The Great Depression was the most severe economic depression ever experienced by the Western world. It was during this troubled time that the world’s most famous case of deflation also happened. The resulting aftermath was so bad that economic policy since has been chiefly designed to prevent deflation at all costs.
Gold is 3.6% higher this week and is now over 9% higher year to date. The dollar saw sharp falls this week on growing doubts that the Federal Reserve will be able to raise interest rates. The gains this week were due to increasing concerns about the U.S. and global economy.
Ponzi schemes are as old as time.
In the wake of the most recent financial and economic crisis of 2007–2008, many people have become concerned that their savings, mostly invested in fiat-denominated bank accounts and bonds, could be devaluated. This has prompted a search for "good" money. A 'colored' bitcoin - or something comparable using blockchain technology - represents a possibility.
The psychology dominating the minds of most institutional investors over the past few years has been that things were slowly getting back to normal. This has weighed on institutional demand for gold in a big way, and been a meaningful factor in the bear market (manipulation aside). The problem now is that this assumption is quickly being called into question, and if this psychological shift gathers pace, the shift back into gold could be very meaningful.
When asked that question last year at the New Orleans Investment Conference Greenspan had two words for the interviewer.
When people lose everything and they have nothing to lose, they “lose it.”
Ten years ago this week, Alan Greenspan left his post as head of the US Federal Reserve, facing disgrace among hard money advocates, which largely persists to this day. However gold investors can learn an important lesson from how little influence Greenspan, one of the gold standard’s most eloquent backers, had during his 18-year tenure.
It didn't take much to fizzle Friday's Japan NIRP-driven euphoria, when first ugly Chinese manufacturing (and service) PMI data reminded the world just what the bull in the China shop is leading to a 1.8% Shanghai drop on the first day of February. Then it was about oil once more when Goldman itself said not to expect any crude production cuts in the near future. Finally throw in some very cautious words by the sellside what Japan's act of NIRP desperation means, and it becomes clear why stocks on both sides of the pond are down, why crude is not far behind, and why gold continues to rise.
Looks like something big is about to take place.......
"Unfortunately, it is not [a mistake]... This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market."
We have made a contrarian call for a falling silver price and a rising gold to silver ratio for years. This ratio has risen a lot during this time. Are we ready to change our call yet?
We have liquidity concerns. We have safety concerns. We have cost and efficiency concerns.
Gold futures just broke out of their recent range, pushing well above the key 100-day moving average and testing towards $1120 - the highest since early November. It appears precious metals are signaling - as they have done since mid-December - that The Fed will be forced to admit it is wrong - just as Jeffrey Gundlach warned.