If you want to know why gold is soaring, take a look at this 100 trillion dollar note which a friend has just brought back from Zimbabwe, where it was given to him by a taxi driver as small change.
Old trillion dollar notes like this one are barely worth even a cup of tea after Zimbabwe's hyperinflation forced the government to drop its currency in favour of the US dollar in April last year. My gold-trader friend, Ross Norman, was in Zimbabwe hunting down the yellow stuff because, with demand so high on the world market, it is worth prospecting again even in such a tricky country, where so many of the mines have been closed due to civil strife.
Like a mad aunt, the Fed is slowly losing its marbles.
Kartik Athreya, senior economist for the Richmond Fed, has written a paper condemning economic bloggers as chronically stupid and a threat to public order.
Matters of economic policy should be reserved to a priesthood with the correct post-doctoral credentials, which would of course have excluded David Hume, Adam Smith, and arguably John Maynard Keynes (a mathematics graduate, with a tripos foray in moral sciences).
Is the gold price being manipulated? There are those who say no, while others say yes - notably The Gold Anti Trust Association (GATA) - and on balance it looks to an impartial observer (relatively) that the answer is probably in the affirmative. But perhaps no more so than any other commodities and some stock prices. There is a whole mammoth industry out there - the big banks, hedge funds etc. - whose whole purpose is to make money from money and the more you have in the first place the easier it is to do.
Russian spies in the United States whose arrest was announced Monday last year conveyed information about the gold market that the Russian security service considered "very valuable" and forwarded to the Russian finance ministry and ministry of economic development, according to the criminal complaint filed by the FBI with U.S. District Court in New York.
The global economic recovery is not looking good. The G-8 meeting this weekend saw divisions that could lead [as the I.M.F. put it] to losses of trillions of dollars and millions of jobs. Now it is reported that Mr. Bernanke and his close allies at the board in Washington are worried by signs that the U.S. recovery is running out of steam. The E.C.R.I. leading indicator published by the Economic Cycle Research Institute has collapsed to a 45-week low of -5.7 in the most precipitous slide for half a century. Such a reading typically portends contraction within three months or so.
Gold is mighty expensive these days but there are many ways to buy and invest in the precious metal, some of which don't require as much money as you might think.
...
Mark O'Byrne, a director at international bullion dealer GoldCore, said the best way for a small investors to invest in gold is to buy small gold coins or gold bars, such as British sovereigns, which are a quarter ounce of gold and can be bought for as little as $300 per coin.
Silver, the precious metal most used in industry, is attracting investors betting on both faster and slower economic growth as prices extend the longest run of quarterly gains in three decades.
...
GoldCore Ltd., a Dublin-based bullion dealer, said second- quarter sales of silver coins, bars and certificates offering ownership of the metal at the Perth Mint rose more than 20 percent from the first quarter.
Ten individuals were arrested on Sunday for supposedly carrying out “long-term, ‘deep-cover’ assignments in the United States on behalf of the Russian Federation,” according to the US Department of Justice. A key figure — one “Christopher R. Metsos” — remains at large.
As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.
Most of us know there is not enough money in the world to fully clean up the Gulf. The same is true with the $700 trillion derivatives market. If just 1% of the $700 trillion derivatives market goes bust, that is a $7 trillion disaster. The entire U.S. economy is only $14 trillion annually. A 10% failure, equating to $70 trillion, would probably bring down the world economy. As with the BP Gulf disaster, there is not enough money in the world to clean up the next disaster.
Well, that's the easy part over with.
After the emergency Budget, no one can doubt that George Osborne really does want to slash the deficit. Labour had hoped to halve our annual overspend within the next five years
Gold, little changed in London, may gain for a second day as concern that the economic recovery will falter spurs demand for the metal as a means to protect wealth.
European and Asian equities declined for a second day after a U.S. report yesterday showed sales of previously owned homes unexpectedly fell in May. Purchases of new houses plunged last month, analysts forecast data to show today. Bullion climbed to a record $1,265.30 an ounce on June 21.
We continue to hear pundits describe gold as a bubble. Certainly it will turn into a bubble before this is all over but we are hardly in the bubble stage yet. In order for a bubble to form you need the public to come into an asset class. The public is pretty dim and it can take 15-20 years before they "catch on". It took 18 before they noticed the tech bubble.
Once they do start to "get it" we will have about a year to a year and a half as gold enters the parabolic stage before the bubble pops. See the Nasdaq chart below from late 98 to March of 2000.
News that Saudi Arabia has secretly doubled its official gold reserves over the past few years should come as no surprise to readers of ArabianMoney. But then it was just speculation. Now this is fact. Will it be the same story for silver?
We can only draw on the evidence and gossip that comes to our attention in Dubai. There has certainly been a big jump in interest in silver on the arabianmoney.net website over the past six months.
There's a growing sense that the current global economic "Plan A", i.e. substitute public debt for private debt and use fiscal stimulus to keep economies afloat until private demand kicks in, has failed. Not surprising to many of us; it was destined to fail, but now the reality of that is becoming undeniable so leaders are scrambling for Plan B. For the U.S., Plan B is to double-down on Plan A. Others are not so sure. One problem is timing. There are several Plan B's, but they all take 5-7 years to implement, e.g. yuan as reserve asset, SDR's as a new liquidity source, etc. The two-tier Euro plan is just another Plan B although it might possibly be implemented in 2-3 years rather than 5-7.
As an asset class, gold stirs the passions. Some folks love it, and others despise it. Be wary of those who will never own gold.
As I write this note to you on Friday, fingers flying over keys like the flickering quotes on my screens, Pink Floyd's "Learning to Fly" is playing on my speakers.
It's an appropriate tune, because gold is once again "learning to fly" now. After one or two scrapped take-off attempts, the yellow precious metal has broken out to fresh all-time highs. (Well... nominal highs at least. To break inflation-adjusted highs – which will happen sooner or later – gold will have to trade above $2,000 per ounce.)
Now that a thin layer of dust and familiar silence has settled over a series of shocking revelations about the markets for gold and silver, I had an opportunity to discuss these topics with a man who has stood at the epicenter of this long-standing controversy.
GATA start from the beginning Bill Murphy co-founded the Gold Antitrust Action Committee (GATA) back in 1999, shortly after the implosion of the hedge fund firm Long Term Capital Management. What Murphy observed as gold price manipulation in the wake of that crisis set him upon a quest for truth and transparency in the gold market.
There’s an old adage about not seeing the forest for the trees. It means getting wrapped up in the details of a circumstance and losing appreciation for the big picture. Sometimes we need to step back and look at things from a different perspective. Consider the extraordinary situation that currently exists in the silver market. We have the unprecedented circumstance of great numbers of investors and observers openly complaining to market regulators about an active manipulation in silver. This has never happened before. There have been commodity manipulations but widespread knowledge of these manipulations only came to light after they ended, such as the Hunt Brothers in silver and Sumitomo in copper. What’s unprecedented about the current silver manipulation is that the allegati
The "let's spend until we're broke" brigade refuses to admit defeat. The fiscal squeeze expected to be imposed in today's Emergency Budget will definitely tip Britain back into recession, the ever outspoken Danny Blanchflower, former member of the Bank of England's Monetary Policy Committee, has been warning, and very possibly something even worse.
Jean-ClaudeTrichet, the president of the European Central Bank (EC), talked days later of "the most difficult situation since the Second World War, and perhaps the First".
The ECB’s latest monthly bulletin gives us some startling details. It reveals that the bank’s "systemic risk indicator" surged suddenly to an all-time high on May 7 as measured by EURIBOR derivatives and stress in the EONIA swaps market, exceeding the strains at the height of the Lehman Brothers crisis in September 2008. "The probability of a simultaneous default of two or more euro-area large and complex banking groups rose sharply," it said.
June
30
June
Gold should be like Martini; anytime, anyplace, anywhere
Jun 30 2010 The Independent
If you want to know why gold is soaring, take a look at this 100 trillion dollar note which a friend has just brought back from Zimbabwe, where it was given to him by a taxi driver as small change.
Old trillion dollar notes like this one are barely worth even a cup of tea after Zimbabwe's hyperinflation forced the government to drop its currency in favour of the US dollar in April last year. My gold-trader friend, Ross Norman, was in Zimbabwe hunting down the yellow stuff because, with demand so high on the world market, it is worth prospecting again even in such a tricky country, where so many of the mines have been closed due to civil strife.
Continue Reading
30
June
Time to shut down the US Federal Reserve?
Jun 30 2010 The Telegraph
Like a mad aunt, the Fed is slowly losing its marbles.
Kartik Athreya, senior economist for the Richmond Fed, has written a paper condemning economic bloggers as chronically stupid and a threat to public order.
Matters of economic policy should be reserved to a priesthood with the correct post-doctoral credentials, which would of course have excluded David Hume, Adam Smith, and arguably John Maynard Keynes (a mathematics graduate, with a tripos foray in moral sciences).
Continue Reading
30
June
Central banks, investment houses probably rig gold
Jun 30 2010 Mineweb
Is the gold price being manipulated? There are those who say no, while others say yes - notably The Gold Anti Trust Association (GATA) - and on balance it looks to an impartial observer (relatively) that the answer is probably in the affirmative. But perhaps no more so than any other commodities and some stock prices. There is a whole mammoth industry out there - the big banks, hedge funds etc. - whose whole purpose is to make money from money and the more you have in the first place the easier it is to do.
Continue Reading
30
June
Russian intelligence found gold market info 'very valuable,' FBI says
Jun 30 2010 GoldSeek
Russian spies in the United States whose arrest was announced Monday last year conveyed information about the gold market that the Russian security service considered "very valuable" and forwarded to the Russian finance ministry and ministry of economic development, according to the criminal complaint filed by the FBI with U.S. District Court in New York.
Continue Reading
30
June
Did the G-8 Push Us Closer to Gold Confiscation?
Jun 30 2010 Market Oracle
The global economic recovery is not looking good. The G-8 meeting this weekend saw divisions that could lead [as the I.M.F. put it] to losses of trillions of dollars and millions of jobs. Now it is reported that Mr. Bernanke and his close allies at the board in Washington are worried by signs that the U.S. recovery is running out of steam. The E.C.R.I. leading indicator published by the Economic Cycle Research Institute has collapsed to a 45-week low of -5.7 in the most precipitous slide for half a century. Such a reading typically portends contraction within three months or so.
Continue Reading
29
June
Gold investment opportunities abound (GC in MW)
Jun 29 2010 MarketWatch
Gold is mighty expensive these days but there are many ways to buy and invest in the precious metal, some of which don't require as much money as you might think.
...
Mark O'Byrne, a director at international bullion dealer GoldCore, said the best way for a small investors to invest in gold is to buy small gold coins or gold bars, such as British sovereigns, which are a quarter ounce of gold and can be bought for as little as $300 per coin.
Continue Reading
29
June
Silver in Best Streak Since 1980 as Economy No Hurdle (GC in BW)
Jun 29 2010 Business Week
Silver, the precious metal most used in industry, is attracting investors betting on both faster and slower economic growth as prices extend the longest run of quarterly gains in three decades.
...
GoldCore Ltd., a Dublin-based bullion dealer, said second- quarter sales of silver coins, bars and certificates offering ownership of the metal at the Perth Mint rose more than 20 percent from the first quarter.
Continue Reading
29
June
Russian-Irish spy ring eyed 'global gold market' in...Jersey?
Jun 29 2010 The Financial Times
Ten individuals were arrested on Sunday for supposedly carrying out “long-term, ‘deep-cover’ assignments in the United States on behalf of the Russian Federation,” according to the US Department of Justice. A key figure — one “Christopher R. Metsos” — remains at large.
Continue Reading
29
June
RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve
Jun 29 2010 The Telegraph
As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.
Continue Reading
24
June
Think the Gulf Spill Is Bad? Wait Until the Next Disaster
Jun 24 2010 Yahoo News
Most of us know there is not enough money in the world to fully clean up the Gulf. The same is true with the $700 trillion derivatives market. If just 1% of the $700 trillion derivatives market goes bust, that is a $7 trillion disaster. The entire U.S. economy is only $14 trillion annually. A 10% failure, equating to $70 trillion, would probably bring down the world economy. As with the BP Gulf disaster, there is not enough money in the world to clean up the next disaster.
Continue Reading
24
June
Why the real Budget pain is still to come
Jun 24 2010 MoneyWeek
Well, that's the easy part over with. After the emergency Budget, no one can doubt that George Osborne really does want to slash the deficit. Labour had hoped to halve our annual overspend within the next five years
Continue Reading
23
June
Gold May Drop on Speculation Investors Lock in Gains After Rise to Record
Jun 23 2010 Bloomberg.com
Gold, little changed in London, may gain for a second day as concern that the economic recovery will falter spurs demand for the metal as a means to protect wealth.
European and Asian equities declined for a second day after a U.S. report yesterday showed sales of previously owned homes unexpectedly fell in May. Purchases of new houses plunged last month, analysts forecast data to show today. Bullion climbed to a record $1,265.30 an ounce on June 21.
Continue Reading
23
June
Gold Bubble? What Bubble?
Jun 23 2010 Smart Money Tracker
We continue to hear pundits describe gold as a bubble. Certainly it will turn into a bubble before this is all over but we are hardly in the bubble stage yet. In order for a bubble to form you need the public to come into an asset class. The public is pretty dim and it can take 15-20 years before they "catch on". It took 18 before they noticed the tech bubble.
Once they do start to "get it" we will have about a year to a year and a half as gold enters the parabolic stage before the bubble pops. See the Nasdaq chart below from late 98 to March of 2000.
Continue Reading
23
June
Saudi Arabia Buying Silver As Well As Gold?
Jun 23 2010 SilverSeek
News that Saudi Arabia has secretly doubled its official gold reserves over the past few years should come as no surprise to readers of ArabianMoney. But then it was just speculation. Now this is fact. Will it be the same story for silver?
We can only draw on the evidence and gossip that comes to our attention in Dubai. There has certainly been a big jump in interest in silver on the arabianmoney.net website over the past six months.
Continue Reading
23
June
Jim Rickards: How the world likely will get back to gold
Jun 23 2010 King World News
There's a growing sense that the current global economic "Plan A", i.e. substitute public debt for private debt and use fiscal stimulus to keep economies afloat until private demand kicks in, has failed. Not surprising to many of us; it was destined to fail, but now the reality of that is becoming undeniable so leaders are scrambling for Plan B. For the U.S., Plan B is to double-down on Plan A. Others are not so sure. One problem is timing. There are several Plan B's, but they all take 5-7 years to implement, e.g. yuan as reserve asset, SDR's as a new liquidity source, etc. The two-tier Euro plan is just another Plan B although it might possibly be implemented in 2-3 years rather than 5-7.
Continue Reading
22
June
If They Don’t Own Gold, Don’t Trust Their Opinion on Gold
Jun 22 2010 GoldSeek
As an asset class, gold stirs the passions. Some folks love it, and others despise it. Be wary of those who will never own gold.
As I write this note to you on Friday, fingers flying over keys like the flickering quotes on my screens, Pink Floyd's "Learning to Fly" is playing on my speakers.
It's an appropriate tune, because gold is once again "learning to fly" now. After one or two scrapped take-off attempts, the yellow precious metal has broken out to fresh all-time highs. (Well... nominal highs at least. To break inflation-adjusted highs – which will happen sooner or later – gold will have to trade above $2,000 per ounce.)
Continue Reading
22
June
The Story That's GATA Be Told
Jun 22 2010 The Motley Fool
Now that a thin layer of dust and familiar silence has settled over a series of shocking revelations about the markets for gold and silver, I had an opportunity to discuss these topics with a man who has stood at the epicenter of this long-standing controversy.
GATA start from the beginning Bill Murphy co-founded the Gold Antitrust Action Committee (GATA) back in 1999, shortly after the implosion of the hedge fund firm Long Term Capital Management. What Murphy observed as gold price manipulation in the wake of that crisis set him upon a quest for truth and transparency in the gold market.
Continue Reading
22
June
Mum's the word on silver
Jun 22 2010 SilverSeek
There’s an old adage about not seeing the forest for the trees. It means getting wrapped up in the details of a circumstance and losing appreciation for the big picture. Sometimes we need to step back and look at things from a different perspective. Consider the extraordinary situation that currently exists in the silver market. We have the unprecedented circumstance of great numbers of investors and observers openly complaining to market regulators about an active manipulation in silver. This has never happened before. There have been commodity manipulations but widespread knowledge of these manipulations only came to light after they ended, such as the Hunt Brothers in silver and Sumitomo in copper. What’s unprecedented about the current silver manipulation is that the allegati
Continue Reading
22
June
Why the 'let's spend until we're broke' brigade are wrong
Jun 22 2010 The Telegraph
The "let's spend until we're broke" brigade refuses to admit defeat. The fiscal squeeze expected to be imposed in today's Emergency Budget will definitely tip Britain back into recession, the ever outspoken Danny Blanchflower, former member of the Bank of England's Monetary Policy Committee, has been warning, and very possibly something even worse.
Continue Reading
21
June
Gold reclaims its currency status as the global system unravels
Jun 21 2010 The Telegraph
Jean-ClaudeTrichet, the president of the European Central Bank (EC), talked days later of "the most difficult situation since the Second World War, and perhaps the First".
The ECB’s latest monthly bulletin gives us some startling details. It reveals that the bank’s "systemic risk indicator" surged suddenly to an all-time high on May 7 as measured by EURIBOR derivatives and stress in the EONIA swaps market, exceeding the strains at the height of the Lehman Brothers crisis in September 2008. "The probability of a simultaneous default of two or more euro-area large and complex banking groups rose sharply," it said.
Continue Reading