A friend of mine, who was struggling with the idea of buying gold, lamented that gold only had any value if someone else perceived it to. Yes that’s true. As it is for everything, whether you’re talking about a share of Apple stock or a 1977 Chevy Malibu.
“Why is gold getting hammered? “the caller asked. I could hear dejection in his voice. “Gold’s not getting hammered,” I said. “The euro’s getting hammered, and right now, just as I’ve warned on my Weekly Metals Wrap interviews with Eric King at King World News, for a while to come gold will trade against the
I highly encourage you to read the latest interview with Hugo Salinas Price. Mr Price is a retired billionaire who made his fortune via a chain of appliance stores in Mexico. He is also a tireless advocate of sound money. His plan to reintroduce silver as a competing currency in Mexico would make it the most sought after money in the world bar none. It is well worth your time to understand the details of how he proposes to do this.
Despite recents price declines, gold and silver remain in long-term bull markets. The primary driver of prices is the expansive monetary policy of the US since President Nixon closed the gold window in 1971. Having absolutely no links to gold enabled the Fed to create trillions of dollars in the wake of the panic of 2008. Massive monetary inflation is followed by massive price inflation.
In the GOP presidential debates, when Ron Paul talks about economics he is a giant among pygmies. None challenge him. The best his opponents can come up with is to rail about the need to balance the budget. But, when he brings up the issue of the business cycle, the other candidates look like they want climb under the podium. Further, no moderator has ever sought to question his economic positions.
The issue of where a central bank stores its gold remains on the forefront. The Dutch people want to know where the Dutch gold is stored. Venezuela called home some 160 tons that previously was held in the US, London and Canada. China has made it clear where its gold is to be with the
ell, here’s an interesting tidbit from the Treasury Borrowing Advisory Committee (TBAC) compliments of Zerohedge. Their latest letter to Timothy Geithner contained the following paragraph: “There was a lengthy discussion regarding the bid-to-cover ratios…
Gold serves as the basis of the global monetary system for the simple reason that it exists as a finite, physical store of value. And unlike every issuance of debt or piece of printed money, there is no counter party risk – unless, of course, you don’t actually have the physical gold in your possession. Then it’s no more a basis of one’s reserves than all of the digital money created with a keystroke.
The Establishment disses gold while central banks, icons of the Establishment, load up big. The third quarter saw the most central bank buying for a single quarter in forty years, and this year is on pace to see the most central bank gold buying since the collapse of the Bretton Woods Agreement in 1971.
If you’ve watched the news for any length of time you’ve probably heard mention of speculators and how they seem to be responsible for much of what ills us. Last week, Japan’s Finance Minister Jun Azumi said that a massive intervention in the Yen market was necessary as there were signs of speculation. Much of the price inflation in commodities over the last decade has been…