“Today, over 95% of New York Stock Exchange trades are generated by robots using algorithms to decide when to buy and sell. These are not matching systems (which have been around since the 1990s). These are trading robots that decide what to do without human intervention.”
USAGOLD note: Ricards says the time has come to move out of stocks and reallocate in bonds, cash and gold, but the memorable takeaway in this article is his view on what he calls ‘trading robots’ that ‘buy or sell based on headlines and keywords.” We highly recommend Ricard’s latest at the link. . . . . . .
“What’s happened is that the Federal government has borrowed money and ultimately that loan is held by the central bank which increases the central bank’s balance sheet size and thereby in there for the monetary base. So it’s the equivalent of debt monetization. When you question whether it’s quantitative easing, whether the current Fed chairman says it’s something different from that, whether it’s money printing, it’s really all the same things because all it is, it’s the Fed increasing the size of its balance sheet by buying Treasuries in one form or another.”
USAGOLD note: David Einhorn, who heads up Greenlight Capital, is one of the many hedge fund proprietors who advocates gold ownership. Einhorn learned about gold from his grandfather – lessons he has never forgotten.
Here is the link to the original Anchor interview (audio). ZeroHedge posts a transcript at the link above.
“Inflows into gold ETFs have moderated — a positive signal . . . “
USAGOLD note: This article explores the thinking on gold from Jeff DeGraaf (Renaissance Macro Research) – one of Wall Street’s ‘most widely followed chart watchers’ and a contrarian.
“Lending would get expensive. Food, energy, and even medical services could all shoot up in price. Not good if you’re Chairman Powell and want to give the impression that the Fed has control of U.S. monetary policy. But the most alarming part of this is ‘real’ inflation may already be over 5%.
Courtesy of TradingEconomics.com
Related: Bloomberg/Emily Barrett/Traders already bracing for wild week ahead/12-7-2019
“‘We still see upside in gold as late cycle concerns and heightened political uncertainty will likely support investment demand’ for bullion as a defensive asset.”
USAGOLD note: Gold demand has been down on a global basis this past quarter, but at the first sign of trouble in the global economy we expect that demand to ramp up quickly – as Goldman says for ‘defensive’ purposes.
Image courtesy of Bullion Star
“The idea that in such circumstances there is a case for making a countercyclical ‘helicopter money’ drop – in which a central bank pumps cash into the economy — is one area in which so-called modern monetary theory is correct: when there is no doubt, shovel it out.”
USAGOLD note: Buiter argues in this opinion piece that the Fed is restricted in what it can do to aid the economy because it will not violate zero percent interest rates – a ‘binding constraint’ that if violated would create ‘upheaval’ among money market funds. That leaves quantitative easing as the logical course of action for the Fed. Not only does Buiter see QE as on the horizon, he also sees MMT, helicopter money and large doses of fiscal stimulus as options should the U.S. enter a recession.
“The unprecedented buildup of speculative leverage throughout the twenties boom played an instrumental role in systemic liquidity abundance that fueled both financial distortions and economic maladjustment. Confidence in the Federal Reserve’s capacity to sustain marketplace liquidity was instrumental in bolstering a progressively speculative market environment that culminated in the 1927 to 1929 speculative blow-off.”
USAGOLD note: It is difficult to read that paragraph without thinking about the present relationship between the Fed and financial markets. . . . “.As the late Dr. Kurt Richebacher would often repeat,” writes Noland ‘the only cure for a Bubble is to not let it inflate.’” Noland’s latest another good read – at the link.
Image courtesy of HowMuch.net
USAGOLD note: Stoferle, along with Mark J. Valek, publish the widely circulated and referenced In Gold We Trust annual report. In this interview, Stoferle says “It is crystal clear. We are in a gold bull market again.” The most important opinion expressed is that the start of something different, perhaps very special, occurred in the gold market over the past 30-days or so. Stoferle and his hosts at MacroVoices delve into just what that “something” might be. If you are looking for fundamental insights on gold’s price potential, this interview will get you where you want to be.
Re-post from 8-11-2019
“Gold broke down from a bull market in 2012/2013 – nearly 7 years ago. Now, Gold has broken resistance near $1375 and is technically in a full-fledged Bull Market. The importance of this is the 7-year cycle and how the rotation in Gold, between the high near $1923 and the low near $1045 represent an $878 price range. The upside (expansion) rally in Gold may very well move in expanding Fibonacci price structures – just like it did in 2005 through 2012. If this is the case, then we may expect to see an ultimate peak price in Gold well above $3500.”
USAGOLD note: Super-bull Chris Vermuelen dives deep to tell why he thinks gold is about to lift off the launch pad. . . . .
Gold in six easy lessons
1. Don’t buy it because you need to make money; buy it to protect the money you already have.
2. Don’t look at price as a barrier; look at it as an incentive.
3. Don’t buy the paper pretenders; buy the real thing in the form of coins and bullion.
4. Don’t fall prey to glitzy TV ads; do your due diligence instead.
5. Don’t allow naysayers to divert your interest; allow yourself the right to protect your interests as you see fit.
6. Don’t forget the golden rule: Those who own the gold make the rules!
“The failure of Abenomics has been phenomenal. The balance sheet of the central bank of Japan has ballooned to more than 100% of the country’s GDP, the central bank owns almost 70% of the country’s ETFs and is one of the top 10 shareholders in the majority of the largest companies of the Nikkei index. Government debt to GDP has swelled to 236%, and despite the record-low cost of debt, the government spends almost 22% of the budget on interest expenses. All of this to achieve what?”
USAGOLD note: There is a certain inevitability in the path Japan has taken economically and there is a growing contingent of economists who believe that the rest of the industrialized world is fated to follow it as a matter or course.
Repost from 11-3-2019
“China’s state-backed Zijin Mining Group has agreed to buy Continental Gold for $1bn, as the industry’s consolidation accelerates.”
USAGOLD note: The article points out that China’s mining companies are likely to make more acquisitions “given the metal’s strategic importance to Beijing.” Ziijn MIning Group is state-owned.
Repost from 12-3-2019
“Of course, the name is something of an oxymoron; there is really nothing modern about this monetary theory. Confusing money-creation with wealth creation was at the core of the debate between John Law and Richard Cantillon 300 years ago. For Law (a Scot who fled British justice, took refuge in France, and within a few years managed to drive what was then the leading economic power of the day into near bankruptcy), increases in the supply of money would lead to the employment of unused land and labor, which in turn would lead to higher productivity. Meanwhile, Cantillon explained in his Essay On Commerce that mistaking money for wealth always leads to disaster.”
USAGOLD note: At the risk of sounding cynical, it would not be difficult to imagine the Federal Reserve – make that the world central banks – proceeding with some version of MMT even while railing against it and saying they would never engage in such a thing. How far from MMT was quantitative easing? Not far, we would venture.
Repost from 3-17-2019
“A decade of easy money has left the world with a record $250 trillion of government, corporate and household debt. That’s almost three times global economic output and equates to about $32,500 for every man, woman and child on earth.”
USAGOLD note: Nobody knows where this all ends, but there is plenty of opinion floating around out there. History tells us that there always comes a breaking point and when it comes, it pays to have taken precautions against it.
Repost from 12-2-2019
Gold coins, hoofs found in 2,000 year old Chinese tomb
“Chinese archaeologists. . . discovered 75 gold coins and hoof-shaped ingots in an aristocrat’s tomb that dates back to the Western Han Dynasty (206 BC – 24 AD). The gold objects — 25 gold hoofs and 50 very large gold coins — are the largest single batch of gold items ever found in a Han Dynasty tomb. They were unearthed from the tomb of the first ‘Haihunhou’ (Marquis of Haihun) in east China’s Jiangxi Province. The coins weigh about 250 grams each, while the hoofs’ weights vary from 40 to 250 grams, said Yang Jun, who leads the excavation team.” – Xinhuanet/11-17-2015
USAGOLD note: These gold artifacts were found along with a portrait of Confucius, perhaps the oldest known. Wisdom and gold make easy company. Confucius once said something that has current applicability: “In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.” Or at the very least, well-hedged . . . . . . . .
“The Reserve Bank of India’s efforts to support the flagging economy are turning out to be a bane for the rupee. The currency is the worst performer in emerging Asia this quarter, and analysts say that’s because the central bank is mopping up dollars gushing into local stocks and bonds.”
USAGOLD note: None of this, of course, has been lost on the gold market when priced in terms of the Indian currency – up 17.5% thus far in 2019. There is much talk of gold imports declining as prices increase, but as long as the currency is in decline investors will add gold to their holdings to hedge against the possibility of it going from bad to worse.
Chart courtesy of TradingView
Repost from 11-3-2019
December Special Offer
$20 Liberty Type II 1875-S PCGS AU58
AGW: .9675 oz –– Quantity Available: 50
Rationale: Use the link below, or by clicking the image above, to view a more complete rationale, but some quick highlights: Only 820 1875-S $20 Liberties have achieved grade AU58 according to PCGS and only 1375 have been graded higher, yet these are being offered at a $15 per coin discount to standard $20 Liberty gold coins – an undeniable ‘value-add’ opportunity.
In lieu of additional details on these coins specifically, we thought we’d offer a little market analysis along with this month’s special offer. We found this to be an interesting – and timely – analysis. Look at the following dates in which gold bottomed in the fourth quarter over the last four years, and the subsequent gains realized by the end of January of the ensuing year.
Low in gold prices: December 2nd – Price of gold: $1053.00
Price January 31st, 2016: $1118.00
Low in gold prices: December 15th – Price of gold: $1128
Price January 31st, 2017: $1210
Low in gold price: December 11th – Price of gold: $1241.00
Price January 31st, 2018: $1345
Low in gold price: October 8, but within $14 of the low on November 27th – Price of gold $1200 (Oct), $1214 (Nov)
Price January 31st, 2019: $1321
Gain: 8.8% (Nov), 10% (Oct)
Can you see the pattern? It goes without saying that past performance in no way guarantees future performance, but the trend is unmistakeable – and accelerating – with each year’s performance from the 4th quarter low to the end of January providing admirable and increasing returns. And with gold pulling back roughly $100 from the highs seen in August (including $15 today), one has to wonder if it isn’t setting up perfectly for a repeat.
We also have a few other intriguing and attractively priced opportunities
if this offer sells out or doesn’t suit your interest. Give us a call.
(USAGOLD – 12/6/2019) – Gold took an abrupt but not wholly unexpected turn to the downside in the wake of this morning’s job report which showed strong gains in U.S. payrolls for November. The metal is down $13 at $1463. Silver is down 20¢ at $16.77. Gold analysts had warned earlier in the week that a strong payrolls number could lead to price weakness. At the same time, some are likely to see the latest surge in stock values – the DJIA is up 180 as this report is posted – as an opportunity to trim positions. Likewise, some will see gold’s weakness as an opportunity to buy. It will be interesting to see if the early reaction sticks as the day wears on and we move into next week. Today’s strength can quickly turn to tomorrow’s weakness and vice versa.
“The major stock market indices will move sideways through the remainder of the month (and year) to end the year about where they are now,” says James Ricards in a fascinating piece on programmed trading (Time to reduce exposure to the stock market) posted at Daily Reckoning. “That said,” he continues, “if markets move outside a narrow range, there is more downside potential than upside. This is a good time to lighten up on equity exposure and reallocate to bonds, cash and gold.” In explaining the role of computerized trading in the chronic see-saw market action in stocks, bonds and gold, Ricards asks, “How is a robot supposed to understand a highly conflicted human? It can’t. But, it can issue automated buy and sell orders on every new headline.”
Chart of the Day
Chart note: “For the first time in 20 years,” says SentimenTrader’s Jason Goepfert, “the big money is betting against stocks. The latest semi-annual survey of big money managers by Barron’s showed a Bull Ratio below 50% for the first time ever, far surpassing the previous all-time pessimistic reading in October 2002.”