Because of Germany’s weakening export driven economy and because German bonds are preferred by the European Central Bank, yields on the country’s 10-year bonds are negative. Consequently, European bond investors, primarily made up of banks and insurers that depend on income, have turned to US Treasuries. Upward pressure on the dollar means downward pressure on
One of the reasons that gold and silver are safe investments is that today central bank printing of paper money is widely accepted. Additionally, there are no limits on how much money central banks can create. The graph shows the balance sheets of the European Central Bank, the Fed and the Bank of Japan. Note
Central banks to the rescue Just as the world’s central banks moved to rescue the banking system during the 2008 World Financial Crisis, they are now moving to rescue gold and silver investors, albeit the central banks are not rescuing gold/silver investors wittingly. Nonetheless, they are doing it just the same.
At the height of the 2008 World Financial Crisis, Greece was in the headlines daily because of its inability to make its debt payments. Now, Greece is seeking a third bailout of €30 to €50 billion, and it’s barely in the news.
At CMI Gold & Silver Inc. we believe that central bank activity is driving the markets — the metals and the stocks. Expectations of loose money mean higher metals prices (in anticipation of increased rates of inflation) and higher stock prices (in hopes that the stimulus will fillip the economy). As for the latter, there
Gold and silver have enjoyed huge upside moves so far in September, despite falling short of posting new highs for the year. Still, gold is up 24% on the year and silver 40%. One of the reasons for renewed interest in the metals is the failure of the European Central Bank’s €80 billion a month
as precious metals surge, says the Financial Times, July 7, 2016. In a glowing report, the Times noted that while “Gold has done predictably well in the wake of Brexit. . . The real star of the show has been silver.” In dollars, silver is up 16% since the Brexit vote but is up 45%
Not surprisingly, Mark Carney, head of the Bank of England, recently said that the central bank would take “whatever action is needed to support growth” in the aftermath of the Brexit vote. Carney’s statements seemed to have been crafted from Mario Draghi’s repeated promises that the European Central Bank would do “whatever it takes” to
Austrian economists assert that governments cannot “manage” economies, but that such efforts only make things worse. Japan is a perfect example.
In what is being reported as an effort to impede criminal activity and terrorism, the European Central Bank announced that it will discontinue issuing €500 notes around the end of 2018. However, the ECB was quick to affirm that the €500 notes already in circulation “will remain legal tender and . . . always retain