (and other central banks), combined with
massive injections of bailout liquidity and the monetizing of
debt portend further currency depreciation and monumental price
inflation -- not only in the U.S., but worldwide. Featuring Pete
Grant and Jonathan Kosares. |
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RoundTable 17 minutes
TARP: Too early to call it a failure?
(Nov. 14th, 2008) -- A discussion of the Troubled Asset Relief
Program and how its highly fluid and flailing administration
has failed to engender confidence and stability in the financial
markets. The federal government appears largely powerless to
provide meaningful corrective measures beyond increasing injections
of liquidity, and this weekend's meeting of the G20 is expected
to take an unspoken shine to gold behind closed doors. Panelists
are P. Grant, J. Kosares and G. Cooper. |
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VideoBrief 7 minutes
The Presidential Election and Gold
(Nov. 3rd, 2008) -- A discussion of new presidential economics
and the need for a degree of austerity to right the economic
ailments of the nation, but the more likely prescription for
the long run will be the inflationary pill because it is politically
easier to swallow. Featuring P. Grant and J. Kosares. |
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VideoBrief 9 minutes
Physical Gold vs. Paper Gold
(Oct. 18th, 2008) -- The Comex gold contract price has been falling
in the face of a major banking crisis and unprecedented gold
demand by investors. Commodity-oriented bank and hedge fund positions
have been forced to deleverage and to liquidate profitable positions
to raise capital for margin calls and in response to shareholder/fundholder
redemptions in a flight to cash. Cash-holders and bond holders,
however, will soon realize that the negative yield against higher
inflation rates and inevitable currency depreciation will make
gold ownership a better alternative as a safe-haven. Featuring
P. Grant and J. Kosares. |
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VideoBrief 6 minutes
The Bailout & Physical Gold Shortages
(Oct. 3rd, 2008) -- A discussion of the Government bailout of
the U.S. financial sector, and a few words about physical gold
shortages and the initial signs of a growing price divergence
between the physical gold market versus the price quoted on the
gold derivatives market. Featuring P. Grant and J. Kosares. |
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RoundTable 9 minutes
The Financial Crisis & Gold
(Sept. 16th, 2008) -- Failures of Freddie Mac, Fannie Mae, Lehman
Brothers and the weakening of Merrill Lynch and AIG point to
a broadening systemic risk in financial markets that Alan Greenspan
describes as "a once in a century event", all leading
to increasing investor demand for gold to diversify portfolios.
Panelists are P. Grant, J. Kosares and G. Cooper. |
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VideoBrief 6 minutes
$100 oil and capital flows
(Sept. 5th, 2008) -- A discussion over the price of oil and the
ongoing flow of international funds into and out of various currencies
as they alternatively seek higher yield or safer havens from
inflation and/or recessionary economies. Featuring Pete Grant
and Jonathan Kosares. |
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RoundTable 16 minutes
A late-summer economic overview
(Aug. 12th, 2008) -- A discussion about gold's late-summer decline,
the dollar's rally, and an assessment of what lies ahead. Panelists
are Pete Grant, Jonathan Kosares and George Cooper. [part
2] |
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