Monthly Archives: July 2019

The next depression will be one for the record books

Daily Reckoning/Doug Casey/7-19-2019

“Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist – it will just change ownership.”

USAGOLD note:  Doug Casey says the next one will be big one. . . .


Repost from 7-22-2019

Posted in Today's top gold news and opinion |

Jerome Powell is wrong: The gold standard would help the world

EurasiaFuture/Adam Garrie/7-11-2019

“Perhaps ironically, Powell’s monetarily authoritarian remarks about gold were likely inspired by the fact that Donald Trump seeks to appoint the pro-gold Judy Shelton to the Federal Reserve’s influential board of governors. In this sense, Powell’s remarks are symptomatic of someone speaking from defensive position. As such, Powell’s defensive remarks are demonstrative of the fact that more and more people are looking to gold as a means of getting out of the inflationary traps and debt traps that are implicitly cyclical when one’s economy is predicated on the artificial value of a fiat currency.”

USAGOLD note: When Jerome Powell was asked about the gold standard during testimony before the Senate Banking Committee, it was not the first time a Fed chairman was questioned on the subject.  Alan Greenspan and Congressman Ron Paul had a long-running discussion on the merits of gold and the gold standard in the late 1990s and early 2000s.  We thought so much of those exchanges that we posted the transcripts in their entirety at the USAGOLD website’s Gold Classics Library where they still reside today.  The following is an excerpt from the Editor’s Note introducing the Greenspan-Paul dialogue:

“In putting this page together, I was struck with Dr. Paul’s ability to cut through the political gamesmanship that necessarily comes with being chairman of the Fed to Alan Greenspan, the man and political/economic philosopher. What emerges is a powerful figure conflicted between the practical manager charged with operating within the current fiat monetary system and the philosopher-academic with a ‘nostalgia,’ as he puts it, for the days of the gold standard. Without Dr. Paul’s incisive questioning, I doubt that this aspect of the Greenspan character would have found its way to the public venue and the historical record. Though the relationship appears adversarial at first blush, one also detects a certain amount of mutual respect and interest. Says Dr. Paul of the exchanges: ‘My questions are always on the same subject. If I don’t bring up the issue of hard money vs. fiat money, Greenspan himself does.'”


Repost from 7-18-2019

Posted in Today's top gold news and opinion |

Facebook’s fake money – A house is only as good as the foundation it’s built upon

Degussa/Thorsten Polleit/7-22-2019

“Against this backdrop, it becomes evident that the libra will suffer from all the economic and ethical deficiencies that come with its underlying fiat currencies. For instance, the Libra will be inflationary money to the extent that the US dol-lar, the euro, and all the other underlying fiat currencies are subject to inflation-ary measures by central banks, resulting in the Libra losing itspurchasing power in step with the fiat currencies. In extreme cases, if the official currencies were to go under, the Libra would follow suit. The Libra is therefore not a real alter-native to official fiat currencies, but rather a more straightforward andmore cost-efficient way to use them.

USAGOLD note:  A house is only as good as the foundation is in built upon. . .one of life’s most enduring and deeply-held fundamental principles.


Repost from 7-22-2019

Posted in Today's top gold news and opinion |

Gold steadies itself after abrupt drop at the COMEX open, pushes higher on the day

(USAGOLD – 7/26/2019) – Gold is steadying itself after an abrupt drop at the COMEX open in New York.  It is now up $5 on the day at $1420. Silver is down 1¢ at $16.44.  Gold had posted stronger gains in Asian and European trading overnight on comments from ECB President Mario Draghi that he would push for another round of stimulus before giving way to his successor in October.  That, along with the prospects a no-deal Brexit under the new Johnson government, pushed the euro lower against the dollar and gold higher in London trading. It is once again pushing against those overnight highs as this report is posted.

Watching all of this unfold, we were reminded of hedge-fund guru Ray Dalio’s assessment of the current political/investment climate as explained in a recent Linked-In article.  “[T]hose that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold,” he says. “Additionally, for reasons I will explain in the near future, most investors are underweighted in such assets, meaning that if they just wanted to have a better-balanced portfolio to reduce risk, they would have more of this sort of asset. For this reason, I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio. I will soon send out an explanation of why I believe that gold is an effective portfolio diversifier.”

Quote of the Day
“Notably too, central bank buying has been geographically diverse. Russia has been the most committed purchaser of gold – acquiring almost 275 tonnes in 2018, the largest amount ever purchased in a single year. China has been consistently adding to its reserves as well, but many other emerging market countries have been accumulating gold over the past year and more, including Hungary, Poland, Egypt, Kazakhstan and India.” – Isabelle Strauss-Kahn, former Director of Market Operations at the Banque de France

Chart of the Day

Chart note:  The OECD measures consumer confidence in various economies including the United States. A reading above 100 indicates a positive outlook toward the future economic situation.  Values below 100 reflect a more pessimistic outlook.  As you can see, we are now at a level in consumer confidence that has signaled downturns in the past.  In fact, consumer confidence is now ahead of where it was just before the 2008-2009 recession and just below the level it registered before the dot.com stock market bust in 2000.

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

Central bankers are playing a dangerous game with asset prices

Bloomberg/Enda Curran and Rich Miller/7-24-2019

“The world’s central banks are in danger of storing up problems for later by taking action to ensure the economic expansion stays on track. In cutting already low interest rates to bolster a sagging global economy, monetary policy makers risk fueling asset bubbles that may eventually burst and propping up zombie companies that could keep dragging down growth. They’re also encouraging a dangerous build-up in leverage in a world where total debt is already approaching $250 trillion.”

USAGOLD note:  The damned-if-you-do-damned-if-you-don’t problem in nutshell – well-stated and copiously detailed in this recommended article at Bloomberg. . . . . .

Posted in Today's top gold news and opinion |

Greenspan says it’s sensible for the Fed to think about ‘insurance’ cut

MarketWatch/Greg Robb/7-24-2019

“Former Fed Chairman Alan Greenspan said Wednesday it made sense for the Federal Reserve to be mulling an insurance interest-rate cut, even as the economy was performing relatively well. Asked in an interview on Bloomberg Television if it was ‘sensible’ for the Fed to be considering a so-called insurance rate cut, Greenspan said ‘yes.’ After all, the U.S. added a robust 224,000 new jobs in June, calming worries about the health of an economy now entering a record 11th year of expansion.”

USAGOLD note:  The maestro is back for an encore, backs the doves.

Posted in Today's top gold news and opinion |

The Fed has reached a turning point

Bloomberg/Narayana Kocherlakota/7-22-2019

“Now, the central bank has reached another turning point. At their next meeting on July 31, officials are very likely to respond to persistently low inflation and global trade risks by cutting interest rates for the first time in more than 10 years. On its own, such a move is of little importance to the economy.  But if history is any guide, it will mean that the Fed is highly unlikely to be willing to raise rates for the next twenty-five to fifty meetings. That is a big deal.”

USAGOLD note:  Kocherlata outlines a future scenario for Fed policy that could turn out to be bullish for our favorite precious metals.

Posted in Today's top gold news and opinion |

Seek out the protection of gold

PalisadesResearch/Interview/3-26-2019

“Gold has been a splendid hedge during times of financial disruption,” says Danielle DeMartino Booth, “We’ve now had a full on reversal of the global reflation trade. We are seeing the consequences with China’s economy slowing along with Europe’s. Right now is a very pivotal time for investors to seek out the protection of gold.”

USAGOLD note:  Timely overview and strategy from an individual who spent nearly a decade at the Dallas Federal Reserve . . . .


Repost from 4-5-2019 –  [New note:  Gold was trading at $1291 when we first posted the link to Dimartino Booth’s interview.]

Posted in Today's top gold news and opinion |

They’re running toward the fire

Hussman Funds/John Hussman/7-16-2019

“One of the most important warnings offered by firefighters is simple: get out early. In the face of wildfires, some homeowners get the idea of staying in their homes and riding it out. As one firefighter warned “The point is to go.” But if you don’t, it’s better to stay than to panic and run in the midst of a firestorm of smoke and embers. It’s not the fire that gets you. It’s the heat. Even before the flames reach the house, it can be fatal to stand outside trying to protect what you have (h/t John Galvin). Similarly, our “Exit Rule for Bubbles” is straightforward: You only get out if you panic before everyone else does. You have to decide whether to look like an idiot before the crash, or look like an idiot after it.”

USAGOLD note:  A not-so-subtle warning from John Hussman who says a 50% loss in the current stock market indices would be “optimistic”. . . . . . .


Repost from 7-17-2019

Posted in Today's top gold news and opinion |

Major gold bull markets are rare, but some investors are betting one is here

CNBC/Fred Imbert/7-19-2019

“Gold has been on fire this year, and some investors think the precious metal is poised to do something it has only done twice since World War II: enter a major bull market.”

USAGOLD note: The two post World War II bull markets cover the periods 1971-1981 and 2001-2011. Some think the current uptrend is part of bull market that began in late 2015 (scroll below for a related post.)  Also, for a long-term gold chart that shows the two bull markets, please visit this USAGOLD page and scroll to “Gold Price (Since 1970).”


Repost from 7-22-2019

Posted in Today's top gold news and opinion |

Central banks return to gold

World Gold Council/Isabella Strauss-Kahn/7-19-2019

“The dollar is the most widely held reserve asset but, according to International Monetary Fund statistics, gold comes third, accounting for 11% of global reserves. Having been net sellers until 2000, central banks have been net buyers ever since. In 2018 alone, central banks bought 651 tonnes of gold, up 74% compared to 2017 and the highest level since 1971. Over the past decade, central banks have purchased more than 4,300 tonnes of gold, taking their total holdings to around 34,000 tonnes today. The trend has continued in 2019, with net purchases reaching 90 tonnes before the end of the first quarter.”

USAGOLD note:  It is not only the points made in this excellent portrayal but also who is delivering it.  Isabella Strauss-Kahn is the former Director of Market Operations at the Bank of France and Lead Financial Officer for the World Bank. “This is where gold,” she says, “comes into its own, as it fulfills central banks’ three core objectives: safety, liquidity and return.” Her objectives, by the way, fit well those sought by most private investors.


Repost from 7-19-2019

Posted in Today's top gold news and opinion |

Gold, silver taking the day off

(USAGOLD – 7/25/2019) – Gold and its sister metal, silver, are taking the day off today with the former up only 50¢ at $1426 and the latter down 11¢ at $16.52. It has been a hectic, see-saw month for the two metals with silver coming out by far the best performer of the two. If we were to put a stamp on July 2019 thus far, it would be to say that the precious metals, with silver leading the way, have stood up uncharacteristically well to the annual summer slowdown. At current pricing, silver is up 8% on the month while gold is up 2.7%. Reuters reports silver ETFs now running at record levels of 666.2 million ounces with iShares Silver holdings rising nearly 13% this year – their best year since 2010. ETF demand is a closely-watched bellwether for fund and institutional interest in the precious metals.

Quote of the Day
“For years, gold’s corrections have been brutal, and that is why many erstwhile bulls have not rushed to buy this rally. They have instead been waiting for a nasty pullback in order to load up at bargain prices. But Mr Market has not obliged. Instead, retracements have been shallow and rallies steep. The latter have often occurred after-hours, but in one recent instance via a trampoline bottom that came early in the day. By playing hard-to-get, gold is displaying the most encouraging signs we have seen in a long, long while.” – Rick Ackerman, FXStreet

Chart of the Day

Chart note:  Whether or not China will begin unloading its very large hoard of U.S. debt is a subject of much concern, but its intentions are one part of the much larger global de-dollarization puzzle. This chart shows the change in U.S. debt held by foreigners and international investors in billions of dollars from 1970 to present.  The level of ownership grew proportionately over time in concert with the overall issuance of U.S. debt until 2015, when it began to fall off.  The problem is not just that foreign investment in U.S. Treasuries is on the wane.  It is that the retreat has come at a time when U.S. borrowing needs are expected to consistently exceed $1 trillion per year. The question becomes, “How is the U.S. federal debt going to get financed?”  (For more detail, please see The $12 trillion federal debt bombshell –  A NEWS & VIEWS SPECIAL REPORT)

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

JULY SPECIAL OFFER
Better date 1900 $20 Liberty priced right

With gold starting to take off, our July offer affords an opportunity to ‘go back in time’ so to speak. First, we have a very limited group of 1900 dated MS63 $20 Liberties graded by NGC.  3x as rare as the more common 1904’s, yet $25 per coin less expensive, still trading at multi-year lows in terms of premium, and $250+ dollars per coin less than the last time gold traded in the low $1400’s (2013). 

These are paired with a batch of stunning Brilliant Uncirculated pre-1900 Belgian 20 Francs offered at a deep discount (5% off!), and less per ounce than a modern bullion equivalent.


JULY SPECIAL OFFER
Available for immediate shipment.
Only 50 of the 1900 $20 Liberties and 500 of the Belgian 20 francs available.
First come-first served


ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

ORDER ONLINE • Description/Details

Posted in Premium Bulletin Board |

The Great American Debt Bubble
Is it going to burst?

“The U.S. economy may be in the middle of its largest expansion in history, but record levels of debt could signal trouble on the horizon. In February 2019, the U.S. national debt reached a record $22 trillion, and the annual deficit for this year alone is expected to be almost $1.1 trillion. At the consumer level, household debt (which includes mortgages, auto loans, student loans, and credit card debt) has risen for 19 straight quarters. With these overarching trends in mind, we compiled 10 of our recent visualizations to show a more complete picture of debt in the U.S. Here’s what we learned.”

For the full visualization: HowMuch/Raul/7-22-1029

 

Posted in Today's top gold news and opinion |

A decade of low interest rates is changing everything

Bloomberg/Liz McCormick/7-23-2019

“The longevity of low rates has upended long-standing assumptions about money and reshaped a generation of investors, traders, savers, and policymakers. The Federal Reserve has tried to push the U.S. into a higher-rate regime, raising rates nine times since 2015, when the key short-term rate was near zero. But now the central bank appears ready to reverse course and start cutting again when it meets at the end of July.”

USAGOLD note:  We have tracked closely the effects of low interest rates on the gold market over the years here at USAGOLD and will continue to make it a priority in the future. Since the first inklings in December, 2018 of the interest rate regime change, gold’s reaction has been to track higher.  It is up 9.5% this year.  (Silver is up 6.8%).  Investors globally see the precious metals as a viable alternative in the low-interest rate environment – safe havens that bring to the table the prospect of capital appreciation.  Therein lies their appeal in the zero-interest rate environment.

Posted in Today's top gold news and opinion |

JULY SPECIAL OFFER
Better date 1900 $20 Liberty priced right

With gold starting to take off, our July offer affords an opportunity to ‘go back in time’ so to speak. First, we have a very limited group of 1900 dated MS63 $20 Liberties graded by NGC. 3x as rare as the more common 1904’s, yet $25 per coin less expensive, still trading at multi-year lows in terms of premium, and $250+ dollars per coin less than the last time gold traded in the low $1400’s (2013).

These are paired with a batch of stunning Brilliant Uncirculated pre-1900 Belgian 20 Francs offered at a deep discount (5% off!), and less per ounce than a modern bullion equivalent.


JULY SPECIAL OFFER
Available for immediate shipment.
Only 50 of the 1900 $20 Liberties and 500 of the Belgian 20 francs available.
First come-first served


ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

ORDER ONLINE • Description/Details

Posted in Today's top gold news and opinion |

This is water

Epsilon Theory/Ben Hunt/4-17-2019

“Financialization is the smiley-face perversion of Smith’s invisible hand and Schumpeter’s creative destruction. It is a profoundly repressive political equilibrium that masks itself in the common knowledge of ‘Yay, capitalism!’. Financialization is a global phenomenon. In China, it’s transmitted through the real estate market. In the US, it’s transmitted through the stock market. Financialization is the zombiefication of an economy and the oligarchification of a society.”

USAGOLD note:  Profound insights that cry to be passed along. . . .but what is the likely  outcome?  Because financialization can go wrong in a heartbeat and no human can predict the outcome, you will need some gold and silver tucked away (it covers alot of the contingencies) . . . Then playing the markets or not playing the markets – whichever your choosing – has a financial and psychological backstop, a fall-back position that provides a little peace of mind amidst Hunt’s ongoing zombiefication and oligarchification (described at the link above).


Image by Trevor Mattea [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)] Edited-Cropped


Repost from 4-21-2019

Posted in Today's top gold news and opinion |

Weekly Commentary: Living Life Near the ZLB

Credit Bubble Bulletin/Doug Noland/7-20-2019


“This work highlighted a number of conclusions based on model simulations. In particular, monetary policy can mitigate the effects of the ZLB in several ways: The first: don’t keep your powder dry—that is, move more quickly to add monetary stimulus than you otherwise might… When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress. …My second conclusion, which is to keep interest rates lower for longer. The expectation of lower interest rates in the future lowers yields on bonds and thereby fosters more favorable financial conditions overall… Finally, policies that promise temporarily higher inflation following ZLB episodes can help generate a faster recovery and better sustain price stability over the longer run. In model simulations, these ‘make-up’ strategies can mitigate nearly all of the adverse effects of the ZLB.”

USAGOLD note:  Such are the words of John Williams, president of the Federal Reserve Bank of New York, occupant of perhaps one of the top two or three positions in the federal economic bureaucracy. We highlight the sympathy expressed because it has so much to do with gold’s recent price performance. As for the Credit Bubble Bulletin, I think it important to note that we include Mr. Noland’s thinking weekly at USAGOLD simply because. . . .well. . . .simply because it makes a great deal of sense.


Repost from 7-20-2019

Posted in Today's top gold news and opinion |

Kyle Bass says U.S. bond yields might go to zero

Financial Times/Ortenca Aliaj and Robin Wigglesworth/7-17-2019

“Kyle Bass, the outspoken hedge fund manager who rose to prominence through prescient bets against the US housing market, Greece and Iceland, is now wagering that US interest rates will collapse to near zero next year as the country enters a recession and the Federal Reserve is pushed into crisis mode.”

USAGOLD note:  Bass has a wide following among gold owners. Let’s not forget that he was the advisor who recommended that the University of Texas buy gold with its wealth fund (which it did).  He now believes, as this article reveals, that the United States could go the way of Europe and Japan – deep into the realm of “the zero bond yield world.” If gold’s performance has been impressive the result of potentially lower rates, how might it react if the yield on the 10-year Treasury actually went to zero?


Repost from 7-17-2019

Posted in Today's top gold news and opinion |

Fed’s wisest strategy is to cut interest rates at first sign of economic distress, Williams says

MarketWatch/Greg Robb/7-18-2019

“Given that its benchmark interest rate is so close to zero, the most effective strategy for the Federal Reserve is to cut rates at the first sign of trouble, said New York Fed President John Williams, on Thursday.”

USAGOLD note:  Williams, Clarida and Powell – a pretty formidable trifecta – laying  groundwork for the July end FOMC meeting.


Repost from 7-19-2019

Posted in Today's top gold news and opinion |

Gold Classics Library

Britain’s Gold Sales ‘a Reckless Act’
(Sir Peter Tapsell’s speech before the House of Commons, June 16, 1999, on the partial sale of United Kingdom’s gold reserves)

We do not update our Gold Classics Library often, but when we do we try to choose items that have a timeless quality.  This latest selection certainly meets that standard. It comes to us unexpectedly as a by-product of research for the recently published article, The Power of Gold Diversification, and with the kind permission of the United Kingdom Parliamentary Archives.

Many associate Britain’s sale of nearly 60% of its gold reserves in 1999 with the beginnings of gold’s secular bull market. The government’s rationale for the sale, as explained by then Economic Secretary to the Treasury Patricia Hewitt, was to “achieve a better balance” in its reserves by going to foreign currencies.  Sir Peter Tapsell took the opposite tack.  “The Chancellor [of the Exchequer] may think that he has discovered a new Labour version of the alchemist’s stone,” he argued, “but his dollars, yen and euros will not always glitter in a storm and they will never be mistaken for gold.”

History’s indisputable verdict is that Tapsell was correct and the British government wrong.  The ensuing nearly two decades featured a global financial crisis, low-to-zero-percent interest rates, scrambling central banks, and the consistent depreciation of global currencies against gold. Currencies did not glitter in the storm, and they could not have been mistaken for gold which rose relentlessly from $287 per ounce at the time of his speech to the current price of over $1300 (at one point reaching almost $1900 per ounce in 2011).  Though his speech before the House of Commons failed to stop the sales, it goes down as one of the most eloquent appeals ever made on the merits of gold ownership for nation states and individuals alike.

[LINK]

[Gold Classics Library Index]

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Posted in Gold Classics Library, Today's top gold news and opinion | Tagged |

Why are premiums on sovereign bullion higher than on generic bullion?

CoinWeek/BullionSharkLLC/7-22-2019

“[I]t is important to understand why one pays a premium for 1 oz silver coins like the American Silver Eagle, Canadian Silver Maple Leaf, South African Silver Krugerrand, and many more sovereign silver coins. The premiums for these pieces can be in excess of $2 per ounce for silver when compared to a generic 1 oz silver round. The premiums for sovereign gold bullion can be in excess of $50 per ounce. Let’s dive into why.”

USAGOLD note: Our clientele almost always buys bullion in the form of gold and silver coins. This article provides an excellent overview if you are in the process of making a decision on what kind of gold and silver will best serve your needs.

Posted in Premium Bulletin Board |

Gold, silver rise sharply in Asia, momentum carries over to London and U.S. trading

(USAGOLD – 7/24/2019) – Gold rose sharply during Asian trading hours on revived safe-haven buying prompted by a range of concerns from Taiwan independence to the future value of the dollar.  Up as much as $10 during Asian trading hours, momentum carried over to London trading and U.S. futures market open.  It is now up $9.50 on the day at $1426.50. Silver, not to be denied, is up another 24¢ this morning at $16.59.  Underlying the strength in both metals is the trend to lower rates globally and speculative short liquidations and fresh purchases in the paper gold market.

“The U.S. dollar (USD) has been the world’s dominant reserve currency for almost a century,” says JP Morgan in a recently released client advisory. “As such, many investors today, even outside the United States, have built and become comfortable with sizable USD overweights in their portfolios. However, we believe the dollar could lose its status as the world’s dominant currency (which could see it depreciate over the medium term) due to structural reasons as well as cyclical impediments.  As such, diversifying dollar exposure by placing a higher weighting on other currencies in developed markets and in Asia, as well as precious metals makes sense today.

Quote of the Day
“Perhaps ironically, Powell’s monetarily authoritarian remarks about gold were likely inspired by the fact that Donald Trump seeks to appoint the pro-gold Judy Shelton to the Federal Reserve’s influential board of governors. In this sense, Powell’s remarks are symptomatic of someone speaking from defensive position. As such, Powell’s defensive remarks are demonstrative of the fact that more and more people are looking to gold as a means of getting out of the inflationary traps and debt traps that are implicitly cyclical when one’s economy is predicated on the artificial value of a fiat currency.”  – Adam Garrie, Eurasia Future

Chart of the Day

Illustration courtesy of HowMuch.net

Chart note: “You don’t fight a trade war without ammunition on both sides,” says HowMuch.net. “In compiling the data of the largest reserves–or total reserves measured in U.S. dollars – you’ll find a keen perspective as to why the markets seem to react to every headline related to the U.S.-China trade wars. Why do liquid reserves matter? As it relates to trade wars, a country’s reserve stockpile has a large say in how much economic weight it can throw around. If China stockpiles a large amount of U.S. dollars, it can influence the value of its own currency, the yuan, which is pegged in U.S. dollars. Given that China holds over $3 trillion in reserves–far higher than Japan’s second-place $1.24 trillion–any movement from China can mean massive economic consequences for the globe.”

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

Who’s ready for decades of low or negative U.S. interest rates?

MarketWatch/Jared Dillian/7-23-2019

“He might have to replace the Fed chairman in the process. Judy Shelton and Christopher Waller (decidedly a soft money advocate) are both chairperson material. My guess is that it would be Richard Clarida who has the resume for it and also has been very malleable to Trumponomics. This goes back to what I wrote about two weeks ago: Trump is an unstoppable force that is going to change the face of macroeconomics for decades.”

USAGOLD note:  This article is mostly a critique of Judy Shelton’s simultaneously endorsing zero per cent interest rates and the gold standard.  Some see it as hypocritical, but as long as gold standard advocates are asked to function in a Keynesian system when they don their administrative hat, they will have an opinion as to what should be done with that system in this time and place.  Alan Greenspan, another gold standard advocate, was one example of that dichotomy in action. Perhaps Judy Shelton will be another. “People should spend less time thinking about whether the U.S. women’s team is invited to the White House,” says Dillian, “and more time thinking about why Judy Shelton is a ZIRP NIRP gold bug.”

Posted in Today's top gold news and opinion |

Gold’s rally will not stop here

GreenwoodInvestments/SeekingAlpha/7-22-2019

“Gold has always been seen as an important diversifier in an investor’s portfolio, both as a hedge against inflation and equity fluctuations. However, investors should start thinking of gold as an Alpha generator in their portfolios. Gold’s technical picture has changed this year, and I strongly believe it is set to embark on a multi-year uptrend.”

USAGOLD note:  An alpha generator, according to Investopedia, is “any security that, when added to an existing portfolio of assets, generates excess returns or returns higher than a pre-selected benchmark without additional risk.”

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

UBS CEO warns of ‘dangerous bubbles’ spurred by central banks

Bloomberg/7-23-2019/Ksenia Galouchka and Manus Cranny/7-23-2019

“UBS Group AG’s chief executive officer is sounding the alarm on fresh monetary easing just as European policy makers appear poised to deliver another helping to stimulus-hungry markets. ‘I’d be very, very careful about growing further the balance sheet of central banks,’ Sergio Ermotti said in a Bloomberg TV interview on Tuesday, ahead of the European Central Bank’s policy decision this week. ‘We are at a risk of creating an asset bubble.'”

USAGOLD note:  The trouble with asset bubbles is that they tend to burst unpredictably and wreak all sorts of financial system havoc in the process. “Asset prices,” says Ermotti, “went up but it’s not really correlated with investor sentiment, which is in my point of view, of course, a very dangerous development.”

Posted in Today's top gold news and opinion |

Why this gold rally feels different

FXStreet/Rick Ackerman/7-18-2019

“For years, gold’s corrections have been brutal, and that is why many erstwhile bulls have not rushed to buy this rally. They have instead been waiting for a nasty pullback in order to load up at bargain prices. But Mr Market has not obliged. Instead, retracements have been shallow and rallies steep. The latter have often occurred after-hours, but in one recent instance via a trampoline bottom that came early in the day. By playing hard-to-get, gold is displaying the most encouraging signs we have seen in a long, long while.”

USAGOLD note:  Good bottom line analysis and advice from an analyst who’s taken a few laps around the track. . .through thick and thin.


Repost from 7-20-2019

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Goldman admits the Fed has lost control

ZeroHedge/Tyler Durden

“Yet as we noted in January, being held hostage, or captive, by the market is nothing new to Powell; in fact, it was way back when in March 2013, ahead of the Fed’s taper announcement, that the Fed chair first realized that it was not the Fed that controls the market, but rather – after years of ZIRP and QE – the Fed had become a hostage of the market’s every whim. And now, none other than the world’s biggest incubator of central bankers, Goldman admits as much.”

USAGOLD note:  We’ve alluded to the Fed’s being forced to chase the market on rates previously in connection with recent thinking from Jeffery Gundlach.  This piece by Tyler Durden is one for the deep-thinkers out there. Be aware that reading it could upend the comforting belief that the Fed is in control of the situation . . .


Repost from 7-8-2019
Posted in Today's top gold news and opinion |

Jim Rogers: Get ready for the next bear market; ‘It’s going to be terrible’

Money and Markets/JT Crowe/7-12-2019

“The way these things have always worked, in 2007, Iceland went bankrupt, and most people had no clue about that and didn’t know or care, and then later though, Ireland went bankrupt. Few more people noticed. A little while later after that, Bear Stearns went bankrupt. A few more people started noticing. A few weeks later, Northern Rock went bankrupt, then people started catching on. Eventually, Lehman Bros. went bankrupt and by then it was on the evening news all over the world.”

USAGOLD note:  Rogers makes an important point for investors to consider in terms of formulating a crisis response.  Of course, the best strategy is to diversify ahead of time in the interest of buying right and keeping the psychological damage to a minimum. It takes awhile for the public to actually believe that a crisis is underway.  Most often, a major event – like Lehman Brothers in late 2008 – precipitates the full-out response. Up until then, the markets (including gold) tend to react slowly and gather pace gradually as investors sort out whether or not the crisis is real or a false alarm that the authorities have under control.  Once the seminal event occurs, the market reaction can last many months – even years.


Repost from 7-15-2019

Posted in Today's top gold news and opinion |

White House knows it needs the Fed to make a dent in the dollar

Bloomberg/Katherine Greifeld and Saleha Mohsin/7-17-2019

“Administration officials believe that for any move on the dollar to succeed, the Fed must agree with the policy and clearly communicate its support, according to people familiar with the matter. The Treasury Department and Fed have coordinated the last three U.S. currency interventions, splitting the amount transacted evenly between them in 1998, 2000 and 2011 in order to nudge the dollar’s value.”

USAGOLD note:  As we mentioned in a previous post, the Treasury’s ability to sell dollar holdings is limited.  For a devaluation policy to have teeth, the Fed must join-in with dollar balances it can tap to sell into the foreign exchange market against various competitive currencies.


Repost from 7-18-2019

Posted in Today's top gold news and opinion |