The A.S.S principle: It's All Speculators StupidMarch 09, 2010 Greek Prime Minister Papandreou delivered an important speech today in the US flanked by Hillary Clinton. To paraphrase the 20-page speech: it is still just the speculators' fault, who are now "threatening not only Greece, but the entire global economy". Hmmm. Lets call it the A.S.S. principle. It's All Speculators Stupid! Everybody should buy some gold every monthMarch 03, 2010 According to Marc Faber, the editor and publisher of The Gloom, Boom & Doom Report, everybody should buy some gold every month “forever” Hyperinflation parallels: Weimar Germany vs US/UKFebruary 28, 2010 SocGen's Dylan Grice provides a gripping account of Germany's hyperinflationary episode, in which he charts the extended parallels between not just the precursor economy that lead to a 16,579,999% inflation in 1923 Weimar Germany, and modern day developed (and highly leveraged) countries, but between Germany's then central banker Rudolf von Havenstein, and the Greenspan-Bernanke duo. And while we know how "der Geld Marschall's" Weimar experiment ended, the future before the U.S., as a result of the Maestro's (both Senior and Junior) almost identical policy response is still open-ended. As the future of America is now exclusively in the hands of insidious economists, the following insight from Grice into the utility of economic models and decision-making should be sufficient to dash the hopes of any optimist for a favorable outcome. End the monetary experiment, retun to the gold standardFebruary 23, 2010 The absurdity of using the US dollar as the worlds reserve currency should not underestimated. The removal of gold in favour of the US dollar in 1971 as the check and balance of the worlds financial system has enabled the US (and the world) to create money out of thin air for nearly 40 years. The consequences were clear. As long as currencies remain relative to one another all governments were empowered to spend with reckless abandon, without need for old fashioned ideas such as raising taxes or balancing budgets. Developing nations loved this cycle because the increased deficit spending and access to consumer credit created demand for their export products. Developed nations liked it because they avoided the nasty boom bust cycles had access to cheap imported goods. Consumers loved it because stock prices moved higher and the humble home became a money tree with an ATM attached. Of course the US benefited most. For the selfless act of becoming the worlds monetary system anchor the US was able to build the greatest empire in history. With access to money without limit the US has funded global military activities and created dominant multinational corporations in food, health, banking, energy and all across the industrial complex. American consumers have also greatly benefited by achieving standards of living well beyond what would have ever been possible pre 1971. Bigger houses, more cars, better holidays, larger stock portfolios and of course bigger wastelines. COMEX option expiry madnessFebruary 18, 2010 Those of you who have followed this blog for a few years will know how important options expiry is for gold and silver. The story is always the same, gold and silver prices begin to decline about 5 trading days before options expiry and magically close just below a key options strike price. All of those poor speculators who thought they had major in the money call options are fleeced by the big trading houses such as JP Morgan, Goldman Sachs and HSBC. February 23rd is March options expiry and todays pullback signals the start of options madness week. A Greek crisis is coming to AmericaFebruary 13, 2010 It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate. Don't be fooled by the sideshow in Greece, the real issues lie within US, UK and JapanFebruary 12, 2010 All FIAT paper money is now in its terminal phase. Don't be fooled by the sideshow in Greece, the real issues lie within US, UK and Japan. Gold and silver will soon demonstrate why they are they are the only true money. That is a unit of account, medium of exchange and most importantly a store of value. The printing presses are about to move into hyperdrive, globally. Too much US Dollar bullishnessFebruary 11, 2010 Beware the crowded long US Dollar trade. Commodities, including gold and silver have taken a hit recently as the world turns bullish on the US dollar. I am not sure that bullish should be the word as it is really that the dollar temporarily looks less worse than the ill fated EURO. All FIAT currencies are terminal. Relativities between currencies is only short term noise. They will alll return to their intrinsic value of zero, some quicker than others. Gold is the only currency that cannot be printed without limit. It will take more and more paper currency to buy gold, not becuase gold is going up but because paper is becoming worth less. The music is about to stop. Do you have a seat?January 26, 2010 The precious metals market is now akin to a game of musical chairs with perhaps only one chair for every 20 players. It might be prudent to follow in the footsteps of Germany, Hong Kong, China and Greenlight Capital and get your chair BEFORE the music stops. Gold is default insurance for paper moneyJanuary 26, 2010 One year on from the height of the financial crisis it is obvious the integrity of the global banking system is still compromised. Despite flooding the system with liquidity, bail outs, zero interest rates and accounting rule magic tricks the problems have not gone away. In fact they are now much worse. Hyperinflation in historyJanuary 18, 2010 All FIAT currency is eventually worth its intrinsic value....exactly zero! The average life of a paper currency is less than 40 years. This article highlights recent episodes of hyperinflation and some of the social and political consequences. Inflation: mainstream vs Austrian viewJanuary 18, 2010 When will the masses wake up that inflation is a deliberate policy of governments and central bankers. Understanding the Austrian view of inflation and its cause and effect will be critical to investment strategy in the next decade. Hyperinflation 101January 15, 2010 Hyperinflation is purely a monetary phenomenon. Governments and Central banks print too much money. The new supply of money depreciates the value of all existing money. Rising prices are a symptom of inflation not the cause of inflation. Gold is better value today at $1100 than it was at $300January 07, 2010 Global investing guru Marc Faber believes that gold is less expensive today at $1100 per ounce than it was below $300 in 2001 due to an explosion of foreign exchange reserves in the world, zero interest rates, the huge debt overhang, and the expectation of further money printing The psychology of buying silverJanuary 02, 2010 Accumulate on dips. Thin market volume and downside volatility in Gold and especially Silver, presents a wonderful accumulation opportunity for precious metal investors Don't be fooled by deflation a tsunami of inflation is comingDecember 28, 2009 Today marks the 5 year anniversary of one of the wost natural disasters in human history. As I reflect on the warnings and terrible consequences of the Asian disaster, I can’t help but draw parallels to an inflation tsunami headed our way. The warning signs have been there all along: loose monetary policy, asset bubbles, competitive currency devaluations, bail outs, excessive debt and leverage, lax or even corrupt regulatory oversight, excessive government and manipulated asset markets. If only paper was as good as goldDecember 27, 2009 This article by Peter Schiff provides a nice overview of how we arrived at todays experimental backed by thin air monetary system. It also provides some insight into the likely consequences of close to 100 years of disasterous monetary policy. Consider not how high gold might go, instead think how low can paper money go. What Peter Schiff has written here is critically important to understanding wealth preservation in a new decade. Also Australian investors should not assume this is an American problem. Since 1971 all paper currencies are essentially derivatives of the US dollar. Despite being the 3rd largest gold producer in the world, Australia owns virtually no gold. In our wisdom we sold it all at the market bottom in 1999 and replaced it with those wonderful interest bearing US dollars which have subsequently lost more than 60% of their purchasing versus gold in just 10 years. Gold the environmental choice?December 25, 2009 Gold the environmental choice? Surely not. Well as with many issues it depends on your frame of reference. Firstly, before I receive thousands of angry emails I want to acknowledge the undeniable fact that gold mining is a dirty industry: it can displace communities, contaminates drinking water, hurt workers, and destroys pristine environments. Not exactly a great foundation for gold as an environmental champion I know, but hear me out. Understanding the essential value of goldDecember 24, 2009 Gold is not a trading-item, gold represents a very specific asset class and an historic store of wealth. The essential value of gold does not change over the years, the value of everything else fluctuates AROUND GOLD. Gold is the basic unit of wealth as it has been for 5000 years. Why China encourages its citizens to buy gold and silverDecember 05, 2009 The Chinese are well aware that the foreign currencies with which their exports are paid, are only fiat money payments and that the Reserves to which they give rise are nothing more than shaky investments whose value is at risk – 60 to 70% of China’s Reserves are dollars which are being savagely debased and the euro is not in much better condition. |
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