Gold and What Moves it.
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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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Top Financial Advisors Negative On Gold As Perfect Contrarian Storm Brews

Top Financial Advisors Negative On Gold As Perfect Contrarian Storm Brews | Gold and What Moves it. | Scoop.it

The outlook for gold has turned profoundly negative.  With prices down over 4% since the start of the year, gold is off to the worst start since 2001.  Billionaire investors George Soros and Louis Moore Bacon have dramatically slashed their gold holdings and Bloomberg reports that money managers have liquidated gold and precious metal holdings for six straight weeks, the longest stretch of outflows since the first quarter of 2011.

 

Further confirmation of the bearish outlook on gold investment was provided by Barron's latest survey of America's top financial advisors who manage money for the ultra wealthy.  According to Barron's, the "one clear theme" of the advisors for 2013 is an increased commitment to stocks,  logically implying that most advisors see a better economy and rising corporate profits.  With bond yields reaching all time lows, stock dividends are also able to provide income starved investors with yields unattainable from government debt securities or gold. ...

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Shelter from The Coming Storm - Gold, Silver, and Real Assets | GE Christenson | Safehaven.com

Shelter from The Coming Storm - Gold, Silver, and Real Assets | GE Christenson | Safehaven.com | Gold and What Moves it. | Scoop.it
What Storm?A hurricane of digital money created by central banks to purchase government debt and other dodgy assets from banks.A tidal wave of deficit spending by governments around the world. It continues, regardless of whether you call it business as usual, stimulus, payoffs, or bailouts.A perfect storm of derivatives - the weapons of mass financial destruction that continue to plague our financial system - but make $Billions (Maybe $Trillions) in profits for the huge banks.A tornado of bailouts, giveaways, loans, and currency swaps from the Federal Reserve to backstop banks, politically connected individuals and corporations, European governments and others.An approaching thunderstorm of new and higher taxes - perhaps a carbon tax, a VAT, and a wealth tax. We hope most of these will be downgraded to a hot air disturbance.A tsunami of Japanese Yen based on the election of Prime Minister Abe and his avowed intention to weaken the Yen.

Why Do We Need Shelter?
Hal's insight:

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Charles Hugh Smith: Martian Central Bank Interested in Buying 100 $1 Trillion Coins

Charles Hugh Smith: Martian Central Bank Interested in Buying 100 $1 Trillion Coins | Gold and What Moves it. | Scoop.it

The $1 trillion coin saga takes an unexpected twist....


The $1 trillion platinum coin saga took a surprising turn as the Central Bank of Mars has expressed interest in buying 100 of the proposed coins. Interpreters are puzzling over the meaning and subtexts of the Martian communique; since Martian is described as an often-ambiguous combination of Fortran and Hungarian, this is no easy task. Opinion on the Martian offer is divided. Some suspect the Martian Central Bank intends to buy the $100 trillion in platinum coins with electronically created quatloos, i.e. worthless currency. These observers believe the Martians intend to claim the $100 trillion in platinum coins constitutes a claim on the entire U.S.A., the purchase of which would effectively give the Martian Central Bank a massive beachhead on Earth. ...
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This is beautiful. LOL! Click over for the full piece.

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$1 trillion platinum coin hogwash – if it should happen buy gold and silver

$1 trillion platinum coin hogwash – if it should happen buy gold and silver | Gold and What Moves it. | Scoop.it

How anyone can suggest the creation of a $1 trillion platinum coin purely to circumvent checks on government spending defeats all logic and its creation would presage a flight into gold and silver.


by Lawrence Williams:


LONDON (MINEWEB) - 

Far be it for me to argue with a Nobel prizewinning economist, members of Congress and however many thousands have signed the White House petition to mint it, but this whole idea of a trillion dollar platinum coin is ludicrous.

 

It would have to constitute the most gigantic fraud ever perpetuated by a government and probably make the U.S. dollar and the U.S. economy the laughing stock of the world.  If anything, it would trigger a huge investment surge into gold and silver as all faith in government-created money would evaporate!

 

Firstly – why platinum?  It is based on a legal technicality allowing the U.S. to mint platinum coins of any face value.  However, given that $1 trillion dollars worth of platinum at current prices represents around 8 or 9 times the amount of platinum ever mined throughout history, a trillion dollar face value coin would have to bring any kind of money creation into even more disrepute than it already is. ...


Hal's insight:

Click through for the rest of Williams's article. But I agree. it's hogwash. Or is that putting lipstick on a pig?

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Charles Hugh Smith: The Rising U.S. Dollar Will Be Corporate Earnings/Market-Negative

Charles Hugh Smith: The Rising U.S. Dollar Will Be Corporate Earnings/Market-Negative | Gold and What Moves it. | Scoop.it

Many large U.S. corporations derive 50%-65% of their revenues overseas. As the U.S. dollar rises, the foreign-exchange boost to overseas profits of the past decade will reverse.


One of the most glaring omissions in mainstream financial-media stock market commentary is the connection between the U.S. dollar's relative value and corporate earnings. I have often commented on this bullish consequence of a weakening dollar.  50%-60%+ of global corporate earnings and profits are non-U.S., i.e. booked overseas in a currency other than the U.S. dollar (USD). As the dollar weakened, global corporate profits skyrocketed as earnings in euros, yen, etc. rose when stated in dollars. In other words, overseas profits expand as if by magic when stated in dollars. When the euro and the dollar were 1-to-1 back in the early 2000s, then 100 euros of profit converted to $100 when stated in dollars. When the euro rose to $1.60, then the same 100 euros of profit earned by the U.S. corporation in Europe converted to a stupendous $160 in profit when stated in dollars. This explains why the Fed has been so keen to ...
Hal's insight:

It's all about currency wars folks. Click over for the rest of Smith's piece and charts.

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Lear Capital: The Leaky Life Jacket or Gold? | Lear Capital Blog

Lear Capital: The Leaky Life Jacket or Gold? | Lear Capital Blog | Gold and What Moves it. | Scoop.it

David Engstrom writes:

 

The unpredictable, unthinkable but undeniable, has come to pass.  After $6 trillion of additional national debt and trillions more in Fed stimulus, the economy shrunk for the first time in 3 years.  So, has money printing worked or not?  The money printers will answer with a resounding, “Yes!”  Had it not been for the trillions of dollars created out of thin air and injected into every arm of the economy, the economy would have disintegrated long ago.  It was the money printing that saved us from losing all of our wealth.

 

Yup!  That was a close one!  How close?  By some accounts, we were just minutes away from economic Armageddon.  For most, that’s a difficult concept to grasp.  It’s easy to understand how highly leveraged investors, did lose or could have lost everything.  But what about the average person who owns some life insurance,  keeps money in a money market, has a few CDs, some savings an annuity and a pension.  What about that person?  It seems the only risk there, is varying rates of return.

 

But think about it.  Every cent of your paper wealth is invested somewhere by someone in some thing. Go ahead.  Go down the list.  Do you think the financial institution you gave your money to can provide you a rate of return without putting your money at risk?  Even the balance in your checking account is at risk.  If you think a bank, any bank, could cash everyone out of their savings and checking, on demand, you are ill-informed.  The only way your cash is safe in a bank is if it is in a safety deposit box.  Even then, cash rots, as inflation gradually eats away its value.

 

Put in that perspective, maybe the money printers are right – money printing saved us.  God help us if that’s true.  If we were really that close to economic Armageddon, guess what?  We’re ...

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This Is About To Rock The Financial World

This Is About To Rock The Financial World | Gold and What Moves it. | Scoop.it

Eric King:  “Kevin, I know you’ve been communicating with many of the sovereign wealth funds overseas.  What are you hearing from them?”

 

Sprott Inc. President Bambrough:  “The burning question that I always have, I’m amazed at their ongoing willingness to continue to accumulate, and hold, such large amounts of US denominated bonds.  It’s been my view that they are basically playing a Ponzi scheme.

 

I’ve had that confirmed when I’ve had long discussions with different sovereign wealth funds and different government agencies around the world.  They’ve been willing to play this game, but more and more now, as their domestic economies have grown and the US portion of their exports becomes smaller, and with the amount of T-Bills that they have (already) accumulated, I believe they’ve reached the boiling point where they are really going to be unwilling to grow their reserves (of US Treasuries).

 

Just the process of not growing their reserves is going to be very disruptive.  If they are not willing to accumulate more T-Bills, this is going to force the trade deficit closed.  I think that is really going to rock the financial world at some point in the near future.

Hal's insight:

click over for the rest of the King World News. I've been wondering about this for some time mysefl, musing that once this begins to pick up steam around the globe that the fear will break out in DC. Pretty much because the emperor will be shown to have no clothes.

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John Hathaway - 2 Key Charts, Gold, Fed & The Big Picture

John Hathaway - 2 Key Charts, Gold, Fed & The Big Picture | Gold and What Moves it. | Scoop.it

January 10 (King World News) - The bull market in gold remains intact.  The metal rose approximately 7.14% in 2012 in U.S. dollar terms and has increased in each of the last 12 years.  Negative real interest rates incentivize capital to move into gold.  

 

It is difficult to imagine a world of positive real interest rates, absent a significant shift in monetary and fiscal policy in the Western democracies.  Gold and gold shares historically have been positively correlated.  

 

However, during the past few years, gold mining stocks have underperformed the metal due a host of issues that we have discussed at length, including in our article A Golden Mulligan.  Although the article was published a few years ago, the issues afflicting gold mining stocks mentioned then still hold true. 

 

Gold mining stock valuations are at the low end of the historical range since the introduction of the gold ETF (GLD) in 2004, or roughly 10% (basis XAU/spot bullion.)  Significant rallies in gold mining shares have occurred in the past few years from this compressed valuation base. 

 

We see evidence of fundamental change within the gold mining industry, which ...

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click over for the full piece and the charts.

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The Reasoning Behind Basel Three Liquidity Requirement Delays « Jim Sinclair's Mineset

My Dear Friends,


The entire reason for the agreed delay of the Basel Three liquidity requirements is the Western financial system’s balance sheets. They are cartoons because of FASB blessing of debatable values for paper assets such as OTC derivatives with absolutely no market relationship.

 

Put succinctly, the Western world financial system simply does not have the ability in terms of real liquidity to meet Basel Three requirements. That is the entire story. The tomes written on this should be but one line – bankrupts cannot meet liquidity requirement now or in two years from now.

 

Add this to the news that a derivative dealer out of Citi has been proposed as Secretary of the US Treasury and my conclusion is that in truth, "Father forgive them because they (our esteemed leaders) really do not know what they have gone and done."

 

Respectfully, 
Jim

Hal's insight:

Heed Jim Sinclair.

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