By: Stefan Gleason, Money Metals Exchange - 1 July, 2020
To quote Thomas Paine once again, “What we obtain too cheap, we esteem too lightly.”
A flood of Federal Reserve Notes pumped into the banking system, the Treasury bond market, the junk bond market, and directly into Americans’ pockets through “stimulus” checks is cheapening the value of the currency and severing the link between economic productivity (i.e., work) and reward.
It’s much harder to mine gold or silver out of the ground than it is to expand the supply of fiat currency. Full Story
The last remnants of the gold standard were abandoned in August 1971, when President of the United States Richard Nixon decided to close the gold window (foreigners couldn’t redeem dollars for gold at the Treasury anymore). From 1945 until 1971, the U.S. dollar was backed by gold, and served as the world reserve currency under a system called Bretton Woods.
The “Nixon Shock”—as the unilateral suspension of Bretton Woods is often referred to—brought about a sea of change in economies and societies around the world, because from that moment on all national currencies stopped having an anchor. Fiat currencies could be created boundlessly. To get an understanding of the changes since 1971, I decided to interview the gentlemen behind the website “WTF Happened in 1971?” Full Story
I've been wondering what might provide the catalyst to push the Dow above 30,000, and this may be it, from Bloomberg: "A strain of virus spreading in Chinese pigs has shown it can also infect humans, with researchers suggesting that another pathogen with pandemic potential waits in the wings behind Covid-19." There's no telling how much stimulus we'd see if a new virus takes wing before we've dealt with Covid-19. For starters, the Fed might bring interest rates down to, oh, minus 3 or 4 percent. Bank loan officers would be giving away toasters and Cuisinarts at that point just to have us take thick stacks of $100 bills off their hands. Full Story
So, anyway, let's just conclude with this. Please do not rush out of here thinking that the COMEX will soon collapse. The weight of all this delivery demand may eventually lead to a force majeure-style failure, but that's very likely not coming this month or next. The CME, the LBMA, and The Banks will work to protect their pricing scheme until the very last moment, so it would be foolish to think they're going to meet a quick end.
However, their fate was sealed in late March, and like a dying animal, the spasms of their death throes are clearly visible...if you know where to look. To that end, I hope you found this post to be helpful. Full Story
Bill Murphy, co-founder of the Gold Anti-Trust Action Committee (GATA.org,) returns to Liberty and Finance / Reluctant Preppers to answer viewers questions on the metals markets and what we must do to get positioned ahead of the next major move for Gold & Silver. Full Story
The Federal Reserve itself is entirely unaccountable to the American people. Nobody votes for the bankers in charge there, and they don’t have to tell anyone what they are doing in the markets from day to day.
There is no effective movement in Washington to restrain the central bank or limit borrowing and spending. If there ever was one, it vanished entirely over the past decade.
The outlook for sound monetary or fiscal reforms looks grim. The swindle will likely continue until frustration boils over into civil unrest or until confidence in the dollar collapses. Full Story
By: Avi Gilburt, Elliott Wave Trader - 30 June, 2020
The general market reliance on the Fed is not only what is driving many investor’s decisions of late, but it will likely reach its peak in the coming years. But, one is going to have be very careful before they buy into this fallacy too deeply.
I am told over and over again that one cannot fight the Fed. Unfortunately, history does not support this proposition. Allow me to begin with the events surrounding the Great Depression, and the Fed’s inability to stem that tide.. Full Story
In an essay posted today at FX Empire, "Gold Market Manipulation and the Federal Reserve," financial planner Kelsey Williams both admits and dismisses complaints of manipulation of the gold market.
Williams doesn't identify the people he purports to be rebutting, but his characterization of them doesn't fit GATA, even though he seems to think it does. Full Story
But I’m here to discuss the “idiot stocks.” I’ve decided to label stocks like SHOP, W, TSLA, BYND, CVNA, etc as “idiot stocks.” Yes, ignorant speculators have managed to get lucky trading these stocks during a period of time when the Fed has printed the greatest amount of money in its history. But only an idiot would consider them to be long term, fundamentals-based investments. Not one of those stocks has ever produced a valid GAAP profit and never will. They are largely cash-burning furnaces that have benefited from a stock market that, for now, will tolerate any negative event short of nuclear war. Full Story
Above is a list of reasons why it makes sense to own gold. Gold is the ultimate store of value, and offers protection from inflation caused by reckless money printing by central banks. Currently, governments want inflation, as politically it’s the easiest way of lowering the debt burden. On May 7, 2020, Ray Dalio wrote, “Printing money is the most expedient, least well-understood, and most common big way of restructuring debts.” Full Story
Make no mistake, hyperinflation is coming eventually. It is the only way, other than via a declaration of bankruptcy, that the U.S. Government can 'repay' debts grown far too large to service, let alone retire, with honest money. But the blowout won't come in time to save us from the crushing burden of private debts we've piled up since the 1970s. Anyone predicting that hyperinflation is likely to happen before deflation must explain how mortgage debts will be settled after the housing market collapses. Full Story
By: Stefan Gleason, Money Metals Exchange - 28 June, 2020
Few politicians have any concerns about the longer-term consequences of running up an unprecedented budget deficit enabled by an exploding central bank balance sheet. One big risk, though, is a rapid decline in the value of the Federal Reserve Note.
The buck traded in a volatile fashion versus foreign fiat currencies this spring, first spiking higher, then lower during the turmoil in financial markets. The U.S. Dollar Index has since settled back down to about where it began the year.
If and when the USDX embarks another leg lower, that should provide fuel for an upside breakout in gold to a new record high. At that point, mainstream investors will start paying attention to precious metals. Opportunistic bargain hunters will see that silver has a lot of catching up to do. Full Story
“Commodities remain one of our favorite asset classes as we head toward year-end 2020,” LaForge added, with the report projecting a solid US recovery in the third quarter, and moderate growth expected in 2021.
The bank also expects the US dollar to be weak going forward, which would be bullish for metals.
Fueled by infrastructure, mined commodities are back in fashion. Call it Roosevelt 2.0. Full Story
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