Al's Insights – Fri 15 Jun, 2012

Central Bank Credit Problems

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Roger Wiegand

  1. On June 15, 2012 at 11:01 am,
    missivedutexas says:

    Funny, all this time I thought they created the moula out of thin air. Are we running out of thin air?

    • On June 15, 2012 at 11:10 am,
      Tex says:

      Yes, we only have hot air left.

    • On June 15, 2012 at 5:47 pm,
      Big Al says:

      Hi MissiveDuTexas,

      It is all hot air and has been since 1972!

      What do you think? We have to pay our bills with real money or something silly like that!

      Big Al

  2. On June 15, 2012 at 12:45 pm,
    shawn says:

    My adult children have been telling me for 3 years to stock up the pantry and I have been reluctant to do so until now, timing in all things is of the upmost concern. For me the line has been drawn in the sand with the Greek vote tomorrow. and hunger is not a problem I want to be concerned with.

    • On June 15, 2012 at 5:17 pm,
      Big Al says:

      Hi Shawn,

      Neither do I!

      Big Al

  3. On June 15, 2012 at 2:09 pm,
    James says:

    gold has made 5 attempts now to take out $1628 and has failed every time. Need to push through this level.

    • On June 15, 2012 at 5:14 pm,
      Big Al says:

      Sooner rather than later, James. In my opinion anyway!

      Big Al

  4. On June 15, 2012 at 5:27 pm,
    MissiveDuTexas says:

    The more I look at all this, the more I stand in disbelief: Are people going to just go along to get along and never ask the question, where does money come from??

    And what about these technocrates in high places, do they not realize their lineage will be wiped out once nations of people realize how they`ve been driven to the cliff by people they trusted??

    Or do the pupeteers control things so much that Jesus` warning now takes its full meaning?

    For there shall arise false Christs, and false prophets, and shall shew great signs and wonders; insomuch that, if it were possible, they shall deceive the very elect. – Matthew 24:24

    I have to confess, the inability of people to grasp that money is created out of thin air is a wonder I marvel at, let alone all the current scams attached to the fraud.

  5. On June 15, 2012 at 5:39 pm,
    Paul W says:

    I love the show and have listened for a couple of years but this is my first posting. I have much of my money in gold and gold stocks. I am not worried and feel quite comfortable with that. The investments that really have me worried right now are my resource stocks like the major oil producers and oil sands stocks. They have really been beaten up and are at very low prices yet they could really go down more if oil drops further. I hate to sell them at such low P/Es so should I put in stops? If so, at what level when there is such volatility? Thanks…

    • On June 15, 2012 at 8:24 pm,
      Peter says:

      Good questions -and tough to answer, which is probably why no one has answered.

      I was in oil for years and found that energy can be a fickle investment. During the 2000s the energy bugs were captivated by the concept of peak oil and everything was literally pointing to a coming oil shortage. China’s and India’s consumption were growing by leaps and bounds, etc. We waited and waited.

      By 2008 we were sure our patience was paying off and there was no way we were going to sell our oil stocks now as oil headed for $150/bl. All the while, energy stocks did not go to the moon. They went up but we felt consternation at their refusal to just ignite. The rest is history. Those who had held for years made good money.

      Oil is a complicated story and the stocks often don’t reflect the price of oil, much like gold stocks don’t.

      Don’t know what to tell you. It’s easier to sell when you’re in the money.

      The oil story is similar to the gold story. It’s not called “black gold” for nothing. If there is official QE and the printed money starts chasing after commods like oil, the price of oil will go up, and hopefully energy stock as well. But if the general markets are not doing well and the rising oil prices hurts the economy, and thus the stock markets, then they might not move with the price of oil, because the market will expect oil prices to collapse significantly “any time now” in view of the bad economy. In other words, energy stocks often don’t believe the oil price. And they’ve been right not to.

      This is where I think gold stocks, if you have GOOD ones, will do better in a negative environment, than energy stocks. Gold really is a “bad news” metal. It does well in times of fear, in times of just plain inflation, in times of a combination of the two, and even in times of deflation, even if not initially. I think one of the reasons for this is that deflationary times are bad times and people want to hold on to their precious metals, precisely because times are uncertain, as a kind of security blanket. What’s also different between now and the ’30s is that the world has drastically changed. So many more people and shifting power centers. There be plenty of takers for gold.

      That’s my two bits on it.

  6. On June 15, 2012 at 6:10 pm,
    Mark Alan says:

    Hey Big Al!

    I would like to ask if I can have your permission to use your personal photo from your ABOUT page? I would like to use it as a reference for my personal blog, only if you allow it of course.

    And is Peter Grandich going to be on the Weekend Show?

    Thanks for all your hard work Big Al

    • On June 15, 2012 at 8:45 pm,
      Jon Nadler says:

      I can’t presume to speak for Al, but I’m pretty sure he’s cool with that.


      • On June 15, 2012 at 9:46 pm,
        John W. Robertson says:

        Well if it’s good enough for Jon, then I’m sure it’s good enough for Al. I would just suggest Mark to place a hyperlink back to in your blog — that’s a common courtesy when putting some sample or reference on one’s own site.

        Nice to hear from Jon.. I appreciated the chat at the Kitco booth I had at the January show in Vancouver.

        • On June 16, 2012 at 8:05 am,
          Jon Nadler says:

          Hi John,

          I usually have an excellent memory, but it seems I have no recollection of ever meeting you.

          Anyways, have a great weekend.

          The sucker rally in gold is almost over now. Lack of demand for physical worries me to no end, and I’m afraid a lot of gold enthusiasts are going to get hurt yet again.

          • On June 16, 2012 at 9:10 am,
            Big Al says:

            HI Jon,

            Thanks for commenting on our site.

            It is going to be really interesting to see if, in fact, this is a sucker rally.

            You know, from an insurance prospective, it really doesn’t matter a whole lot does it.

            You know my feelings about trading gold. You better be really good because the competition certainly is! That is why I have a “stash” and don’t worry about it.

            Big Al

          • On June 16, 2012 at 2:18 pm,
            John W. Robertson says:

            You were flooded with visitors, 2nd day of the show. I’ll say hello again next time I can make a show. I don’t look too much like my icon…well, not yet anyway.

            I do take the view that gold is a decent investment to hold for the medium term, which probably won’t surprise you on this site! I have low confidence in the freely invented money being used to fund debts and deficits around the world. However, I have noted for 10 years that you’ve always advocated some gold, just not too much. I appreciate your cautions, because I know it’s with the intent of helping Kitco customers and readers alike. As always, I also appreciate your research which you freely give away in your columns, and provide sources for. Debating with you is not an easy thing!

          • On June 16, 2012 at 2:57 pm,
            Big Al says:

            You are wrong John W,

            Jon is a great guy to debate with after he has had at least six glasses of wine!

            Big Al

      • On June 16, 2012 at 7:46 am,
        Mark Alan says:


        Thanks? Mr. Nadler

  7. On June 15, 2012 at 6:16 pm,
    BJ says:

    Yes, when governments sell public debt, they compete for the money/capital needed to grow a free market economy–and thus, the economy slows/stagnates. When they issue too much debt, they debauch their currencies (print money) to finance their debt because there’s no money left in the marketplace to purchase the sale–and the economy enters a death spiral until it finally crashes!