Fed credibility questioned and Yellen sick - Palladium surges 8% - Russia and central banks buy gold - Smart money rebalancing and selling overvalued assets to buy depressed assets especially silver
"Unlike his acolytes, Keynes understood the value of gold and the dangers of currency debasement ... World where currencies are backed by nothing more than a governmental promise to pay while the printing presses whirled unchecked ..."
Gold had a 3 percent weekly gain and silver had a 3.5% weekly gain. Gold ended with a gain of 0.73% on Friday while silver rose to as high as $15.43 before ending with a gain of 0.26%.
The incredibly strong demand for physical precious metals around the world continues to be obscured by institutional selling of futures contracts on the COMEX. The paper or electronic market continues to dominate the spot price for now. But rising premiums and delays for popular bullion products suggests that proper price discovery reflecting real world supply and demand may be at hand.
Yellen was more dovish than expected which is bullish for gold and suggests that the long awaited for bottom for gold may have occurred in early August prior to recent market volatility.
The simple fact that the Fed is struggling to increase interest rates from near 0% after seven long years should give pause for concern. It underlines the vulnerability of the U.S. economy and means that another recession is very likely. Indeed, the huge levels of debt at all levels of U.S. society and the significant increase in global debt levels during the last seven years mean that another recession is almost certain.
Today, most of the developing world, tomorrow most of the developed world. Today Ukraine, Syria, South Africa and Brazil. Tomorrow Ireland, Greece, the UK, the EU, other Middle Eastern and African nations and the U.S. (see important charts)
Silver is poised to see massive buying. Brave contrarians willing to buy silver and its miners low before this becomes widely apparent stand to earn fortunes.
- Bail-ins, withdrawal limits and negative interest rates may be imposed - FT proposes a ban on “barbarous relic” cash - Central banks and banks would have citizen's wealth and people themselves “completely under their control” ...
Fostering dependence on irresponsible banks and a still very vulnerable banking sector will make the entire western financial and economic system even more vulnerable.
This development is an important one for the gold market and is bullish for gold. It shows, once again, that gold is slowly but surely becoming a cash equivalent and as money again.
