Monthly Archives: November 2020

Biden team denies rumors of pushing for smaller stimulus deal

CNBC/Jacob Pramuk/11-23-2020

graphic image of 'off-on' switch“Biden spokesman Andrew Bates called the report ‘incorrect.’ In a statement to NBC News, he said the president-elect ‘fully supports the Speaker and Leader in their negotiations.'”

USAGOLD note:  It appears that the markets, including gold, are attempting to sort out how to interpret this news. Is stimulus on again? Or off again? The gold market read this report as stimulus negative and promptly dropped over $30 yesterday.

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Treasury-Fed rift raises concern over future crisis lending

Financial Times/James Politi and Eric Platt/11-21-2020

graphic image of walking a tightrope between night and day“The move by Mr Mnuchin jeopardized a very effective partnership with Mr. Powell that was crucial to securing a hefty US policy response to the coronavirus crisis early on.”

USAGOLD note:  This article goes on to make a point that the Fed may not be at the ready should another round of financial crisis suddenly descend upon Wall Street. In the wake of Mnuchin’s pulling of various credit facilities, corporate, state and municipal debt look particularly vulnerable – areas of concern already high on investors’ worry lists.

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Fitch Solutions: Gold mine production to grow by 2.5% annually on average over next decade

MiningWeekly/Tasneem Bulbulia

graphic image of pick and shovel symbolic of gold mining industry“Global gold mine production growth will rebound in the coming years, underpinned by higher gold prices and mergers between major mining firms, Fitch Solutions Country Risk and Industry Research says.”

USAGOLD note:   A quick overview of global mine production by country …… Much of the growth projected, they say, will come from Russia – a country that largely keeps its production within its own borders.


Repost from 11-18-2020

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Dudley says more fiscal stimulus needed even with vaccines

CNBC/Jeff Cox/11-16-2020

photgraph of the seal of the Federal Reserve system“Even with the good news, Dudley said additional bridge money of $1 trillion to $2 trillion will be needed to get impacted individuals and businesses to the other side.”

USAGOLD note: Though no longer running the New York Fed, Dudley is pretty much following along with the consensus already voiced publicly by many Fed luminaries. This is the first time we can recall seeing anyone connected with the central bank offer a number.


Repost from 11-18-2020

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The little and big picture

Blain’s Morning Porridge/Bill Blain

graphic image of road sign reading Welcome to Bedlam

“However, it’s at the individual level where things really start to happen.  It’s a single pebble shifting that triggers a landslide. It’s the butterfly flapping its wing…. You know the story. Maybe the tipping point is a worker who just lost their job in a cinema because some exec decided to delay a film release. Or maybe it’s in the petty bureaucratic pain of trying to deal with a bank, or get an appointment to get your eyes tested. (I’m told the number of homeworkers suffering eye strain has gone through the roof.) As we get more and more frustrated and annoyed, there is an increasing sense that nothing really works or makes much sense anymore.  Our anger and sense of injustice is rising. Whoever shouts loudest seems to get all the attention. Things just ain’t working. Nothing seems to make sense anymore.  We are losing faith in decision-makers.”

USAGOLD note:  Some organizations have adapted very well to the new abnormal while others haven’t a clue. We all find ourselves separating the wheat from the chaff in that regard these days – and it soaks up valuable time. As for the bigger picture – the macro-political and economic scene – Blain is onto something. Things just don’t seem to be working very well.


Repost from 11-16-2020Repost from 10-14-2020

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China is getting back to normal and that’s a win for gold

Daily Wealth/Brian Tycangco

photo of Chinese Panda 1-oz gold coinWhat I learned along the way is that when the Chinese want gold, price doesn’t matter. And that goes a long way to explaining why the metal can rise much higher from here. Let me explain… If the Chinese want gold, they’ll pay any price for it. This became especially clear to me in 2012, during gold’s last major bull market.I was in Hong Kong which, at that time ……”

USAGOLD note:  Some interesting perspective on China’s cultural attachment to gold …… Based on the writer’s direct experience.


Repost from 10-8-2020

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Which is better?
A gold ETF or outright ownership of the real thing?

Not a day goes by that one gold ETF or another is reporting strong gains to its stockpile. Most of those gains come from financial institutions and hedge funds boosting their portfolio positions. We applaud Wall Street’s move to gold. At the same time, though an ETF might make sense for funds and institutions, it might not be the best choice for private investors interesting in owning gold for long-term asset preservation purposes.

Gold ETFs, says Simon Black of the SovereignMan website, are “purely a financial product that defeats the entire purpose of owning gold to begin with. Why turn one of the best, longest-standing physical assets in the history of the world into a paper asset? With this type of debt instrument, you don’t actually own the gold yourself. You become a creditor with nothing more than a claim on someone else’s gold.”

At USAGOLD, we have an alternative you might want to consider ……

The Precious Metals Safe Storage Advantage

Image of golden safe doorIt only takes a few minutes to complete a Precious Metals Safe Storage account opening form, but it could mean all the difference for the investor seeking a superior alternative to gold and silver ETFs. We use the word “superior” because depository storage accounts come with an option not readily available in most ETF accounts – You can take delivery of the metal in your account, or any portion of it, whenever you wish.

At the same time, given the exclusive preferred referral storage rate you receive by opening your storage account through USAGOLD, the annual cost to maintain your holdings is comparable (and often lower) to what most ETF vendors charge in annual fees. All the while, your metal is stored safely and fully insured at one of America’s oldest, largest and respected independent depositories – a firm with which we personally have done business for decades. To get started, we invite you to go to the link immediately below and fill out the application.

Account Form – Precious Metals Storage Account


Interested in the convenience of an ETF but want gold and silver you can get your hands on?
DISCOVER THE USAGOLD DIFFERENCE
ORDER DESK:1-800-869-5115 x100/orderdesk@usagold.com
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Bull case for gold remains despite coronavirus vaccine

Stockhead/Derek Rose

cartoon image of snorting gold bull“Vaccine should ultimately be a boon for gold bugs, as the Fed could keep nominal rates capped while inflation expectations could firm further as a result,’ … ‘We believe that there is still a clear appreciation for gold amid all the uncertainty that still persists,’ the bank said. ‘Gold’s story is not yet over in our view.’”

USAGOLD note:  The quote above is from Canada’s TD Securities and reflects the prevailing view among many gold market analysts.


Repost from 11-16-2020

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Gold drifts marginally lower to begin the week, Goldman doubles down on bullish forecast for 2021

(USAGOLD – 11/23/2020) – Gold drifted marginally lower in overseas and early U.S. trading to begin the week. It is down $3 at $1870. Silver is down 7¢ at $24.18. Some would argue that with gold stuck in a holding pattern since August we are in a period comparable to last March which in retrospect turned out to be the quiet before the storm. From the mid-March lows at $1470 per ounce, gold is up 27%. Goldman Sachs’ commodity analysts Jeffrey Currie and Mikhail Sprogis doubled down on their bullish forecast for gold last week saying it would reach $2300 over the next twelve months – a 23% appreciation over the current price.

Chart of the Day

Gold –  silver – Dow Jones Industrial Average
(Year to Date)

overlay line chart showing percentage gains in gold silver stocks year to date through 11-20-20

Chart courtesy of TradingView.com • • • Click to enlarge.

Chart note: Despite the sideways, rangebound trading since August, gold has still managed to post a 22.25% gain year to date.  Silver has been the star performer among the precious metals – up 34.18%.  Stocks have been the laggard among this trio that we follow regularly here at the Daily Market Report – up just 1.37% thus far on the year.

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Central banks keep shooting themselves in the foot

themarketNZZ/Mark Dittli/11-16-2020

photo of noted economist William H. White“This is exactly my definition of the debt trap: Central banks know they can’t leave interest rates as low as they are, because they are inducing still more bad debt and bad behavior. But they can’t raise rates, because then they would trigger the very crisis they are trying to avoid. There is no way out but to keep doing what you are doing, but by doing that, you are making it worse. Pretty uncomfortable, right?”

USAGOLD note: William H. White, formerly chief economist at the Bank for International Settlements, is a highly respected monetary policy analyst. His definition of “the debt trap” amounts to a very strong argument for gold ownership in our view.  He elaborates in detail at the link above. A must-read for serious investors ……

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Fed under pressure to act, no longer ‘has the luxury of time,’ – Jefferies’ economist

CNBC/Jeff Cox

“’I just don’t see the benefits of waiting until December,’ said Aneta Markowska, chief financial economist at Jefferies. ‘A lot has changed in the past two weeks. Almost all the worries they flagged in September have materialized or are in the process of materializing. So they don’t have the luxury of time anymore.’”

USAGOLD note:  Markowska channels the thinking of a good many on Wall Street particularly with it becoming increasingly a concern that, barring a political miracle, we might not get anything on the fiscal side until well into next year.

cartoon of a tow truck marked Washington towing a car marked economy


Repost from 11-1-2020

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Venezuela’s 100,000 Bolivar note worth 23¢ (US), printer ships 71 tons of paper notes to economically blighted country

Bloomberg/Patricia Laya and Fabiola Zerpa

“Venezuela has begun to import banknote paper and is mulling plans to print bills with larger denominations as hyperinflation causes shortages of cash …”

USAGOLD note:  Difficult to avoid drawing parallels between Venezuela’s hyperinflationary nightmare and what occurred in Germany in the 1920s when people pushed wheelbarrows loaded with currency from store to store. One hyperinflation, though, is pretty much like any other – with the destruction of life savings the chief feature. Other, more stable currencies are a hedge, but nothing holds a candle to gold – the ultimate store of wealth under such conditions.


Repost from 10-6-2020

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Short and Sweet

American colonists had a modern
monetary theory of their own

“But there was a serious problem,” writes Stephen Mihm in Bloomberg Opinion piece. “The colonial government had no money, and failed to secure a loan. It fell to a small committee of prominent citizens to figure out what to do. The head of the committee was a man named Elisha Hutchinson…Hutchinson and the others devised an unusual solution to the problem. They issued what is generally recognized as the first fiat currency in the Western world. The twenty-shilling notes they printed cheekily claimed that they ‘shall be in value equal to money’ – meaning that they were equivalent to silver coin.”

Though, as Mihm explains, the original paper currency Massachusetts introduced in 1690 functioned reasonably well in terms of holding its value, some of its successors did not do so well.  Years later, a paper currency inflation during and after the American Revolutionary War earned a prominent place in the Amerian lexicon for the phrase “not worth a Continental.” Mihm’s article makes reference to the period in Massachusetts around 1690 as a “crude forerunner” of Modern Monetary Theory and is an interesting in-depth read.

In the 1950 book Faith and Freedom, Austrian School economist Murray N. Rothbard offers some interesting background on the Continental hyperinflation. “The Congress issued six million dollars of continentals in 1775, and the issues increased each year. One hundred and forty millions were issued in 1779. As prices rose, the government found that it needed more and more dollars to finance its expenditures. More money was printed. This added supply of dollars led to further depreciation in the infamous spiral of inflation. At the outset, the continental had circulated at par with a dollar of specie. By 1780, over one hundred continental dollars were required to exchange for one specie dollar; Congress had printed continentals until they were worth almost nothing.” 


Worried MMT might make the greenback not worth a Continental?
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ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

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Russia National Wealth Fund seeks approval to add precious metals

Reuters/Staff

graphic image of a golden bear“Finance Minister Anton Siluanov has previously said he favoured this plan, saying last year that he saw gold as more sustainable in the long-term than financial market assets.”

USAGOLD note: Given circumstances in the global bond market, Russia’s sovereign wealth fund might benefit from strong domestic production.  Some see Russia as ascending to the number one spot in global gold production some time within the next several years. With central banks, pension funds and other financial institutions joining the gold acquisition sweepstakes, there might be something to be said for being early to the game.


Repost from 11-13-2020

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Gold posts cautious gains in quiet early trading, ‘bullish gold outlook does not depend on the world economy ending up in stagflation’

(USAGOLD – 11/20/2020) – Gold is posting some cautious gains in quiet early trading as we close out a marginally down week. It is up $8 at $1877. Silver is up 34¢ at $24.38. Financial markets in general appear to be in a holding pattern this morning with only commodities showing some minor strength. For its part, physical gold continues to draw consistent interest from investors even as inflationary expectations are pushed to the background under the weight of renewed pandemic lockdowns and reduced economic activity. Robert Rekasi, who heads up foreign exchange reserves management for the Central Bank of Hungary, is one who believes inflation is only one of many factors affecting gold demand.

“I would not put too much emphasis on inflation in the short term,” he says in an interview yesterday with Central Banking magazine. “In theory, increasing global debt levels at some point could have an inflationary effect. But, in the current context, it is not an immediate threat. Changes to the market structure are more important than the inflation outlook for gold. In the last decade we saw how central banks became net gold buyers mainly because of the ultra-low-yield environment. The development of the ETFs market has boosted it even further. All of these moves took place in a context of subdued inflation. A bullish gold outlook does not depend on the world economy ending up in stagflation.”

All of which serves as an appropriate introduction for our ……

Chart of the Day

overlay area chart showing gold's performance during the disinflationary economic breakdown 2008-2015

Chart note:  The gravitational pull of disinflation was a constant in the economy even before the coronavirus. Now it is fully asserting itself – at least in the short term – despite the ongoing discussion about future inflation and inflationary expectations. Debt becomes an enormous weight under disinflationary conditions with threats to the stability of the financial system multiplying accordingly. The last crisis was essentially a disinflationary breakdown. Gold, as you can see by the chart,  rose to the occasion.

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Gold is a hedge against bad government decisions

BloombergOpinion/Jared Dillian/11-18-2020

photo of open book, reading glasses with notation 'a good weekend read'“Gold is a hedge on government authorities making poor economic choices. Inflation is usually the result of those poor decisions, but people confuse cause and effect here. Gold is a hedge on policy makers screwing up, and there has been a lot of screwing up in the last 20 years.”

USAGOLD note:  We would stretch that to the last fifty years (the fiat money era) – as many of those poor decisions ended up negatively affecting the value of the currency, the stability of markets and the savings and investments of ordinary Americans. We have relayed the writings of Jared Dillian in the past. He is an effective communicator and a long-time proponent of gold ownership.

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Cramer lightning round: Terrific opportunity to buy gold

CNBC/Tyler Clifford

graphic image of 2021 the year of gold with 1799 U.S. gold $10 gold piece“I think gold’s going down here and that is a terrific opportunity to buy gold. Buy GOLD … or gold. Barrick Gold is fine.”

USAGOLD note:  Cramer has stepped up his advice to buy gold over the past several months.


Repost from 11-16-2020

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Consumer sentiment falls as virus spike darkens economic hopes

NewsMax-Bloomberg

cartoon of grim reaper and election day

“U.S. consumer sentiment unexpectedly declined in early November as an increase in Covid-19 infections and the election prompted Americans to reassess their outlooks for the economy and finances.… ‘Republicans now voice the least favorable economic expectations since Trump took office, and Democrats have voiced more positive expectations,’ Richard Curtin, director of the survey, said in the report.”

USAGOLD note:  The drop in consumer sentiment does not square well with Wall Street’s belief, as emphasized consistently in the mainstream media, that the economy is on the mend. As the Ramirez cartoon suggests life is complicated these days. If it’s not one thing, it’s another.


Cartoon courtesy of MichaelPRamirez.com


Repost from 11-16-2020

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Some perspective on gold in the new paradigm

Bridgewater/Research & Insights

photo of a pile of coins with a kilo bar“In brief: in a world of ongoing pressure for policymakers across the globe to print and spend, zero interest rates, tectonic shifts in where global power lies, and conflict, gold has a unique role in protecting portfolios. The move we’ve seen in gold this year is quite modest relative to what we’ve seen in past reflationary periods, and given still depressed levels of activity globally, the need to keep reflationary policies in place will persist for some time. While gold offers no known yield, no known yield can be quite attractive when the yields on other assets are known to be terrible.”

USAGOLD note:  There are many ways to take a stake in the gold market but the best approach, particularly when you take into consideration analyses like this one from Bridgewater, is to own the metal itself in the forms of coins or bullion and have it stored nearby or in a safe, segregated (even fully allocated) depository account in your name.  The full report is highly recommended at the link. Bridgewater, as many of you already know, is headed up by Ray Dalio, a vocal advocate of gold ownership.


Repost from 10-4-2020

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Gold ranks in top five most commonly owned investments among U.S. investors

World Gold Council/Staff

photo stack of modern gold bullion coins

“Potential investors are put off by the feeling that they don’t know enough about buying gold. In both countries {the U.S. and Canada], 7 in 10 of those investors who have never bought gold but are now open to it said they lacked the necessary know-how.”

USAGOLD note:  At USAGOLD we have always prided ourselves in educating first-time investors – taking the time and providing the means for would-be owners to learn about the investment and find their comfort level. This website is a testament to that commitment and you will find us just as dedicated to that notion should you decide to contact us personally to discuss your needs and concerns. We have thousands of clients – some stretching back to the 1970s and a long history of efficiently and economically serving their investment needs. We invite you to become a client of the firm.


Repost from 11-12-2020

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