It was, after all, a simple question that sparked my interest in silver from the start. Some 35 years ago, my now-departed friend and mentor, Israel Friedman, challenged me with a question that took me a year to answer. Actually, “challenged” is not the right word, either back then or today. Izzy simply asked a question to which he had no real answer of someone he thought might be able to answer. In a real sense, the question conveyed a degree of respect, in that Izzy only asked me because he thought I might have an answer. It is with that same degree of respect that I ask for answers to my own questions today.
Back then (1985), Izzy asked me why I thought silver was priced so cheaply (around $5/oz) in the face of universal awareness that the world was consuming more silver than was being produced (mining plus recycling); a deficit consumption pattern that had existed for more than 45 years to that point. Simply put, a deficit consumption pattern is the single most bullish condition possible for any commodity, yet silver appeared to be immune from the law of supply and demand. Full Story
It was, after all, a simple question that sparked my interest in silver from the start. Some 35 years ago, my now-departed friend and mentor, Israel Friedman, challenged me with a question that took me a year to answer. Actually, “challenged” is not the right word, either back then or today. Izzy simply asked a question to which he had no real answer of someone he thought might be able to answer. In a real sense, the question conveyed a degree of respect, in that Izzy only asked me because he thought I might have an answer. It is with that same degree of respect that I ask for answers to my own questions today.
Back then (1985), Izzy asked me why I thought silver was priced so cheaply (around $5/oz) in the face of universal awareness that the world was consuming more silver than was being produced (mining plus recycling); a deficit consumption pattern that had existed for more than 45 years to that point. Simply put, a deficit consumption pattern is the single most bullish condition possible for any commodity, yet silver appeared to be immune from the law of supply and demand. Full Story
Last week the Fed announced that it was going to start buying $60 billion in T-Bills per month at least into Q2 2020. The Fed will also rollover the proceeds as the T-Bill’s mature. The rationale was to address the decline in the “non-reserve” liabilities of the Fed. So what are “non-reserve” liabilities? Federal Reserve Notes. Full Story
By: Peter Schiff, President and CEO Euro Pacific Capital - 17 October, 2019
Rene Magritte’s 1929 painting “The Treachery of Images,” depicts a tobacco pipe with a caption that reads “Ceci n’est pas une pipe,” (French for “This is not a pipe”). Everyone who has taken a course in modern art knows that Magritte’s exercise in contradiction was meant to draw a distinction between a real thing and a representation of that thing. Perhaps we should send Federal Reserve Chairman Jerome Powell a beret and an easel as he is attempting a similarly surrealistic take on monetary policy.
Early last week, the Chairman announced a new, as yet unnamed, Fed program through which the bank will now buy regular amounts of short-term U.S. government debt. Seeking to counter the rumblings that a new form of quantitative easing would be seen as an admission that the economy may be in trouble, Chairman Powell asserted during the annual meeting of NABE on October 8, “This is not QE. In no sense is this QE”. In other words, “Ceci n’est pas QE.” Full Story
By: Gary Christenson, The Deviant Investor - 16 October, 2019
The music died many times in the past. To name a few:
1929 Market crash 1933 President Roosevelt confiscates citizen gold and declares it illegal to own more than a few ounces. 1971 President Nixon “closed the gold window” and severed the last link between the devaluing dollar and gold. 1987 Stock market crash 2000 Stock market and “dot-com” crash 2008 Stock market and housing crash 2019? Stock market and “everything bubble” correction/crash 2020-2025? “Inflate or Die” QE, bond monetization, helicopter dollars etc. Full Story
I agree and stick by my call for $10,000 an ounce gold. Some critics believe only a major event, such as a war or famine, would be enough to push the metal up that high, but really all it takes is monetary and fiscal mismanagement. That’s exactly what we’re seeing right now in Europe, where growth is slowing because of business-killing regulations. But instead of getting rid of these rules, interest rates have been allowed to dip below zero. In Denmark, banks are actually paying borrowers to take out a mortgage, which is contributing to what Nancy sees as a European housing bubble.
Conditions aren’t much better in the U.S.—or at least they weren’t, until President Trump began rolling back unnecessary regulations.
According to Steve Forbes, there are 773,000 words in the Bible, which sounds like a lot until you learn that there are around 10 million words in the federal income tax code. Similarly, there are more than 185,000 pages in the Federal Register of rules and regulations. That’s up 17 percent from 158,000 pages in 2008. But in 2018, the number of pages actually fell almost 1,000 pages, or 0.5 percent, meaning Trump is keeping his word. Full Story
Perhaps the biggest takeaway from these events is that Fed stimulus is a one-way train.
Anyone who bought the official promise that central bankers would withdraw stimulus as markets recovered should abandon that notion, now and forever. They tried. They failed.
Stimulus is better understood as an addictive drug. The Fed can never withdraw it without crippling or killing the markets. Plus, there is always the risk of an overdose. Full Story
It’s QE4ever, Baby! The Fed’s latest move back into quantitative easing took a quantum leap in a single day with last week’s rush announcement of major permanent money injections to begin this Tuesday. Since the Fed adamantly denies it is doing what it is doing — going back to quantitative easing (because they legally have to deny it) — we could just call it the Fed’s new quantitative mechanics. If we must avoid the term quantitative easing, as some writers are insisting we should, I’ve come up with the new term from the definition of quantum mechanics in which … Full Story
In all likelihood, the recent rise in the price of gold, which has been driven by escalating demand for physical gold – notably by eastern hemisphere Central Banks – reflects the increasing visibility of an inevitable collapse in the global fiat currency system. The Dutch Central Bank has made it clear that it sees gold as an ideal asset for wealth protection when the next crisis erupts. Full Story
But if indeed the two super economic powers kiss and make up, cyclical inflationary forces gather, our positive readings on the leading Semiconductor sector prove to be real as they were in 2013, the negatives gathering in US manufacturing dissipate (which could be aided by a weaker US dollar, which itself could be instigated by a dovish Fed should it decide to go that route) the macro would transition inflationary.
Unfortunately, with the trade hype as fresh as ever the indications are not yet definitive. But a road map is in place. Full Story
It might not go much farther. I'm amazed and quite impressed with how gold is hanging right around $1,500. It doesn't like to much below that. We could easily see a stab down to $1,450 or $1,425, but I think that's going to uncover a lot of buy-in. On the upside, if you get above $1,650 it's off to the races. So, $1,650-$1,700 that may not happen until next year, next spring, but I see a predictions from people that are pretty reliable that say could happen before the end of the year. So, it's not so much when it happens but that it is going to happen. Full Story
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