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November 08 2018

moneymetals

Rep. Alex Mooney: Bring Back Gold!

Washington has been quite the circus lately. Bret Kavanaugh’s appearance in front of the Senate Judiciary Committee prompted dozens of interruptions from Democrats and numerous protests from leftists.

During Twitter CEO Jack Dorsey’s testimony to the House Commerce Committee, journalist Laura Loomer demanded to be verified on the social media platform, and Representative Billy Long (R-MO) held an auction.

Alex Jones tried to fight Senator Marco Rubio, a has-been actress got escorted from the premise, and CNN's Oliver Darcy was on the brink of tears.

What a time it was on Capitol Hill.

But as the crazies enveloped these events, a more subdued and mundane hearing occurred at the same time.

Entitled “The Future of Money: Coins and Banknotes,” the House Subcommittee on Monetary Policy and Trade discussed cryptocurrencies, counterfeit currency, intellectual property, and the U.S. Mint’s security developments.

One distinguished GOP representative took the opportunity to home in on two issues important to libertarians, constitutionalists, and sound money advocates: the gold standard and the Federal Reserve.

Representative Alex Mooney (R-WV), who has ostensibly continued where former Representative Ron Paul (R-TX) left off, alluded to the Fed’s inflationary policies, taxing legal tender under the Constitution, and his bill that returns the nation to money backed by the yellow metal.

Continue reading... 

November 05 2018

moneymetals

A Tale of Two Metals: One WAY More Valuable Than Gold, The Other Historically Undervalued

Gold is the metal of kings, the ultimate money, an eternal store of value, an un-tarnishable embodiment of beauty. Gold is all those things. But it is not the most valuable metal you can own on a cost-per-ounce basis.

Often, platinum commands a higher price than gold. Lately, platinum has traded at an abnormally large discount to the yellow metal.

Metals investors who want to hold the most concentrated wealth in a single ounce bullion product should opt not for gold or platinum…but for a different platinum group metal called rhodium.

Rhodium is scarce and thinly traded. Frankly, it’s a little-known metal even among metals investors.

Like platinum and palladium, the primary application for rhodium is catalytic converters for cars and trucks. It is alloyed with platinum and palladium to enhance resistance to corrosion. Rhodium is also used in some types of jewelry.

Rhodium has quietly been in a raging bull market over the past couple years. Prices bottomed out in 2016 at around $600/oz. This September, they surged to over $2,400/oz and have remained there.

As impressive as that quadrupling is, rhodium still trades far below its all-time high from 10 years ago. From 2004 to 2008, rhodium launched from $500 to as high as $10,000/oz. At its current value of $2,425/oz, the niche metal still has lots of room to run.

Of course, the trade off associated with rhodium’s explosive price potential is that it also carries significant downside risk. This metal isn’t for the faint of heart.

Folks just getting started in precious metals investing should first build up core holdings in gold and silver. But more seasoned hard assets investors who want to add a high-risk/high-reward speculative component to their precious metals portfolio might consider rhodium.

The high-flying metal is currently available to investors in the form of one-ounce bullion bars. They come sealed and authenticated by either of the reputable mints Baird & Company or PAMP Suisse.

More options are available for the more popular catalytic metals, platinum and palladium. Bars, privately minted rounds, and even some sovereign coins are available to investors.

Continue reading: https://goo.gl/wSqPno


November 02 2018

moneymetals

Chris Martenson Warns: Markets Are Making Faulty Assumptions about Growth & Resources

Chris martenson

Well now, without further delay, let’s get right to this week’s exclusive interview.

Mike Gleason: It is my privilege now to welcome in Dr. Chris Martenson of PeakProsperity.com, and author of the book Prosper! How to Prepare for the Future and Create a World Worth Inheriting. Chris is a commentator on a range of important topics such as global economics, financial markets, governmental policy, precious metals and the importance of preparedness among other things. And it's always great to have him with us.

Chris, it's been too long, but welcome back and thanks for joining us again.

Chris Martenson: Hey Mike. Thank you so much. It's great to be back with you.

Mike Gleason: Well Chris, we continue to follow your work closely, and your Crash Course video remains in our opinion, a must watch for people who are concerned about the road we are all on. You have summarized the problems we face as “expecting infinite growth in an infinite world.” No amount of money printing and Wall Street wizardry can change the fact that resources and energy in particular are limited. Unfortunately people are not always ready to listen, lots of folks tuned in following the 2008 financial crisis, but years have passed, and many Americans have forgotten about those darker times. Home prices and stock prices have been rising and few people are worried, at least with regards to the markets.

It isn't fashionable to be preaching caution, but the need for it is, we think, greater than ever. What are you saying to people who might think 2008 was just another bump in the road and now is not the time to be bearish, Chris?

Chris Martenson: Well, they have a point. They've got 10 years under their belt of the most expansive monetary policy ever, and I got dinged because I saw a lot of bearishness in 2011, and called it at the time, and of course, things just bottomed a little bit and then went up. Same thing in 2016, beautiful head and shoulders top, there was emerging market trouble everywhere, bonds were exploding overseas, and the dollar was spiking, as carry trades unwound, called that too, said, "Uh oh, this looks bad" and then was 50-degree rocket ride of monthly gains on U.S. equities after that.

Well, now we have the data, Mike. We look back, we say, "Oh, the central banks just printed more, then even more, and then even more." Most people mistakenly think the crisis was in 2008, they did a few extraordinary things on the fiscal side, they had TARP on the monetary side, there was all this quantitative easing, and then that's in the rear view.

But the truth is, the largest ever amount of printing happened in 2015, '16, and '17. Those in '16 and '17 in particular. Those were the years. If you want to understand why things denominated in freshly printed money go up in price, you don't need a PhD in economics. It's just how it works. And the central banks printed like crazy, tens of trillions, shoved it into the markets and guess what happened? Exactly what we predicted in the Crash Course in 2008.​...

Continue reading: https://goo.gl/47gwK4​

October 31 2018

moneymetals

WAITING FOR THE BUY SIGNAL: What’s Going On With Silver Investment

invest-in-silver-social.jpg

The Silver Market is setting up for one heck of a move higher as investors are waiting for the signal to start buying. While the silver price has shot up due recently, it still isn’t clear if this is the beginning of a longer-term uptrend. The reason for the quick spike in silver was likely due to a small short-covering rally by the Large Speculators trading on the Comex.

For the first time in a quite a while, the Large Speculators (Specs) were net short silver. For example, the Large Specs were net long by more than 100,000 contracts last year when the silver price was $18.50. However, the last COT Report showed that the Large Specs were net short silver by 17,000 contracts:

Net commercial short positions silver fell from 7,400 - 2,600

The Large Specs are shown in the Light Blue bars. Typically, the Large Specs are long, not short silver. You can see the Large Specs going short three weeks ago as their light blue bars turned down. On the other hand, the Commercials (in Red) are usually net short. However, the Commercials had the lowest net short position in years. So, to see the price of silver shoot by nearly $1.00 in a few days isn’t surprising when I have seen this setup for a few weeks.

However, it’s difficult to know if this is the start of a long uptrend in the silver price. It’s coming, but I just don’t know if this is it yet. We will know when the Silver price is making a big move when it finally gets above $20 as the broader markets crash. Now, many silver investors might be a bit frustrated because silver sentiment and investment demand dropped to a low last year.

Continue here to read the article: 
https://www.moneymetals.com/news/2018/04/23/is-it-wise-to-invest-in-silver-001460

October 29 2018

moneymetals

Greg Weldon Forecast: Dollar to Get Whacked, Catalyzing Gold & Silver Rally

Well now, without further delay, let’s get right to this week’s exclusive interview.

Greg weldon

Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and president of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in the metals and commodity markets, and his close connection with the metals led him to author a book back in 2006, titled Gold Trading Boot Camp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce.

He is a regular presenter at financial conferences throughout the country and is a highly sought-after guest on many popular financial shows, and it's always great to have him on the Money Metals Podcast. Greg, good to talk to you again and welcome back.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: Well, Greg, let's start by getting your update on what impact trade policy and tariffs may be having on the U.S. economy. We last spoke in July. Tariffs were just beginning to actually take hold. Since then, the President has imposed additional tariffs. Anecdotally, we have seen some effect. We've recently ordered some steel storage lockers for our client storage vaults and the price was increased 10% based on the higher cost of imported steel. There are also wholesale price increases coming on one line of the preparedness products we offer on our SurvivalGoods.com website. We can assume lots of businesses are experiencing the same sort of thing. Do you think tariffs are now having a significant effect? Is any of the recent weakness in the equities markets attributable to trade policy, do you think?

Greg Weldon: Yes, no, and yes. First of all, in the sense of is tariffs having an effect, absolutely. But maybe not in the way you think and not in the way you couched the question. What I find really interesting is the Fed just published a really comprehensive survey last week in which they asked businesses, manufacturing firms, I should quantify, but this is where we're talking about in terms of trade ... Manufacturing firms in terms of the impact of tax cuts versus the impact of tariffs. And the results were fascinating, because the impact of tax cuts was dramatically positive, as you might suspect. But what you might not have suspected was the impact of tariffs, which were there a degree of percentage of firms which had negative impact from tariffs? Yes. I don't remember the exact numbers, but it was somewhere less than 20%.

At the same time, there was roughly something like 13% of firms that said that tariffs actually helped their businesses in terms of generating high revenue and to whatever degree there would be benefits to certain businesses, so offsetting and mitigating the negatives of the 20%, the 13%. So the net-net negative was not as big as you might think and was overwhelmed by the positives still from the tax cuts. We know that to be true as it relates to labor, stock buybacks, and even wages.

I think from the U.S. economic slowdown perspective not a big deal, and that's what Trump's counting on. But the bigger picture, absolutely an impact, because it's affected China so much, and China was already slowing. So the GDP numbers that came out, and you know that we look at most things from a mathematical perspective, and one of the knocks on China is the slowdown in retail sales, the slowdown in money growth, the slowdown in GDP growth, the slowdown in industrial production and FDI.

But the nominal numbers are so high in trillions of renminbi that of course you're going to have a percentage slowdown, because you came from such a low base. So something like retail sales, you've gone from a 15% year-over-year rate to 9, and everyone's up in arms because the consumer in China's slowing. No, it's a record number every month. It's just a lower percentage gain because the nominal numbers are so huge now.

But right here, the third quarter numbers, were different. There was real weakness, and it's kind of even ahead of tariffs, which are going to cause more problems for China. We already see inflation on the rise. We see commodity prices in renminbi breaking out here, big thing that nobody's really talking about too much. And the renminbi's about to take out 7, probably going to 7-1/4. So yes, major impact, but it's on China.

Then you see the flow through to how this affects the U.S. and how this affects other global markets, and this coming at a time when you have a lot of other things going on: The Fed, what's happening with emerging markets, how emerging markets, specifically Turkey, might flow into Spain, and how Europe is vulnerable. So, there's a lot more than just tariffs going on. Yes, there's a major impact, but it's not on the U.S. economy. It's in the market vis-a-vis what's happening in China as a result.

Full podcast: https://goo.gl/rKxkuN

October 26 2018

moneymetals

Win Big in Gold and Silver without "Buying the Bottom"

Last month in this space, I penned an essay titled "Are Silver and Gold 'at the Flood'"?. A few weeks later, two other essays on another widely-read site discussed this topic from the same perspective and sourcing – a case of "great minds thinking along similar lines"?

Please take time to read or review that Money Metals Exchange Post of August 28.

I made the case of a misalignment in the precious metals' markets regarding price versus value which had become so pronounced that – in the near term – an explosive change in trend catching most participants by surprise was pretty much baked into the cake.

Since that day, gold has notched its largest one day up move in two years, palladium has risen $200 an ounce, platinum and silver have penetrated the first layers of resistance, and mining sector ETFs have moved forcefully from their basing platforms.

Does this signify the end of the seven-year metals' bear market stretching back (with the six-month exception in 2016) to mid-2011? And is the bullish case risk/reward profile still compelling?

What follows could be one of the most valuable (and perhaps prescient) series of comments David Morgan has made in recent memory. Concerning the past few weeks' market action of the overall markets in general, and the impact on the precious metals' space in particular, he tells us:

The best way out is always through. Precious metals investors have gone through an extensive "wear you out" phase, in what may prove to be the most important precious metals bull market in the past century.

These words will no doubt be scoffed at during the initial publication of these thoughts. Yet the very few who have gone through this trial of holding a position in the precious metals need to understand that the shift from paper forms of wealth to real forms of wealth has now begun.

Almost everything in today's world is not what "appears" to be true. U.S. Bonds are thought to be the safest investment possible, yet monetary history is clear that there is a 100% failure rate of currency [which has been] issued beyond the markets' capacity to utilize it for productive means.

At that point, rank speculation takes over the markets, and gambling becomes the fashionable way to "invest." Gold has proven through thousands of years to remain a final means of payment, as currencies come and go. This lesson – which is missed by the vast majority – will once again be taught to the world.

A number of charts and comments by market participants could be presented here to bolster the bullish case, but let's just look at two charts from many, plus a comment -- then summarize how you might either add to your metals' holdings, or step up to the plate for the first time and "catch a wave" on what may become a major wealth-creating bull run.

Continuous gold contract - bull continuation hs pattern

The above chart, posted by Stewart Thomson of the Graceland Updates active traders' Letter - to which I have been a paid subscriber for a number of years - speaks eloquently for itself. As wizened traders with decades of experience in the markets like to say, "The bigger the base, the greater the upside case!"

Article source: https://goo.gl/Y57j3L

October 25 2018

moneymetals

How the Midterm Elections Might Affect Gold and Silver

midterm-elections-affect-gold-silver-social.jpg

The outcome of the November 6th voting will be a big deal for investors, including gold and silver bugs. The metals, perhaps more than most other asset classes, are sensitive to geopolitics.

Let’s break down what the potential voting outcomes might mean for the factors currently driving the metals.

Election

Let’s start with the equity markets. Stocks got a boost from President Trump’s election and subsequent tax cuts. Last week, the President floated the idea of additional tax cuts and he wants to pass a major infrastructure spending bill.

Not much of what he wants will get done unless Republicans do well at the ballot box. Republicans retaining control in Congress almost certainly represents the best-case scenario for stock prices.

Perversely for metals investors who favor the President’s policies, a positive outcome for the GOP could negatively impact gold and silver prices, at least in the short run.

Rising stock prices and the pervasive “risk on” attitude on Wall Street limits demand for safe-haven assets. We will need plenty of inflation reaching beyond equity markets and real estate for metals to win in that scenario.

Alternatively, gridlock in Washington based on Democrats winning one or both houses may not be good news for stocks. The metals may get a boost, however.

Full Article: https://goo.gl/7o7QTi

October 22 2018

moneymetals

Bitcoin or Gold: Which One's a Bubble and How Much Energy Do They Really Consume

is-gold-or-bitcoin-a-bubble.jpg

If you are investing in either Bitcoin or Gold, it’s important to understand which asset is behaving more like a bubble than the other. While it’s impossible to understand how the market will value these two very different assets in the future, we can provide some logical analysis that might remove some of the mystery associated with the market price of Bitcoin vs Gold.

I’ve read some analysis on Bitcoin profitability and energy consumption that seemed unreliable, so I thought I would put my two cents in on the subject.

For example, many sites are using the Digiconomist’s work on Bitcoin energy consumption. However, I believe this analysis has overstated Bitcoin’s energy consumption by a large degree. According to the Digiconomist, Bitcoin’s annual electric use is approximately 24 TerraWatts per year (TWh/yr):

Digiconomist bitcoin energy consumption

In a recent article that was forwarded to me by one of my readers, How Many Barrels Of Oil Are Needed To Mine One Bitcoin, the author used the information in the chart above to calculate the energy cost to produce each Bitcoin. He stated that the average energy cost for each Bitcoin equals 20 barrels of oil equivalent. Unfortunately, that data is grossly overstated.

Check out the article here: https://goo.gl/QEwGi4

October 17 2018

moneymetals

Fed Policy Rattles Wall Street, Riles President Trump

Stocks just finished their worst week since March, but Friday left equities on better footing than they might otherwise have had. Buyers emerged at a critical moment to prevent even worse damage to the charts.

Given the timing, some speculate the Federal Reserve’s plunge protection team swung into action. We know the central bank is always ready to intervene, so that would come as no surprise.

This week’s performance in the equity markets will be telling. Last week’s weakness may prove temporary, just as prior bouts did in February and March. History could certainly repeat – particularly if the Fed is stepping in here.

Much will depend on bond yields. Stocks ran into trouble early in the year when the 10-year Treasury yield approached 3%. When rates moved above 3% in May, the S&P 500 stood near 2,700. A drop in yields during the spring and summer corresponded with a move higher in stocks and the S&P reached 2,930 on September 20th.

Falling stock prices

The Fed hiked rates again September 26th and yields jumped to near 3.25%. Stocks have been selling off since. The S&P 500 is at 2,762 (thru Friday’s close) and has given up nearly all of the gains made since May.

Stock prices have now fallen 7% since late September.

Roughly a third of the stocks in the S&P 500 have fallen into bear market territory – down more than 20% from their highs.

Fed officials may finally have reached the moment of truth. Prior to the last hike, they got away with tightening without a lot of corresponding pain. The next hike is expected in December. The landscape could look a whole lot different before the FOMC central planners get together again.

President Donald Trump is ratcheting up the rhetoric against the Fed. A big correction in stock prices won’t help Republicans going into the midterm elections early next month.

Trump said last Wednesday, “I think the Fed has gone crazy” as he reiterated his belief that officials there are making a big mistake by raising rates.

So far, the President is not threatening to replace Jerome Powell as Fed Chair. Heavy losses in the stock markets and in the elections may change Trump’s plans.

The metals markets appear to be sensing trouble ahead.

Thursday’s $30 spike in gold prices was the largest jump since Brexit in June 2016. If investors continue to seek shelter from falling stock prices, and if the consensus around another rate hike in December starts to crumble, the last quarter of the year could be a dandy one for metals.

Article Source: https://goo.gl/8sSavM

October 15 2018

moneymetals

As The Markets Sell-off The Precious Metals Rebound

To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.

However, even though we could see a late-day rally in the markets, and even higher stock indexes over the next few months, the bear market for stocks is still coming. The Dow Jones Index has now suffered two large sell-offs in the past ten months:

Dow jones - oct. 10, 2018

In January, the Dow Jones Index fell by more 3,000 points, and the current correction is only one-half of that amount. So, I expect to see a continued correction over the next month. Because October is the worst month for market Crashes, this could be one hell of a blow for not only the economy but also, for investor confidence.

For example, according to the Zerohedge article, Used-Car Prices Plunge Most In 15 Years:

CPI - used cars & trucks mom

Looking deeper at the core inflation print, it reflected a 3% monthly drop in prices for used cars and trucks following increases in each of the last 3 months, and the biggest drop in 15 years…

And then, of course, the continued disintegration of the U.S. Retail Market, Sears Creditors Push For Bankruptcy Liquidation As Vendors No Longer Paid:

Amid recent reports that Sears is set to file for bankruptcy as soon as this weekend ahead of a $134 million debt payment due on Monday, the only question is whether the filing will be a Chapter 11 debt for equity reorganization or a Chapter 7 liquidation. And contrary to the desires of Sears CEO and biggest creditor, Eddie Lampert, who would like to preserve the core business, others are pushing for an outright liquidation.

Article Source: https://goo.gl/Ked2FS


October 09 2018

moneymetals

The Federal Reserve’s Rising Interest Rates Are A Ticking Time-bomb For U.S. Economy

One of the worst things for an over-heated and extremely leveraged economy is rising interest rates. So, with the recent 2-2.25% interest rate, big trouble is on the horizon, Also, with higher interest rates, the U.S. Treasury will have to fork out even more money to service its debt. In just a little more than two years, the U.S. Fed Funds Rate jumped by nearly 2%.

This is indeed a big change for the Federal Reserve’s “economic stimulation policy” as it kept interest rates below 0.25% since January 2009. And with extremely low-interest rates, nearly zero, it allowed the United States to more than double domestic oil production. Unfortunately, this newly created oil supply has come at a huge cost. It has created another big mess which I call the U.S. Shale Ponzi Scheme.

But, before I get into details of this article, I wanted to let my readers and followers know that the lack of articles this week was due to a freak storm that impacted our area. We had a mini-tornado or a micro-burst that touched down in our local area which caused a great deal of destruction, mostly to trees and bushes. In a little more than 10 minutes, upwards of 100 mile per hour winds uprooted, snapped and destroyed a large number of trees on our property.

Interestingly, there was only minor damage done to one home in the adjacent neighborhood. The homeowner’s wooden porch and garage tin roof were ripped off, and part of the roof is still hanging 30 feet up in one of our trees. So, I have been quite busy not only cleaning up the mess on my property, but also helping my neighbor. I will say, the good thing that came out of all this destruction is how our neighbors came out together to help out.

So, I apologize for the lack of articles this week. But, I will be posting several articles next week on the interesting changes taking place in the economy and financial system.

Okay, getting back to rising interest rates. The Federal Funds Rate is now 2-2.25%. As we can see in the chart below, it is the highest it has been in nearly a decade:

Effective federal funds rate (chart)

Furthermore, each time the Fed hiked interest rates, a recession (shown in the shaded areas) was the result. When the Fed increased the Funds Rate from 1% in May 2005 to over 5% by 2007, it assisted in the crashing of the mighty U.S. housing bubble and precipitated the investment banking meltdown in 2008.

Continue reading: https://goo.gl/3Ud3qx

October 01 2018

moneymetals

Italy Borrows Too Much, The US Borrows More

Last week’s rally in the U.S. dollar was driven largely by weakness in the euro.

Italy was back in the headlines. The Italian government committed to borrowing even more money and, to the surprise of nobody with sense, the odds of default on Italian debt leapt higher.

Italian bonds are getting clobbered, and renewed concerns over the potential for a default now weigh heavily on the euro. Populists rose to power in recent Italian elections, promising to reduce austerity and increase government spending to stimulate the moribund economy.

Last week they delivered, passing a budget with large increases in a number of programs. The deficit there is expected to rise from 0.8% of gross domestic product to 2.4%, triple what was planned before.

The Italian government has already borrowed well in excess of the nation’s gross domestic product. The debt to GDP ratio is currently 132%. Those who own Italian bonds are right to be nervous.

When will the holders of U.S. Treasury debt begin wising up? Investors seem to think default is only possible elsewhere. European nations such as Italy, Greece, and Spain have been cycling in and out of financial turmoil for years now. So far, none of this has troubled the U.S. bond market.

The people who are worried about a jump in deficit spending in Italy ought to have a look at U.S. deficits when compared to federal spending...

Recent federal deficits as pct spending us from fy 2007 to fy 2017

The 2018 deficit is forecast to be 20% of overall spending. Currently one in five dollars spent in Washington has been borrowed. There has not been a year below 10% since before the 2008 financial crisis. And deficits are back on the rise, since bottoming in 2015.

The U.S. debt to GDP ratio currently rests at 104% and it is growing quickly. The trillion dollar deficit projected for next year will push that ratio to near 109%. When we get a major recession like the one plaguing Italy, GDP will be falling and our politicians will be pouring on the stimulus spending. The ratio will explode higher.

Check it out here: https://goo.gl/1YYQqX

moneymetals

Congress Approving Extraordinary New Deficit Spending


Chris powellMike Gleason: It is my privilege now to welcome in Chris Powell, Secretary-Treasurer at the Gold Anti-Trust Action Committee, also known as GATA. Chris is a long time journalist and a hard money advocate and through his tireless efforts at GATA he is working to expose the manipulation of the gold and silver markets. Through GATA's work over the years some important revelations have come to light, which quite honestly should concern everyone.

It's great to have him back with us. Chris, good to have you on again and how are you?

Chris Powell: Oh, very good, Mike. Glad to be here.

Mike Gleason: Well, Chris, before we get into other things please start by giving our audience a bit of background on your organization as some may not be familiar. What is GATA? How did you get started? And where do you focus your efforts?

Chris Powell: GATA is the Gold Anti-Trust Action Committee. We got started in January 1999 to expose and complain about and, if we could, stop the manipulation of the gold market, which is done largely surreptitiously by central banks and their agents. Certain investment banks.

We originally thought that the suppression in the monetary metals prices was an ordinary market rigging scheme run by the largest participants in the markets, the banks. After we did a year or two of research we realized that gold price suppression is longstanding Western government and central bank policy going back many decades. It used to be implemented in the open through the gold standard and the London gold pool and mechanisms like that. Now it is implemented largely through the rigging of the futures and derivatives markets. The major participants in this rigging are the Federal Reserve, the Treasury Department, the Bank of England, the Bank for International Settlements.

If you look closely through the government archives, the policy records, you can see this policy of gold price suppression is very plainly articulated. There's really nothing secret about it if you're ready to look for the documents. The problem is there're very few people who want to get into this issue because it would show that our market system is an illusion. That governments and central banks are really rigging not only the monetary metals markets, but they're rigging all markets and that in fact, we have a very elaborate government system of control of the prices of all capital labor goods and services in the world. It's really a totalitarian system and we just try to show people the documentation of it, urge them to raise questions about it and slowly push the world toward a free market system.

Mike Gleason: On that note, you guys have been at this a long time and the evidence just keeps piling up as to pervasive price manipulation in the metals markets. And to be fair, banks have now been caught cheating in a variety of markets – LIBOR, currency markets, mortgage back securities – you name it, they've rigged it. It seems like your job should be getting easier, but it isn't. Why is that? Why is it so difficult to get reform given the markets so clearly need fixing?

Check it out: https://goo.gl/kF7CaM

September 26 2018

moneymetals

Gold/Silver Ratio Back at Extremes

gold-silver-ratio-at-extremes-social.jpg

The gold/silver ratio, calculated by simply dividing the gold price by the silver price, may be signaling the end of the bear market in metals is drawing near. That could be good news for gold investors and great news for those who hold silver.

First, let's take a look at a long-term chart of the ratio:

Gold/Silver ratio (1975-2018)

The 1980 low in the ratio coincided with the blow off top in the silver price at $50/oz. Both metals fell sharply after that peak, and silver underperformed gold for the majority of the next 11 years.

The gold/silver ratio peaked in 1991 when it spiked to almost 100. Gold was priced near $400/oz and silver near $4. Since that peak, the ratio has spent the majority of its time bouncing between about 40 on the low end and 70 on the upper end of the range.

Read more: 

https://www.moneymetals.com/news/2018/09/24/gold-silver-ratios-at-extremes-001623

September 24 2018

moneymetals

The Least Known (and Best Performing) Precious Metal

palladium-good-investment-social.jpgGold and silver have risen substantially off the price bottom put in just 2-½ years ago, but the gains have yet to attract much notice. Gold has gained roughly 28% and silver is up 20%.

Meanwhile, another metal has more than doubled since bottoming. This performance should have been more than enough to catch the attention of metals investors, if only they were watching. The metal is palladium and, for those who haven’t paid much attention, it is time for a brief update.

Palladium is one of the platinum group metals (PGMs) and it has a lot in common with its higher profile brother.

Like platinum, palladium is a lustrous, silver-white metal. It has many of the same applications. The largest application is in automobile catalytic converters, but there are also uses in jewelry, dentistry, surgical instruments, and electronics.

Palladium also shares platinum’s troubled supply chain.

The top producers are Russia and South Africa. The latter nation has fallen deeper into turmoil in recent months.

Mines there have dealt with unreliable electricity and labor strife for years. Operators are now at great risk of the having mine properties seized by government officials.

PGMs represent a good way for bullion investors to diversify and gain exposure to different market fundamentals.

Diversification can reduce the volatility in any investment and can produce better results – particularly in weaker markets. Just consider the relative outperformance of palladium versus gold and silver over the past 30 months.

Continue reading: https://goo.gl/rUXEFt


September 19 2018

moneymetals

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

The question on the minds of many investors, is which of the precious metals will be better investments during the next market crash? I should know because I receive this question in my email box quite often. So, I decided to test the price action of several metals and how each traded during a large market correction.

This article will focus on the top four precious metals, gold, silver, platinum, and palladium. Even though Rhodium and other metals are considered precious, the ones listed above take the lion’s share of the investment market. Furthermore, while platinum and palladium are purchased as investments, they have a much larger industrial component than gold or silver.

As I have mentioned many times, gold and silver disconnected from the broader markets when the Dow Jones Index fell 2,000 points in the first six weeks of 2016.

The two reasons I believe gold and silver jumped considerably as the markets sold off at the beginning of 2016 were:

  1. Gold and Silver were extremely oversold, and the Commercial hedgers’ short positions were at a low, thus very bullish
  2. Investors were extremely worried that the Dow Jones and markets were beginning a massive correction, so they moved into both gold and silver

To explain why investors were spooked in 2016, we need to look at the following chart:

Dow jones (september 14, 2018)

Typically during a major correction, the market makes several attempts at a top. In 2007, there were three tops made before the market finally came down in 2008. Then in 2015, we had three more tops and two large corrections. The reason investors’ worry turned into fear at the beginning of 2016 was that the last top did not reach the previous 18,000 level.

Full Article: https://goo.gl/asrgNh

September 17 2018

moneymetals

A Reader Asks: Should I Sell Gold and Buy Bitcoin?

Although the fervor has diminished substantially since the crypto price smash earlier this year, we do still see a degree interest in bitcoin among precious metals investors.

Question and answer

Bitcoin and metals arguably share some appeal as an “honest” alternative and as a hedge against the fiat dollar and the insolvent U.S. government which backs it.

In light of the bitcoin price falling dramatically this year, one reader asked, “Is now a good time to swap gold for bitcoin?” Below is our response.

It may be bad form to answer a question with another question, but it seems like a good way to approach this subject. So we ask; are you in the mood to gamble? If you are, it might make sense to swap some metal for bitcoin.

Cryptocurrency can potentially generate bigger returns... in exchange for bigger risk. Since there is no tangible backing to bitcoin, it could conceivably go to zero – much like shares in a defunct “dot com” company.

The two assets are far from interchangeable and will serve different purposes in your portfolio. Bitcoin has often been called “digital gold,” but that comparison is dangerously wrong. Gold is a reliable store of value with a track record thousands of years long. Bitcoin’s price has collapsed from its all-time high of nearly $20,000 to $6,000.

This is a vital difference between gold and bitcoin: gold will always retain some intrinsic value, while the price of a digital token might go all the way to zero. That is not our prediction for bitcoin. It is, however, a possibility.

A technology, which is one way to think of bitcoin, must hold its value amongst a growing number of alternatives. If it cannot, it will be replaced. That happens, even to leaders. Remember Napster and CompuServe?

Continue Reading: https://goo.gl/EHsJYV


August 21 2018

moneymetals

Spot Prices Are Falling, But Premiums Are on the Rise

Gold and silver premiums – the price dealers add to the melt value of an item to cover manufacturing and overhead – began climbing in the past two weeks.

Many clients see falling gold and silver spot prices as an opportunity to buy, but some are disappointed to find the premium for the item they want is suddenly higher, negating some of the price drop.

The challenge they face is that lots of other bargain hunters are trying to jump on the same opportunity.

Supply & demand

Premiums are very sensitive to supply and demand in the retail market for finished coins, bars, and rounds, and the reasons are pretty straightforward.

First, when prices drop, retail bullion investors stop selling and start buying. That has a profound effect on the availability of resale, or secondary market, product inventory.

The large quantities coins, bars, and rounds coming back to market in the past year or two have driven premiums to the extraordinarily low levels we saw recently. Now, supply from the secondary market is drying up fast.

Second, there are only a few mints and refiners making coins, bars, and rounds. Like any manufacturer, they gear production to market demand. Scaling up takes a bit of time, and it isn’t something most will do without first developing some confidence that the higher demand will persist.

​Continue reading: https://goo.gl/cRFcUF​

August 20 2018

moneymetals

Dr. Engelhardt: Economy Beholden to Fed Interest Rate Policy; Here's One Way Gold Could Reach $14,000+...

Well now, without further delay, let’s get right to this week’s exclusive interview.

Mike Gleason: It is my privilege now to welcome in Dr. Lucas Engelhardt associate professor of economics at Kent State University. Dr. Engelhardt is an Austrian economist who has been a guest lecturer at the Mises Institute and in his teaching specializes in macro-economics in the examination of the business cycle, and it's certainly a real pleasure to have him on with us today. Lucas, thanks so much for taking the time and welcome.

Dr. Lucas Engelhardt: Well thank you for having me on.

Mike Gleason: Well, I'm excited to have you on today because there is a lot to discuss with you. For starters I think a good place to begin is the business cycle. Now, but before we get into the misunderstandings that the Keynesians seems to have about this, explain the business cycle if you would and why it's important in order to have a proper understanding of monetary policy.

Dr. Lucas Engelhardt: Sure. Now, as you mentioned, I come from the Austrian economic framework. And Austrian economics describes the business cycle as the consequence of manipulations happening in the money supply, specifically in credit markets. So starting from that point, so how the business cycle happens is that we have somebody in the banking system. We know in modern America it would be the Federal Reserve is generally responsible for this. Decides to push down interest rates, normally to stimulate the economy.

Austrians, we definitely do not deny that this actually does work for a while. That the lower interest rate does actually encourage investment, especially in very long structures of production. The types of things that won't pay off maybe for five, 10, or even more years. We see lots of research and development, lots of construction, these types of things happening when interest rates get pushed down.

The problem is that the way that the Fed pushes interest rates down, as I suspect most of your listeners know, is by adding additional money into the economy through the banking system. Eventually this money gets out into the economy and prices start going up. You have more money, the money loses value, the flip side of that is that prices are higher. It takes more money to buy anything.

Now, there are a couple ways this can go. The central bank could just ignore this fact and continue with the low interest rate policy, just pumping out more and more money to the point where the money is worthless. We see that happen right throughout history, and we see that happening today in places like Venezuela. Now, what the Fed has done historically most of the time is get nervous about this rise in prices and start tamping back on the increase in the money supply. Of course, as soon as they do that interest rates go up. Once interest rates go up, all these investments that looked great when interest rates were low, that research and development, building new houses and what have you, stop looking as good.

So, we see all of these areas that expanded then start contracting, and that's where we see the bust of the business cycle come in. We see there it's really all centered on what the Federal Reserve in modern America is doing in interest rates.

Mike Gleason: Now, you come at things from an Austrian viewpoint as you mentioned. I'm curious if sometimes you feel like a lone wolf in the wilderness, because nearly everyone in the mainstream financial world and among the central bankers and central planners throughout the globe seems to have that Keynesian mindset where government and a tight management of monetary policy is the answer to every economic problem. So, why is it dangerous in your view, expand the point if you would about a centrally planned economy instead of letting the free market forces dictate things. What are they so afraid of?

Full podcast here: https://goo.gl/dUWCp8​

August 17 2018

moneymetals

For Sterling (Silver) Results, Repetition of the Basics Is Worth Its Weight in Gold

Whenever you encounter a "sticking point" in some activity – any activity in which you are engaged – it always helps if you "return to the basics."

Sure you may "know" what they are, but do you really follow them? Ask an expert in most any field of endeavor, and he/she will tell you the same thing.

The basics that lead to outsized results are still around and followed for a reason – because they work! Take the idea of building up a comfortable position in precious metals...

You've decided that you either want to start "stacking" – or adding more to your current holdings. You look at the charts and see that prices are falling, and others are fearful. You're not interested in "buying the bottom." You're looking to build a foundational position into that bottom.

From experience you know that "going against the crowd" and buying when metals are "on sale" has been working since at least 2002, when gold was under $300 an ounce and Silver was below $5 the ounce.

Even at today's prices, gold and silver are still up 400% and 300% respectively.

Gold price has crushed the market so far this century

After reconfirming your understanding and belief that precious metals have remained as a store of value for thousands of years will continue to do so, you move closer to acting on that belief.

Revisit your tolerance for risk, the financial means available, your holding time outlook, and how much you're willing to pay per ounce.

Check out the article here: 
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