Get rich with crypto, stay rich with gold

Atlas Pulse/Charlie Morris

Repost from 9-3-2021

graphic image of gold bar chart with line chart overlays

“I can’t help but think the next decade will belong to gold. After all, the S&P 500 trades at a lofty valuation by historic standards, while gold doesn’t. The main reason I have confidence that gold will win the 2020s is that this almighty asset bubble all around us will implode, and the crowded trades will disappoint the most. Gold is far from being crowded.”

USAGOLD note: Though Charlie Morris’ thought processes are held in high regard, we continue to counsel caution when it comes to cryptocurrencies. Many harbor a lingering suspicion that crypto has as much chance of rapid decline as rapid advance. In the end, though, we all need to find our own way on the matter. As for the second half of Morris’ mantra (as expressed in the title), there is a great deal of merit and historical support for preserving one’s gains, wherever they might occur, through conversion to gold. For those who have made significant profits in the crypto arena, perhaps preserving some of those gains is an option worth considering. After all, the crypto space has tracked the S&P more closely than it has gold. Morris’ latest is well worth the time spent no matter where you come down on the crypto controversy.

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

Swiss stock up on gold – OpEd

Eurasia Review/Claudio Grass

Repost from 9-3-2021

photo of pile of Swiss 20 franc gold coins

“Over the last couple of months, it has become clear from conversations with friends and partners from the gold industry that there is a marked increase in retail demand for physical gold from Swiss investors. The most interesting thing about this development is that the bulk of new orders is coming from smaller accounts, showing that it’s ordinary savers and citizens that are driving this trend, rather than professionals, speculators or larger investors.”

USAGOLD note: The United States is experiencing a similar surge in demand from private investors who tend to gravitate towards coin and bullion acquisitions. The big institutions and funds favor gold ETF acquisitions for ease of holding and liquidating very large positions. “It is essential,” says Grass, “to think for oneself and to plan for the future, regardless of what the majority may think at the time or what any centralized authority might promise.”

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

Central bankers are spooked by signs that inflation is lingering for longer

Bloomberg/Shelly Hagan

Repost from 10-13-2021

Artist rendering of two doves, Asian motif“But the forecasts — displayed as anonymous dots on a chart — can be affected by shifts in personnel. In addition to Powell’s chairmanship, President Joe Biden has the chance to pick three other governors on the seven-seat Board in Washington. A decision on the chair is expected this fall.”

USAGOLD note: This article is of value to gold investors on several different levels having to do with the politics of central banking. Some might quarrel with our use of the word “politics” with reference to central banking, but it has become apparent that it now plays a direct role in monetary policy. The Biden administration has some major decisions ahead of it in that regard – decisions that could radically alter the already dovish course of the Federal Reserve with an even more dovish tilt. (In addition to appointments listed above, it will also be choosing replacements for Robert Kaplan and Eric Rosengren, “two of the most hawkish” regional Fed presidents.)

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

Beyond Bretton Woods: When it comes to money, we need a common discipline

The New York Sun/Jacques de Laorsiere

Repost from 10-13-2021

photo of Jackques La Rosierre, former IMF managing director, president of the bank of France“So the world at large welcomed the collapse of Bretton Woods as a ‘liberation.’ In reality, though, the world was not free. It became more and more dependent on financial markets which are now the financiers and decision makers of our system.”

USAGOLD note: Important and surprising insights on the history of the current monetary system and where we stand now from the former managing director of the International Monetary Fund and president of the Bank of France ……

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

Gold pushes steadily higher on China concerns, global surge in inflation
‘You’d better be hedged. Equities are not attractive on an outright basis.’

(USAGOLD – 10/20/2021) – Gold pushed steadily higher in overnight and early US trading on concern about China’s property sector meltdown, double-digit wholesale inflation in Germany, and a general sense that the global economy might be headed into a period of stagflation. It is up $17 at $1788. Silver is up 48¢ at $24.23. Back in late July, Bridgewater Associates’ Co-CIO Greg Jensen, who has gone on record on numerous occasions advocating gold ownership, made a nuanced observation about how policymakers themselves might become victimized by a rapidly rising inflation rate. We came across those comments while reading John Hussman’s (Hussman Funds) latest market commentary yesterday, and thought them worth passing along.

“Easier and easier money, bigger and bigger deficits – that’s the destiny, until – and this is the big risk.” he said. “A deflationary slowdown is easy for policymakers. They’ll print more money and spend more money. What’s hard is when they’re constrained, and that constraint is obviously inflation and currency, and that’s where the gig will be up. That’s actually what, in our view, everybody has to start hedging in their portfolios – it’s not the next disinflationary or deflationary downturn. It’s essentially inflation and currency problems becoming constraints on the government and this world where we’ve been living in where policymakers can get whatever they want from the stock market and interest rates to one where they can’t. You’d better be hedged. Equities are not attractive on an outright basis.” [Emphasis added.]

Chart[s] of the Day

US producer prices
(2012-September 2021)

Line chart showing US producer prices as a percent 2012 to present

United States Inflation Rate
(As a %, through September 2021)

line chart showing consumer prices as a percent through Septermber 2021

Year ahead inflation expectations
(Percent change monthly 2013 to September 2021)

line chart showing New York Fed inflation expectations

Charts courtesy of TradingEconomics.com

Chart note: In September, U.S. consumer prices registered a 13-year high at 5.4%. Producer prices set a record for the sixth straight month jumping 8.6% year on year. We should keep in mind that wholesale price inflation is not just an American problem. China, for example, reported producer prices rising 10.7% year on year last week, and Germany reported a 14.2% increase in wholesale inflation earlier today. Inflation expectations are an important data set because it, not the CPI inflation rate, is what is formally used to calculate the real rate of return.

 

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

Silver to the stratosphere

Singapore Bullion Market Association/Emil Kalinowsky/Fall 2021

graphic representation of an angry silver bull“I’m ‘crazy’ about silver’s bullish outlook for the rest of this decade, and I explain why in this article (i.e., green energy, inflation). I could have styled this article in a matter-of-fact way, but I’ve been reading too much science fiction while pining for international travel to resume once again. And so I wondered, What would it be like sitting next to someone? And what if they wouldn’t stop talking? On an interstellar trip? What would I say? Hopefully the content is educational and entertaining. See you at the spaceport.”

USAGOLD note: An entertaining review of silver’s longer-term fundamentals for those looking to check that box on their investment To-Do List.

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

2022 is shaping up to be a bad year for the stock market as investors grapple with these 3 ‘shocks,’ BofA says

MarketsInsider/Matthew Fox/10-17-2021

graphic image of a seated bear gazing quietly back at the viewer“‘Bear case is pandemic ending and so is $30 trillion of emergency policy stimulus,’ BofA said, referencing the liquidity provided by global central banks since the pandemic began.”

USAGOLD note: We’re pivoting from pro-growth to anti-inflation, says BofA and that will send shocks rippling through financial markets in the coming year. More at the link ……

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

Notable Quotable

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

“The current combination of monetary debasement, populism and social unrest is neither a new phenomenon nor a coincidence. The late Roman empire shaved silver coins as it disintegrated; Henry VIII replaced silver coins with copper to pay for wars against France and Scotland; the British empire allowed double-digit inflation to erode bondholders’ wealth following the War of Independence; the Weimar Republic precipitated an inflation spiral. Comparing these examples to QE may sound extreme. Yet the biggest debasement in history may be the one we are experiencing now under the form of a $20tn central bank experiment, which is de facto depreciating money by boosting the price of all assets it can buy.”

Alberto Gallo
Algebris Investments

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

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

Fed staff says Wall Street is getting inflation all wrong

Bloomberg/Steve Matthews/10-18-2021

photograph of Federal Reserve monetary report booklets“The Federal Reserve’s army of more than 400 Ph.D. economists has a message on inflation for policy makers and the American public: Chill out.”

USAGOLD note: Presented as a public service announcement …… Out of the army of economists at the Fed, how many predicted a year ago that the inflation rate would go from 0.5% to over 4.25%? Not many, we would venture. So why should we believe Fed economists when they tell us inflation will be under 2% in 2022?

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

El-Erian says investors should prepare for bigger market swings

Bloomberg/Tony Czuczka/10-17-2021

cartoon showing a boat riding the rising tide“If I were an investor, I would recognize that I’m riding a huge liquidity wave thanks to the Fed, but I would remember that waves tend to break at some point, so I would be very attentive.” – Mohammed El-Erian, Queens College Cambridge

USAGOLD note: Quite a few heavyweight investors and analysts have weighed in of late on the danger of a cresting wave in the stock market. El-Erian is one of the more vocal in the group. He warns that inflation is likely to remain elevated for at least another year.

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

Chinese developer Sinic defaults as Evergrande deadline looms

Financial Times/Staff/10-19-2021

photograph of China Evergrande sign with Chinese characters

“Sinic Holdings has added to a growing list of defaults across China’s contracting real estate sector as markets are braced for a deadline this weekend for developer Evergrande to settle interest payments on its offshore bonds.”

USAGOLD note: Far from tansitory, far from contained …… China appears willing to bail out bond investors within its borders, but the jury is still out on foreign holders. If Evergrande defaults “offshore” this weekend, we will know soon enough whether or not we move to the early stages of a global contagion. You will find details at the link worth considering. Sinic’s default and the prospect of still more was probably a major impetus for gold’s strong move to the upside in overnight markets.

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!


Looking to prepare your portfolio for whatever uncertainty lies ahead?
DISCOVER THE USAGOLD DIFFERENCE
ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

ORDER GOLD & SILVER ONLINE 24-7

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

World Bank economist rules out risk of hyperinflation in Argentina

Buenos Aires Times/Staff

Repost from 10-15-2021

“I don’t see that risk. Inflation is around 50 percent but the government still has some tools to prevent the crisis from deepening. In addition, reaching an agreement with the IMF will anchor expectations, further reducing risk.” – William Maloney, World Bank chief economist for Latin America, when asked about the risk of hyperinflation in Argentina

USAGOLD note: Argentina, we are confident, feels reassured by these words. Calm, no doubt, has returned to financial markets. With thanks to Rogue Economics‘ Bill Bonner, who included this anecdote in a recent report. As shown in the chart below, it took 10 Argentina pesos to buy a dollar in 2016. It now takes almost 100.

US Dollar/Argentina Peso
line chart showing depreciation in the Argentina peso against the U.S. dollar 2012-2021
Chart courtesy of TradingEconomics.com

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

Contagion

Credit Bubble Bulletin/Doug Noland

Repost from 10-12-2021

“Beijing waited much too long to begin reining in its Bubble. Pandemic stimulus stoked already perilous excess. Now Chinese officials face a terrible predicament and onerous decisions. At this point, large liquidity injections could further stoke inflationary pressures, while risking a disorderly decline in the Renminbi. The Fed waited much too long to begin reducing historic monetary stimulus. Pandemic stimulus stoked already perilous excess. Federal Reserve officials could soon face quite a predicament and difficult decisions.”

graphic image of a red dominoe starting a chain reaction“Was the jobs report good enough for a November taper? That just doesn’t seem the crucial question today. What does the world look like a month from now? Has China’s unfolding crisis by then enveloped the ‘Core’? How powerful are de-risking/deleveraging dynamics in November, globally and in U.S. markets? My thoughts harken back to the March 2020 dislocation in bond (and equities) ETFs. Since then, Fed pandemic measures have spurred additional gargantuan bond fund inflows (at historically low bond yields), while simultaneously unleashing powerful inflationary dynamics. Quite a combustible mix. Clearly, the Fed is not about to ‘slam on the brakes.’ Might the bond market?”

USAGOLD note:  In this lengthy piece, Noland chronicles the unfolding debt crisis starting with China and Evergrande and working his way in careful detail to the contagion, as he now labels it, beginning to “wash up on our shores.” Noland conveys a sense that things could spin out of control, launching a crisis that could once again catch the bulk of investors by surprise. Secretary of State Blinken directed comments to China last week that serve as a wake-up call for western financial markets as well. He said that China should act “responsibly and deal with the challenges” imposed by the ongoing meltdown in its real estate and credit markets. What the country does economically, he said, “is going to have profound ramifications, profound effects, on literally the entire world because all of our economies are so intertwined.” In short, Blinken, too, is raising the specter of a contagion.

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

The illusion of control

Alhambra Investments/Joseph Y. Calhoun

Repost from 9-2-2021

graphic image of a wizard in silouette“I understand the desire of the public to believe that there is someone in charge, that we have some control over our economic fate. What baffles me is that the economists at the Fed and elsewhere continue to believe in the Fed’s control over such a wide range of real variables in the economy.”

USAGOLD note: An interesting look at the psychology behind the market action that ends with some proactive comments about YOLO (you only live once) and FOMO (fear of missing out).

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

How long will the US dollar’s dominance last?

Sovereign Man/Simon Black

Repost from 9-2-2021

graphic image of stacks of hundred dollar bills“It was nearly 1,000 years ago when foreign traders began looking for new options after they lost confidence in the solidus, and in the Byzantine government. Today there are already international banks, multinational businesses, and foreign governments that are starting to diversify out of the US dollar.”

USAGOLD note: Black says diversification out of the dollar will “happen gradually, then suddenly.”

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

A very predictable global energy crisis

OilPrice.com/Irina Slav

Repost from 10-12-2021

“Gas prices in Europe are breaking record after record. The UK is facing supply shortages reminiscent of the late 1970s winter of discontent. Chinese factories are shutting down because of power shortages, and the outlook is grim. In fact, it may be the first crisis of many.”

USAGOLD note: Predictable? Yes. The ramifications, though, are yet to be determined This article quotes long-term oil market expert Daniel Yergin as saying “It is a cautionary message about how complex the energy transition is going to be.” This article covers the origins and extent of the developing energy crisis as well as what is likely to sustain it.

Coal, natural gas, crude oil
(One year, % gain)

overlay line chart showing coal, oil, nat gas prices one year 10-21
Chart courtesy of TradingEconomics.com • • • Click to enlarge

 

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

Short and Sweet

How to spot a bubble
‘Amount of leverage in U.S. equity markets now easily the highest in history.’

Ramirez cartoon of Wall Street blowing speculative trading bubble
Cartoon courtesy of MichaelPRamirez.com

“If you want my opinion,” writes Hussman Fund’s John P. Hussman in a recent analysis, “I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue, as in 1987, driven by nothing more than the sudden concerted effort of overextended investors to sell, and the need for a large price adjustment in order to induce scarce buyers to take the other side. As usual, no forecasts are necessary. … This dysfunctional behavior isn’t about any particular video game retailer. I suspect it’s actually about some sort of fragility or segmentation in order-flow mechanisms, possibly coupled with poorly managed derivatives exposure. As I used to teach my students, show me a financial debacle, and I’ll show you someone who had a leveraged, mismatched position that they were suddenly forced to close into an illiquid market. Though my concerns run far beyond the amount of leverage in the system, it isn’t helpful that the amount of leverage in the U.S. equity markets is now easily the highest in history.”

These days spotting the bubble is about as difficult as finding it in the Ramirez cartoon above. Hussman attacks Wall Street’s new rationalization of buying into the bubble, i.e., extreme valuations are justified by low interest rates. Those who are all-in for fear of missing out – blindly walking on air – are obviously the most vulnerable. When investing becomes a matter of faith, that faith will be tested. A solid diversification, we will add, would blunt the downside. Though investor margin debt is small compared to the leverage funds and institutions deploy in the market, it does serve as a bellwether for analysts looking for what might trigger a market crash. SentimenTrader’s Jason Goepfert recently posted a warning to his readers that at $831 billion, we are fast approaching a “year-over-year growth rate in [margin] debt – on both an absolute scale and relative to the change in stock prices – will compare with some of the most egregious extremes in 90 years.”


Are you worried about the egregious extremes in the stock market?
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 Short and Sweet, Today's top gold news and opinion | Tagged |

Stock market’s volatile October history means it’s time to steady yourself for a ‘black swan’ event

MarketWatch/Mark Hulbert

Repost from 10-13-2021

image of black swan head“Gabaix’s research underlines why it’s so important to prepare for so-called black swan events like market crashes that are sudden, awful, unpredictable and rare. Notice that, by this definition, they are unpredictable, so it’s false comfort to believe you can anticipate future black swans in time to reduce your portfolio risk and thereby sidestep a market crash.”

USAGOLD note: Too often, minor events are described as “black swan” even though the portfolio effect is minimal. We would underline the word “awful” in Hulbert’s description above. It is an essential component of a real black swan. As he points out, portfolio insurance plays an essential role in prepping the portfolio for a real market meltdown  – though he neglects to mention gold and silver, the two most frequently chosen alternatives for hedging such an outcome.

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

Gold turns higher on inflation expectations, China property sector woes
Silver surges 3.9% higher in early trading

(USAGOLD – 10/19/2021) – Gold turned higher in overnight trading on rising inflation expectations and growing concerns about China’s property sector defaults. It is now up $20 in early U.S. trading at $1786.50. Silver us up 91¢ (+3.9%) at $24.19. “Low interest rates have created a tremendous leveraged bubble,” notes Equity Management Academy in a report recently posted at Seeking Alpha, “which we won’t know the extent of until it bursts. We are just seeing how over-leveraged China Evergrande was, and there are bound to be countless other firms that are equally over-leveraged. With money so cheap, it is extremely tempting to borrow money to invest, which leads to over-leveraging. … Gold and silver are real monetary assets and with them trading at fairly low levels, it is an excellent time to build a position in precious metals. As governments print more and more paper currency, the currency is devalued and it leads to inflation – which will make hard assets, such as gold and silver, worth far more than they are presently priced.”

Chart of the Day

Coal, natural gas, crude oil
(One year, % gain)

overlay line chart showing coal, oil, nat gas prices one year 10-21
Chart courtesy of TradingEconomics.com • • • Click to enlarge

Chart note: Concern is elevated that we might be in the middle of another energy crunch – a problem reflected in the price of coal, natural gas and oil, as shown in the chart. “Gas prices in Europe,” says Irina Slav in an article posted at the OilPrice.com website, “are breaking record after record. The U.K. is facing supply shortages reminiscent of the late 1970s winter of discontent. Chinese factories are shutting down because of power shortages, and the outlook is grim. In fact, it may be the first crisis of many.”

 

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