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Confusing Inevitable With Imminent
Submitted by Jeff Thomas via InternationalMan.com,
In the early 2000s, I began to advise friends and associates that much of the world would likely be entering a depression before the decade was out. In my belief, it would happen in stages, first with an initial mini-crash and recovery, but that, at some point, several years later, the recovery would prove to be a false one. The economy would remain in the doldrums. Then, a far bigger crash would take place and the world would be in a full-blown depression. As a hedge, I recommended that they buy gold, as gold would survive and retain value, as stocks, bonds, and even currencies went south.
I turned out to be correct on the timing of the initial crashes, but entirely incorrect on the timing of the second, greater crash.
I considered it possible that the major events could begin as early as 2010, but would more likely occur from 2012 on. That date has passed, and, although governments have consistently damaged their economies ever further, the house of cards, however shaky, is still standing.
Thankfully, I’m not alone in my inexact timing. Those investors and economists who have had decades-long records for accuracy in their prognostication have all been early in their predictions with regard to the major events that surround the coming crashes.
And each has recommended gold as a hedge, stating that, if and when markets do crash and currencies collapse, there will be a dramatic rise in the price of gold.
Certainly, gold continued its rise following the mini-crash of 2008, and it seemed that it was on its way skyward. Many prognosticators stated that, if it topped $2,000, that would be it; there would be no stopping gold, as even the average person would finally understand that gold is not an investment as such, but a means of wealth preservation, especially during times of great flux.
But, after gold passed $1,900, it took a dive. Gold bugs regarded it as an overdue correction, but the “get rich quick” punters dropped gold like a hot potato and gold remained down. Each time gold has rallied, the bullion banks have sold naked gold shorts in the futures market, then purchased the shares, to be redeemed for bullion, which has then been sold in the physical market, hammering down the gold price. Now, four years after the fall from $1,900, gold sits a price that makes it just low enough to prohibit the profitability of taking it out of the ground.
Certainly, it benefits both the banks and the major governments of the world to hold down gold and we should not be surprised if they endeavour to do so.
Nowhere is the “gold is dead” message more prominent than in the U.S., where people tend to see the value of any commodity in terms of its relativity to the U.S. dollar. Understanding gold’s real value would be easier if Americans regarded the dollar as “rising against gold” instead of “gold declining against the dollar.” This may seem like hair-splitting, but, in fact, the dollar is concurrently rising against most of the world’s currencies. The currencies of most countries are, in fact, declining against gold.
These Are the Good Old days
The U.S. dollar is looking good worldwide and, in fact, so is gold - it’s just that, at present, the dollar is in the number one spot. In fact, I wouldn’t rule out a burst of faith in the dollar when, inevitably, the recent papering-over of the Greek problem once again fails and the EU as a whole is clearly in trouble. When that occurs, gold will again rise, but the dollar will also be likely to rise - possibly more dramatically than gold.
But, unlike gold, the dollar is at risk. U.S. debt has placed it in a precarious position from which it will most certainly fall. As billionaire investor Jim Rogers has repeatedly stated, “I’m long the dollar, but I hope I’m smart enough to get out in time.” Recently, he added, "If gold goes under $1,000, I hope I'm smart enough to step up and buy more gold - maybe even a lot of gold."
The dollar is not a truly strong currency; it is essentially, “the best looking horse in the glue factory.” It will be the last to go, but it will indeed go. We may have a bit of time before that happens. Whether it’s measured in months or years, we can’t be certain. But right now (and especially if the dollar rises further against gold), gold is a bargain. It has either reached its bottom, or will do so in the foreseeable future. Any significant drop would be a sign to back up the truck and load up, as its eventual rise is inevitable.
These are, in fact, the good old days; a time when gold is comparatively cheap.
Availability of Gold
But those who are just getting on board with the concept of wealth preservation through gold ownership are bumping into a problem that they hadn’t anticipated - it’s getting harder to find any for sale.
With the news of each major sell-off, investors assume that availability must be considerable, yet physical gold is becoming evermore difficult to locate. The Chinese, who have a vested interest in holding down the price, repeatedly downplay their purchase volume, yet even the amount that is known to pass into Chinese hands far exceeds that which they claim to hold.
Further, the issue of coins by those countries that produce gold and silver coins for sale is steadily diminishing. Large private suppliers are advising their retailers that their inventories cannot be maintained. And at the street level, coin shops are announcing that they’re no longer able to promise even thirty-day notice deliveries of coins.
So, what does this say to the potential gold buyer? Well, first, it says that, whilst there is still paper gold out there in the form of ETF’s, the punters whose approach has been to chase the market, hoping to sell high and buy low, have largely left the market and moved on to other speculations. Those who continue to hold gold tend to be those who do so for wealth preservation. For them, a year (or even several years) of low prices is not a reason to dump the yellow metal. They are the long-termers, who will hold, no matter how low gold may go in the short term. In fact, should the price drop below $1,000, they (like Jim Rogers) are likely to buy with both hands.
But, there’s still the dollar to be considered. As long as it continues to rise against other currencies, gold will appear to be falling in price. The dollar promises to remain high as long as the yen and the euro hold out. But should they fall, the dollar will be exposed.
Let’s say the Chinese start selling their U.S. debt back into the U.S. market in a bigger way, or the EU defaults on its debt, or the inflation caused by quantitative easing creates commodity price spikes. There are many, many possible triggers that will cause the dollar to tank and, surely, one of them will occur. We just don’t know which one, or, more importantly, when.
Of one thing we can be reasonably certain. If the dollar starts to head south, we will see a flood of people seeking to buy gold in an effort to preserve their wealth. However, as all the punters have already been driven out of the market and only the long-termers remain, potential buyers will find themselves making higher and higher offers, as sellers will be almost non-existent.
With any investment, when panic buying sets in, the sky is the limit. We shall therefore see a gold mania. Most contrarian economists predict a figure in the $5,000 to $8,000 range, but other estimates go far higher.
A gold mania is not imminent, but I believe it is inevitable.
* * *
Gold and silver have served as money for centuries and across many different civilizations. They have always been inherently international assets. There is nothing at all particularly American, Chinese, Russian, or European about gold and silver.
Buying precious metals is perhaps the easiest step you can take toward protecting yourself from an economic collapse.
The next step is to store that physical gold and silver in a safe foreign jurisdiction. That way it's out of the immediate reach of your home government and cannot be confiscated at the drop of a hat.
We have done due diligence and on-the-ground research on a number of private vaults and storage facilities around the world. You’ll find all the details on our preferred jurisdictions - like Singapore and Switzerland - and nonbank storage facilities in our Going Global publication.
Normally, this book retails for $99. But we believe this book is so important, especially right now, that we’ve arranged a way for U.S. residents to get a free copy. Click here to secure your copy.
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I own more precious metals than most would consider prudent as a percentage of my net, but I have to say that articles like this that have appeared here (and many other sites) for years, ignore a simple fact -- we do not live in a world where fundamentals matter as it relates to asset prices, and there are many governments that use our money to suppress the price of precious metals. Just once I'd like to see an article that cogently explains why and when that model is going to fail. I recall Faber saying that it would take several years (several years ago), and Jim Rogers showing his gold coins to various spokesmodels on CNBC and Bloomberg. But no one seems to know when.
This is not to say that I don't think it will happen and I've put my money where my mouth is, but sometimes I wonder if this game can go on for a lot, lot longer than many think.
It can go on as long as people have "faith" that it can go on. And there is a lot of blind "faith" that it will, for purely selfish reasons, peoples retirements, the paid security apparatus to keep the wolves at bay, corporations accepting it as money, for jobs jobs jobs...lol.
It's an intricately woven web of deception with "faith" and yes, trust, that it will at it's very core.
As for me...the trust has been broken, I'm just here to shove another log on the fire ;-)
Let the fools ban cash. That will destroy the faith.
They're workin on it, from a lot of different angles ;-)
I must admit... some days I serioursly want the currency collapse to hurry up and happen. I'm all in the long game and I realize that the longer this circus continues, I get to "hoard" a little more every day. But, I have been humbled by how long it's been drawn out at this point and over the past couple of years have realized that's it's probably going to go on for a really long time. All the while, my patience thins. Perhaps there's a gear I can throw a monkey wrench in to just nudge it along a little...
All these articles talk about scarcity of metals, and maybe that's the case if you are trying to buy a 100oz gold bar or 1000 ounces of silver, but it's never been the case for me, unless I am looking for something specific. Maybe my LCS is out of eagles, but I really don't care what's stamped on it. I've never gone in there and not been able to walk out with gold or silver. Granted, he doesn't have the really diverse selection lately, but if I want a couple tubes of silver coins or rounds or a gold eagle or buffalo, he has always have them. And when I've been looking for something specific, such as needing 10 more APMs to finish a tube I started a few weeks back, I've always been able to find it on jmbullion or one of the others. Maybe my place is unique, but I doubt it. And MOST people aren't looking to buy much more than that at a time. Granted, if there was a sudden stampede into the metals, in sure they would dry up, but that hasn't happened yet, and it makes the article come across as nothing but a sales pitch
You nailed it on your frist sentence. You and I are shrimps in the gold market. When it comes to scarcity, the rubber hits the road with the big boys who buy in volume.
im still stacking the real against the fiat and will continue to do so.
Faith in the status quo is a very hard thing to shake. I stopped trying to convince ordinary people (co-workers, friends, friends of friends, some relatives) of what was inevitable years ago. It is very hard for older A,mericans, in particular, to think bad things are going to happen to the good ol' USA. My wife and kids believe and we just keep on keeping on.
Laying up wood for winter, putting the garden to bed, storing up extra gas for emergencies. But also enjoying traveling with the wife and kids and thanking God for gainful employment.
I don't think anyone knows what the final chaos will look like, even if they do think it's coming. I want to be prepared to watch and wait till the dust settles, not participate - at least at first.
I too have learned to just be very patient. But, that's OK, I have "plenty" of gold, my wife tells me I do not need anymore. But the gold we have is more for our kid and any grandchildren who may come along in the future.
That's what I do with the money family members give me for my kids savings. They think I am nuts for not opening up a savings account and keeping it in a bank, investing it for them 'so it will grow', etc. maybe they are right. But it's funny, with no debt and a growing stack of metal(mostly silver) they have a higher net worth than most adults and they aren't even 2 yet.
Carl,you are a gold/silver bug. Your friends and family are chinch bugs. If you haven't seen Caddyshack this will make no sense. The rich will become the beggars and the fool will become the wise. They don't even know what manganese is. Lol
You are wondering if a guy calling himself Greenskeeper Carl has seen Caddyshack? lol
When faith and belief in the almighty dollar is finally exhausted, the rush to the exits will be truly staggering both in its ferocity and volume. Long live the dead dollar.
About as liquid as a reservoir in SoCal.
Exactly, they keep bringing up this same tired old glue factory cliche like it has any value at all.
What do you call a fiat currency of a nation 19 trillion in debt, 1/3 of the population not in the work force, 46 million having to be fed, 1/2 getting some kind of govt check with the other half paying for it and soon 1 pensioner for every 2 pulling the wagon, with zero prospects to turn things around for the foreseeable future?
I tell you what I call it. Not worth the paper its printed on. 1ply toilet tissue.
Lets see you squeeze some glue out of that. The only reason its still here is it is being manipulated and propagandized with asinine phrases like that to have imaginary value.
That, and I think at this point avg Americans are just too stupid to realize just how worthless it really is. Saved by the grace of ignorance.
I worked in a glue factory and there ain't no such thing as the "best looking horse"
They all get shoved into the kill line... good, bad and ugly.
whaaha whaaha whaa whaaaa whaaaa whaaaaaaaa
so if the dollar is the last to collapse I should put my physical gold and silver in a safe foreign jurisdiction? and it will be "safe" from MY government...
Possibly.......but most certainly accessible to some other government.
Why in the world do people 'believe' some 'governments' won't be as panicked, pressured or just plain corrupt as others when the shit truly hits the fan? Is this not the ultimate in wishful thinking?
If you don't hold it you don't own it. It really is that simple. The counter party risk is the vault and the sovereign entity where the vault is located.
When the US dollar is in its final death throes who in hell thinks those in power will not do everything and anything within their power to hold on if only for another day or a few more hours. Desperate people do desperate things. Imagine what a desperate PTB will do? Now imagine what a desperate "We the People" will do? Now imagine what others will do to protect themselves from (the) US.
I agree. Every time I see one of these articles from Casey research I remember that these are the same people who were trying to corral people into the libertarian paradise known as Argentina. Id be pretty pissed if is put any money into that. Rich foreigners will be the first ones to get their shit stolen, especially rich Americans. We make way to easy of a scapegoat. If I had enough money to store a significant amount of gold in a couple other countries, I would, but I don't, and neither do most people. So I will keep mine close by, because as you say, if you don't hold it, you don't own it.
It makes the bottom of your local lake or reservoir lumpy, but you know, there are differences amongst the various 'security' systems.
Lakes in So. Cal. maybe, not so much.
If you do international travel it is possible to own and hold gold outside of the USA and banks.
Safe foreign jurisdiction. What a crock. Do people who live in safe foreign jurisdictions still have to put their gold and silver in a safe foreign jurisdiction too?
People buy gold to avoid counterparty risk. Now, can somebody please explain why on earth I should reintroduce counterparty risk into the equation by sending my gold out of the country?
There will be war first, then, who knows really...
The dollar may be a flawed currency but what does that make the yen? The japanese debt makes our debt look like a surplus, they kicked the pension funds out of the bond market so the BOJ could buy all their debt. Yet the yen, although somewhat devalued against the dollar still hangs in there. Now, when we and the EU follow that insannity (and we will) then you have a case for gold, possibly gold will catch a bid when QE4 is anounced. But in the end we cannot walk around with gold in our pockets, 'debt foregivness' will be the term that catches on. The central banks of the west will forgive the debt from their respective treasuries and wipe it off their book, this is why the radical left economists of the world speak of debt not mattering. A new currency will be created, maybe a single world currency and we will start from scratch but we'll get screwed big time in the process.
Comparing the USD to any other fiat is like saying the dollar is winning first place in the special olympics.
He lost me at the end paragraph, where he said due diligence on putting it into somebody else s vault overseas.
Not everybody is a jet setting Millionaire.
he lost me in within the first paragraph....the stench of a sales pitch was just too overwhelming...
Me, too. I don't agree with that. I want in hand. Which is riskier, storing it overseas in someone else's vault or the gov't trying to take it from you? I think the former is riskier.
We all know how much "safer" those foreign governments are...no corruption there
People I know who are Swiss and American citizens tell me they can't even hold a safety deposit box in their country of origin. I'm not sure an American could even find a secure deposit location in another country. And even if you could, what would be the chances of getting that money back into the states without tax or confiscation? At this stage a bird in the hand is worth a flock in Europe.
People have lost the sense of the value of money. The more the money loses its phisicality, the easier to spend it and lose the sense of its value. So money loses value continuosly. Gold retains its phisicality forever hence its value.
The only thing that retains long term investment value is people's gullibility. They will go for anything that offers something for nothing or a "good return on investment".
There are too many snake oil salesmen as gold promoters.
Anybody can run a track record for this guy?
my thoughts as well..."prove it or shutup"...
EVERYONE has a bias. What's yours? Are you too deaf to hear the message and more interested in assasinating the messenger?
heh....I think the message is pretty clear..."Normally, this book retails for $99. But we believe this book is so important, especially right now, that we’ve arranged a way for U.S. residents to get a free copy. Click here to secure your copy."...perhaps you're too deaf to hear it?
Using that logic you shouldn't even be on ZH because god forbid that they make money as you click around on the ZH page.
thanks for that pearl...
what's this guy selling? ...wait...let me guess...
If gold jumps to 5-8,000 from here, a lot of people holding it for all the wrong reasons will cash in their hoards and pat themselves on the back for being so clever.
But that jump will actually be a sign that the dollar itself has entered the last phase of its long illness. They will be left with fistfuls of worthless fiat.
When you hold gold in uncertain times, you have to tune out a lot of noise and remember WHY you hold it. Sure, sell a little just for fun if we get a dramatic rise. But don't succumb to the lure of a price jump and try to make a killing just because the fiat numbers get bigger. You will reap your reward after the chaos when things settle somewhat. You won't be filthy rich unless you are stacking like Midas, but you'll have more security, and that is priceless.
Gold is the money of kings. You should think of kingly purchases like premium real estate or productive businesses, without the use of fiat for the transaction. I'm quite sure that this can be done today in some countries (Vietnam) but we're not there yet in N America.
And measure you success with gold in what it can by, not by fiat. An ounce of gold should be able to rent a one bedroom apartment regardless of the paper money cost. It was true in 1903 and it's true today.
An ounce of gold should be able to rent a one bedroom apartment regardless of the paper money cost. It was true in 1903 and it's true today.
Dundat - This is a simple concept that most people cannot grasp for some reason. Using silver as a benchmark you can go back to the early 1960's where silver was going for something like $2.00/ounce (I'm not sure of the exact price but am using that as an example). Gas back then was in the range of $.30/gallon so for an ounce of silver one would be able to buy about 6.5 gallons of gas for an ounce of silver. Fast forward to current times . . . using a silver price of $15.00/ounce and the price of gas at $2.25/gallon (that's the price where I'm at right now) one could buy - wait for it, wait for it - 6.7 gallons of gasoline!! You can take the price of silver or gold and pick any common commercial item and do this same thing - almost across the board. And the sad thing is that the people that don't believe PM's are money just don't get it at all . . . .
Good points Bemused! There are some prognosticators out there who go beyond predicting gold will be hitting the $5-8K range. These guys have been saying for quite some time that in the near future PM's will become "too precious" - i.e. that people that own gold and silver will not be willing to sell for any price in fiat currency. Seeing the ongoing debasement of all fiat currencies and with the FED locked into "QE-forever" I don't think that that the "too precious" concept may be too far off the mark.
Foolish people. Our threat is not currency devaluation, it is government devaluation. Anyone who thinks that gold will hit 5 or 8 thousand and the government will stand idlely by watching THEIR currency head for ZERO, just ain't paying attention. It is our government that is the threat and we can worry about money or gold or property all we want but it will be government that decides what is valued and what is ILLEGAL. Even our property rights hinge upon government interpretation and enforcement. Pushing gold in this environment is like hoarding plywood in Florida in August, hoping for a really good hurricane. It might work out or you might just blow away. Timing is everything but to hope for $8 k gold is a deathwish. Big bad government will NEVER let you cash those chips in.
This thing is likely going to blow so I guess it really doesn't matter anyway, so if you need something to do to feel proactive there are definitely worse things to do with your time and money. I put mine into lead and its delivery systems.
apparently more info available from casey research...isn't casey the guy who said something about the folks who say the gold price is manipulated being idiots?
Casey had to sell out to Stansberry and Associates to survive. Seems like a lot of these "experts" are folding or consolidating here.
I'll keep my pet rocks close and my guns closer thank you
gold gold gold...money forever...so buy 'gold AND silver'????
Silver hasn't been money in the US for 150 years. There was a plan to suppress gold prices (London Gold Exchange) but no plot to suppress silver.
Why does silver get a free ride?
That's news to me. What are the pre-65 quarters and dimes in my safe made out of then?
"That's news to me. What are the pre-65 quarters and dimes in my safe made out of then?"
And, let's not forget that smaller bills ($1 and $5) used to be denominated in silver. The silver certificate was printed until 1964, and during 1968 could be redeemed for silver bullion or U.S. Mint silver dollars. So for many years we were on a bi-metallic monetary standard - like the Chinese of yore.
Maybe the poster is just mathematically challenged - a graduated product of teh Yoonited Stayts Deepartment fo Edyoucahsun.
Give it up, FOFOA. Silver is money. Has been for 5000 years. Just because the Central Banks stopped holding it a few decades ago isn't going to change that fact.
When paper money fails, no mater how bad it gets, people always default back to hard money. There is no counter party risk. People have a hard time understanding that their government is made of crooks and paper means nothing. Silver and Gold are money. Metals are hard evidence of work realized, period. Metals are useful also, but they will never be anything less than the equivalent of work. As long as there is corruption, gold/silver will be money. Gold/Silver is truth, it is free of corruption. Pure money. No person or government to screw it up. Our government just ruined the dollar just like every other paper currency in history. The people we have in charge are not special, especially historically speaking. This is proven time and time again in history, the fact that anyone in this day and age thinks gold/silver is not money, they are clearly the product of a failed educational system. I am thankful and was fortunate enough to have had teachers that taught me these truths about money. It is what it is and that is how it has always worked, and how it always will work. Its the people that are just stupid.
The fact that anyone still believes the market can successfully be manipulated by printing money tells us just how out-of-touch and stupid everyone is. We can never grow or get past this point as a human race unless we use the truth, we will forever be bouncing down off our inferior ceiling.
According to VTB Capital:
https://app.box.com/s/to11bysjl4r6o4op1n97y2uv3yxnmkq8
Growth concerns
It has been a volatile few weeks for the financial markets, with investors’ main issues being the health of the global economy, especially the Chinese economy, concerns that deflationary forces might be quite intense and uncertainty over the intentions of the Fed as regards its monetary stance.
For most investors, the base case is a disinflationary economic recovery with the US leading the way, the Eurozone gradually recovering and China avoiding a hard landing. Inflation remains generally subdued, with the major central banks managing to meet their 2% inflation targets and with the Fed gradually lifting the fed funds rate commencing at the December FOMC meeting. A divergent monetary policy between the US and the rest of the world means a stronger US dollar. The US is the only economy that can cope with a stronger economy because of better economic growth prospects while everyone else, including China, prefers currency depreciation, albeit not in the form of an outright currency war. Policymakers prefer to stay within the confines of the G-20/G7 policy umbrella, despite there being little sign of any policy co-ordination.
The disinflationary economic recovery scenario is probably what is priced into markets at the moment. Investors do not want to deviate from the ‘Buy The Dip’ equity market mantra on the basis that Fed policy will still remain accommodative so that equities will outperform bonds and cash. BoAML points out that this might be the first year since 1990 that cash outperforms both equities and bonds.
The S&P500 index is down 6.2% year-to-date, with the global equity index down over 2% while a global government bond index is down a similar amount over the same period. The MSCI World Equity Index (MXWO) peaked in May this year but is now at its lowest level since late 2014. The MXWO has to defend current levels, in other words, investors have to retain conviction and buy here if a global recession and deflation scenario really is not on the agenda. For the S&P500 index, this translates into levels around 1,850 holding (the low in October 2014 and in August 2015). For the MSCI EM Equity Index (MXEF), this means that the August low at 762 also has to hold. A global recession and deflation scenario could easily plunge MXEF back to the 2008-09 low around the 445 level. Corresponding signals of recession-recovery risk are to feature in oil and other commodity prices, such as iron ore, steel and cooper. Recent lows have to hold up otherwise this too would reflect a move into global recession. Watch the Glencore share price as a commodity indicator and Caterpillar as a China play.
In terms of economic indicators, most investors watch the monthly purchasing manager indices, the PMIs. China’s PMI for the manufacturing sector (47.0 in September) already points to recessionary conditions, though the service sector PMI is slightly more resilient. Japan’s PMI is just above 50 and this week’s Tankan survey is an important indicator of business confidence. The global PMI stands at 53.7. It has to drop below the 50 level for recession concerns to intensify.
Against this backdrop of global economic uncertainty, it is no surprise that more recently there has been a focus on how policy-makers might respond. This includes the possibility of fresh ‘unconventional’ monetary policy measures such as ‘helicopter money’, negative interest rates in the UK, QE4(-ever) in the US and explicit debt monetisation.
Whether more QE is the answer is debatable, though the main central banks such as the Fed, ECB and BoE would probably prefer to extend or renew existing QE programmes before venturing into the uncharted waters of ‘helicopter money’. China has scope to cut interest rates and reduce the banks’ reserve requirements ratio (RRR) before resorting to outright QE, though some argue that there has been implicit QE through the official underwriting of local government debt. The latest data, out this morning, shows that Chinese industrial profits fell 8.8% year-on-year in August.
However, we would be concerned from a general perspective that implementing such policies just perpetuates a financial cycle which has already inflated financial asset prices, increased leverage and distorted savings and investment decisions in the real economy. Japan is a classic case where a quite aggressive QE programme has failed to spark an economic recovery or meet the BoJ’s inflation objective of 2%. There are a number of Fed speakers this week including Janet Yellen, Stanley Fischer and Bill Dudley who might inject some clarity into the Fed’s policy intentions. The key US economic data release this week is Friday’s nonfarm payroll report and the market is discounting an increase of 200k in jobs, with the unemployment rate just above 5.0%. So far, wage inflation has remained subdued, but in the UK it has started to pick up even though the market still thinks that the BoE will defer a rate increase until February 2016.
One thing that caught our attention in Janet Yellen’s speech on inflation dynamics last week was the fact that she believes that inflation is determined by an ‘Expectations-augmented Phillips Curve’. In her inflation model, there is no role for money supply growth. Readers who recall their economics education will remember the quantity of theory money and Milton Friedman’s adage that “inflation is always and everywhere a monetary phenomenon.” Yellen might be looking at the wrong inflation model.
The problem facing the main central banks is that by delaying the normalisation of monetary policy, especially in the US and the UK where economic growth has actually been quite good (3.9% real GDP growth in the US in the latest data), the central banks become boxed in and at the mercy of external developments. Investors might start to become concerned that the central banks are running out of ammunition with which to combat the next recession and/or financial crisis. Certainly, the use of fiscal policy is constrained, in some cases, by the increase in government debt-GDP ratios since the crisis. In the US, there is also a renewed concern that there might be a repeat of a federal government shutdown (at the end of this month) as well as a fresh debt ceiling crisis in October-November. The US presidential election in November 2016 has the potential to create some degree of policy paralysis even though, in principle, the US has scope for an expansionary fiscal policy given that the US budget deficit is now at 2.5% of GDP, compared with the peak of 10% in 2009.
In the Eurozone, through the course of this year, there has been evidence of a gradually improving if unexciting economic recovery. Money supply growth in the Eurozone is picking up and bank loans to households and corporates are increasing. However, the VW scandal has just seen the ECB limit its funding which might have adverse knock-on effects on corporate bonds elsewhere in the auto sector. The slowdown in the Chinese economy had already adversely affected the car sales of the big European manufacturers. European small caps have outperformed large caps, reflecting this China/EM exposure. Euribor futures are pricing in a cut in interest rates. On top of this, there is growing political uncertainty as evident in the Catalan elections yesterday where separatists won 72 out of 135 seats. Catalonia accounts for 20% of Spanish GDP. Wolfgang Munchau writes in the FT today that Europe is juggling five simultaneous crises: the migrant crisis, Eurozone periphery debt, a global downturn, Russia and the VW scandal, which all limit Germany’s fiscal space. Problems indeed.
I always choose physical gold (jewellry or bullion). Don't like silver tough. Not many likes silver here. However "white gold" (aka. Platinum) also in demand here.
Gold is always "RARE" in this universe. It's created in a rare cosmic events.
https://www.washingtonpost.com/national/health-science/origin-of-gold-fo...
Of course there won't be ANY on earth (or any place in this universe)..
"Not many likes silver here."
Just curious, where is "here"? No need to be very specific, just a region would suffice.
I love silver.
Where have I read this article verbatim 1000 times already...?
It's never been a better time to buy_________.
Evidently we don't know how to do anything else but buy.
This article failed to use "inimitable" along side the other useful words in the title. It is the world's longest blurb, bigger than any back cover could hold.
Obviously we are not there yet, but after it is all said and done we will likely look back and say:
"It's never been a better time to buy_________.
Lucky (?) _________ who didn't know how to do anything else but buy."
Sorry tyler(s) I need to call you out here...why do you channel ANOTHER and FOA without attribution? While I'm on this topic where is the expose on the grand induction of "free gold" in general? A rebuttal? Anything over the years? To my knowledge it is the only: rational, largely positive, and inevitable out come that could perhaps cure a good amount of the perceived doom posted here and elsewhere on the web. It contains more logically and historically guided hope then has ever been posted at ZH IMHO. What is the point of continually beating on the how why and who of gold suppression and its inevitable rise without any focal point or conclusion? Is it enough that the readers of ZH simply buy the stuff? I was on the kitco forums back in 97 when another first showed up and blew everyone away... just a guess but id say one of the Tylers was there too. Time to write about it on ZH already. XD
And I'm a gold and silver bug but honestly I don't see these shortages. I can still buy everything at very large quantities.
And these are the same articles that gave me the extra push in 2007 to go into gold and silver.
´´The dollar is not a truly strong currency; it is essentially, “the best looking horse in the glue factory.” It will be the last to go, but it will indeed go.´´
Many non-Americans expect the US$ to be one of the 1st to go right behind Ukrainian hyvrna due to the huge amounts hoarded globally when events trigger a desire to cash in as a result of loss of confidence in $ having any future sustainable purchasing power. Last to go will be gold back currencies like Russian rouble and Chinese RMB and smaller self sufficient energy independent currencies like Danish krone
There is not enough gold to have any meaninful impact.
When you come out of your cave to buy food, you will be return to your cave (if you survive the trip), with neither gold nor food.
Save a reasonable amount of your earnings in PMs every year. Buy on dips.
Build up emergency supplies, sufficient food supplies (that you rotate), medical supplies, et.
Learn important, practical, and live-saving skills.
Get into good health or maintain good health. Get in good physical shape.
Prepare yourself psychologically and spiritually (if you believe in such a thing).
Keep an eye on world / financial / political events, but don't obsess about it.
Build relationships with decent people around you.
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If you have done these things. Chill and enjoy life as much as possible. Not much else you can do.
A gold mania is not imminent, but we believe it is inevitable.
With only 1oz of the stuff per person on Earth, whether imminent or inevitable, gold mania will be immaterial.
Miners today are willing to produce new ounces for less than $2,000. That means there is only $2,000 worth of mania per person on Earth. That's less than 250 hours of unskilled labor ... a unit that never changes over time or space.