Five important properties of Money. I was talking about gold crashing, gold as the anti-currency, gold as the ultimate money, Do you really know what money is? The difference between money and currency, and why I am a buyer of metals.
In history, many “things” have been labeled money. Shells, tree bark, stones, plants, etc. But all of them lost their attractiveness and people turned back to gold and silver. Will the crypto currencies likewise eventually be shunned for something more 3 dimensional like the metals again? Time will tell.
Each day that goes by brings us one day closer to the “end game.” One would have to be genuinely silly to try and put a date on that event, but you all know it’s coming. The US dollar’s days as the world reserve is going to come to an end.
But now it’s stirring again. While it is still trapped below 1300, what we do see is the gold miners have really perked up.
They’re buying it for a reason and the reason isn’t to lose money. It’s stability, it’s diversified reserves, it’s a way to “back” their currency.
In short, when China really starts buying, it’s not going to be able to disguise it any longer. And that could cause a run on gold like the world has never seen before.
The coronavirus's impact on mining not only prevents an expansion of supply, but may actively shrink new production at the very moment gold demand is surging.
There’s a hundred places to buy a safe, and a million prices. But if you’re like me, you want the most value for the money you spend.
We know the biggest problem driving the price of gold is the ever-burgeoning stack of public debt, which the folks at ValueWalk believe could be exacerbated by inflation next year.
They recently reported Noble Gold founder and CEO Collin Plume's observation that central banks will have to bear to brunt of "government generosity."
As you know, the performance of gold responds to the interaction of demand and supply, which, in turn, is influenced by the interplay of four key drivers:
“This alone gives gold and other commodities a generally inverse relationship with the USD.”
But nominal rates don’t necessarily sync with inflation. As Tiggre explains, a nominal 1% interest rate is actually negative if inflation is greater than 1%. “This is why gold and nominal rates can rise together during times of higher inflation.”
Gold vs. Bitcoin. Who’s going to win? Right now, gold is taking an absolute pounding, and Bitcoin continues to hold ground or gain. Who’s the ultimate winner here?
Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy.
Once again, it’s time to keep our keen eyes on the target — gold’s and silver’s long-term price appreciation.
With inflation on the rise (you decide whether it’s temporary or ongoing), keeping real interest rates ultra-low, these metals are poised for a ride to the moon and beyond.
I’m going to hop around a bit here today, so try and follow the plot I’m laying out. First off, if you follow markets, you know that this week the PPI and CPI both came in blazing hot.
So lets chat about gold for a minute. If scarcity is an attribute, then gold’s got a lot of it. Jim Rickards was recently interviewed and he told the host that while visiting several of the most major gold refiners/minters, all of them told him that “there’s just no gold around.”
To paraphrase Kitco’s Neils Christensen, “…what investors have been waiting for has arrived” — gold pushing through the $1,900 level and moving into positive territory for the year.
Gold finished up a good week in the New York spot and the August futures markets yesterday, closing at $1,904.50 and $1,906.30, respectively.
Spot gold’s $27, 1.4% rise this week is its best monthly gain since July — it’s up $103, or 6.8%, in May — turned its movement positive for the year.
And now, its momentum is poised to push prices to $2,000 and above by the end of the year, sweeping aside the skepticism — and manipulation — of gold bears.
According to many analysts, gold's rally is just getting started, particularly as threat of rising inflation spreads.
Earlier this week, the World Gold Council released its informative and eminently readable mid-year outlook for gold.
Looking at the first half of 2021, the WGC found that “strong consumer demand recovery and [2nd quarter] gold ETF inflows were not enough to offset heavy [1st quarter] outflows.”
Looking ahead to the rest of the year, the WGC sees interest rates, inflation, devaluing of fiat currencies and higher exposure to risk assets combining “to prompt strategic investors to add gold to their [portfolios].”
That, in turn, will put upward pressure on gold prices in the second half of 2021, especially when assuming expectations for underperforming economies in the U.S. and elsewhere (the WGC doesn’t forecast prices of gold).
In a further signal that the U.S. economy isn’t out of the woods, the widely followed consumer sentiment index that’s produced by the University of Michigan shows that consumer sentiment plummeted in early August.