Monthly Archives: September 2022

US is inflating its debt away after unprecedented spending binge

Bloomberg/Ye Xie/9-23-2022

graphic showing cash as trash“This is a big break for the government and taxpayers. It makes the debt more manageable and easier to pay back. It’s lousy for bondholders. The money they’ll be repaid by the government will be worth a lot less than the money they put up.”

USAGOLD note: It’s not just bondholders who suffer – from Tokyo to Beijing to Berlin and beyond. Ordinary citizens with money in CDs, money market accounts, and the like, also suffer as their purchasing power slowly goes up in smoke…… As many thoughtful commentators have suggested, we are in a whole new financial era. We get the feeling that the real reaction to all of this hasn’t even begun.

Posted in Today's top gold news and opinion |

A great copper squeeze is coming for the global economy

Bloomberg/James Atwood/9-21-2022

“You wouldn’t know it from looking at the market today, but some of the largest miners and metals traders are warning that in just a couple of years’ time, a massive shortfall will emerge for the world’s most critical metal — one that could itself hold back global growth, stoke inflation by raising manufacturing costs and throw global climate goals off course.”

USAGOLD note: Over 25% of the silver supply comes as a byproduct of copper mining. A copper squeeze, as a result, would also greatly affect the supply of silver at a time when above-ground stockpiles have been depleted. As you can see from the chart below, copper and silver have been traveling companions over the past decade.

overlay chart showing silver and copper prices
Chart courtesy of

Posted in Today's top gold news and opinion |

From the Fed to Europe’s currency crisis, here’s what’s behind this selloff in financial markets

CNBC/Patti Domm/9-24-2022

graphic illustration of a crowded exit“‘By basically endorsing the idea of a recession, Powell set off the emotional phase of the bear market,’ said Julian Emanuel, head of equity, derivatives and quantitative strategy at Evercore ISI.”

USAGOLD note: In the financial world, October, not April, is the cruelest month. The month nature retreats – goes into hiding, and prepares for the winter. And at the end of September 2022, the prevailing mood in markets suggests the beginnings of just such a full retreat. “The bad news is you are seeing and you will continue to see it in the near term in indiscriminate selling of virtually every asset,” says Evercore’s Emanuel, “The good news is that tends to be that the end game of virtually every bear market we’ve ever witnessed, and it’s coming in September and October, where that has historically been the normal state of affairs.”

Posted in Today's top gold news and opinion |

Fed’s tough task: History shows inflation takes average of 10 years to return to 2%

MarketWatch/Vivien Lou Chen/9-21-2022

grpahic image of a red inflation sign with arrow higher and rising percentages“History shows that inflation takes an average of 10 years to return to 2% once it breaks above 5%, according to Thanos Vamvakidis, a strategist for BofA Securities in the U.K.”

USAGOLD note: One would think too, that the greater the gap between the current headline inflation rate and the 2% target, the greater the difficulty returning to that target number. At the moment, that gap is 6.3% but the future number is dependent on the future price of raw materials and finished goods at a time when the supply chain is breaking down.

Posted in Today's top gold news and opinion |

Gold up marginally in early trading as we close out a positive week
Britain’s quick turnaround likely to leave an indelible impression on investor psychology

(USAGOLD – 9/30/2022) – Gold is up marginally in early trading as investors continued to weigh the impact of the UK’s return to quantitative easing, inflation moved to double digits in Europe, and the British pound sunk closer to parity with the dollar. Gold is up $5.50 at $1669. Silver is up 16¢ at $19.05. As we close out a week of improvement in gold and silver pricing, the one event likely to leave an indelible impression is Britain’s surprise turnaround on monetary policy. It happened quickly and without hesitation. In the end, the risk of inflation was far preferable to a collapse of a large portion of the country’s pension system and the potential for a domino effect. Britain’s decision will not be lost on investors in other nation-states whose bond markets rest on similarly shaky ground. Historically, central banks have opted for monetary inflation as their baseline policy because the alternative – an economic depression – is something no policymaker wants to add to their resume.

photograph of Paul Volcker reading newspaper before Congressional testimony

“We sometimes forget that central banking, as we know it today, is, in fact, largely an invention of the past hundred years or so, even though a few central banks can trace their ancestry back to the early nineteenth century or before. It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. By and large, if the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.’ The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.” –  Paul Volcker, Deane and Pringle’s The Central Banks, 1995


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

Dalio sees early signs of a recession, economy could get worse over next two years


photograph of Ray Dalio making a point at an investment conferrence“You’re starting to see all the classic early signs. …I think it’s going to get worse into 2023 and 2024. Which has implications for elections.”

USAGOLD note: The tweet links to a  Mark DeCambre (MarketWatch) video interview with Ray Dalio……

Posted in Today's top gold news and opinion |

The silence of the economists

National Review/George Leef/9-21-2022

grpahic image of an economist watching the collapse of a house of cards

“Throughout the Covid crisis, the world heard very little from the economics profession. Economists love to find fault with governmental policies, but few of them questioned the extreme dirigisme of the way the U.S. and most other governments reacted to events. Few warned that we would suffer from high inflation as a result of spending binges and locking down of much economic activity.”

USAGOLD note: A scathing review of the economics profession – too little, too late, too often. In the end, it does matter if we fail to get good guidance from those who are supposedly in the know.

Related: The economists self-censored and inflation is the result, Bhattacharya and Packalen, Brownstone Institute, 9/21/2022

Posted in Today's top gold news and opinion |

‘The world doesn’t work like that’

Seeking Alpha/The Heisenberg/9-19-2022

Ramirez cartoon showing President Biden piloting the BidanicCartoon courtesy of

“[Bloomberg’s Vincent] Cignarella put the blame for inflation on fiscal policy, whereas I’m more inclined to cite what, try as I might, I can’t avoid describing as the self-evident notion that when, as Pozsar put it, “the price of everything is thrown around randomly,” inflation is just a kite without a string — condemned to whipping around wildly, and notwithstanding episodic downward spirals, always at risk of being carried away into the wild blue yonder.”

graphic image of a book and reading glasses A Good Weekend ReadUSAGOLD note: A detailed refutation of the notion that inflation can be readily controlled with rate policy, and rate policy alone. In short, The Heisenberg, like Zoltan Pozsar, believes the world doesn’t work like that.

Posted in Today's top gold news and opinion |

Carl Icahn to investors: ‘The worst is yet to come’

MarketWatch/Charles Passy/9-21-2022

photo of $100 bills rolling off the printing press at the Bureau of Engraving and Printing“Not surprisingly, Icahn said inflation was playing a significant role in the market’s downturn. ‘Inflation is a terrible thing,’ he said, observing that it led to the downfall of the Roman Empire. ‘You can’t cure it.'”

USAGOLD note: Icahn says we’ve “printed-up too much money”… and now “the party’s over.”

Posted in Today's top gold news and opinion |

Gold gives back some of yesterday’s solid gains
International Banker explains why central banks now have an ‘insatiable appetite’ for gold

(USAGOLD – 9/29/2020) – Gold gave back some of yesterday’s solid gains in early trading as the dust settled around the UK’s sudden relaunch of quantitative easing. It is down $9 this morning at $1653. Silver is down 19¢ at $18.76. One cannot help but recall, under these circumstances, Britain’s decision in the late 1990s to auction off a significant portion of its gold reserves in order, it said, to diversify into various currencies. What would it give today to have that asset still on the books – one it sold for under $300 per ounce? As it turns out, the BoE sale was among the last major liquidations before the group went from net sellers of the metal to net buyers in 2011. Since then, the official sector has added over 5000 metric tonnes to global reserves (See chart.). International Banker’s Nicholas Lawson says there is now an “insatiable appetite for the yellow metal” among central banks.

“Part of gold’s appeal,” he says, “is the diversification benefits it offers to central banks – and investors in general – especially given how vulnerable their respective currencies can be to bouts of pronounced volatility. And with quantitative easing proving an increasingly popular policy to combat economic crises in recent years, currencies have been even more under pressure in the face of massive injections into the money supply. In contrast to currency reserves, however, gold’s durability, scarcity and finite supply are just some features that provide central banks with surety and trust during times of uncertainty and market turmoil. As such, it provides them with crucially stable assets in their reserves.” He goes on to say that 57 central banks “expect to boost their gold reserves over the next 12 months” and that the most interesting finding in a recent World Gold Council survey is less optimism about the US dollar’s role as the global reserve currency.

bar chart showing world gold reserves and annual changesChart courtesy of GoldChartsRUs/Nick Laird

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

Gold miners look beyond Fed hikes to predict return to $1800

Yahoo!Finance-Bloomberg/Yvonne Yue Li/9-20-2022

photo of two gold miners' bars“Not even the most hawkish Federal Reserve in decades can beat down the exuberance of gold enthusiasts at the industry’s biggest annual gathering. Bullion prices will reach $1,806.10 an ounce by year-end, according to the average estimate in a survey of 10 participants at the Denver Gold Forum, the yearly meetup of mining executives, investors, bankers and analysts.”

USAGOLD note: That’s a pretty good move if it does in fact materialize before year-end …… The consensus has gold rising on “heightened geopolitical and economic risks.”

Posted in Gold-silver price predictions, Today's top gold news and opinion |

Silver inventories plummet at LBMA and COMEX

Numismatic News/Patrick A. Heller/9-15-2022

photo of three silver bars“Where is the physical silver going that is leaving the LBMA and COMEX? Metals Focus India reports that silver demand in that country, perhaps the world’s top silver consuming nation, is now so strong that the silver price in India is trading at a premium to the world silver spot price. In July 2022, almost 58 million ounces of physical silver was imported into India. This was at least 50 percent higher than in any month in the previous four years and may be an all-time high record amount of imports into India in any month.”

USAGOLD note: Silver, like gold, is traveling west to east. We cited this article in Tuesday’s DMR and repost it here for those who may have missed it.

Posted in Gold-silver price predictions, Today's top gold news and opinion |

Still on ‘Crash Watch’

SprottMoney/Craig Hemke/9-20-2022

photograph of red hurrican warning flags stiff wind“Through the month of September, we’ve been on ‘Crash Watch’ over concerns that a global equity market drop could lead to a liquidity-driven margin call across all asset classes. The watch continues through this week’s FOMC meeting and then into October. What is ‘Crash Watch’? It’s sort of like a Tornado Watch for those of us in the American Midwest.”

USAGOLD note: Not a totally unreasonable reaction to current Fed policies in the face of a developing recession…… “Beware and be wary,” Hemke warns.

Posted in Today's top gold news and opinion |

Short & Sweet
The Exter Inverted Pyramid of Global Liquidity

Exter's inverted debt pyramid with derivatives at top and gold on the bottom

“[Exter’s Inverted] Pyramid stands upon its apex of gold, which has no counter-party risk nor credit risk and is very liquid.  As you work higher into the pyramid, the assets get progressively less creditworthy and less liquid. . .[In a financial crisis] this bloated structure pancakes back down upon itself in a flight to safety.  The riskier, upper parts of the inverted pyramid become less liquid (harder to sell), and – if they can be sold at all – change hands at markedly lower prices as the once continuous flow of credit that had levitated those prices dries up.” – Lewis Johnson, Capital Wealth Advisor’s Lewis Johnson


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Posted in Short and Sweet, Today's top gold news and opinion | Tagged |

‘This New Period Is Very Different, And Far Worse In Many Ways Than The 1970s’

ZeroHedge/Eric Peters/9-19-2022

graphic image red sticker with the word "inflation"“There’s an assumption that this transition will be disinflationary, but I really don’t think that’s right. Most big transitions are inflationary with a lot of volatility and relative instability. In general, predictability, stability, peace, cooperation, etc. are disinflationary for goods prices and inflationary for asset prices. Instability, less confidence about the future, more combative markets/governments all add extra costs that translate into higher goods prices and lower asset prices,” she said. “Not all transitions are inflationary but transitions that will require a significant rerating of existing capital because of its obsolescence, transitions that create scarcity, transitions that shift power dynamics; those tend to be inflationary.” – Lindsay Politi, One River Asset Management

USAGOLD note: Insights on where we are headed…… Politi does a good job of offering some perspective and food for thought on the profound changes underway in the global economy. “Expecting there to be limits on things like inflation or price movements because they existed in the past will also prove to be very wrong,” she says.

Posted in Today's top gold news and opinion |

Gold level as markets process Bank of England’s bond market re-entry
Gold serves as a “good wealth protection choice” in the United Kingdom

(USAGOLD – 9/28/2022) – Gold is level in early US trading as markets processed the news out of the United Kingdom this morning that its central bank would re-enter the bond market as a buyer. It is unchanged at $1630. Silver is down 19¢ at $18.26. The BoE’s surprise decision is likely to have a mixed effect in global markets. The pound continued its sharp sell-off adding to the US dollar’s good fortune. In general, though, the market mood is likely to be tempered by the reality of a major central bank capitulating to a wobbly bond market and suddenly returning to quantitative easing. Gold, as might be expected, is up sharply in British pounds. UK stocks are level.

“In pound sterling terms, the gold price has actually appreciated by no less than 13% while the FTSE all share index for comparison has declined by around 10% [year to date],” writes Sharp Pixley’s Lawrie Williams in an analysis posted yesterday before the BoE’s decision. “With the Bank of England following the U.S. Federal Reserve with an aggressive interest rate raising policy to fight inflation, and commenting that the UK economy is probably already in at least a mild recession, one can anticipate further equity price slippage, while the gold price can probably still hold its own making it a continuingly good wealth protection choice for investors.… All currencies fluctuate – even the mighty U.S. dollar and there is a feeling that it may well be flying too high at present. There is the possibility it may start to come down from its peaks when there is a realization of quite how much the servicing of the huge U.S. debt position will cost at the higher interest rate levels currently in place, and likely to be further increased.”

 Gold in British pounds and UK stocks
(%, year to date, FTSE)
overlay line chart showing the price of gold in British pounds and the FTSE year to date
Chart courtesy of • • • Click to enlarge

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

Bridgewater’s Rebecca Patterson: Fed risks credibility in inflation fight

Pensions&Investments/Jennifer Ablan/8-25-2022

graphicimage of 'are you secure' sign“Bridgewater, [Patterson] said, is bullish on inflation-linked securities and gold, to name a few investments in this environment, as well as Chinese equities, whose valuations she calls ‘attractive’ and ‘a way to get diversification in a portfolio.’ Bridgewater is ‘bearish on equities broadly, including the United States, including Europe,’ Ms. Patterson said.”

USAGOLD note: We missed this interview of Bridgewater’s chief investment strategist, Rebecca Patterson, when it first came out, so we’re playing catch up. She says that Bridgewater’s institutional investors are preparing for “a prolonged stagflationary period,” and “sustained bear markets.” Bridgewater, and its famed founder, Ray Dalio, as you probably already are staunch advocates of gold ownership and have been for a long time.

Posted in Today's top gold news and opinion |

El-Erian warns Fed rate hikes may fail to squash inflation – but could tank the US economy and job market anyway

MarketsInsider/Theron Mohamed/9-19-2022

graphic image of a bull and bear with the words 'stagflation ahead'“Mohamed El-Erian has raised the prospect of a worldwide economic disaster in the form of slowing growth, stubbornly high inflation, and surging unemployment.”

USAGOLD note: El-Erian pitches his tent in the stagflation camp……And warns that another central bank policy mistake is “uncomfortably high.”

Posted in Today's top gold news and opinion |

Jittery markets? Just wait ’til QT really kicks in

Reuters/Jamie McGeever/9-19-2022

stein cartoon Treasury bonds as paper towels

“Investors’ focus on the Fed’s policy rate is understandable, but they should not underestimate how much the Fed’s other policy lever – quantitative tightening – could tighten financial conditions and crush asset prices even further.”

USAGOLD note: Another stark warning of a potential left field event …… The markets will be forced to absorb $2 trillion in Treasuries and mortgage back securities that previously were going on the Fed’s balance sheet and no one has a clear understanding how that is going to work out – not even the Fed.

Posted in Today's top gold news and opinion |

Roubini sees ‘long, ugly recession’

Bloomberg/Natalia Kniazhevick/9-20-2022

graphic image of 1970s reducs coming soon to an economy near you“‘Even in a plain vanilla recession, the S&P 500 can fall by 30%,’ said Roubini, chairman and chief executive officer of Roubini Macro Associates, in an interview Monday. In ‘a real hard landing,’ which he expects, it could fall 40%.”

USAGOLD note: Dr. Doom stays on theme in this latest interview reiterating his base forecast of a stagflationary disaster like the 1970s……

Posted in Today's top gold news and opinion |