The truth about Quantitative Easing

October 22, 2011

Classic Clarke and Dawe cutting to the core of the issue. A must watch for anyone who believes true deflation is a possibility with money printers at the helm of world central banks.

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Silver price risk: options expiry & thinly traded holiday markets

April 20, 2011

With so much open interest at the silver May $40 strike call options, traders should be aware of some shenanigans on the silver price in the next week to ten days. JP Morgan, HSBC and the other heavily short investment banks have a huge incentive to flush long speculators by pushing the silver price lower. The thinly traded Easter holiday period is the perfect scene for this criminal manipulation. Should they fail to push the price below $40 by next Tuesday New York time, the upside could be spectacular. Whilst many in the blogosphere have written off JPM and can only see higher silver prices, I urge you not to underestimate the determination and capacity of wounded criminal banksters

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China will cause a gold price tsunami

February 17, 2011

Ignoring real estate, most people invest their hard earned money in paper things. Stocks, bonds, annuities, insurance - it’s all paper, and it sits nicely in our bank accounts and shows up on our computer screens. Halfway across the world, investors in China and India have never trusted paper investments as a store of value - and they’re converting their hard earned paper money into gold and silver bullion. Not that this is anything new. It isn’t. But the scale and speed with which they are accumulating precious metals IS new, and it’s driving the fundamentals that we believe will lead to higher prices in 2011.

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To hell with farming

February 07, 2011

As a former international corporate lemming, I have made a transition to a more self sufficient rural existence. Land. Check. Tractor. Check. Chainsaw. Check. Cows. Check. The ounces to acres strategy is now more attractive than it has been for many years. Today you can buy farmland for half the ounces of silver than just 2 years ago. Even the famed investors Marc Faber and Jim Rogers are suggesting to buy a farm and learn to drive a tractor. So would I recommend you quit your job, sell up and chase the dream country lifestyle? Well plenty of magazine interviews of "tree changers" paint a rosy picture dont they? I can tell you from personal experience that rural life is tough, but very rewarding when it works out. Unfortunately the reality is that it does not work out for most. For these "experience rich" but "cash poor "people it means a retreat back to the big smoke in search of a job. Many tree changer families that survive only do so because one parent commits to an ultra long daily commute or even a weekday stay over in the city. The unfortunate reality is that either family or physical pressures make this unsustainable in the long run. The following story was written 70 years ago and provides a light hearted take on the serious challenges of life in the country that are just as applicable today as they were back then. Enjoy.

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All that glitters: agnostics view on gold investment

December 22, 2010

Neither bull nor bear. A well contructed article from a gold agnostic. He is spot on. You either get gold or you dont. Unfortunately the non belivers of gold are by default bullish FIAT. To us that is very dangerous in a time of corrupt, or at the very least irresponsibile, central bankers and politicians. To us gold is the ultimate hedge....but then again we are gold bugs!

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The bull case for gold

September 03, 2010

Imagine you owned a stock. The management diluted your equity by an average of 6-8% per year. No dividend payouts ever. If the company is wound up you have no claim over assets. In fact there are no assets just promises. Substitute stock for paper money. Welcome to the world of FIAT currency. In reality the bull case for gold is simple: the supply of Dollars, Yen, Pounds and Yuan will grow way faster than the supply of gold. Therefore by extension, we could also refer to this as the bear case for FIAT currencies. Understanding that gold does not rise in value but rather currencies fall is akin to understanding that the Sun does not revolve around the Earth. It changes your perspective all of things within the solar system. So as you shift your mindset to price currencies and assets in terms of gold, you start to see the investment universe differently.

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BIS gold looted from customer holdings?

August 05, 2010

The FT reports: "The gold used in the BIS (Bank of International Settlement or the Central Banks's Central Bank) swaps came mainly from investors' deposit accounts at the European commercial banks. Some investors prefer to deposit their gold in so-called 'allocated accounts,' which restrict the custodian banks' ability to use the gold in their market operations by assigning them specific bullion bars. But other investors prefer cheaper 'unallocated accounts,' which give banks access to their bullion for their day-to-day operations." Hmmm. Maybe time to take physical delivery of your holdings?

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It is a game of golden musical chairs

July 30, 2010

The disconnect between mainstream financial reporting and the reality of the sovereign debt crisis grows wider by the day. Is it any wonder this recent 380 tonne gold swap transacted by the BIS has attracted so much unwanted attention from the gold community. The shell game being played by central banks and sovereign balance sheets is clouded in secrecy, when the real money – the gold bars get passed around we can’t help but wonder who’s plugging what holes. Hope you own physical gold to ensure you are not left standing in this absurd game of golden musical chairs.

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Something has got to give

July 29, 2010

If you were waiting for a bigger pull back before buying gold as portfolio insurance, consider these timely words from Richard Russell. Russell’s concern about more stimulus has been echoed by many experts in the field of late. G8 central bankers are looking to jump on the gas with a second round of quantitative easing, this should bode well for gold prices. Fiat currencies on the other hand, are still full steam ahead in their race to the bottom.

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Gold: Insurance against sovereign debt

July 27, 2010

Consider this - global gold production is 2600 tonnes p.a. At $1180oz, that's $98.6 billion worth of new gold supply per year. This figure is dwarfed by the trillions in QE, stimulus and bailouts which has flooded the system in the past two years. Pierre Lassonde highlights a similar arguement below comparing the gold market to the market capitalisation of global bond and equity markets. When these bond markets get the jitters and acknowledge the inherent risks of escalating sovereign debt / GDP ratios, one wonders where these trillions of dollars will be headed?

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The collapse: US vs Roman empires

July 14, 2010

Jim Rickards is a student of history, his recent interview with King World News is a refreshing take on the current situation in the US, drawing striking parallels to the Roman Empire and its fall into economic doom. The stealth debasement of currencies by government is as old as money itself, the names have changed but the game remains the same. A Roman, should he live today, could certainly tell you why gold coin sales have the US mint clamouring to keep up with demand. History is a funny thing – rinse, wash, repeat.

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The perpetual war: gold vs paper

July 13, 2010

In its latest research report the Longwave Group uses the Kondratieff cycle, Dow to gold ratio and Homestake mining to Dow ratio provide a warning that the perpetual gold vs paper war may soon reach an ugly conclusion....for paper assets.

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Greenspan understands gold

June 23, 2010

As the Fed loads up artillery for QE2, we thought we would take a trip down memory lane and resight a golden proverb from one of the Maestro’s earlier works. How times have changed!

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Geological anomalies are like opinions: Everybody has one

June 19, 2010

There’s a great deal of chatter in the press and online about the tremendous US$1-trillion-dollar mineral “discovery” in Afghanistan headlined by The New York Times recently. Most of the discussion seems to centre on whether or not this is really news and whether or not the NYT was played by the powers that be for purposes of their own. Few, if any, people seem to be questioning the value of the so-called discovery itself. The US$1-trillion-dollar figure, at best, cannot be anything more than the wildest of hopeful guesses.

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Gold for beginners

June 17, 2010

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The 2010 Silver Buying Guide

June 17, 2010

Silver has been sizzling and causing lots of buzz in the industry. Investors are excited. Part of the hubbub is due to its current run. Since its February 8 low, silver has roared ahead 22.4% (through June 21) and has doubled from its November 2008 low. This excitement has spilled over into greater investment demand – especially so for coins. The U.S. Mint sold more Silver Eagles in the first quarter of this year – just over nine million – than any prior quarter in its history. The Royal Canadian Mint produced 9.7 million silver maple leafs in 2009, also a record.

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Gold vs Australian Real Estate

June 11, 2010

Is Australia's housing bubble about to burst in terms of gold. It is our view that in the not too distant future the average Australian home will cost not much more than a couple of kilos of gold. The question remains, however, will gold rise 700% or house prices drop by 85%?

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Is gold a bubble?

May 28, 2010

It's been the amazing, runaway boom of the past decade. If you'd put your money into gold at the lows about 10 years ago, you'd have made a nearly 400% return. That's left pretty much everything else -- stocks, China, let alone housing -- in the dust. But with gold now trading near record highs, the big $1,200-an-ounce question is obvious. Is the gold rush over?

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Gold coin premiums explode in Greece

May 28, 2010

Many gold buyers question why they need to pay a 5-6% premium for gold coins. The current crisis in Greece highlights why small denomination and immediately recognisable gold is exceptional value. Reports now that prices at which the Greek Central Bank is selling one ounce gold equivalents are as high as $1,700 (40% over spot), and prices on the black markets are even higher. The punchline, as Athens slowly returns to a forced gold standard: " A popular spot for street vendors to sell their coins is near the Athens Stock Exchange. There the traders wait for citizens to bring payments received from unloading their paper assets like stocks and bonds." That's good - downtown Manhattan close to the NYSE has some free space for gold vendors to set up shop as well, they just need to push some of the frontrunning/collocation boxes off to the side. And in other rhetorical ruminations, is it safe to say that the last days of the fiat experiment are among us now that people themselves are bypassing the government and enforcing their own gold standard?

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No longer lonely in the bear bunker

May 23, 2010

I have been bearish the world for sometime now. Anyone who studies history and has common sense could see all of current troubles well in advance and have a fair idea as to what happens next. I am beyond bearish. I am in the bunker. Pick your issue: China, stocks, real estate, bonds, sovereign debt, paper currency, derivatives, peak oil and war are all crisis triggers on the horizon . The only problem is that I now have many well respected commentators in the bunker with me. As a contrarian this is an indicator that warrants caution and may mean we are not quite ready for the ultimate crisis just yet. Here's the thoughts of my fellow bunker dwellers.....

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