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This Is What Gold Does In A Currency Crisis, Canadian Edition
Submitted by John Rubino via DollarCollapse.com,
Along with the currencies of most other commodity-exporting countries, the Canadian dollar has been in near-freefall lately.
Gold, meanwhile, has been sucked down with the rest of the commodities complex, falling hard since 2013. But only in US dollars. For Canadians, with their weak domestic currency, gold has been behaving just fine. It’s up 17% in C$ terms over the past two years and looks ready to rally from here:
Protection from currency trouble is why people own it, and why in the vast majority of places it’s owners are very happy.
Now combine a falling currency with a crashing oil price and the result is a surprisingly favorable environment for Canadian and other weak-currency-country gold miners. Big mostly-Canadian miner Goldcorp, for instance, has seen its production costs fall by almost 20% in USD terms in the past two years, with more to come based on the subsequent cheapening of the diesel fuel required to run its equipment.
If 2016 plays out according to the script that has rising US interest rates producing an even stronger dollar (and correspondingly weaker currencies elsewhere) the terms of trade for non-US gold miners should become even more favorable. Many of them will report positive earnings comparisons while most other industries are doing the opposite, putting them on the radar screens of momentum traders and value investors who haven’t been paying attention since the last gold/USD bull market ended.
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Usd will join next year.
From your lips to God's ears
IMO, the US$ will remain the strongest for a while, but what do I know.
Gold, at least 5% of your net wealth in it, will help keep anyone safe.
Arrgh! If you simply held US dollars (as I have) You would be ahead much much more than 17% Even the graphs above clearly show that. As a Canadian, there's no reason to go to gold. Not yet at least.
No, 17% is nothing /s
Just don't hold on to that US$ for too long.
Measure the value of gold in what it can buy.
As long as an ounce of gold will rent a nice two bedroom apartment for a month, it is holding its value.
You will need 240 ounces of gold to live well for five years after the crash. ( family of four)
And you will not care about currency valuations.
It's not keeping up with the price of a nice suit on Seville Row. The rubber band is stretched.
And in NYC that ounce will rent you a walk-in closet
I have not made my mind, yet, truth is that there si not enough inormation to determine when will the next and coming economic crisis will be felt. I think that from mid year on we will see some major PR maneuvers by the FED and lackeys, and by year end, we will witness the acknowledgement and beginning of market response to the worst exonomic crisis in US history, I do not believe that everything is fine, not by a long shot, and people acting like it is, is going to amke things a lot worse.
He hears you. Coming soon.
Already has joined, it is ignorance that has kept it afloat.
You can keep the miners, I'll continue to exchange my spare fiat for moar gold. Oops, did I say that out loud? I meant to say who the fuck wants that barbaric relic?
I love our NSA overlords.
And a big Thank You to all those who are letting us swap less fiat for barbaric relics!
The good thing is that the quantum computers scanning the internet just logged that as a pro-status quo comment and downgraded your threat rating a notch. Very fast, not so bright. They even believe the BLS data.
I'm 'barbaric' enough. I now load up on civilized currency: Single Malt Scotch and reds from Chateau Margaux.
Much better store of value, unit of value, fungible, no counterparty risk, not banned or confiscated by TPTB, no storage fees, and quite... liquid.
Can't put a price on sound money with zero counter-party risk. End of discussion.
I put a price on mine, anyone comes up with $5000 and i'll part with one. Of course, that is subject to an unannounced increase as i may come to believe it's worth more.
LOL LOL Lol....
Gold, silver, ammunition, and Bitcoin. Yep. Oh, and a years supply of food, clothing etc.
Can't go wrong with that. You gotta eat, after that you protect your wealth. Come shit hit the fan you are sitting pretty, fat, dumb, and happy. Simple, really.
You too can profit from the coming fucked up situation.
I would think you would need something to store the Bitcoin in. A computer or phone or USB drive. But now you need energy and if the grid goes you will need a generator. You will therefore also need fuel for the generator. Plus you probably need a stabilizer for the fuel if it's gasoline. Methinks you need to work on your list. Maybe a solar powered Bitcoin?
I thought small solar powered charger is on average prepper's short list. Was I wrong?
PS. You can store bitcoin on paper.
yep. can't argue with anything in the article. Except perhaps that owning shares in gold miners is a bit like trying to take a shit on a roller coaster.
Especially a Vancouver Exchange roller coaster.
<Gold
<Fiat LOL
This is how a green arrow junkie words things. Well done!
Hahaha... yup he nailed that one. Who in his right mind is gonna give fiat a vote? lol
If the BOC does what they outlined 3 weeks ago, they will further reduce the lending rate in 2016 by the remaining 0.5% it currently stands at now, bringing Canada down to ZIRP. By middle of 2017, BOC announced it is not beyond them to introduce NIRP of -0.5%.
If gold was in my portfolio I would have lost money over the last decade. Only Real Estate pays reasonably well, but gold is a waste of money entirely, and so are stocks. And I don't have a 'portfolio', I was just saying 'if'. Bottom line is that gold is a loser.
"Bottom line is that gold is a loser."
For some reason I get a real sense of irony reading that sentence.
Somehow I feel when your CAD realestate loses 30-40% of its value in the near future you may see the light and wish you had part of your savings in Gold
I think 30-40% is conservative.
Going strictly by the numbers it has been a crappy investment. Patience will rule out in the end. Keep buying on the way down.
A decade is generally considered to be a 10-year period that's divisible by 10; e.g. 2000, 2010, 2020. We are halfway thru the current decade.
The fiat price of gold in the past 10 year is up ~111%.
You, sir, are a liar.
Your talking apples to oranges.
Besides, gold over the last decade has done outstanding. Pull up any gold chart from 2005 to now. Check your facts.
Real estate CAN be income, but gold is a hedge against inflation.
Real estate - if NOT owned for income, does not return a decent income - if you account for maintenance, upkeep, taxes, etc.
Stocks can be both growth and income.
Real Estate, like stocks AND PM's all fall under the same investment umbrella.
When you buy it, your time horizon for ownership of it, and knowing when to sell some of it, is the key with any PM.
Ask yourself this; the next time someone says the USD is done, ask them;
"Compared to what"? Laugh in their face if they say ANY other "currency". It's all fiat - backed by nothing - except the criminal elements of the elite.
ONLY Gold and Silver is the answer. No other answer is even close.
"Real Estate, like stocks AND PM's all fall under the same investment umbrella."
Not true, your realestate and stocks will go up in Fiat, but Fiat may drop 30-40% and wipe out any gains, gold not so much, if at all, hence when fiat drops and realestate drops people will run to gold and it will increase even more.
Ya, that's all great, but I haven't bought any in nearly two years. Just can't buy it cheap enough any more.
Two years ago it was $1700. What do you mean? Now's a great time to smooth out your cost basis.
Not until it gets really looney Turnwise...
Under a grand, then it might get intertesting.
My clients cost basis is $417.00 an ounce - PHYZ - not paper.
I sold their original investments in it in August of 2011. Not the top, but close. My clients are playing with house money.
Made some buckos in the market, and fun to fade the rallies in the past year or two -
But people that saw this shit show for what it was years ago are so deep into the money that even now, it's too much.
Now silver.....another story.
I live in Canada, its more expensive now. Don't have US fiats to convert with.
Dude, where do you shop? Gold is the same price today in CAD that it was 2 years ago, hovering around 1500/oz. In fact silver is cheaper now @ 23.73 for a '15 maple leaf vs 24.33 in May 2014. Prices include approx 20% premiums.
One must thank Harper for putting all of Canada's interest in the oil sector.
You know what they say when you put all of your gold in one boat ahhh basket.
Oil's still better than pulp, and paper. It's one of the downfalls of living in a country with lots of natural resources, and stifling regulations that strangle, prevent value-add industries from developing.
Yes regulations will kill any country's manufacturing sector..
All the high paid union ship builders in BC cannot figure out why all the new ferries are bult in Poland...
We will be the safest Country to work in, except there wil be no work...
Well, traditionally Forestry and Manufacturing dominated, but they've been gutted so oil is about all there is now. It's also an east-west power play. Most prime ministers are from the industrial/manufacturing provinces of Quebec or Ontario. Harper is an Alberta boy who remembers the National Energy Policy introduced by Pere Trudeau, Justin's father, who introduced additional failed policies of bilingualism, mullti-culturalism and deficit spending in the 70's.
Sorry, I did it again. Bought 50 oz of silver around 7:00 pm ET tonight and, like magic, the price gets whacked in HK.
That's OK, Scottsdale is delivering by boat, so maybe...
Anyhow, happy holidaze. Got a beer making kit from a friend. Will be growing hops and barley in the spring.
Party on, you hosers!
I have the same results that you do right after buying. Ahh, well.
Try making mead some time. Much easier and at $2 a litre for good quality finished product it can't be beat for taste/buzz/$$ value. The only downside is that you have to wait for a year with the mead in the bottle before you drink it. On the plus side of that is that it lasts in the bottle for years and gets better with age unlike beer.
Now that's what I call a beer kit. I get my barley from the animal feed supplier, but can't find any hops yet. Living in wine country has its downside.
I have conversations with the sheep I work with and try to explain fiat vs precious metals. Without fail they want me to repeat over and over why I prefer gold & silver. I just say this quote in my head till I feel better.
"An investment in knowledge always pays the best interest."
- Benjamin Franklin
Try these on them;
"I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements." - Thomas Jefferson
As is well known, there has never been a successful experiment with fiat currency in all history. Nor was it for lack of trying.Antal E. Fekete
Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, said:
"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
“A friend asked me to choose one investment that I would want to leave to my great-great-grandchildren. I immediately answered that it would be gold coins. The reason I explained is as follows – corporations can disappear, stocks can collapse, governments can change and they can fall, booms and recessions come and go – but gold is intrinsic money, and no man or nation has ever doubted its value. And they never will.”
Richard Russell "By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard KeynesNot worth the effort... some most people are immune to critical thinking and logic.
"I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements." - Thomas Jefferson
There is a very good reason for manipulation of the gold/silver prices, and that reason is to make slaves of ALL people who labor with natural resources to create wealth. They're literally lyin' and stealin' the profits from their labor. That's why the middle class is disappearing. Almost no profits are accrusing to labor to trade for other things. Industry has become plantations. This ZeroHedge article reminded me of the end-result of all this lyin' and stealin' and manipulation. It's pretty obvious who profits greatly, and who doesn't at all.
http://www.zerohedge.com/news/2015-12-14/meet-burmese-slaves-helping-wal...
Gold bug fever hit hard in '08. At that time, the narrative was that unrestrained money printing would lead to a dollar crash, hyperinflation and gold would go to infinity. It's 7 years on now and we're still waiting for the hyperinflation. Gold had a nice pop through about '11, but has underperformed badly since.
There are two choices now. 1.) Pull the plug on your bad trade, or 2.) start comparing your dog to a bunch of irrelevant measures. For instance, the article above: "yeah, you're getting crushed on your USD/Gold trade, but you'd be really happy if you'd bought it with Canadian dollars!!"
Good grief.
Here's a bit of investment wisdom: when everyone finally agrees that gold is the worst possible investment anyone could ever own, the bear market will be over.
You fail Dr snooze alarm. First of all you all you are full of shit. Second of all I have been in gold since you were peeing in your pants. You have no clue what you are talking about. Hey asshole, people that buy gold are not in it for the five minute trade.
I could care less if 15 years went by. If the rest of my fucking life went by then so be it. Go do your own thing,
im a stacker but upvoted you because its the truth. Most experts still wont admit that they never fully understood the real economy which is why nobodys predictions come true regarding gold and loss of hegemony.
Looks like their Ontario is ready to default on its debt.
http://www.zerohedge.com/news/2015-12-27/ontarians-urged-voluntarily-pay...
Hmmm. CDN tanking. Sounds about right.
Why the fuck do Canadians continue to elect socialists? Here comes the pain train.
Because we have a fucking enormous free shit army. That is why. If 5% of Americans know how currency is created and what inflation is or why you should work for youself and that debt is bad then perhaps 1% of Canadians know that. Most Ontario residents would be SHOCKED to find out that they live in one of the most indebted jurisdictions in the world. Followed closely by Quebec. Don't get me started on the stupidity of the free shit army that is Quebec.
That voluntary debt payment has been on tax forms for years, not sure which individuals think they can afford to pay off the debt, but hey, there's a sucker born every minute. Canadian politics is such a cesspool of graft and innuendo that finding integrity and leadership is unlikely.
On the bright side, as indicated in the article, gold is doing just fine preserving wealth and is maintaining its value in CAD very nicely, silver too, even though our dollar has dropped to $0.72 USD or about $1.38 to purchase USD.
What it does mean is no more cross-border shopping - as when the CAD was at PAR - to support US retailers, and fewer Canadians taking vacations is US. A LOT fewer. That's ok though, because with our $30B currency swap with China and the new Renminbi currency hub opening in Toronto we won't need the USD for long. Thanks, it was a good ride while it lasted.
Why the fuck didn't you stay in school instead of becoming a zero doomer?
Oh that's why Goldcorp is at multi year lows right?
Police da Police: Don't go preaching gold to your "black lives matter" friends .... they're too dumb to get it .... but, they will remember what you said .... when TSHTF .... and follow you homey ? (Disclaimer: No Boyz Town Cathlick priests were harmed .... in the filming of my Avatar !)
So what's the true value of a US Dollar? Let's have true US dollar price discovery
If you live in Canada and spend CAD, and had invested your CAD in US Treasuries instead of gold, then you would have had:
1. Huge capital gain due to CAD currency deppreciation vs USD
PLUS +++
2. INTEREST income
Yes, what the article doesn't say is that if a Canadian put their money into US dollars, they would be UP 40% plus 6% interest over the same 2 years.
That means by holding gold instead of US dollars they LOST 30%
That's sure expensive "insurance".
Ahhh yes...but I bought pms last year...100 oz silver bars at C$1957 each and now they are woth C$2262. So basically it didn't matter if I bought US Treasuries, or pms to get a capital gain.
See how this works.
If I wanted to make capital gains, interest or profit I would have bought and traded paper. But I bought actual for a reason and I stand with it.
You would have earned MUCH MORE in US Treasuries, but if you already have all the wealth you want, then standing pat is OK.
The article pulls out Goldcorp. Most of what they say is bullshit. Goldcorp has 18 mines, only 5 of which are in Canada. And even those mines in Canada, almost all large equipment and major spare parts are priced in US dollars. Only equipment and spares manufactured in Canada (very few) will be discounted.
They will save on labour in Canada and other countries but overall, they still are losing ground because the price of gold is down. Labour is about the #4 cost of running a mine.