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Sunday, August 9, 2020

GOLD COIN AND MEDAL UPDATE


The most significant auction in historical gold medals in recent history has just been completed at Stacks Bowers Auctions.  The Duke of Lansing collection featuring many high grade British gold coronation and jubilee medals brought historically high prices.  The Charles II coronation and William and Mary coronation in gold pictured above both brought just a touch below $40,000.  Each of these is the finest of these rare issues to have been auctioned in recent memory.  Many others hammered at record levels.  

  this George VI medal in SP 64 brought $28,800.  Last year at the New York International the same medal in the same grade brought $16.500.  With a mintage of only 274 pieces in this high grade the medal is certainly worthy of such a high bid, but the jump from year to year is remarkable.

Even the silver coronation medals are following suit.  Last year a George I silver coronation medal in sp 63 sold for $2000.  This year an SP 64 sold at Heritage for $7000..

These high prices were not confined to the medals selection. Both at Stacks and Heritage high grade coins of interest brought historically high prices.  

The reason for this jump in prices should be obvious to anyone who has been tracking global central bank activity.  The Federal Reserve Bank in the United States alone has printed 10 trillion dollars this year in order to acquire the bad debt of US and International Corporations and Banks that it deemed necessary to preserving the global financial system.  The ECB and the Bank of Japan and printing money at a similarly Furious pace.  Concomitantly the price of bullion gold is at record levels in nominal terms through when adjusting for real inflation (not the absurd central bank inflation figures) the price is sure to go much higher.

So you can look at it as real assets are inflating at a terrific rate - or the value of paper money is being destroyed at a terrific rate.  It amounts to the same thing.  And the trend is only accelerating



Monday, August 3, 2020

WHY THE BIG BANKS COULDN"T KNOCK THE GOLD PRICE DOWN THIS SUMMER: FUTURES BUYERS ARE TAKING DELIVERY!!!!!!

(Kitco News) Trading behavior is changing in the gold space with investors preferring physical versus paper while at the same time investing more in ETFs than futures, according to Commerzbank.

Traders issued the largest delivery notice on record at Comex, declaring their intent to deliver 3.27 million ounces of gold against the August Comex contract.  

“According to traders, 102 tons of gold were delivered to the holders of expiring gold future contracts on the Comex last Thursday – this also fits the picture of changed investor behavior,” said Commerzbank analyst Carsten Fritsch. “Physical deliveries on the Comex have been rising for months: they totaled just 26 tons in February, 98 tons in April and as much as 171 tons in June.”

This trading pattern shows that investors prefer physical to paper gold, Fritsch pointed out. 

Despite the want for physical, no shortages are expected, the analyst added. “Still more gold is being shipped into the COMEX warehouses than delivered on a net basis. Currently over 1,100 tons of gold are being stored there, so no shortages of standard bars are to be expected, even if investor demand remains high,” he said. 

Another shift in the trading pattern has been investors’ preference for gold ETFs versus future contracts, according to Commerzbank. 

“Clearly there has been a shift in investor preferences: rather than investing in futures contracts, they are opting to put their money in gold ETFs,” said Fritsch.

Massive inflows are the proof with 155 tons, which is half of monthly global mine production being reported in July alone, the analyst said, citing Bloomberg data. 


Wednesday, July 29, 2020

DO YOU VALUE GOLD AS A COMMODITY OR AS A CURRENCY?

Gold prices surge to highest level in over seven years

As gold nears $2000 again, there is much speculation as to a "fair value" and what to expect next.

There are many billionaires like Ray Dalio, Jim Druckenmiller, Paul Tudor Jones, Jim Rogers etc who are still aggressive buyers of gold.  Most of these base their decisions on fundamental analysis having to do with expanding money supplies and debt loads in the major economies.

Then there are many technical analysts like Bob Prechter of the Elliot Wave school, and TV personality Jim Cramer's favorite chartist Carley Garner who fee that gold is on the verge of a major bust and has no real intrinsic value at all.

The real difference in analysis comes down to whether you view gold as a currency or a commodity.

Historically gold was the major global currency for at least 3500 years of recorded history.  Silver was also used in about at 10 to 1 ratio as a secondary currency.

Paper chits or IOU's were also used insofar as they were convertible into gold..

In 1933 The United States had issued so many paper chits they decided to freeze the price of gold and make private ownership illegal because they could no longer honor the conversion of paper into gold.

From this point on the Federal Reserve bank and the US Treasury created a system of floating paper money uncorrelated to anything but the "Good Faith" of the US Government.

All the governments of the world still used Gold as the currency of last resort.  All Governments of the world stored gold in their central banks for use as currency of last resort and for large international payments.  And all paper was still supposed to be convertible into gold at a controlled price.

In 1971 Richard Nixon closed the gold window for good in the United States.  Gold was no longer money available for the settlement of commercial transactions.

The Question is: is it still a currency?  If not it's value is purely emotional and sentimental, which is the argument of many technical chartists. 

 If its value is emotional and sentimental what is it's value?  Honestly, I have no idea,

And if it can not be used in the settlement of trade, how can it be a currency?

The answer is: it is a currency because it is held by the central banks of all the major global governments.  Why do they hold it?  Because it is an asset that as readily convertible into every major currency, it is durable, divisible, immutable, and has a 3500 year track record of holding its value over time.  In short, all the conditions that Aristotle laid out for currency in 500 BCE.

And right now Gold is the only asset held by the central banks of the world that are holding many trillions of dollars worth of liabilities in the form of bad debt they've taken onto their balance sheets to bail out the over leveraged banks and corporations of the world.

So if you accept the premise that gold is still a currency then what is the value?  

First, you can ask yourself what price would gold have to go to in order to make the central banks of the world solvent?  This is not an easy question, but surely the answer is much higher than it is now.  And this is the reason many billionaires who are looking at the global economy and seeing great value in gold disagree with many chartists who are looking at their computer screens and computing stochastics and wave counts and relative strength indicators and seeing a commodity trading at perilous levels.







Friday, July 24, 2020

Gold's Best Friend Ever, hard at work destroying the value of the dollar

Trump's Day In Review (2/3/2017) – ENIGMA IN BLACKThe Trump Trade is Sinking the US Dollar
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Perhaps the single greatest thing preventing gold from taking off into the stratosphere has been the strength of the safe haven status of the US Dollar.

Since gold is first and foremost a hedge against instability, as long as the US Dollar had also been a hedge against instability, Gold's primary function had serious competition.

The dollar has long had serious debt problems to contend with.  However, it had been backed by the strength of the respect that the US Government has commanded internationally, as well as the respect for the depth of our financial markets.

Until now.

Now the US Government is the laughing stock of the developed world with a President who thinks Science is a hoax, a free press is the enemy of the people, and that brown and black people are inferior.

He has also long believed that a weak dollar benefits real estate - which it does, and since his wealth is held in real estate he is all for destroying the value of the dollar.  Which he is rapidly succeeding in doing.

A Global de-dollarization effort is underway.  Contracts for commodities like metals, food and oil have largely been settled in dollars,  This has given the dollar a special status around the globe.  Every country needed a reserve of dollars.  This has also helped support our massive debt.

But Trump's trade wars, and  his lack of respect of international treaties and institutions have initiated a global move to settle contracts without dollars. Which means countries around the globe do not need a reserve of dollars.

At the same time Trump's historic ineptitude in dealing with a virus is crippling the once vaunted US economy.

So as countries around the globe de-dollarize and our economy sinks, the dollar is quickly losing its special status as the global reserve currency, and its value is sinking.

Whatever other damage this is doing to our economy, it is probably the single greatest thing to happen to gold in the post war era.

Because when investors get nervous now they look away from the dollar.  So where else can they look?  The euro has structural problems.  The Yuan is gaining strength but the Chinese economy is still relatively closed.  The yen is burdened with even more debt than the dollar.

Gold is becoming the currency of choice, as its status as a safe haven currency loses its greatest rival.




Friday, July 17, 2020

U.S. budget deficit shattered one-month record in June as spending outpaced revenue by $864 billion

The 2020 budget deficit is likely to exceed the combined 2014 through 2019 deficits.


An extraordinary assault on US Fiscal Solvency is under way under the Trump administration and because of all the other crises, this one gets little play in the media, yet it may be the most damaging of all/

The Federal Government is now running close to a TRILLION DOLLAR DEFICIT PER MONTH/  Meanwhile the FEDERAL RESERVE BANK OF THE UNITED STATES OF AMERICA if standard accounting practices applied would be running a parallel annualized deficit also close to A TRILLION DOLLARS A MONTH - when you account for the fact that they've taken over 10 trillion dollars of Bad Debt onto their balance sheet to support this imploding economy.

When the Fed took on Three Trillion Dollars of bad debt after the crisis of 2008 they promised to "normalize their balance sheet as soon as appropriate."  They briefly tried to do so in 2013.  The stock market immediately began to crash it what was dubbed a TAPER TANTRUM.  The Fed immediately desisted proving once and for all that their true mandate is to support the risk assets of the very very Rich.  (They've since insisted that much of the bad debt was repaid, without ever opening their books to back up this claim.)

Where is the talk of a normalized Fed balance sheet now?  There is none, because, frankly, it would be regarded as an absolute joke.  

Where is the talk of fiscal responsibility of the Federal Government now?  There is none.  It would be a joke.  The only talk is how many trillions of dollars more do we print up to stave off a depression?

A Solvency Crisis is looming.  And not just in the US.  It is a global crisis.  The only question is what will protect your personal finances during a Solvency Crisis?


Monday, July 13, 2020

The shrinking dollar (another chart to illustrate the inflation super cycle. And a Politician who gets it!




Surreptitious intervention in the gold market by the U.S. government is the target of legislation introduced in the House of Representatives by Rep. Alex X. Mooney, R-West Virginia.

Mr. Mooney has introduced a bill HR 2559, Mooney also has introduced legislation to protect Americans against the Federal Reserve’s steady devaluation of the dollar — legislation to forbid federal taxation on the sale of gold, silver, platinum, and palladium coins.


In a letter to colleagues seeking support for his Monetary Metals Tax Removal Act, H.R. 1089, Mooney writes: “The Internal Revenue Service does not let taxpayers deduct the staggering capital losses they suffer when holding Federal Reserve Notes over time, so it is unfair to assess a capital gains tax when citizens hold gold and silver to protect them from the Fed’s policy of currency devaluation.”

Saturday, July 11, 2020


THIS HUNDRED YEAR GOLD CHART SHOWS THE EFFECTS ON
THE GOLD PRICE OF A MASSIVE INFLATION SUPERCYCLE.  YOU
CAN SEE THE CYCLE GO BALLISTIC STARTING WITH THE
CLOSING OF THE GOLD WINDOW IN 197O,   
IN THE CHART BELOW YOU CAN SEE THAT AT THE SAME TIME WAGES AND SALARY AS A PERCENT OF GDP STARTED TO DROP PRECIPITOUSLY.

THE CHART BELOW ONLY SHOWS THIS PERCENTAGE THROUGH 2012.
IT DROPPED OFF A CLIFF IN TH LAST 3 MONTHS.
COINCIDENCE?
THE QUESTION IS: HOW CAN ONE BEST PROTECT ONESELF FROM THE MALIGNANT CONSEQUENCES OF THIS CYCLE?
STOCKS?  PERHAPS.  BUT STOCKS ARE AT THE MERCY OF THE EFFICACY OF THE FEDERAL RESERVE BANK TO ENDLESSLY SUPPORT THEM.  MAYBE THEY CAN.  MAYBE THEY CAN'T.
REAL ESTATE?  PERHAPS.  BUT REAL ESTATE IS SUBJECT TO THE VICISSITUDES OF OVERCAPACITY AND THE MORTGAGE MARKET.
THAT LEAVES REAL ASSETS: GEMS, OLD MASTERS ARTWORK, HISTORICAL ARTIFACTS, GOLD. 








Workers' salaries are at the lowest percentage of GDP since 1929 ...