When the phantom wealth evaporates and risk assets go bidless, cash will once again be king, for the simple reason there will be so little of it.
Occasionally it's a good idea to step away from the daily grind to consider the larger issues we all face--for example, the future of the money we earn and the bits we invest in something we hope holds or increases its value.
At present, cash is trash: cash earns almost no yield, and in some countries it now earns a negative interest rate, meaning it costs you to park your cash in a bank.
Even cash equivalents such as one-year Treasury bonds pay almost nothing.
Those who avoided debt and risky assets since 2009 have seen their cash lose value when adjusted for inflation, while those who borrowed to the hilt and bought risk-on assets such as stocks, junk bonds and high-end housing have skimmed monumental gains for doing what the central banks incentivized: ...
At present only 15 banks are allowed to import Gold. Chinese consumers had to pay high premiums to ensure fast delivery of the yellow metal. The new move is likely to bring down premium on Gold. More competition can be expected which may lead to the dip in premiums.
These are seen as gold positive long term by julian Phillips in his latest analysis of the gold and silver markets and the geopolitical factors impacting them
New York closed yesterday at $1,193.70 up $3.10. Asia held it at $1,192 before London opened, where it held that level up until the “LBMA Gold price” setting. It was set at $1,192.55 down $0.65 which was the euro equivalent of €1,085.57, down €1.18. Ahead of New York’s opening, gold was trading in London at $1,194.40 and in the euro at €1,087.55.
The silver price closed at $17.00 down 6 cents. Ahead of New York’s opening it was trading again at $17.00.
A syndicate of UK firms led by Swindon, UK-based Tetronics has announced construction of gigantic plasma arc facility to recycle unwanted and used electronics appliances and devices. UK to build $1.5 million plasma facility to recover precious metals from e-scrap
A solar eclipse, a super moon, the FTSE 100 breaching 7,000 and the US Federal Reserve speaking in tongues - truly some kind of financial apocalypse must be nigh. Well, maybe. We are certainly living in strange times. An unprecedented monetary experiment is coming to a staggered end and no one knows the potential repercussions - a plague of frogs cannot be entirely ruled out. For the time being, the markets remain sanguine, expecting, for example, a gentle increase in the Bank of England’s main interest rate to just 1.5pc by the end of the decade. And, who knows, maybe the markets are right.
Julian Phillips’ take on the current gold and silver markets and geopolitical effects impacting on them
There was a large sale of gold from the SPDR gold ETF on Friday of 5.373 tonnes but there were no sales or purchases of gold into or from the Gold Trust on Friday. The holdings of the SPDR gold ETF are at 744.401 tonnes and at 164.71 tonnes in the Gold Trust. This size sale would ordinarily have hurt the gold price in New York, but it didn’t, as you can see. This confirms underlying strength. The dollar weakened with the dollar index falling to 98.22 after its high of over 100. The euro recovered to $1.08 in Asia, slipped back to $1.0772 ahead of London’s opening then rose to $1.0887.
China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan. These banks do business at the behest of the old Bretton Woods order. The AIIB will dance to China and Russia's tune instead. The geopolitical importance was immediately evident from the US's negative reaction to the UK's announcement this week that it would join the AIIB. And very shortly afterwards France, Germany and Italy also defied the US and announced they might join. In the Pacific region, one of America's closest allies, Australia, says she is considering joining too along with New Zealand. The list of US allies seeking to join is growing. From a geopolitical point of view China and Russia have completely outmanoeuvred the US, splitting both NATO and America's Pacific alliances right down the middle.
Latest thoughts from Frank Holmes, CEO and chief investment officer of U.S. Global Investors – www.usfunds.com
Following the recent Federal Open Market Committee (FOMC) meeting, Federal Reserve Chair Janet Yellen made it clear (again) that interest rates would not be raised until inflation gains more steam. With current inflation rates negative for the first time since 2009, and with the U.S. dollar index at an 11-year high, we can probably expect near-record-low interest rates for some time longer.
Debt saturation and debt fatigue = diminishing returns on central bank tricks.
Does anyone else have the feeling that things are not just unraveling, but that the unraveling is gathering speed?
Though quantifying this perception is more interpretative than statistical, I think we can look at the ongoing debt crisis in Greece as an example of this acceleration of events.
The Greek debt crisis began in 2011 and reached a peak in 2012. The crisis was quelled by new Eurozone/IMF loans to Greece, and European Central Bank chief Mario Draghi’s famous “whatever it takes speech” in late July, 2012.
The Greek debt crisis quickly went from “boil” to “simmer,” where it stayed for almost two-and-a-half years. But no one with any knowledge of the gravity and precariousness of the situation expects the latest “extend and pretend” deal to patch everything together for another two years. Current deals are more likely to last a matter of months, not years.
The ICE Benchmark Administration now shows that JP Morgan Chase has become the seventh Direct Participant in setting the twice daily LBMA Gold Price benchmarks – a selection which will be indeed inflame those gold price manipulation believers who reckon that JP Morgan and Goldman Sachs are behind almost any irregularity in global financial markets.
If any selection could be seen as inflaming the gold price manipulation believers, it would be the addition of JP Morgan as one of the new participants in the LBMA Gold Price benchmarking process. And guess what? ICE Benchmarking Administration (IBA), which runs the new benchmarking process, confirms that indeed JP Morgan has joined the Direct Participants in the new benchmarking process – not by any announcement, but just by the inclusion today of JP Morgan on its website as being among the members of the panel which now sets the twice daily London benchmark gold price to replace the old Gold Fix.
Richard Russell: "Gold, gold, you are making me old. Today could be the day gold closes above resistance at 1200. The anti-gold propaganda voiced to the American people by the Fed has been long lasting and ingrained.
"He Who Owns The Gold Makes The Rules"
On other subject, China is forming a bank to rebuild and refinance the world. China is sick of the US led IMF and World Bank and is slowly moving towards the point where it will own the world’s next reserve currency.
March 26 (Silver Seek) — Has the tide begun to turn for the precious metals, notably silver and gold? In our view the turn began last year and if pressed to pinpoint one event, it would be following the failure of the Swiss referendum when the SNB de-pegged the franc from the euro. The Swiss National Bank was frustrated with the continued depreciation of the Euro. This had as much to do with sentiment as it did with the SNB clearing seeing the Euro might be going the way of the Rentenmark.
Around this timeframe, investors received a flurry of news regarding worldwide demand for both silver and gold. This news continues to pore in, that multiple factions that are unsure of the longevity of the U.S. dollar continue to buy precious metals. For example, net silver imports into India in November, set an all-time monthly record. This would be followed by a record setting year of net silver imports, amounting to 7,063 tons.
As for gold, a recent publication by Koos Jansen put’s SGE gold withdrawals at a whopping 505 tons year to date. Koos goes onto discuss that netting out mine supply and scrap/recycling, 378 tons of gold were imported. This is meaningful because China is the largest gold producer so having imported 378 tons in just 10 weeks is speaks loudly of the Chinese view about gold. To put in simpler terms, Shanghai Gold Exchange (SGE) withdrawals are on pace to reach 600 tons in the first quarter, importing 450 tons. ...
When the ratio is falling as it is now, both silver and gold usually go up.
The gold price added to recent gains on Tuesday, finding support from a slump in the dollar following dovish comments from the US Federal Reserve and a diminishing likelihood of an early rate increase.
At $1,192.70 an ounce by late afternoon in New York gold investors can boast of a nearly 4% or more than $40 gain over the past week fortnight. ...
A month-old, and very hard hitting, article by Tyler Durden of Zero Hedge, has new relevance given the make-up of the initial six direct participants in the LBMA Gold Price benchmarking system as all of them have been reported as being under investigation by the U.S. Department of Justice for possible gold price rigging.
We make no apologies for re-examining a month-old article from Zero Hedge given the recent selection of the six banks now involved in the new London gold benchmarking process. Never one to mince his words, Tyler Durden of ZeroHedge really climbed into whether the gold market is rigged, and if so (he reckoned it is beyond doubt that it is), who is doing the rigging. The answer: virtually everyone with the financial clout to get involved.
Click through for the rest. But does anyone actually think anything will come of it? More a dog and pony show to me.
Gold prices ticked higher against the Dollar following last week's 2.2% rally in London trade Monday, but slipped against the Euro as the US currency fell towards 2-week lows on the FX market. Gold Prices 'Still Cheap' vs Falling Dollar, ETFs Shrink Again, 'Seasonal Demand' Seen in India
As the chart below shows, there very dramatic, and very glaring discrepancy between what BofA started experiencing one year ago (when we first noted it) when it comes to loan creation, and what the Fed represents every Friday in its weekly H.8 statement, has never been greater!
Handles are starting feel like they are about to break.
What a difference a few days can make as the gold market sees renewed optimism, ending the week solidly positive on the back of a weaker U.S. dollar and lower U.S. treasury yields. Gold Could Push To $1,200 Next Week If U.S. Dollar Remains Weak – Analysts
March 21 – (King World News) – The Fed removed the word “patient” from its statement made following the FOMC meeting that concluded on Wednesday. But, taking out that one word proved to be mostly irrelevant. The removal of the patient language was more than offset by the Fed’s lowering of its GDP growth estimates and its projection for when and how high it will raise rates based on its previously incorrect assessments of inflation and growth.
Ms. Yellen said in the FOMC press conference that removing “patient” did not mean she would become impatient with raising rates. It is clear that the dollar's strength and the cascading economic data reported since the start of 2015 caused the Fed to push out its timing for its first rate hike and the overall level for which it will finally reach equilibrium….
Financial writer and analyst Bix Weir predicts, “When we have our next crash, and it is coming, I believe it will be here this year, and that’s my final conclusion. I am looking around September, but I believe it has already started. When it does come, people will have a different mindset because they have learned so much. It won’t take too many people to stand in front of an ATM machine and not get their money to be really angry at these people who have rigged our markets and basically stolen our country over the last hundred years.”
Weir, who just released a book titled “Silver, Gold, Bitcoin . . . and God,” goes on to say, “People talk about the government taking us over, and they are going to have the police strong arm us. That’s only as long as the system is up and running. When the system fails, and it’s obvious that these people have screwed up the world, the police are not going to knock on doors taking houses. They, more or less, will not even be working because who is going to be paying them?
Asia’s financial system liberalization and its population’s growing wealth are two key factors expected to boost demand for gold and push the price of the key commodity over US$2,400 an ounce by 2030, a report published Wednesday claims.
Julian Phillips comments on the gold and silver markets on a day on which the new LBMA Gold Price benchmark came into play – first set at $1171.75 this morning in London
New York closed yesterday at $1,170.30 barely changed on yesterday’s close. Asia has held it there too before London opened. Today is an historic day again because it sees the start of the new Fixing process. It does not have the Chinese banks as participants, which could prove a mistake. But they may be added later. This morning the first ever “LBMA gold price” was set at $1,171.75. Ahead of New York’s opening, gold was trading in London at $1,172.50 and in the euro at €1,094.57.
The silver price closed at $16.13 up 7 cents. Ahead of New York’s opening it was trading at $16.20. Its trading range is narrowing pointing to another strong move shortly, either way.
Renowned economist Laurence Kotlikoff recently testified at the U.S. Senate about the runaway U.S. budget. How bad is it? Kotlikoff says, “I told them the real (2014) deficit was $5 trillion, not the $500 billion or $300 billion or whatever it was announced to be this year. Almost all the liabilities of the government are being kept off the books by bogus accounting. . . . The government is 58% underfinanced . . . . Social Security is 33% underfinanced . . . . So, the entire government enterprise is in worse fiscal shape than Social Security is, but they are both in terrible shape.” So, how much is America on the hook for in the future? Kotlikoff contends, “If you take all the expenditures that the government is expected to make, as projected by the Congressional Budget Office (CBO), all the spending on defense, repairing the roads, paying for the Supreme Court Justices’ salaries, Social Security, Medicare, Medicaid, welfare, everything and take all those expenditures into the future . . . and compare that to all the taxes that are projected to come in, and the difference is $210 trillion. That’s the fiscal gap. That’s our true debt.”
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