Author Archives: News

The Alchemist/Mike Silva

“Absolutely. As long as we have a financial system, we will have financial crises. The only question is how often and how severe. Personally, I think a crisis is likely to happen sooner rather than later because of the large number of possible crisis triggers that are currently being squeezed. . . . Fortunately, because of improved capital, liquidity and risk management, the next financial crisis is unlikely to result in a banking crisis. But it could still  easily result in sufficiently deep losses across a sufficiently broad range of assets to trigger an extraordinarily painful recession, or worse. The likelihood that the US has seen its last depression is about as high as the likelihood that it has seen its last war. Just saying.”

USAGOLD note:  In this fascinating peak behind the curtain, Mike Silva tells the inside story of the 2008 financial crisis from the perspective of someone who, as Tim Geithner’s chief of staff at the New York Fed, was at the policy-making epicenter during the breakdown. Silva delivered his remarks in a speech before the London Bullion Marketing Association in October 2018.

Image by Benji the Pen [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons [Edited]

Repost from 2-13-2019

CNBC/Jeff Cox

“In a blog post released over the weekend, Bernanke cited the benefits of at least keeping the option alive to take short-term rates below zero. Doing so, he said, would give the Fed flexibility at a time when its policy toolkit is limited.”

USAGOLD note:  As such, Bernanke agrees with Greenspan that below-zero interest rates are possible in the United States. Ex-Treasury Secretary Larry Summers (see link below) calls Bernanke’s speech “the last hurrah for central bankers” and supports instead a fiscal spending program to “put money in peoples’ pockets” through direct government spending.”  Isn’t that the equivalent of Bernanke’s helicopter money?  It would be difficult to envision Bernanke arguing against Summers’ proposal. Both occupy prominent positions on the Easy Money team’s roster.

Related: Summers calls Bernanke speech ‘last hurrah’ for central bankers/Bloomberg/1-9-2020

Repost from 1-12-2020

Bloomberg/Justina Vasquez

“A volatile week ended in favor of gold investors, with geopolitical tensions reigniting haven demand for the metal.”

USAGOLD note:  This Bloomberg piece reinforces the point made in the USAGOLD note to the post immediately below. It is not really a matter of ‘sticking to one’s guns’ as it is a deeper understanding of the ever-present need to hedge uncertainties of which geopolitical tensions are just one.

Repost from 1-12-2020

South China Morning Post/Dewey Sim

“Jia Qingguo of Peking University told a forum in Singapore that bilateral ties are in ‘bad shape’ as the US seeks to contain China.”

USAGOLD note:  We continue to get conflicting accounts on the trade negotiations between the US and China with the American press passing along happy tidbits and the Asian press casting doubt on the proceedings.  Hard to know which is the accurate representation of reality. . . . . .

Repost from 1-9-2020

Reuters/Gabriel Crossley/1-13-2020

USAGOLD note:  Some perspective from the U.S. Chamber of Commerce . . .

CNBC/Jeff Cox/1-13-2020

“The budget shortfall hit $1.02 trillion for the January-to-December period, a 17.1% increase from 2018, which itself had seen a 28.2% jump from the previous year.”

USAGOLD note: And that’s the political deficit, i.e., the one the politicians and government bureaucrats reference.  The real addition to the national debt was over $200 billion more – or $1.258 trillion.  The national debt stood at $23.2 trillion on December 31, 2019 – up 5.7% on the year.

Cartoon courtesy of Scot Stantis

ETMarkets/Gayathi Nayak

USAGOLD note:  This report notes that India’s central bank bought the gold as a hedge against currency volatility.

Repost from 1-10-2020

World Gold Council/Adam Perlaky

“Investment demand increased as the gold price reached or was near all-time highs in every major G10 currency apart from the US dollar and Swiss franc, moving the most in ten years . . .”

USAGOLD note:  Funds, institutions and ultra-high net worth investors continue to be big buyers. . . . .

Repost from 1-9-2020

Financial Times/Hudson Lockett and Henry Sanderson

“Private investors have begun to shift their holdings of gold from Hong Kong, months into the financial centre’s worst political crisis since the handover from British to Chinese sovereignty in 1997. Gold is moving to Singapore and Switzerland . . .”

USAGOLD note:  The safe haven seeks safe haven. . . . . .

Repost from 9-17-2019

Financial Times/Eva Szalay and Colby Smith/1-10-2020

“Typically, the dollar jumps, along with gold, when bouts of geopolitical nerves strike. But after the US assassination of Iranian military commander Qassem Soleimani last week the currency barely budged . . .”

USAGOLD note:  As noted in the post immediately above, the article goes on to question if gold’s role is changing from safe-haven to risk asset.

Update courtesy of TradingEconomics.com

CNBC/Tyler Bailey

“[I]s this gold rush just a flash in the pan? Not according to the options market.”

USAGOLD note: Speculators are betting gold will jump higher in the short term, according to this CNBC article.  The interesting part of this is what it represents in terms of market sentiment.  Some think that gold’s upside is a flash in the pan.  Others believe it represents the first stages of a major bull market.  As always, we prefer owning physical gold coins and bullion for the long run – first and foremost as a safe haven store of value to weather uncertainties and sudden threats to asset values.

Repost from 1-7-2020

Photo courtesy of Bullion Star

Mental Floss/Elizabeth Miller

“Gold’s symbol on the periodic table, Au, comes from its Latin name aurum, which means ‘glowing dawn.’ This metal’s tantalizing yellow color and shining exterior has made gold a prized element in jewelry and treasured objects for thousands of years—but, amazingly, all of the gold that has ever been refined could melt down into a single cube measuring 70 feet per side. Read on for more opulent facts.”

USAGOLD note: A refresher course on humanity’s long-term attachment to the yellow metal dating back to the Thracian civilization 4000 years ago.  We take special note of  fact #10. On a sunny autumn day, the golden Colorado capitol dome does truly shine lustrously against the bluest sky you will ever see . . . . . .

Image by Billmcmillan [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons [Edited]

Repost from 9-27-2019

Newsweek/Aristos Georgiou

“‘A kilonova is a flash of light produced by the radioactive debris of a neutron star collision,’ Troja said. ‘During the collision a lot of neutron-rich stuff is spewed into space at a velocity that is 20-30 percent the speed of light. In these extreme conditions something very special happens: neutron star matter turns into gold, silver, platinum, uranium… all the metals heavier than iron are forged in these cosmic collisions.'”

USAGOLD note:  I would not be surprised to see the Wall Street anti-gold crowd use this discovery as a justification to short gold on the COMEX [smile].

NASA image, Spitzer Space Telescope Cassiopeia A – supernova remnant, public domain/WikiMedia Commons

Repost from 10-18-2018

CNBC/Patti Domm

“The Fed has plenty on its agenda in 2020, including fixing the short-term funding market, but some market pros expect it to also face inflation in the near future.”

USAGOLD note:  We have spent the past year with a nary a word on inflation.  Now it seems to be popping up as a subject of discussion more frequently. One interviewee goes so far as to say in this article that we are likely to have an “inflation scare” in 2020.  When is the last time we saw those two words residing next to each other in a sentence?

Repost from 12-31-2019

INDIA WATCH

Reuters/Rajendra Jadhav/1-6-2020

“Gold prices in India jumped over 2% on Monday to record levels amid a rush to invest in safe-haven assets globally as well as a steep fall in the rupee, dampening demand for the precious metal in the world’s second-biggest consumer.”

USAGOLD note:  The last third of that sentence seems a bit incongruous with the other two thirds. . . .We have said all along that demand in India would rise as the value of the rupee fell – a point of view at odds with what a good many experts on gold demand in India predicted.

ArabTimes/Staff/1-6-2020

“Al-Sayegh [a jewelry dealer] said . . .  “It is noticeable that many citizens want to buy bullion besides gold jewelry, with the aim of investing in this yellow metal because it is considered as a safe haven for investors.”

USAGOLD note:  The time period covered in this article is prior to the Soleimani incident. With tension rising in the Middle East the demand for gold bullion and coins could become even greater among citizens living in the danger zone along the Persian Gulf.

Reuters/Karl Plume and P.J. Huffstutter/1-2-2020

“Many don’t know yet what crops they’ll plant next season among a host of dicey options.”

USAGOLD note:  Uncertainty reigns in agriculture. Federal government assistance accounted for one-third of farm income in 2019, according to this Reuters report.

(4:15pm MT)

Up $23 at $1575.50. Silver up 21¢ at $18.24.

South China Morning Post/Zhou Xin/1-5-2020

“The Chinese trade delegation tentatively plans to travel to Washington on January 13 for the signing of the phase one agreement that would herald a truce in the costly trade war between the world’s two largest economies.”

USAGOLD note:  Difficult to overlook SCPM’s use of the word “tentatively” in the opening sentence of this report. . . . .