By: The Gold Report and Mike Niehuser - 7 September, 2012
Mike Niehuser, founder of Beacon Rock Research, incorporates his banking school background into his mining industry analysis. In this exclusive interview with The Gold Report, he assesses the macroeconomic situation from a banker's perspective, explains why he is convinced gold is ready to take off. Full Story
FOR the second time or more since May, today's Handelsblatt newspaper in Germany carries a big picture of Edvard Munch's The Scream. This time, the picture doesn't replace the painter's tortured self-portrait with chancellor Angela Merkel's head. The headline now reads "Angst of the Germans". But the subject is the same. Full Story
Government spending on infrastructure would revive the economy by putting people back to work, consumer confidence would increase, spending would increase. Inventories would need to be restocked, business would invest in new plants and equipment. American business would become more competitive because of the increased quality of modern infrastructure, exports would increase, imports decrease. Full Story
We are now at least somewhat clear on one central bank’s plans for the economies under control. Save a significant reversal, the European Central Bank (ECB) is going to ‘nuclear’. That is to say the bank will engage on a program of bond buying in the Eurozone that is unlimited in scope, duration, and magnitude. A thoroughly anemic August jobs report has now applied even more pressure on the USFed to act when it meets next week. Full Story
After weathering a long consolidation followed by a major correction, gold stocks remain deeply out of favor today. But this bearish sentiment is slowly yielding as gold powers higher in its usual autumn rally. Gold stocks are starting to show signs of life again. And after their strong advance since late July, they are now on the verge of a major upside breakout. Odds are this event will herald a major new upleg. Full Story
It is not just the skyrocketing prices we pay for Food and Energy as reflected in the CCI, that demonstrate the Price-Inflationary effect of The Fed’s (and ECB’s) ongoing Monetary Inflation. But it is the prices for most of what we buy that have skyrocketed as a result of The Fed’s decades-long monetary inflation. Consider the following chart comparing the 1930’s cost in the U.S. for common goods and services, with today’s costs. Full Story
This past Friday, as Fed Chairman Ben Bernanke delivered his annual address from Jackson Hole - the State of the Dollar, if you will - I couldn't help but hear it as an incumbent's campaign speech. While Wall Street was hoping for some concrete announcement, what we got was a mushy appraisal of the Fed's handling of the financial crisis so far and a suggestion that more 'help' is on the way. Full Story
I was startled to read Reading Ben Bernanke's remarks, made at Jackson Hole, about using "nontraditional policies" at the Federal Reserve. Nontraditional policies, indeed! By "nontraditional policies" he no doubt means his current policies of 1) the inflationary horror of monetizing of debt by the simple expedient of simply creating the money to buy new government debt, and 2) the bizarre idea to purposely create inflation in consumer prices. Full Story
The price of gold jumped to $1,733 and silver to $33.50 an ounce on news of worse than expected US job figures. The US economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated. Full Story
Generally speaking, half of all gold demand is comprised of jewelry sales. About 10% of gold is used in technology, where it is used in devices ranging from computers, cell phones, space shuttles, and defense technology. Lastly, 40% of gold is used as an investment – and this percentage is growing significantly. Full Story
If it looks like a duck, quacks like a duck, it just might be a duck. We are talking about the euro: it now looks like a currency, acts like a currency, it might as well be yet another currency. The new framework of the European Central Bank (ECB) morphs the euro from a currency of nations to a currency of the United States of Europe. This has major implications on how to value the euro and with it, the U.S. dollar and other currencies. Full Story
By: The Gold Report and Don Coxe - 6 September, 2012
China and India have always been crazy for gold, and the yellow metal remains the choice store of value in those two countries, says Don Coxe, a strategic advisor to the BMO Financial Group. In an exclusive interview with The Gold Report, Coxe explains how demographic shifts are affecting the price of gold and delves into the logic of investing in gold as a long-term strategy. Coxe also draws an important lesson in economics from his reading of Lenin. Full Story
By: The Gold Report and Paul Harris - 6 September, 2012
Living in Colombia gives Paul Harris, publisher of the Colombia Gold Letter, invaluable first-hand knowledge of the exploration scene there. On a macro level, mining development in Colombia will create opportunities for massive wealth generation for company shareholders, for local communities and for the government and could move Colombia into the ranks of the developed nations. On a micro level, junior explorers still have to navigate through an as-yet-untested permitting process. Once the first junior does that, Harris sees the floodgates opening up. Read more in this exclusive Gold Report interview. Full Story
In addition to being a Grammy nominated record producer, jazz buff and popular L.A. radio host, our friend Alan Geik, whose thought have been featured here before, holds a masters degree from the London School of Economics and has taught economics in London colleges. In the essay below, he explains why the European Union and its central bank will survive the current crisis even if some members are forced to withdraw. The ship will not be allowed to sink, says Alan, simply because there are too many bureaucrats dependent on the EU for cushy jobs and fat pensions. They will do whatever it takes to hold onto their sinecures, our guest columnist assertsm ensuring that the EU itself will endure. Full Story
The Hippocratic Oath dictates never to do harm to the patient. The central bankers instead take the Hypocritical Oath that dictates to cripple the patient, to drain the blood, to preserve power by tightening the straps, to erode buying power from hard work, and to render life savings a weak shell, while whispering lies in the ears on blame for what went badly wrong, against the background din of endorsed war themes. The effectiveness of the latter oath is seen in the systemic failure of the USEconomy, whose financial and economic structure has been destroyed by bad economic policy, the poor paper financial foundation from the monetary system, corrupt bond market practices marred by $trillion frauds, and a marriage between the state and sanctioned large corporations whose only efficiency is seen in dark corners protected by criminal impunity. Full Story
We believe that the markets have yet to catch up to what’s going to happen. But the current gold price breakout is not because of this aspect of gold; it’s because of both Technical and seasonal factors. When gold is a Tier I asset and commercial banks appear in the market place, then the gold market will also see a new driving force behind the gold price. There is still a considerable distance to go before the gold price really does discount these potential changes. Full Story
EARLY ON the morning of Friday, 14 September 2007, nervous savers formed queues outside several branches of Northern Rock – the former building society then writing 1-in-5 of all new UK mortgages. Waiting patiently to withdraw their money, the Rock's customers were spooked by news that the bank had taken an emergency loan from the Bank of England, the UK central bank. And once they'd got their cash, at least a few began gold investing. Here at BullionVault, for instance, September 2007 brought more new UK users than the previous 3 months combined. Full Story
The German economy is undoubtedly the powerhouse of Europe. As a result, an understanding of the developments within Germany can offer a strong indication of the path that the rest of Europe is likely to take. Until recently, Germany stood as a bastion of sound money against those Keynesian led regimes in the developed nations that favor continual currency debasement as an economic panacea. Full Story
Gold’s latest rally – and the dollar’s recent decline – has the investing world buzzing with speculation as to the meaning behind it. Convention wisdom says that gold senses another round of loose money on the part of the world’s leading central banks. But what few investors have considered is that gold is most likely serving its role as a crisis barometer, warning of trouble ahead on the economic horizon. Full Story
The title ‘The Business of Mining” sounds very simple doesn’t it? But the ‘business of mining’ may not be what you think. I recently attended my first mining conference in Mexico, actually in Durango, MX, August 29 – September 1. While this may have been my first, it will not be my last conference in Mexico and as I have met many new friends and have great respect for their hard work in this business. Full Story
Last year on September 6, 2011, gold reached a high of $1920; but when bullion banks intervened by pushing gold lease rates deep into negative territory in early September, they made sure enough leased gold would reach the markets to drive the price of gold lower. Full Story
Gary Leibowitz, a regular in the Rick’s Picks forum, has a knack for attracting hostile fire. An unrelenting optimist in a bear’s lair, he is a guy who consistently raises everyone else’s hackles. In the guest commentary below, however, he digresses on a topic that all of us can take pleasure in – not just for its own sake, but as an investment. Full Story
There is an ongoing three way debate between those who believe the Fed should do more to strengthen the recovery, those who believe that the recovery is strong enough to continue on its own, and those who believe that the economy has been so fundamentally altered by the recession that no amount of stimulus can succeed in pushing unemployment down to pre-crash levels. As usual, they all have it wrong (although some are more wrong than others). Full Story
We know that the decelerating economic backdrop (with inflation measures in check) is supportive of a Fed going unconventionally dovish in unleashing QE style policy if it so chooses. We also know that the political backdrop is not supportive, with Republicans sounding off about a gold standard and a soon to be former Fed chief. Full Story
The cheek of it! They raised the price of my favorite ice cream. Actually, they didn't increase the price; they reduced the container size. I can now only get three servings for the same amount of money that used to give me four, so I'm buying ice cream more often. Raising prices is one thing. I understand raw-ingredient price rises will be passed on. But underhandedly reducing the amount they give you… that's another thing entirely. It just doesn't feel… honest. Full Story
Some critical technical events have occurred in the gold markets over the past week. Please click here now. Friday’s price action likely established the $1625-$1645 area as powerful support for the bulls (you). The decline halted at almost exactly $1642.40, and then rocketed towards $1700. Full Story
When markets don’t go our way, our emotions get tested. Our thought processes and decision-making ability gets polluted by fear. And when overcome by fear we often make bad decisions. Sometimes these bad decisions can be actions taken as a direct result of fear. But fear can also lead to an inability to take action, as a result of emotional scars from the experience. Full Story
According to recent statements by Bernanke, the Fed stands ready to act with further easing of monetary policy (QE3) if economic conditions warrant it. But let's face it, because the Fed has never been audited we only receive the data they deem fit to publish. We know the government lies to us about inflation, unemployment, GDP, etc. Does anyone really believe the Fed is publishing true accounting numbers? Full Story
In 1980, the price of one ounce of GOLD reached $850. Today, the purchasing power of the US dollar is substantially less than in 1980. The price of one ounce of gold would have to rise to $ 2,550, assuming an annual average inflation of 3.5%, to reflect the value of the US dollar thirty years ago. Full Story
While we believe the rebound has more room to run we have to note the sudden large increase in bullish sentiment. As you can see, public opinion in Silver has surged from only 32% to now 70% bulls. Two months ago only 47% were bulls on Gold. Now its 70%. Commercial short positions have increased by a similar degree. In Silver, commercials are now short 38K contracts, which is a large increase over 23K contracts from two weeks earlier. Full Story
I noticed that I don't laugh as much as I used to, but I curse a lot more. I figure it's because things economic are so serious and insistently suicidal lately. I still laugh at funny jokes, however, like the classic "Knock knock. Who's there? Mogambo Guru. Mogambo Guru who? That's what everybody says!" Hahahaha! Full Story
We frequently hear the financial press refer to the U.S. dollar as the “world’s reserve currency,” implying that our dollar will always retain its value in an ever shifting world economy. But this is a dangerous and mistaken assumption. Full Story
Within the eurozone there are great stresses. At one extreme there are punitive costs of borrowing for Greece, Cyprus, Portugal, Ireland, Spain and Italy; at the other there is zero or negative interest rates for Germany, the Netherlands and Finland. Doubtless the first group begets the second, as captive investors in euros have to buy government bonds, and this requirement is being funnelled away from risk into safety. Full Story
The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70’s Gold Parabola. Thus, “timing” is taken directly from the late 70’s cycle, with price targets created from a combination of the late 70’s Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the “Stagflation” comparison to the late 70’s was exceeded and “Hyper-inflation” would become a real possibility. Full Story
We heard from Bernanke today with his Jackson Hole speech. Not quite the fireworks of his speech ten years ago, but it does offer us a chance to contrast his thinking with that of another Federal Reserve official who just published a paper on the Dallas Federal Reserve website. Bernanke laid out the rationalization for his policy of ever more quantitative easing. But how effective is it? And are there unintended consequences we should be aware of? Why is it that the markets seem to positively salivate over the prospect of additional QE? Full Story
By: Ty Andros and Gordon T Long - 3 September, 2012
Italy will soon collapse despite the pending EU Monetary "Bazooka". It will be only the next example of failed public policy, whether Monetary or Fiscal. Politicians, public servants and the electorate consistently fail to understand the central issues that are operating in an ever more complex global economic system. Full Story
Silver prices rallied by four per cent after Ben Bernanke sat down from speaking at Jackson Hole on Friday, and that was with the chairman of the Federal Reserve hinting at QE3 to come and failing to actually do it. Full Story
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