Monthly Archives: August 2023

The US reserve currency and commodities

Goehring & Rozencwajg/7-24-2023

photo of gold bars atop a $100 bill“Incredibly, by 2016 commodity prices had sold off to such an extent that they were the most radically undervalued in 120 years. The only times that came close were in 1929, 1969, and 1999. Following every prior period of radical undervaluation, commodity and natural-resource related investments dramatically outperformed, both in absolute and relative terms.”

USAGOLD note: In this in-depth study, Goehring & Rozencwajg say the coming rally and eventual overvaluation in commodities will likely be led by gold.

Share
Posted in Today's top gold news and opinion |

Short and Sweet
Two legendary central bankers embrace gold

Image of one-time central bank heads Mervyn King and Alan Greenspan

In The End of Alchemy (2017), Mervyn King, the former governor of the Bank of England, writes of central banks’ frustration in dealing with the persistently stagnant global economy. “Central banks,” he says, “have thrown everything at their economies, and yet the results have been disappointing, Whatever can be said about the world recovery since the crisis, it has been neither strong, nor sustainable, nor balanced. . . [W]ithout reform of the financial system, another crisis is certain – sooner rather than later.”

“Our problem,” Alan Greenspan once said, “is not recession which is a short-term economic problem. I think you have a very profound long-term problem of economic growth at the time when the Western world, there is a very large migration from being a worker into being a recipient of social benefits as it is called. And this is legally mandated in all of our countries.” The western world, he concludes, is headed to “a state of disaster.”

It is interesting to note that both Greenspan and King, two of the most respected central bankers in modern times, have embraced gold since leaving their respective posts. The former Fed chairman has consistently suggested that gold is “a good place to put money these days given the policies of governments.”

The former governor of the Bank of England says that he is “very struck by the fact that over many, many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio…[W]hen unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold.”

_____________________________________________________________________________

Are you ready to embrace gold?
DISCOVER THE USAGOLD DIFFERENCE

Reliably serving physical gold and silver investors since 1973

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

A long-time market bear who called the 2000 and 2008 crashes warns the S&P 500 could plummet 64%, bursting a historic bubble

MarketsInsider/Zahra Tayeb/7-25-2023

graphic image of a seated bear gazing quietly back at the viewer“John Hussman is doubling down on his dire outlook for US stocks, even after the market defied recession predictions to notch some impressive gains this year.”

USAGOLD note: Hussman is not impressed by the stock market rally thus far this year. “Yes, this is a bubble  in my view,” he says. “Yes, I believe it will end in tears.”

Share
Posted in Today's top gold news and opinion |

No DGMR today or tomorrow. Back Monday.

Share
Posted in Today's top gold news and opinion |

Young, rich Americans don’t trust the stock market, so they’re turning to alternative assets

Yahoo! Finance/Jeannine Mancini/7-31-2023

cartoon of a hedge fund manager on the phone telling a client to buy gold

“Based on a survey conducted by Lansons, it was found that less than 10% of the entire American population has invested in alternative assets. However, among the younger generations, there is a more significant interest in alternative investments, with 30% of Gen Z and 25% of millennials either investing in such assets or possessing knowledge of platforms that facilitate these investments.”

USAGOLD note: One of the alternatives mentioned is gold.

Share
Posted in Today's top gold news and opinion |

Notable Quotable

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

“The first step in theorizing correctly about money is to understand that the value of money, like that of commodities, is never fixed and unchanging. Chinese philosophers who published the earlier Mohist Canons(468 B.C.~376 B.C.) grasped this crucial point. They recognized that metallic money, such as the ‘knife coins’ then in wide circulation, was valued and exchanged by weight and argued that the real value of money, despite its fixed face value, was not stable but fluctuated inversely with the prices of commodities. When commodity prices were high, money was ‘light’ or its purchasing power low; when prices were low, money was ‘heavy’ or its purchasing power high. Thus, if monetary conditions were such that the nominal prices of commodities were abnormally high, the real prices of commodities were not high but rather money was ‘light’ or depreciated.”

Joseph T. Salerno
The Mises Institute

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Share
Posted in Notable Quotable, Today's top gold news and opinion | Tagged , |

Air pockets, free falls, and more cowbells

Hussman Funds/John Hussman/July 2023

photo of a road sign reading Bear Market Ahead“There is a particular “setup” that we’ve historically found to be associated with abrupt “air pockets” and ‘free falls’ in the S&P 500. It combines hostile conditions in all three features most central to our investment discipline: rich valuations, unfavorable market internals, and extreme overextension. The last time we observed this combination to a similar degree was in November 2021, shortly before the S&P 500 lost a quarter of its value. The S&P 500 remains lower than it was then. Despite enthusiasm about the market rebound since October, I remain convinced that this initial market loss will prove to be a small opening act in the collapse of the most extreme yield-seeking speculative bubble in U.S. history.”

USAGOLD note: Hussman tells in detail how the stock market is breaking down and why it should be taken seriously.

Share
Posted in Today's top gold news and opinion |

Market Overview

Landscape mode is recommended for mobile phone viewing.

Market Data by TradingView
Delayed data except FOREX

Share
Posted in Announcements, Today's top gold news and opinion |

It’s all about the lags

LinkedIn/David Rosenberg/7-27-2023

“The fact that Fed-induced curve inversions have presaged recessions 100% of the time in the past is never respected. Always a case of hope triumphing over experience. Thing is — very rarely do recessions occur in the same month as the onset of the inverted yield curve. There are lags, and that typically can be a year or longer. Think back to 2007. But like the story of the boy who cried wolf, the wolf did show up in the end.”

USAGOLD note: A heads up from Rosenberg……

Recessions follow inverted yield curves with a lag
(Grey bars = recessions)
lince chart showing the inverted yield curve relationship to recessions
Source. US Federal Reserve [FRED]

Share
Posted in Today's top gold news and opinion |

Gold is the investment for All SeasonsLooking to prepare your portfolio for whatever uncertainty lies ahead?
DISCOVER THE USAGOLD DIFFERENCE

ORDER DESK
1-800-869-5115 x100 • • • orderdesk@usagold.com • • • ONLINE ORDER DESK-24/7

Reliably serving physical gold and silver investors since 1973

Share
Posted in ClientInsights, Today's top gold news and opinion | Tagged |

Citi says it’s ‘only a matter of time’ before gold hits a record

Bloomberg/Renjeetha Pakiam/7-20-2023

photo of stacks of gold bars

“The metal is benefiting from loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation, the bank’s analysts including Aakash Doshi and Ed Morse said in a report. Gold is expected to climb to an all-time high in the next six-to-nine months, and there’s a 30% probability it’ll top $2,000 an ounce in the next three-to-five months.”

USAGOLD note: The report points out that prices for the metal have already posted new highs in every other G-10 and major emerging market currency this year. Silver, it says, will benefit from “demand for a store of wealth.

Share
Posted in Today's top gold news and opinion |

Our primal instinct for gold

Money Week/Dominic Frisby/7-20-2023

“The experience of beauty, whether derived from nature, art, music or even mathematics, correlates with activity in the emotional brain, the medial orbitofrontal cortex. Beauty has long been associated by philosophers with truth and purity – also qualities commonly associated with gold. Our instinct for gold and the emotions it inspires from beauty to desire are basic.”

USAGOLD note: Frisby examines mankind’s age-old attachment to gold.

Share
Posted in Today's top gold news and opinion |

Short and Sweet
Only real intrinsic money survives the test of time

photo of stacks of gold and silver coins

Here is a timeless observation from the now-deceased Richard Russell (Dow Theory Letter):

“Paper money is now being created wholesale throughout the world. Stated simply, all paper currency is now valued against each other. But more important, ultimately ALL paper is ultimately valued against the only true, intrinsic money – gold. In world history, no irredeemable paper currency has ever survived. Since all the world’s currency is now irredeemable (in gold), this means that in the end, the only form of money that will survive is real intrinsic money – gold. It’s not a question of whether gold will survive, it’s a question of when the world’s current paper money will deteriorate and finally die. I can tell you that irredeemable paper will not survive – but obviously I can’t tell you when it will die. The timing is the only uncertainty.”

The chart below from the World Gold Council speaks to Russell’s point. It shows the performance of various currencies – past and present – against gold over the long term.  When the end comes, as the chart illustrates, it can come abruptly and without warning. For those who stick to the proposition that gold is not really an inflation hedge, or that it is not really a safe-haven against currency debasement, the chart offers instruction. For those who already own gold as a safe-haven, it provides justification. For those who do not own gold, it serves as an incentive.  As the old saying goes:  All is well until it isn’t.

Chart showing gold outperforming all major currencies since 1900
Chart courtesy of the World Gold Council
________________________________________________________________________

Ready to begin or add to your precious metals holdings?
DISCOVER THE USAGOLD DIFFERENCE

Reliably serving physical gold and silver investors since 1973

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

Oil markets will face ‘serious problems’ as demand from China and India ramps up, IEF secretary general says

CNBC/Charmaine Jacob/7-22-2023

artist rendering of oil platform in black and white“Oil demand bounced back to pre-Covid levels quickly, “but supply is having a tougher time in catching up,” said Joseph McMonigle, secretary general of the International Energy Forum, adding that the only factor moderating prices right now is the fear of a looming recession.”

USAGOLD note: Rising oil prices could have a profound effect on the inflation rate as it settles in, assuming McMonigle is right.

Share
Posted in Today's top gold news and opinion |

Daily Gold Market Report

No DGMR today or tomorrow.  Back Monday.
Below is yesterday’s report.

––––––––––––––––––––––––––––––––––

Gold marginally higher as Fitch downgrades US credit rating
Rating drop comes as the Treasury Department gears up for heavy debt issuance

(USAGOLD – 8/2/2-23) – Gold was marginally higher in today’s early going as markets mulled over Fitch’s downgrade of US debt from AAA to AA+. The rating service cited tax cuts, greater fiscal spending, economic shocks, and continuing political gridlock as reasons for the rating demotion. Gold is up $2 at $1949. Silver is up 3¢ at $24.40. Fitch’s downgrade comes just as the Treasury Department gears up for a heavy debt issuance of $102 billion to replenish its coffers following the debt ceiling battle earlier this year. As shown in the chart below, the additions to the national debt in June were already notable.

“Last time S&P downgraded in 2011, the markets went nuts, although we are not seeing the same type of reaction in the early going, but things bear watching,” Marex analyst Edward Meir told CNBC this morning. Wells Fargo’s John LaForge told KitcoNews that “he expects growing debt in the U.S. to be a major bullish factor for gold that could support higher prices for at least the next three years.”

US Government Debt
bar charat showing showing sharp increase of US national debt in June
Chart courtesy of TradingEconomics.com

Share
Posted in Daily Market Report, dailyquotes |

Most of what we’ve heard about the yuan dethroning the dollar is from the West. Here’s what China’s actually said about it.

MarketsInsider/Huileng Tan/7-31-2023

photograph of 100 yuan and $100 bills“While China might not be happy with American dominance  — in global politics, culture, or the financial system — Beijing is far from openly advocating for the ‘redback,’ another name for the yuan, to immediately replace the greenback.

USAGOLD note: Important insights at the link……

Share
Posted in Today's top gold news and opinion |

Notable Quotable

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

“‘Experience keeps a dear school,’ said Ben Franklin, ‘but fools will learn in no other.’ The wise man remembers. The fool forgets. The wise man listens. The fool talks. He ignores both the living and the dead… the immemorial dead, whose whispers carry the distilled wisdom of history. No – this time is different, comes the fool’s eternal cry. The past is of no use to me.”

Brian Maher
Daily Reckoning

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

 

Share
Posted in Notable Quotable, Today's top gold news and opinion | Tagged , |

Traders brace for $102 billion wave of Treasury bond sales

Bloomberg/Liz Capo McCormick/7-31-2023

cartoon of a man rolling out paper towels that are U.S. Treasuries“The US Treasury is set this week to begin a ramp-up in issuance of longer-dated securities that’s likely to stretch into next year, forced by a rapidly deteriorating budget deficit and soaring interest rates.”

USAGOLD note: The new bond sales come at a time when the Fed, Japan, and China are no longer buyers. What happens if support doesn’t materialize?

Share
Posted in Today's top gold news and opinion |

China’s gold consumption reaches 555 tons, rising 16.4% in the first half of 2023

Global Times/Staff/7-25-2023

graphic image of overseas shipping container filled with gold bars showing China flag“Among the gold consumption, the purchase of gold bars jumped 30.12 percent year-on-year to 146 tons in the first six months, while that of gold jewelry reached 368 tons, up 14.82 percent from the same period last year. Gold used for industrial and other purposes declined 7.65 percent to 40 tons, the data showed.”

USAGOLD note: China’s appetite for gold grows as its middle classes gain wealth……Note the strong gain in bullion bar demand, a sign that Chinese investors are buying gold as a safe haven.

Share
Posted in Today's top gold news and opinion |

Thinking about buying gold and silver?


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!


Ready to become a member of the ruling class?
DISCOVER THE USAGOLD DIFFERENCE

ORDER DESK

Reliably serving physical gold and silver investors since 1973

Share
Posted in ClientInsights, Today's top gold news and opinion | Tagged |