Here is how the yield curve inversions boost the gold price

Wall Street Window/Mike Swanson/6-10-2019

“The indicator on the bottom of this chart is the gap between the 3-month and 10-year US Treasury bond. As you can see it is now below zero, which means that the interest rate on the 3-month bond is higher than that of the 10-year. This is the very definition of an inverted yield curve and forecasts a future slowdown in the economy and future interest rate cuts from the Federal Reserve. Now as you can see this has happened twice in the past twenty years and both times it did gold soon broke out of a long-term resistance level to launch big massive gold bull runs that lasted for years.”

USAGOLD note:  The reasons for those previous massive bull runs are twofold.  The first has to do with economics. The Fed immediately talked up and inaugurated stimulus programs to keep the economy from rolling over to a deflationary depression and financial panic.  The second has to do with market psychology. The possibility of a systemic breakdown ran at fever pitch causing a worldwide influx of capital into the gold market.  The two together amount to the disinflationary argument for gold ownership and one we have made for a long time here at USAGOLD.  The best strategy is to understand what’s at work in this economic milieu and make your purchases ahead of the clamor when it becomes evident to the masses.

Repost from 6-11-2019

Posted in Today's top gold news and opinion |

Gold reverses overnight downtrend, now up marginally on the day

(USAGOLD – 6/17/2019) – Gold has reversed an overnight downtrend that took it just below the $1335 mark.  It is now trading at $1342 up $1 from Friday’s close and $7 from the overnight bottom. Silver is up 2¢ at $14.91. Since vaulting to the $1355 level on Friday, gold has retraced some of its gains (from the $1280 interim bottom at the end of May) but looks now like it might be regaining its footing.

Financial markets, in general, are in abeyance this morning and weighing potential outcomes from this week’s FOMC meeting.  The Fed will be addressing serious market concerns about a possible recession and the ill-effects of the U.S.-China trade war at its meeting tomorrow and Wednesday.  Though most analysts feel a rate decrease will not come until July, there is a lingering cloud of unpredictability hanging over this meeting. A surprise of some kind is not out of the question.

Quote of the Day
“One thing that amazes me about the current cohort of global central bankers is the lack of insight into the fact that their extreme loose monetary policy and financial repression may actually be making deflation in the real economy worse – despite clearly succeeding in creating rampant inflation in financial assets. To be sure some of the major players in the central banking orbit, such as ex-Fed Governor Kevin Warsh, have broken out of the QE group-think that grips the minds of central bankers. Warsh has openly stated that financial repression has exacerbated, rather than cured, our economic ills.” – Albert Edwards, SocGen

Chart of the Day

Chart note:  This chart shows the connection between inverted rates and recessions.  Some say that the rate inversions predict recessions, other say inversions create recessions.  Either way, central banks tend to stimulate economies when recessions surface or even prior to their surfacing.  The next Federal Reserve Open Market Committee meeting occurs Tuesday and Wednesday and we should know more about its rate stance by Wednesday afternoon.

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

Currency markets expose a crucial flaw in Trump’s China tariffs

Bloomberg/Katherine Greifeld/6-14-2019

“After Trump raised tariffs on $200 billion of Chinese imports last month, the yuan quickly fell toward 7 per dollar — a level not seen since the financial crisis. The drop effectively reduced the price of Chinese imports in dollars and has blunted the cost shock of higher tariffs. (The same thing happened with the peso following a similar threat against Mexico in late May; the peso plunged over 2% in less than an hour.)”

USAGOLD note:  The hole in this argument is that China does not appear to have a great deal of interest in allowing significant depreciation of the yuan and it has the reserves to mount a credible defense of the yuan if it so chooses.  History has shown that the free market ultimately overrides currency interventions so we will have to see how all of this works out.  Goldman recently suggested a 2019 Sino-American version of the Plaza Accord might be imminent. That agreement between Japan and the United States under similar circumstances in 1985 allowed for a depreciation of the dollar against the yen.

Posted in Today's top gold news and opinion |

Beijing stockpiles on gold to hedge against potential economic downturn

CNA/Tom McGregor/5-14-2019

“A more accurate interpretation is that China, like many other countries, is watching very closely global economic indicators, in anticipation that the global economy may be heading towards gloomier days. As it strives to buffer its people from the harmful effects of a downturn, the Chinese are responding in a routine manner to protect themselves against potential headwinds by making safe investments to protect coffers and shoring up reserves of the US dollar and gold, both of which tend to rise in value when the international economy slows down.”

USAGOLD note:  China’s official sector gold acquisitions are nothing new.  They have been going on for over a decade and for the reasons the author mentions.  We continue to believe that the announcements of increases to their gold reserves of late are after the fact.  At some point, China will reveal its real gold reserve number and it will likely jolt the market.  The roughly 15 tonne additions per month now being announced, we believe, are just the tip of the iceberg.

Chart courtesy of

Posted in Today's top gold news and opinion |

Wealthy Americans say financial worries hurt their mental health

Bloomberg/Lananh Nguyen/5-14-2019

“Even relatively wealthy Americans are so worried about their finances that it’s affecting their mental and physical health. That’s one of the findings in a Bank of America Corp. survey of more than 1,000 people in the U.S. who have enough investable money to qualify as “mass affluent.” Financial concerns affected the mental health of 59% of respondents, while 56% said their physical health has been hurt.”

USAGOLD note:  One wonders how many among that 59% are properly diversified – and by that we mean with gold as part of the portfolio mix. (Too many see diversification as the proper mix between stocks and bonds.)  Want less stress – or no stress?  Diversify and let others fret.

Image by TheVisualCapitalist/Jeff Desjardins

Posted in Today's top gold news and opinion |

Why the next bear market could shave 35% off the Dow

MarketWatch/Mark Hulbert/5-14-2019

“How severe? A simple econometric model whose inputs are past bear markets and CAPE values predicts that, if a bear market were to begin from current levels, the Dow would tumble 35.3% Though that’s less severe than the 2007-2009 bear market, it still would sink the Dow below 17,000. Bulls take note.”

USAGOLD note:  A numbers based approach worth that might be particularly useful for those who refuse to recognize that bear markets can be very difficult experiences.

Posted in Today's top gold news and opinion |

Previewing the upcoming FOMC meeting

Federal Open Market Committee meeting – June 18 -19, 2019

Fed could deliver dovish shock

Investopedia/Edward Moya/6-13-2019

“The Fed is in the middle of correcting a couple of policy and communication mistakes, and the markets should not be caught off guard if the central bank decides to deliver a surprise rate cut at June 18-19 meeting. While the Fed is historically slow to act, it has laid out the groundwork to officially signal a shift from a tightening bias to an easing one.”

The Fed won’t cut rates at its June meeting. Here’s why

CNBC/Jeff Cox/6-15-2019

“Not moving next week essentially comes down to three factors, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and President Donald Trump’s hectoring; and the desire to avoid making December’s rate hike look like a policy mistake.”

USAGOLD note:  Cosmetics and substance about to collide?

Fed faces Hobson’s Choice

Credit Bubble Bulletin/Doug Noland/6-15-2019

“The global yield collapse is not so much in response to economic weakness and trade war risks. The global financial system is an accident in the making. China is an accident in the making. Markets are demanding: ‘Give us rate cuts and prepare for aggressive QE – or we’ll give you central bankers the type of vicious market dislocation you are not prepared to contend with!’ The Fed is faced with the Hobson Choice of either stoking the Bubble or waiting for incipient ‘risk off’ – and hoping it possesses the firepower to hold things together. Markets bet confidently the Fed lacks the fortitude to wait.”

USAGOLD note:   Mr. Trump himself has made it abundantly clear that he is in step with those market demands.  We will get an idea this week where the Fed stands.  As someone said recently, it used to be that the Fed was responsible for removing the punch bowl from the party.  Now the punch bowl is glued to the table.

The Fed tries to predict politics

Financial Times/James Politi/6-15-2019

“When Jay Powell stepped up to the podium at the Federal Reserve Bank of Chicago earlier this month, he delivered what in Fed-speak amounted to a thunderbolt. Talking about the impact of ‘trade negotiations’ between the US and China, the Fed chairman said: ‘We are closely monitoring the implications of these developments for the US economic outlook and, as always, we will act as appropriate to sustain the expansion.’”

USAGOLD note:  Fed meetings do not usually bring out the best in gold, but this time could be different with the level of uncertainty rattling around markets. In that same speech, Powell said tools used during the credit crisis – near-zero rates and quantitative easing – are likely to be deployed again, a course of action to which the Fed had not committed publicly before.  He also said that it was time to retire the word “unconventional” when referring to those tools.  At first, the gold market pretty much ignored that change in philosophy, but now it seems to be sinking in along with the longer-term implications.

Posted in Today's top gold news and opinion |

COT–Gold specs sharply boost bullish bets 2nd week

–– Now posted ––
Commitment of Traders reports for Tuesday, June 11, 2019

Commentary by Zac Storella, CountingPips


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

‘Bond King’ Jeffrey Gundlach bets on gold, sees rising recession chances, dollar decline

CNBC/Yun Li/6-14-2019

“DoubleLine CEO Jeffrey Gundlach is betting on gold. ‘I am certainly long gold,’ Gundlach said in an investor webcast Thursday. He added his trade is based on the expectation that the dollar will finish the year lower.”

USAGOLD note:  It is not surprising that Gundlach is a gold owner given his current perceptions not just about the dollar but about the stock and bond markets as well.  Gold may be the only logical refuge.

Posted in Today's top gold news and opinion |

Capitalism vs. socialism. And the winner is …

FoxBusiness/Steve Forbes

“The morality and strength of capitalism (or free enterprise, free markets, whatever term you choose for the U.S. economic system) is that it allows people to succeed by meeting the needs and wants of others. People in a capitalist society are constantly trying to come up with ways to make everyone’s lives better. The failures critics blame on capitalism are caused by the mistakes of government, not an economic system that rewards hard work and innovation. Those failures are many.”

USAGOLD note: Margaret Thatcher said it best: “The problem with socialism is that you eventually run out of other people’s money.”

Repost from 5-23-2019

Posted in Today's top gold news and opinion |


Gold – Past, present and future

Dr. Moneywise says:  Gold has a past. I suspect it has a future. We live in a time when currencies and financial markets have become political enterprises – creations of the world’s governments and central banks. Since we have never seen times like these, when so much depends on the monetary largesse of the policy-makers, no one really knows where the future might lead us. Uncertainty reigns and, when that is the case, history teaches us that gold demand rises proportionally and at times impressively so.

“Why is it,” asks Nathan Lewis in a Forbes magazine article, “that the collective intelligence (let’s be generous) of today’s central bankers, and indeed all the central bankers since 1971, cannot outperform a yellow rock? This probably strikes some as bizarre, but it has always been thus. Way back in 1928, in a book called The Intelligent Woman’s Guide to Socialism and Capitalism, George Bernard Shaw declared: “You have to choose … between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”

Whether or not gold is the best basis for money may be a moot point.  On the other hand, whether or not private investors should own it because the money is not gold-backed remains a vital question. The gift of gold – the one passed from generation to generation from ancient times to present – is the protection it offers against a profligate government, an unpredictable economy, unstable financial markets and a myriad of additional threats to private wealth. The gift of gold, in short, is peace of mind.


Posted in Dr. Moneywise, Today's top gold news and opinion | Tagged |

Morgan Stanley tells investors to play defense as cycle indicator flashes ‘downturn’

MarketWatch/Sunny Oh

“Investors should brace for market turmoil over the next 12 months. That’s the warning from Morgan Stanley’s cross-assets team, who says their cyclical indicator has flipped to ‘downturn’ from ‘expansion,’ a shift that has historically led to weaker returns for stocks and other risky assets, along with an elevated chance of a recession. In a note dated on Sunday, the bank advised market participants to go on the defensive, eschewing U.S. stocks for the safety of Treasurys and cash.”

USAGOLD note:  There’s one other alternative that Morgan Stanley may have skipped in its recommendations.  It is yellow, shiny and it comes in the form of coins and bullion. Best of all, when you own it in physical form, it is not simultaneously someone else’s liability.

Repost from 6-3-2019

Posted in Today's top gold news and opinion |

‘Where can you still put your trust in today’s often cynical world?’

ETF Daily News/Frank Holmes/6-10-2019

“Americans’ trust in institutions, from the federal government to banks to the news media, has been deteriorating for decades. Sixty years ago, three quarters of Americans expressed faith in the government to do the right thing “most of the time” or ‘just about always.’ Today, only one in five people, a near-record low, believes our leaders make decisions in the country’s best interest.”

USAGOLD note:  Holmes takes the same tack as many American investors worried about the stability of our institutions.  “As an investor,” he says, “I continue to have great faith in gold as a store of value during times of economic and geopolitical uncertainty.”

Repost from 6-10-2019

Posted in Today's top gold news and opinion |

The USAGOLD Website – A guiding light for current and would-be clientele since 1997

Welcome newcomers!

When the USAGOLD website was established in 1997, there was no Google, no Facebook, no I-Tunes, no Amazon. Instead there was just a handful of scattered websites trying to figure what this new technology was all about and how it could be used to some advantage.  We were among that group.  Our idea of innovation in those early days was two spinning globes on either side of the USAGOLD logo.  We marveled at it; considered it state of the art.  If you would like to witness that piece of technology in action, you can see it here at the WaybackMachine.  (Don’t laugh.)

But being among the first on the internet to have spinning globes was not our only achievement. We were also among the first to sponsor a Daily Market Report (1996), a Discussion Group (1997), Live Prices and Charts (2007) and a Mobile Website (2011) – to mention just a few of our ground-breaking internet ventures.  We await the next wave of innovation so that we can offer even more value to our regular visitors.

Through our 22-year presence on the world wide web, the philosophy underlying our website has always been a simple one – to act as a guiding light for our current and prospective clientele by providing a state of the art information portal coupled with a reliable and competitive brokerage service.  We had and still have no aspirations beyond that, and that pinpoint focus has paid dividends beyond anything we would have imagined in 1996.

From a humble beginning (When you visit the WayBackMachine, take special note of the number of visitors registered on our counter!) we have grown to over 600,000 visitors per month currently and there have been times when that count has been significantly higher. USAGOLD today remains one of the most highly referenced and visited web portals in the gold business. We once had a client tell us of visiting the Gold Souk in Dubai and being surprised that so many merchant stalls had USAGOLD on their computer screens. 

If you would like to gain a better understanding of what USAGOLD has to offer to you as a current or prospective client, the menu at the top of the page is good place to start.  For a full site outline including links and page descriptions. . . . . .

We invite you to visit our
Table of Contents

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

Gold rises sharply on Mideast tensions

(USAGOLD – 6/14/2019) – Gold rose sharply in overseas markets last night after Secretary of State Mike Pompeo blamed Iran for the tanker attacks in the Gulf of Oman. That strength carried over to the COMEX open in New York where it is now trading at $1350 – up $5.50 after being up $9 yesterday. Though the tanker attacks are the clear catalyst for the upside, safe-haven demand and the price were already in a steady upward trajectory on recession, trade and interest rate concerns.  Silver is up 3¢ at $14.98. Technical analysts have long identified the $1350-$1360 price level as strong overhead resistance for gold.

Stay tuned.  We will update this afternoon if anything of interest develops.

Quote of the Day
“If we don’t quite know what the future holds, there is little point in getting carried away by very fancy mathematical calculations of optimal portfolios. Don’t rely on past data to be a good guide. Try to think through what mix of assets gives you the best chance of surviving some big event. That must mean including assets that are negatively correlated or uncorrelated in your portfolio. And I am 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. Obviously, there is no high running return, but when 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.” – Mervyn King, former Governor, the Bank of England

Chart of the Day

Chart note:  This chart shows how both the dollar and gold reacted to the start of the credit crisis from late 2007 to late 2008.  The initial reaction for gold was a strong move to the upside.  For the dollar, it was the opposite – a strong move to the downside. Then in early 2008 as the dollar strengthened, gold declined. But for both that slice of price history was more a beginning than an end. In the ensuing three years (not shown), as the depth of the crisis became apparent and central banks launched stimulus policies, gold kicked into overdrive rising from the $720 level to nearly $1900 per ounce.  The US Dollar Index declined by about 18% over the same period.

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

May deficit surges to $208 billion, 42% higher than last year

The Hill/Niv Elis/6-12-2019

“The federal deficit in May reached $208 billion, surging 42 percent over last May’s monthly deficit figure, according to new Treasury Department data released Wednesday. The figure put the cumulative deficit for the eight months of fiscal 2019 at $739 billion, within range of the full 2018 deficit, which amounted to $779 billion, according to the Treasury figures. Treasury estimates that the full deficit will exceed $1 trillion by the time the fiscal year wraps up at the end of September.”

USAGOLD note:  That $208 billion monthly figure is extraordinary.  And that is under relatively strong economic circumstances. What happens if/when the recession hits?  The rhinoceros in the room. . . . . . .

Posted in Today's top gold news and opinion |

Gold wins with no end in sight to U.S.-China trade war – Bank of America

Kitco/Neils Christienson/6-12-2019

“Gold could be one of the big winners as the trade war between the U.S. and China continues to escalate with no end in sight, according to one American bank. Analysts at Bank of America Merrill Lynch reiterated their call that gold prices could push through $1,400 an ounce this year as geopolitical and trade uncertainty weighs on global economic growth.”

USAGOLD note:  Bank of America joins the chorus on the prospects for gold under the current circumstances.

Posted in Today's top gold news and opinion |

US blames Iran for Gulf of Oman tanker attack

“Mike Pompeo, the US secretary of state, has blamed Iran for attacks in the Gulf of Oman that severely damaged two oil tankers, sparked a surge in crude prices and heightened tensions in the Middle East.”

USGOLD note:  For those wondering why gold started the day quietly and ended it with a bang. . . . .

Posted in Today's top gold news and opinion |

Better Business Bureau Five Star Review


Recent Better Business Bureau Client Review

“Before investing in gold I really didn’t have a clue about what or how much to invest in. I came across the USAGOLD website and found an excellent resource for both first time and seasoned buyers. My representative has always provided me with useful and trustworthy analysis related to the markets and trends that has further informed my purchase decisions. Transactions are timely and handled with a high degree of professionalism and integrity. I cannot recommend this company highly enough.” – Y.O., 5-14-2018

Scorecard: 38 45 48 53 five star reviews. Zero complaints.
A+ rating. Accredited since 1991.


USAGOLD Recommendation: The precious metals industry is unique in the financial industry in that it is not subject to oversight or regulation by third-party government entities like the SEC or CFTC. As such, marketplace forums and feedback sites often serve as a replacement for investors attempting due diligence. While several options can be found, by far the most impartial and least susceptible to vested influence is the Better Business Bureau. When looking at a company’s BBB profile, don’t focus solely on the rating. To be honest, pretty much everybody has an ‘A’ or ‘A+’ rating. What is far more important to assess is the number and nature of complaints, number and caliber of positive and negative reviews, longevity with the BBB, as well as the number of ‘stars’ given a company through the actual customer review system.


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

The next great monetary experiment

DailyReckoning/Brian Maher

“This MMT sounds like a recipe for immense inflation, even hyperinflation. You are spending all this money directly into the economy. It will drive consumer prices through the attic roof, you say. This is crackpot. A witch’s sabbath of inflation would surely result. Yes, but here the MMT crowd meets you head on… They agree with you. They agree MMT could cause a general inflation, possibly even a hyperinflation.”

USAGOLD note:  Modern Monetary Theory (MMT) is neither modern nor a theory. John Law, the Scottish financier, tried a version of it exactly 300 years ago (1717-18) in France.* He did so with the blessing of the French monarchy and with a rationale very similar to MMT’s proponents today. In the end, Law’s theories (to his surprise if we are to believe the historical account) bankrupted the French people and the government, reduced the economy to ashes, and created such a distaste for paper scrip among the citizenry that it took 80 years for France to reintroduce paper money as a circulating medium.

“The shrewder speculators* became alarmed. They began to sell their shares of stock, and hoard in gold the enormous wealth they had acquired. This resulted in a demand on the government for metal in exchange for its paper, and soon the government had no metal to give. Then the crash came. Those who had the government paper could buy nothing with it. Those who held the Mississippi stock could scarce give it away. It was worthless. The government itself refused to accept its own paper for taxes. A few lucky speculators had made vast fortunes; but thousands of families, especially among the wealthier classes, were ruined.” – Edward S. Ellis and Charles F. Home, The Story of the Greatest Nations (1900)

* Please see this link for a summary of  Law’s Mississippi Company land scheme.

Image by Internet Archive Book Images [No restrictions], via Wikimedia Commons/The Mississippi Bubble, Street of Speculators/The Story of the Greatest Nations/Edward S. Ellis and Charles F. Home (1900)

Repost from 2-4-2019

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

Short and Sweet


Doomsday prep for the super-rich

“Survivalism, the practice of preparing for a crackup of civilization, tends to evoke a certain picture: the woodsman in the tinfoil hat, the hysteric with the hoard of beans, the religious doomsayer. But in recent years survivalism has expanded to more affluent quarters, taking root in Silicon Valley and New York City, among technology executives, hedge-fund managers, and others in their economic cohort.” – Evan Osnos, The New Yorker

Everyday on this page we report on the reasons why gold ownership makes a great deal of sense to ordinary investors.  In doing so, we have always taken exception to the mainstream media’s portrayal of the ordinary gold owner as “the woodsman in the tinfoil hat”. . . etc.  I would think that many among the media are utterly amazed that people like Steve Huffman (Reddit, CEO), Peter Thiel (PayPal founder) and the long roster of other luminaries mentioned in this New Yorker article are identified as “preppers” in one capacity or another.

They would probably be even more amazed to find that a good many of this same group are likely to be gold and silver owners as well. As such, they take their place alongside a wide range of Americans who own gold – physicians and dentists, nurses and teachers, plumbers, carpenters and building contractors, business owners, attorneys, engineers and university professors (to name a few.)  We know because that is the description of our clientele. In other words, gold ownership is pretty much a Main Street endeavor. One Gallup poll a few years back found that 34% of American investors rated gold the best investment “regardless of gender, age, income or party ID. . .” In that survey, investors rated gold higher than stocks, bonds, real estate and bank savings.


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

Investors are counting on Jay Powell to save them

Financial Times/Gillian Tett

“This week, I asked a flock of financiers at a New York conference to predict the direction of American interest rates. The results were clear-cut . . [T]hree-quarters of the group expected two or three rate cuts over the next year. Wall Street, in other words, thinks the interest rate cycle has turned — with a vengeance.”

USAGOLD note:   Some direct evidence of Wall Street’s attitude on rates from Gillian Tett.  This supplements our post yesterday on rates with reference to the thinking of the New York Fed’s Williams (please scroll).  She ends with a few well-chosen words of warning on the ‘Greenspan put’ which has become in today’s parlance the ‘Fed put.’

Repost from 6-6-2019

Posted in Today's top gold news and opinion |

Fed uses Chicago conference to signal it will use quantitative easing aggressively to fight next recession

MarketWatch/Greg Robb

“The Federal Reserve’s two-day Chicago strategy conference laid the groundwork for the aggressive use of asset purchases, known as quantitative easing, to counter the next recession, experts who attended the forum said. With short-term interest rates in a range of 2.25%-2.5%, the Fed does not have a lot of ammunition to fight the next downturn. In the past, the Fed was able to slash rates by 5 percentage points to stimulate the economy as needed. So the Fed is going to use ‘pretty aggressive, desperate, measures,’ to stem the next recession, said Adam Posen, president of the Peterson Institute for International Economics.”

USAGOLD note:  What is odd about the resurrection of quantitative easing is that few in and around the Fed seem opposed to it.  Now, the Fed intends to employ “desperate measures” in an ordinary recession.

Repost from 6-9-2019

Posted in Today's top gold news and opinion |

You want to buy gold right now

Bloomberg Commodities Edge/Interview of Citi Research’s Ed Morse

USAGOLD note:  When asked if a gold is buy right now, Morse says “Absolutely. . .”  He says gold is not just a safe haven asset, it is a wild card asset.”  He sees gold as going “significantly higher.”  The video begins with some very interesting comments from Electrum Group’s Thomas Kapaln.

Repost from 6-9-2019

Posted in Today's top gold news and opinion |

Gold reaction to Gulf of Oman tanker attack muted

(USAGOLD – 6/12/2019) – Gold’s reaction to the tanker attack in the Gulf of Oman has been muted thus far. It is up $2 on the day at $1336 after being up as much as $5 in overnight trading. Oil, on the other hand, rose over 3% on the news. A similar rise in gold would have had it up $40 on the day.  Silver is up 4¢ at $14.81.  As it is, the chief determinants in capital flows remain the potential for a recession, a possible escalation of the trade war between the U.S. and China and falling interest rates in response. Over the past two weeks, gold has been a prime beneficiary of those flows led by professional money managers seeking a safe haven.  Its price is up almost 4.5% since the end of May as a result.

Highly-regarded billionaire investor Paul Tudor Jones is among that group of professional money managers with a favorable outlook for gold. “If I had to pick my favorite for the next 12 to 24 months,” he told Bloomberg in an important interview, “it would be gold. If it goes to $1400, it goes to $1700 rather quickly.” Tudor Jones goes on to say that the U.S. is reversing 75 years of expanding globalization and trade. “When you break something like that, a lot of times the consequences won’t be seen at first. It might be seen one year, two years, three years later. . .  So that would make one think that it’s possible that we might go into a recession or make one think that it would make rates go back toward the zero bound level and of course in a situation like that gold is going to scream.”

Quote of the Day
“Debasement was limited at first to one’s own territory. It was then found that one could do better by taking bad coins across the border of neighboring municipalities and exchanging them for good with ignorant common people, bringing back the good coins and debasing them again. More and more mints were established. Debasement accelerated in hyper-fashion until a halt was called after the subsidiary coins became practically worthless, and children played with them in the street, much as recounted in Leo Tolstoy’s short story, Ivan the Fool.” – Charles P. Kindleberger, Manias, Panics and Crashes

Chart courtesy of

Chart note: If you follow the on-going trade war between the United States and China with even passing interest, you have no doubt come across references to China selling U.S. Treasuries as its ultimate hole card. This chart shows something that few, including many financial journalists, acknowledge: China has been unloading exchange reserves since 2014 when they peaked at nearly $4 trillion. Most of those reductions, which have taken China’s reserves to a little over $3 trillion (a 25% reduction) occurred from 2014 to 2017 and came as part of its policy to smooth the yuan exchange rate against the dollar and prevent wholesale capital flight. It is unclear at this juncture to what extent China would be willing to drain reserves in defense of the yuan at this point in time. Trading Economics, as the chart shows, projects further reserve reductions in the future.

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

A recession shock could wipe 30% off U.S. stocks, warns Oxford Economics

MarketWatch/Barbara Kollmeyer/6-12-2019

“An uneasy mood is rippling through markets. For starters, we’ve had chaotic scenes out of Hong Kong where police have been firing tear gas on protesters who amassed in the thousands to push back against a China extradition bill. That news has hit local stocks hard, and may be partly why we’re seeing some safe haven moves to gold, Treasury bonds and the Japanese yen.”

USAGOLD note:  So starts this short piece that goes on to examine Oxford Economics worst-case scenario as captured in the headline to this post.

Posted in Today's top gold news and opinion |

‘Full-scale bear market’ for stocks is among 3 scenarios Citi analysts predict amid trade tension

MarketWatch/Mark DeCambre/6-10-2019

“‘Applying a game theory lens to the problem, one could argue that President Trump is likely to continue to take a hard line,’ the analysts said. That could help drive stocks into a bear-market, which is usually defined as a drop of at least 20% from a recent peak. . .With that thinking in mind, the Citi analysts anticipate a trio of market outcomes as tariff negotiations progress ahead of the G-20 meeting this month.”

USAGOLD note:  Citi goes on to list three scenarios, two of which forecast gold rising considerably. . .in one to $1600 and the other to $1500.

Posted in Today's top gold news and opinion |

Hayek’s slippery slope

The National Interest/Neil McInnes

“In fact, Hayek said, central planning led, via cumulative attempts to mend its inevitable failures, to ‘a servile state’ (he recalled Hilaire Belloc’s 1913 book of that name). It led to serfdom, to a condition ‘scarcely distinguishable from slavery.’ Moreover, any attempt at getting a little bit pregnant in this domain, by toying with moderate planning and a ‘middle way’ between capitalism and socialism, would set the democracies on a slippery slope that would end, more slowly but just as surely, in that same serfdom. The free market was not only more efficient economically but indispensable for political and cultural freedom. Its enemies were intellectuals, meddling politicians–and unbridled democracy, which is to say, oppression and spoilation by demagogues invoking the unrestricted will of the majority.”

USAGOLD note:  Given the developments in American politics over the past several months, including the left’s sudden embrace of Modern Monetary Theory, it might be worthwhile to revisit the thinking of Frederich von Hayek and, in particular, his book, The Road to Serfdom. Von Hayek was awarded the Nobel Prize for Economics in 1974. The article linked is a review of that book and highlights many of von Hayek’s principles. He memorably dedicated the book to “The socialists of all parties”.

Repost from 4-23-2019, article publication date = 3-1-1998

Posted in Today's top gold news and opinion |

A USAGOLD Special Report



Toward a better understanding
of the U.S. national debt . . .
and its consequences

“As of Friday, April 12, 2019, the national debt stood at $22,027,837,127,788.04 – $966 billion higher than a year ago, $2.081 trillion higher than when Donald Trump took office January 20, 2017, and nearly double where it was ten years ago. It is no doubt much higher now than it was then as that is the nature of the national debt. It always grows. It never shrinks. And that has consequences for the country and for you as an investor.”

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Is the supply of gold depleting?

The Gold Telegraph/Lawrence Thomas

“The demand for gold is increasing, yet new discoveries of the precious metal have not kept pace with the demand. Funds for exploration are historically high, $54.3 billion, up 60 percent over the past 18 years. . . Gold discoveries have followed a predictable pattern. 263 major gold discoveries have been made in the past 28 years, but half of those discoveries happened in the 1990s. This boom lasted until the turn of the century when the rate of discovery began to decline. Only 16 discoveries were reported from 2000 to 2002, which produced 108.3 [million] ounces of gold. That amount was below the average finds of the 1990s. This decline has continued, with both new discoveries and the amount of gold mined decreasing steadily. By 2010, only 18.6 million ounces of gold was discovered, a severe drop from the 61.5 ounces found in 2009.”

Repost from 5-7-2018

Posted in Today's top gold news and opinion |