The gold market on a worldwide level
Hour 1:
Click download link to listen on this device: Download Show
Hour 2:
Click download link to listen on this device: Download Show
This Show was fun to put together. A little less formal than in the past, particularly in Segment 8. More economics than politics. Obviously, a bit more attention was given to gold after the run-up which began on Thursday. Enjoy the Show and have a great weekend!
Hour 1:
- Segment 1-2: Peter Grandich chats gold and gold stocks, and he answers the question when do you sell?
- Segment 3: Chris Temple of the National Investor discusses what the US real estate market is telling us about the overall economy.
- Segment 4: Valentin Schmid, Business Editor of The Epoch Times, gives listeners a primer on BIT Coin.
- Segment 5:
Dan Kurz, an investment adviser for Naples Asset Management, provides an excellent overview of the gold market on a worldwide level. - Segment 6: John Kaiser of The Bottom Fish Report discusses a few of his favorite resource companies.
- Segment 7-8: Our panel this week includes Richard Postma, AKA Doc, Gary Savage of the Smart Money Tracker, Rick Ackerman of Rick’s Picks, Tim Iacono of Iacono Research, and Dan Oliver of Myrmikan Capital. The expert panel discuss macro investing ideas.
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Click download link to listen on this device: Download Show
Very true, cash….but people are not borrowing to buy homes, most purchases are all cash!
I think the number, that are buying with cash….is 34%, which is not a majority.
When interest rates rise, the affordability of the McManions will drop like a rock.
This market is history, and will not be affordable for another 10 years or longer.
Considering there are no jobs, which pay for the real cost of a McManion, the resale value will be less , based on INCOME and Rise in Interest rates.
Lenders are already tightening lending on all loans…….
Those paying cash, will be lucky to get their cash back, when interest rate rise, which they have no other way to go…..but UP…….
There is another crash coming ,,,,You can not have HALF the Population on FOOD STAMPS and have a recovery in real estate……
only speaking of US markets………….
I think we are revisiting the VICTORIAN AGE OF HOUSING…..
Jerry…you are spot on..and the crash will be worse than 2008…..
thanks Gator………
and you are spot on ……
Zerohedge reported the bottom 5 states for cash were in the low 30% of purchases. The top 5 cash states were in the low 80’s in percent of cash sales
Top 5 ….80% paying cash?
Foreign or domestic buyers? and number of occupants in each unit……..
Example ,,,in San Francisco there are 15 owners who occupy one house because of the rent is to high……….affordability……..this is like owning a time share……..
FROM zerohedge……….73% of cash buyers are speculators……..foreign, flippers, investors and wealthy , who do not want to apply for a mortgage ,,,,,but, does not include the MIDDLE CLASS………
WELL THE 80% STATES are FL,NV,AL,NY,AZ….., the sales numbers are for cash buyers of CONDOS…………
and if you read the very end of the article it says………this bubble will be WORSE THAN 2008 BUBBLE…………..BIG PROBLEM…………
I CAN not figure out why ALABAMA would be on the list, of people paying 80% cash for condos………………..
BOBBY….just read in zero hedge the 63% of the buyers in Florida were cash buyers,
foreign, flippers, wealthy?
which confirms your statement on the cash buyers above……..
Problem, will come later……….as they resale…….to who?
Thanks jerry
Re: Gold price:
The price of gold for several decades has been manipulated downward.
In order to long-term manipulate the price, real gold HAS to be sold or leased.
(Sure it can be sold short in the paper market, but eventually those shorts have to be covered, and this requires physical unless you want to drive the price back up.
I believe the western bullion banks have raided ALL physical supplies available to them. (Including e.g. gold stored at the New York Fed actually owned (in theory) by other parties/countries. Including all the gold at fort Knox, etc.)
I believe there is minimal gold left in the west.
Ergo, the West no longer has the ability to drive down the price to any extent.
3 or 4 months ago, I posted in this forum, physical gold supplies used for price manipulation, I estimate, would run out about the end of April.
Time will tell if I was right, but it sure looks like it at this moment in time.
Not sure how to prove that point.
At best we are forced to deal with estimates regarding above ground supplies. This is unfortunate because with a matter this important it is best to have the absolute truth regarding the supply of real metal and the currency supplies, world economy and so on.
One needs true facts for proper price discovery and not estimates or the current politically correct guessing game executed by the so called market.
Gold flow over to China is such that their stockpile exceeds 15,000 tonnes.
(Calculation explained by McCleod on Jay taylor’s podcasts.
http://jaytaylormedia.com/media/taylor20140415-4.mp3
gets a download of the explanation.
I don’t know about 15,000 tonnes CFS but I have done my own third grade calculations and arrived at a figure in excess of 6000 tonnes. All the information is out there if anyone cares to find it. I cannot believe there are people still talking 2, 3 and 4 thousand as if that is even close to reality. The Chinese gold hoard is already amongst the largest in the world if not THE LARGEST.
If McCleod is double counting then Birdman’s figure wouldn’t be far off – how about 7500 tonnes?
Thanks James. I will be frankly shocked if China’s official gold reserves do not exceed 5000 tonnes at the minimum once they officially report. That announcement will most certainly light a fire under gold and is most likely the reason they remain hush on the topic. I also think that China is the country most likely to confiscate the gold of its citizens in the coming years and that will be an outcome of their credit bubble eventually bursting.
‘A pathological philanderer’ is how Obama’s wife puts it. Is that all? Do people remember those uncensored clips showing him dressed up in some serious drag?
YES…..
Very informative as usual – thanks guys. For what it’s worth I hold my mining stocks on the Toronto Stock exchange, having heard that that offers added protection compared to being on the U.S. exchange.
Re Housing I agree with CFS that a 1% rise in interest rates is hugely significant when it means a 25% increase in costs. I believe that the current housing bubble we have here in the U.K. (fuelled by our Chancellor’s’ Ponzi ‘help to buy’ scheme) stands to be scuppered on three fronts: (1) More stringent rules are now being applied to would-be house buyers, suggesting that as many as 1 in 5 new mortgage applications will now be turned down, while (2) interest rates MUST be going up somewhere inside the next 12-18 months. and (3) Unaffordability: Someone on a £50k salary living in London simply cannot get on the housing ladder. The Russians, Chinese and Asians are buying up all prime locations.
Re Bitcoin: As Al says it’s strength lies in its new technology. But there are plenty of websites to say it equates to a major Ponzi scheme and should be avoided like the plague. That said, Max Keiser is smitten with cryptocurrencies, so much so that he’s introduced his own ‘Max’ coin.
Andrew…you are right about rates rising. Mark Carney has stated that interest rates will be increasing sixfold between now and 2015 in Britain. We do not even need to speculate on that anymore. If the Governor of the Bank of England says rates are going up I suspect we ought to take him seriously. That means the housing bubble will be flattened, assets will decline, cash will be taken more seriously and credit will tighten. All in one fell swoop.
Re Bitcoin
I really don’t know where “cryptos” are going, I really don’t see them having value other than people are trading them.
My opinion will change when governments accept them for taxes.
I believe that to be the intrinsic value of a currency, keeps me out of jail when used for taxes.
For now, in Canada, I see no NEED for them.
Canadian currency still seems to be working.
Got cut off in mid flow…! Meant to add that the unaffordability of housing is going to affect young people and graduates in particular. Whilst a US graduate completes his studies with c $26k of debt, here in the UK a British graduate is landed with somewhere nearer to £60k!! Furthermore between ’07 and ’12 a graduate’s typical starting salary over here has gone down from £24293 to £21702.
Re gold: Who was it that described gold as being this side of heaven the nearest thing to God’s money? Get the stuff while you can, since as David McAlvaney recently reported anyone owning 30 ounces of gold belongs to the top 1% of the world’s gold owning population.
Black swans are becoming as commonplace as white ones. Gold could ascend very rapidly within 2014.
Interesting, Andrew, thanks.
Robert Kyosaki (sp) author of Rich Dad Poor Dad
calls gold Gods money.
GREAT READ………
On April 10th when people were debating whether or not there would be a slow grind down or a capitulation I said gold does not have to go down.
I stated the bottom could be in…
On April 10, 2014 at 12:02 pm,
james (the lesserrr) says:
todays claim number normally would have crushed gold, but gold hardly budged.
this is a new thing
the uglier it gets for stocks the better it gets for gold
gold does not have to go down. the bottom could be in.
dont get caught in the swtiches
Then on April 15th I reiterated my bottom call…
On April 15, 2014 at 10:01 am,
james (the lesserrr) says:
if the gold bugs havent capitulaed by now i dont think they ever will
do you really think another $200 drop is going to shake them out of their principles?
Doubt it
today was just another hatchet job on gold
yesterdays rabbot out of the hat was just another example of rigged stocks
when the system starts to break down, which it is, chaos ensues.
those who are holding gold for insurance ought to have a word with their insurance saleman.
nevertheless i bleieve we have just witnessed the bottom in gold
Reply to this comment
Deflation?
What the hell is Rick talking about?
Name the price of anything that has gone down in the last year.
No Bob. He gets it. What the discussion is about is asset deflation. Can you tell me you will feel richer once stocks go through an impending correction, once houses start to fall again due to a lack of genuine buyers or when your motor home cannot fetch 15 cents in the dollar?
Look, we are in the midst of an epic global asset bubble.
That is the harbinger of a correction that must come to create balance again. You need to be very worried because the future is going to be so unlike the past that virtually nobody is prepared. Fewer still even understand the signs. Ackerman gets it. Ask him.
If all you are left with after the prices of homes, stocks and foreign investments have declined is that the price of vegetables went up I can assure you that you will feel your grocery store inflation is just a form tax and not the incipient signs of real growth breaking out. Why the hell do you think Wall Street is in such a rush to dump all these crap IPO’s on the public? They have no earnings. Some will NEVER have earnings.
The reason is because the end is near. That is why they are doing it. This is a rush to exits to put as many dollars into a few key pockets as possible and leave the rest of the herd holding a boat anchor. Seen it before man. It is over when the IPO’s don’t work anymore (seen the results for those Chinese floats or noticed the cancelled issues lately? It is a BAD SIGN.
I will tell you without hesitation though that I do expect some very heady inflation but also that it will be accompanied by another fierce decline in the value of the things that we ordinarily think make us wealthy. Not everywhere of course. Just be careful where you buy and what you buy.
That is how wealth shifts from weak to strong. That is how you will know your living standard got eaten. And that is why you cannot protect wealth except by investing in those things most likely to be impacted by the policies of governments intent on making the system work again.
Food, energy and precious metals. That’s my call.
Birdman,
You are smart dude….but it doesnt take a “rocket scientist” to figure out food, energy and PM’s……:))……oh yeah, I forgot NETFLIX TOO!……yeah, right…u got all your money in that type of stuff you are asking for big time trouble!
yabbut Marc;
I bet most rocket scientists can’t balance a cheque book!
-sometimes brains get in the way of practicality.
Oh…thanks for that vote of confidence Irwin (or not)!
I agree, Bob, but Rick has been a deflationist for many years. This guy gets it:
http://danielamerman.com/
Being a deflationist for “many years” does not make you wrong.
Correct. My point was that Bob shouldn’t be shocked by Rick’s views since they haven’t changed.
…and so does this guy:
http://www.youtube.com/watch?v=uaOudcjEqgM&list=UUIjuLiLHdFxYtFmWlbTGQRQ
Looking forward to reading your post Matthew, A
Me too. Maybe Matthew will offer original commentary instead of recycled quotes of other thinkers for a change of pace. How about it Matthew. We await your wisdom.
Thanks for a great show Al. It is really interesting that for once I am in agreement with your current optimism (segment 7). That agreement has been fairly rare in the past as I have learned over time that you often try to find the silver lining even in the worst news for miners and precious metals.
To be honest, I normally disregard your personal comments on metals that are appended to the daily shows because it has been my feeling your pro-gold bias was just too obvious. You have sponsors after all!
Today is different though.
The confluence of political events, insider activity, Comex silver being suddenly drained, the boatloads of worthless Tech and IPO’s stocks being pushed on an enraptured market, sudden merger activity and a wide variety of other indicators in the investment world tell me that it is now time to start seriously investing in gold. I do not even need to mention rising taxation, capital controls, extreme levels of stock margin or investor stupidity as reasons to be fearful anymore.
I think the market has topped. It only begs a reason to sell off and correct. First out wins.
Goldmans 1050 gold call will not be hit. That dream is over and done and we would gold buyers would be fools to keep waiting for their suggested new lows to come. As an outcome of my own analysis I am therefore officially out of the bear camp.
Damn to Torpedoes as I said the other day.
So I am a buyer again. And really, if gold drops a hundred from here, I don’t give a rats-a$$. This is close enough to the bottom that it is just stupid to keep waiting for a bigger deeper decline.
Some juniors have already been flying, some midcaps are teaming up to be stronger. In the background, a potentially very ugly equities correction looks to be on the horizon. For my money I do not want to gamble on a few more hundred Dow points and try to time to the top to perfection while missing the approximate bottom in commodities and resources that is clearly here and now.
I mean to say…I don’t know exactly where the indices will top but I do have a lot more confidence lately that gold and silver have already bottomed. So I am in your camp 100%. Something materially different happened last Friday. The probabilities of losses by shifting to resources now are limited to 10 or 15% downside at most whereas the downside to stocks could be double or triple that number in my view.
So lets go boys. Metals are finally looking good again.
With due respect, Birman: Quite a different (and no less strongly stated) opinion you had on April 1st when you, quite confidently, predicted the demise of gold. Specifically the dramatic fall of the price of gold.
I shall place your posts (and opinions) in my “Entertainment Section” going forward.
Brian
You were adamant on April 1st that the month of April would see significant declines on the PMs.
Since gold was @ $1280 on April 1st, I’m quite confident that on May 1st (if gold is above $1280), you will post a succinct message stating how wrong your predictions were?
Brian
I’m so infuriated, I double posted in a single box.
Summary: If people re going to post their predictions on this blog, let them be responsible.
Goodness knows, Gary (especially), Rick, and Doc get enough grief from you pikers.
Brian
The primary problem with most of you gold-bugs, Brian, is that you are entirely inflexible thinkers and cannot account for changes in the market place that are usually quite unknowable to everyone but God himself.
We must all deal each day with the new facts as they emerge and this includes changes in market sentiment that are not hard and fast rules from anyone’s guidebook to the future. A prediction is not a “fact” in case you do not understand that childishly simple concept.
You would therefore be well advised to be prepared to change your position when the market changes or you shall continue to lose money on your investments. I do not hold to any theory that is no longer valid. That is called rolling with the punches.
What I see here from many posters is a stick in the mud philosophy that does not allow outside ideas or marketplace changes to materially alter their viewpoints. That is why some of them held gold all the way from 1900 dollars and sold out as 1190. The stupidity if beyond reproach.
Enter that in your entertainment category. Maybe you will learn something from it one day.
I forgot to accuse the market of playing let’s pretend. Market, consider yourself accused of playing,”Let’s pretend”.
Another excellent show with great questions. Thanks!
Let’s not kid ourselves about Russia…..
Be in no doubt that Russia’s serious.
Interesting cost of living comparison tool.
Just enter the two cities you want to compare.
http://www.expatistan.com/cost-of-living/comparison/ottawa/london
Segment 8…..Please guys, let it run!
That was just getting interesting but it ended too soon. Rick was making a point that is barely acknowledged by most analysts. It is the level of debt that is increasing that puts us at risk of a major deflation.
That is the reason housing has stalled in the US. It is why the bubbles MUST eventually burst in England as one example and also in most of the bubbly Northern European countries plus Canada, Australia, Hong Kong, Singapore, China and elsewhere.
Gary, I understand your point but please consider that the steps taken to head of the Global Financial Crisis were done with the cooperation of most of the globe. That is not the case now. Instead we face devaluations that are competitive as in the case of China competing with the Yens fall. Governments may indeed print to get us out of trouble but that does not mean the money is not real nor that the debt has not just increased further.
Al….ask Rick if he will expand on his idea because he gets to the heart of it in a way few others seem to appreciate by using their outdated Second World War models.
I would suggest looking at history. In the last 85 years we’ve only had one real deflation back in the 30’s when the dollar supply was constricted by being tied to gold. As soon as Hoover devalued the dollar against gold he stopped deflation in it’s tracks.
We had a very short deflation in late 2008 and early 2009. Again the Fed turned it on a dime just as soon as they turned on the printing press. As long as the debt is government debt it is has virtually no deflationary force as governments can print any amount of money they desire.
We had the deflation in 2008 because the debt was private and we the people can’t print money so we had massive defaults which are deflationary.
Now that bad debt has been moved to government balance sheets where it is impossible for it to default because the government can monetize it at will.
We already have massive inflation at the moment but we don’t view it as inflation because it is occurring in assets like stocks and real estate which we don’t consider inflationary when they go up.
But you watch, when that liquidity starts to come out of those overvalued assets it’s not just going to disappear, it will flow somewhere else, and that somewhere will be the commodity markets where we will all of a sudden view it as real inflation. It was real inflation when it was in the stock market but we just didn’t view it as such.
It has already started as the CRB has broken it’s 3 year down trend. Once the stock market puts in a final top (which I’m convinced it has yet) we will see this inflation in commodity prices start to accelerate as the inflation drains out of stocks and goes into the commodity markets.
As I’ve been saying for months I expect this process to accelerate in the second half of the year. Right now commodities are due for a major correction into a yearly cycle low. Oil has probably initiated the process as it broke it’s major intermediate trend line yesterday. The rest of the commodity complex should turn and follow oil down one by one over the next month or two.
Gary – you should stick to what yo know Cycles and you do some good analysis. You are making statements about deflation and inflation that are incredibly inaccurate….imo
Gary – you need to get a better understanding of the Bond market and interest rates.
On the contrary I’ve pointed out exactly what has happened historically rather than trying to speculate that somehow this time it’s different.
It’s never different.
Japan has been printing for 20 years and their bond market still hasn’t collapsed. And contrary to what everyone would like to believe Japan has not experienced deflation just disinflation. Now that they have embarked on a full scale unlimited QE program they are getting inflation just like I predicted would happen.
Exactly right, Gary, but no amount of evidence will change a believer.
Prominent deflationist, Bob Hoye, has been very surprised by the Fed’s actions over the last four years. In fact, with silver at $18 in August, 2010, he suggested selling and going short silver stocks (I went long -even tapping my broker for funds. Something I rarely do). Silver then went to $49.
I should note that I remain very interested in Hoye’s opinions and that I’ve made plenty of blunders myself.
Japan’s housing market and stock markets are still dropping for their highs in 1990. There are periods of rebounds but overall trend is down until all debt is wiped away. Your statement about 0 chance of deflation is incorrect as the end result of all these attempts to inflate asset classes will be deflation.
Definition of deflation – all asset prices falling together. We are not there yet.
Deflation is a contraction in the supply of money. Keynesian’s say that it is a decrease in the general price level of goods and services – NOT assets. By either definition, there is no deflation in Japan.
Overvalued assets will fall regardless of inflation or deflation.
“I would suggest looking at history”.
Gary, you are looking at a mirage! We are living in a monetary experiment in case you don’t know it. Lets never forget that each dollar has been used or will be used to buy real goods made by real people using real labour and those things have a price. Obligations are created that must be repaid. You may think the Fed can just print willy nilly and save the day but that does not come without serious consequences. In the end the result will be the same. The bills come due and must be paid or the population is stripped of its wealth one printed note after another. You should look at history. The tenure of this experiment is pretty damn short. I think I will side with what we all learned during the prior 2500 years of recorded economic history of the world.
Nice comment PG.
It is the belief that it is somehow different this time that creates many points of view. We have been down this road many times before and the result is the same. This also means there will come an opportunity to profit from it.
This “experiment” is nothing new, its been tried many times in history. Always with the same result. As long as a government is willing to destroy it’s currency deflation is a myth. I would argue that ever since 2000 our government has clearly been willing to sacrifice the dollar. We are going down the same path that nearly every empire in history has gone down at one point or another and we will get the same result. We will default on our debt via inflation. It’s the path of least short term pain, but maximum long term pain. Humans are programmed to avoid short term pain though so we always make the same mistake.
Excellent Explanation.
Excellent Explanation by Gary
Ha Ha! You guys are killing me laughing!
Rick – your analysis is absolutely correct, once this game end, deflation on a massive scale. Currently Feds trying to pump up asset classes with little success ie. look at housing market. Smoke and mirror show can only keep going for so long.
Regards
Sorry, but Peter and Cory are missing the biggest problem in Canada any many other parts of the world that is coming to a head soon. A housing bust caused by a world wide slow down, and housing prices in Canada will fall by around 50% in some areas. Yeah – I know it’s different here, as Cory might comment, but it’s not! Prices will always revert back to the mean, and it will be sooner rather then later.
Canada isn’t the only country that has a housing bubble. Housing prices will plunge in several countries during the next world wide slow down. Mark this link as it’s coming, and it will be bigger, and more painful then 2008 in some countries. I’m not wishing for it, but the last 5 years as to be paid back and it’s coming.
Lots of your guest talk about slow-downs, but don’t talk about what will happen in these countries which currently have Housing Bubbles…..Yeah, sure, it’s
different there….Again, I’m talking about a world-wide slow down that’s coming and what it will do to housing prices in some of these countries……I will say it again, It just can’t happen here they will say……I say we shall see . Got Tulip’s!
Another great show, and how about a guest to talk about the housing bubbles in these countries and what happen when the world wide slow down happens? The wealth effect will change for these folks buying these houses at crazy prices.
An old article, but you get my point.
http://thethirtiesgrind.com/2012/04/09/absurd-vancouver-property-of-the-week-19/
I’m not very good at posting comments, so I hope you get my point.
Peter Grandich “The bears are losing control”
Ha Ha!!! Good one Peter. Sorry but those are not bears. Those are pirates and mercenaries. They just decided to switch sides is all because (like me) most of them don’t give a damn if gold rises or falls. All they care about is making money and being on the correct side of the trade.
Hate to agree, but I think until the hedge funds get back in game, PMs will continue basing–trading within a channel that is starting to show a modest upward bias.
Deflation is a process, just like stock market bottoms and tops. Take a look at Japan,
24 years later and still stuck in deflation.
Take a look at interest rates around the world.
Falling asset prices and a stagnant or contracting economy are not definitions of inflation. Did Japan’s money supply contract? Does the yen purchase more than it used to?
Cory, implicit in you comments is that two decades of trickle down economics is a big flop or am I misinterpreting your dialogue?
Also, homes declining this time of the year is VERY bad. Late spring, early summer are the strongest months for single family home sales. People sign their purchase contracts now, spend the next few weeks getting appraisals for loan originations, and then try to close before midsummer so they can move and settle their families before the start of the new school year. Thus, month over month single family home sale declines at this time of year are bad news.
Great show Big Al, excellent comments here on the thread.
Well, opinions, opinions we all have them………for me its ALL about Price….next week we have FOMC and NFP data the two events that usually create one hell of a rollercoaster ride in the precious metals sector with knee-jerk retail reaction and then perhaps a new trend created by those that move the charts.
Gold next week for the Bulls need a close above $1332 and Silver $20.40, HUI 237…which would be very positive finish not only on the daily charts but the weekly and a bullish finish to the monthly chart.
Last week gave us the support zones that the Bears will be looking to close below, Gold at $1268 Silver $18.93 HUI 215
As Gary mentioned on the thread this am the CRB index had a clear breakout in Jan on the weekly and the monthly chart dragging gold n silver and the miners along for the ride into March 17th (again Gary called that top right here during the days action) lets see in the key 275 area holds on the CRB chart.
War drums from Ukraine, FOMC and NFP….next week is going to be wild!!!!!
Big Al is on it.
The young land that is America is about to serve up it’s citizens what the rest of the world has gone through endless times in the past.
Nobody trusts fiat masters,especially this global destroyer of world reserve currency fiat-and the one before it.
Personally, I believe we’re in a schizophrenic inflation/deflation scenario. Certain assets that have been elevated over time due to monetary and credit expansion are now in the process of deleveraging—-in spite of the Fed’s effort to keep them elevated. One area is housing ——we saw a deleveraging in pricing in 2007 and are now about to see another deleveraging. Bob Shiller’s 100 year chart for housing reveals we haven’t deleveraged yet to the mean and it is inevitable that we will. Other areas will be the conventional markets and ultimately the bond market. This is all a result of too much debt and credit and the reverse of “demand pull inflation”. Another area has been the deflation of median incomes.
However, having said the above, you might expect “cost push inflation” on the other side of the equation which could be the result of scarcity, demand, and currency depreciation. This area would be hard assets of which many have not seen the tremendous elevation like housing and other assets.
Doc, that is exactly what Jim Sinclair has been warning about for the past 14 years, currency induced inflation….from 2000-2011 while the US$ fell from 121 to 72 everything priced in US$ rose…..(obviously the waterfall event in 2008 paused the trend) Every country from Cyprus to Japan and now Russia that has seen huge declines in their currency values vs the US$ every citizen who held their worth in physical gold prevented/ preserved their purchasing power.
Its that day “that may come” to the US citizens that suggests it will be no different in the USA….when that day is, well the gold gurus have been as correct calling that as those who have been calling for the end of the world!
Interesting; I must be in good company if Sinclair is saying the same thing. I really believe the dollar is looking more vulnerable and believe on a trade basis, more and more countries will move away from the dollar. The chart of the dollar looks very vulnerable and we could see a drop from 80 to 72 in the coming weeks and months. I really feel this will fuel the next fire in commodities and the metals.
Doc, the monthly chart of the US$ Index clearly shows off the 2008 and 2011 lows that a close below 74 would be a Breakdown…not seen in 6 years…that a BIG call Richard
Thanks Doc. I agree. When we talk all of housing, stocks and bonds facing declines in the coming years we are talking a lot of steam being taken out of the investment choices on hand. What you are saying in short is similar to my remarks above. Asset deflation is our fate and it is going to be murder for pensioners whose future payouts depend on one or all of the above to keep rising. Consumer price inflation on the other hand will come as a bitter pill when introduced alongside those other declines. It will amount to little more than a tax on disposable income.
For all you Silver bugs…in the last 44 years holding a position in silver vs the Dow and the winner is????…..
Considering the real world challenges for individual investors holding the Dow (companies going away, falling off the index, etc), the risk adjusted winner is gold, hands down. Only tangible assets can provide wealth storage without counterparty risk.
http://smaulgld.com/gold-vs-dow/
I was going to post that comparison….thanks!….can you imagine seeing that 44 year comparison on CNBC, lol….better off holding gold vs the Dow…they would never highlight such a FACT….scum!!!
The only counterparty risk was the Central Banks regarding gold and I remember clearly when Sinclair stated the central banks will become NET buyers not sellers, everyone thought he was nuts!…not!!…..I have lost some respect for Jim after his $50gs gold call as imo that doesn’t do the sector any good as its looked upon as nothing but Tin foil hat goldbuggers…lets regain $1525 before we mention Mars
I am not sticking up for Sinclair, but, I think he was not saying it was going to $50k, but, that there reasons it could go to , but, did not call for $50k, That article is about two years old…and going from memory……….
(but, I do read him everyday……….and have been reading him since 05)
As I recall the article explained full well how gold could be 50k and even higher.
Think Zimbabwe, a complete collapse in the currency.
Funny, people remember 50K and not the other half of the story.
Actually, bb, a complete backing of the currency could take gold to 50k or more. A complete collapse would take it to infinity. I agree with your point.
So…we are all waiting for 1979 to roll around again?
For all the Chart bugs….Warren has another excellent outlook…Silver needed to hold $19 or it was setting up a very bearish outcome….he is very bullish silver after last weeks performance…time will tell as we know it was Ukraine related as gold popped silver bounced.
http://wizzentrading.com/wp-content/uploads/2014/04/April-26-2014-pdf.pdf
I agree with Bevan. As you pointed out previously, his record has been very good.
I think him and Norcini do a great job of unwinding the rigid thoughts from those that dislike the chart goers or have no understanding of technical….when an upward or downward trend is in play all charts do is highlight the support and resistance levels and not written in stone movements…..one needs a flexable mind to understand the cahrts…I use they because they are 100% opinion free!
“time will tell as we know it was Ukraine related “. I’m not so sure, “jj”. I think “Ukraine” was the convenient “excuse”, NOT the real “cause”. What was going on at the time over there was, indeed, serious, but NOT serious enough to be the catalyst for the sort of turnaround the PMs put on that morning. The Ukraine news was enough to have maybe brought them back to “even” from the mugging they were taking, but not enough to produce the outside day that occurred.
Well we will never really know for sure will we, but that am was the hottest point in the Ukraine mess toss in aswell the options expiry with gold and silver
I was short gold from $1350 and I took off my short position when gold climbed back above $1280 purely on technical that am
Of course every goldbugger always claims its China that puts in these reversal days…we will never really know, will we
And is heats up yet again:
Every country making a loan deal with the IMF, well your dealing with the DEVIL !!!!
◾Russian media reporting that Russia, Kazakhstan and Belarus will sign an agreement in May to accelerate the formation of an economic union and a joint “gold” currency: the Altyn
Take a look at DOW in terms of Gold over the past 15 years, that is not inflation stored in stocks. It is an illusion to think that stocks have gone up due to inflation. When the next crash occurs, there will be no transfer from one asset class to another, that inflation stored in most of the stock market will disappear into to thin air.
Kind of agree PG. Assets deflate and the money is just gone into the ether. It was not money to start with unless you cashed out and put it in your bank account. One day there will be all selling and no bids and prices will respond as they usually do by crashing through the floor. Poof….Hey, where the hell did the money go? Same deal for homes. They are only worth what another will pay. As we know well though, prices can literally fall to zero for houses where there is no bid. In other words, I disagree with Gary’s contention that assets are storing inflating wealth that will somehow leak into other investment arenas as if there is a stable pool of capital that just shifts around from class to class. That is definitely NOT the case. Stock markets are not a zero sum game for starters where the total of all inputs must equal the total of all output (plus inflation). What people forget is once a crash scenario begins you are trapped or you get bid at some miserable price far below your stop. Oh gee….why is that they wonder (!)
Stocks DID go up due to inflation. It’s the increase in value that is an illusion. When the Dow first hit 1000 in 1966, it was worth 28 ounces of gold. As it struggled to recapture 1000 in 1981, it was worth just 2 to 2.5 ounces. If not for inflation, the Dow would have been around 100 in 1981.
In real terms, of course we have nothing but deflation. In imaginary (government money) terms, we have inflation. Hyperinflation is only possible where imaginary money exists.
Gold and silver purchases made easy at CIBC branches and online
Wide array of coins and bars conveniently available for investing, gifts or commemorative purposes
TORONTO, April 25, 2014 /CNW/ – Canadians looking to buy gold and silver now have fast and convenient options at CIBC (TSX: CM) (NYSE: CM) branches and a new online store, which can also be accessed via a mobile device.
High quality gold and silver bars, coins including collectibles and certificates are available for purchase at all CIBC branches across Canada. Bars and coins can also be ordered online at: https://www.preciousmetals.cibc.com. Branch, online and mobile purchases may be made by CIBC clients and by those who currently bank elsewhere.
Key features of CIBC’s gold and silver service include:
• Secure online ordering 24 hours a day
• Live market pricing
• Branch and home delivery options
• Bars and coins in various denominations, as well as collector and commemorative coins
“Our clients have told us they want a simple, straightforward option to buy precious metals and that’s why we are making it easier and faster for Canadians to purchase gold and silver,” said Larry Tomei, Senior Vice President, National Sales and Service, CIBC. “Whether it is to mark a special occasion for a family member, or to hold for investing purposes, CIBC now gives Canadians access to buying precious metals when, where, and how they like.”
Precious Metals More Popular Among Canadians
Mr. Tomei noted that there are many reasons Canadians buy gold and silver – including as gifts for important occasions, or as an investment holding. “We have clients who want to hold physical precious metals as part of a broad diversification strategy, and we also have clients who come to us to buy gold and silver to celebrate a special occasion,” said Mr. Tomei.
While there has always been a demand for gold and silver among Canadians, the bank says clients may not be aware that they can buy these items directly through CIBC. “We have a long history of helping Canadians purchase gold and silver. We’ve enhanced that service by making it simpler and by expanding our product offering. We’ve also responded to clients seeking a self-serve online option they could use from the comfort of their own home,” says Vineet Malhotra, Managing Director, Capital Markets Trading at CIBC World Markets
Thanks bb! Much appreciated.
Several years ago the Indian government public ally announced they were buying x tons of gold at $1000 an ounce.
It was then the floor was set and gold took off.
What we need now is China to public ally announce they are buying x tons of gold at $1300 an ounce.
Once again that will confirm the bottom and it will be all systems go
I remember that well james because at the same time Barrick was taking a massive hit as they removed ALL their gold hedge positions….that was a real double whammy and gold never looked back below $1000 it was also one of the few times Gold AND the US$ rose together.
We have been thru this scenario before and it will end the same. Look at 1930s and line up events.
Again I would point out that conditions are completely different today than they were in the 30’s. The reason we had deflation in the 30’s is because the money supply was linked to a finite gold supply. Once the value of the dollar was severed from gold deflation was stopped in its tracks.
The same thing happened in 2009. Once Bernanke cranked up the printing press deflation was halted almost instantaneously.
Just as an example the price of oil jumped 100% in 5 months, Stocks over 70% in a year. Gold 30% in 4 months. Gasoline 150% in 5 months.
This my friend is the power of the printing press to halt deflation at will.
Now if we were to tether the dollar to a finite gold supply again then yes we would experience deflation, but the odds of that happening are slim IMO and will only happen during an extreme currency crisis where the only escape from a currency collapse is a return to a gold backed system.
Gary you need to research a bit mor carefully. Price of Gold readjusted from $20/ounce to $35/ounce in 1933.
Despite all the efforts by the Fed to pump up asset prices, here we are with new home sales exactly where they were in 2007, oil at $100, Gold at 1300, Silver at 19….etc. World economies are slowing as witnessed by extremely low interest rates. This is deflation at work, high levels of debt leads to lack of demand for all assets.
Re: “Despite all the efforts…” –Pure propaganda.
FDR’s policies only prolonged the depression.
“FDR’s tripling of taxes, his regulation of business, and his relentless antibusiness propaganda also contributed to a worsening of the Great Depression, but his labor policies were probably the most harmful to the employment prospects of American workers. ”
https://mises.org/freemarket_detail.aspx?control=515
Price of Gold readjusted from $20/ounce to $35/ounce in 1933.
This is exactly what I was telling you. As soon as FDR expanded the money supply deflation was stopped in it’s tracks. That’s what the revaluation of gold did. It effectively doubled the money supply.
Yes economic activity is slowing. Again this is what happens during an inflation. The middle class and lower income families get squeezed by cost of living increases as commodity prices rise and discretionary spending starts to contract.
Profit margins contract as input costs rise.
Wage growth stagnates as profit margins contract making it harder for businesses to increase pay, plus an oversupply of labor drives wages even lower.
These are all the symptoms of inflationary pressures.
The CAD line needs to top first, still making all-time new highs
Then the US indexes will top
This will not occur until at least 2015.75 as per Martin Armstrongs Econmoinc Confidence Model.
As we get to the next bear market bottom in stocks, the mining stocks will start their next bull leg.
This is how things played out in the 1930’s, 2000 and 2008
Unless it’s different this time.
Regards
I do not see how things are any different today from a macro perspective. 15-20% umemoyment, 50-60 million Americans living on food stamps, top 85 family’s in US have more wealth then the next 150 million families…..do I need to go on.
Just give it time and the end result will be the same.
No one is denying the the middle class is suffering. That’s what happens during an inflation. Wages stagnate but cost of living expenses increase squeezing middle and lower income families. This is the same thing that happened during the inflation of the 70’s.
You need to address my research and data on ECM, CAD line and DOW tops, you will see my work is accurate. Even 1929 was an ECM top with CAD line topping in 1928 and DOW in Oct. 1929.
If you had said it is different this time, one would have been wrong at every top since 1929.
Again no one is disagreeing that stocks are topping, although I’m not convinced we have a final top just yet. It’s been my opinion for months that we would see a final top this year, probably during the first half of the year.
But that doesn’t automatically imply deflation. It just means the inflation will leak out of overpriced stocks and flow into undervalued assets. The same thing happened in 2007/08.
As the overvalued housing and stock market topped liquidity flowed out of those markets and into the undervalued commodity markets.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=8&mn=6&dy=0&id=p12508040657&a=348622398&listNum=1
Liquidity will always eventually flow into undervalued assets. This is a universal law that never changes.
1970s was a completion of bear market in stocks, interest rates were not at 0 percent, debt levels were historically low, bond market was bottoming….. You are comparing 2 completely different periods.
Nonsense debt levels were at astronomical levels as the Vietnam war had basically bankrupted the country. Why do you think Nixon took us off the gold standard? Because the only way to pay the war debt was by inflating the money supply which he couldn’t do as long as it was tethered to gold. Well at least not without losing all of the US’s gold which is what was happening.
Once again from a macro perspective, today is more similar to the late 1920’s than the 1970’s. Your argument is very weak by focusing on just debt created by the war.
You premise is correct about liquidity flowing out of stocks into other assets but I believe your timing is going to be off and that is based on fact and not my opinion. Remember it is not different this time.
If you happen to have a working crystal ball and can tell us exactly when stocks are going to top and liquidity flows into commodities I’m all ears.
Let’s wait for the CAD line to top first, then we know the US indexes are near a top as we will see a divergence and then we will see the SPTSX head to new highs as will see energy prices soar. As I pointed out the correlation between CAD line top DOW top and Martin Armstrongs ECM 8.6 year cycle top…….next ECM top date is 2015.75. Once the next bear market starts, we can then expect a bull market in mining stocks as the stocks markets approach their bear market bottom.
1929 was also an ECM top date, the 2 most recent top dates were in spring 1998 and spring of 2007.
Regards
With respect to Gold Bullion, I have input my research, that shows Gold has been bottoming 1 month on either side of a Major Bradley turn date since 2008 and the next MBTD is July 16th, so I expect Golds next bottom between June16th and August 16th. I expect a move to $1087 or lower before this bear market is over and I am also aware that the bear market in Gold may extend to 2016.
During the 1930’s – mining stocks topped with the Down and crashed but bottomed in 1931 and headed higher into 1935. The DOW bottomed in June 1932 and Silver bullion bottomed in December 1932. Golds price was fixed at 20/ounce till 1933 and then readjusted higher to 35/ounce. DOW rallied 500% from its bottom in 1932 and we also had a commodities bull market from 1932-1937.
Interestingly the CAD line which had topped in 1928 did not surpass it’s 1928 high till 1944, depression ended in 1949 and next cycle started.
If gold has one more daily cycle lower we would get a bottom in late May or early June. If it were to have two daily cycles lower then July comes into play.
Personally I’m in no big hurry to buy until I see a right translated daily cycle or a move to 1050, which ever comes first.
If history repeats, I believe we will see stocks go much higher and longer than most investors expect and gold and silver could head much lower than most investors expect.
One thing I have learned by my research is that it is dangerous to your financial health to think it is different this time.
One step at a time.
Al Please keep Grandich a regular. He’s so refreshing honest and appreciate he reminds us as much of his miscues as his successes, something most others badly lack the ability to do
I agree Francis – anyone who readily admits his mistakes becomes instantly worth listening to.
And those who do not admit their proud ways should also be ignored. I agree too Reverend!
Re: Housing.
As interest rates rise from 4% to 5%, that is not well described by a 1% rise; that is a 25% increase in interest costs. This does make a difference in affordability!