Guest post by Gold SIlver Worlds.
GoldSilverWorlds had the honour to do a Q&A with Dimitri Speck who is the author of the best-selling book “Geheime Goldpolitik”. He is chief financial engineer of Staedel Hanseatic and runsSeasonalCharts.com, offering a wealth of intraday trend charts. He is also one of the people who increased the pressure to create transparency in the German’s gold holdings.
A lot has been written lately about the gold price manipulation and the real amounts of gold reserves of the central banks. There are several views on the same topic, the most rational one being purely statistical. As it’s easy to get caught by emotions, we have chosen in this article to let the figures and the charts tell the story.
As a seasoned mathematician, Dimitri Speck is focused on what the charts are revealing. He looks both into intraday charts as well as seasonal charts, the former being one specific variant of the latter. Based on years of chart analysis, he could clearly pinpoint the manipulation in the gold market. In his book, he explores the subject of gold holdings of the central banks, in particular the Bundesbank. Interestingly, there is a link between all the different topics we just mentioned, which was the topic of our Q&A.
Guest post by Gold Silver Worlds.
Marc Faber is one of the very successful investors on earth. He recently explained his view on the monetary policies of the developed regions in the world. Obviously he is no fan of the Keynesian way of thinking which is applied by the central banks in the developed regions.
The Keynesian policy considers easy money as a way out of economic recession and deflation. They argue that money creation smoothens out the business cycle. In his presentation, Marc Faber demonstrates that these kind of interventions achieve exactly the opposite: they make the business cycles much more violent, create extreme fluctuations in economic activity and result in far more financial volatility. In his opinion, the essential problem is that the Keynesian way of thinking tries to solve long term structural problems with short term fixes, with an emphasis to create bubbles to help the economy. However, Mr Faber notes that bubbles usually hurt the majority of market participants.
Guest post via Gold Silver Worlds.
It is highly unlikely the Mayan predictions of the end of the world referred to the bankers’ world of credit and debt. Nonetheless, with only one month remaining until December 21, 2012—the end date of the Mayan 5,125 year Mesoamerican calendar—the concomitant end of the bankers’ 300 year ponzi-scheme of credit and debt should not be dismissed as mere coincidence.
The world has entered a paradigm shift of immense proportions; and the collapse of the bankers’ economic world is a part of that shift. The bankers’ credit fueled a 300-year global expansion which transformed the world. The bankers’ credit, however, has now become debt which increasingly cannot be repaid.
Economics is not rocket science although the arcane algorithms used by Wall Street banks to predict capital markets imply that intended conclusion. Modern economics, i.e. capitalism, is merely the current iteration of the supply and demand dynamic distorted by 300 years of credit and debt—a distortion that’s now about to end.
Guest post via Gold Silver Worlds.
A remarkable event has taken place in the gold and silver markets in the past two days. It didn’t go unnoticed to anyone following these markets. The gold and silver mining shares have been sold off hard. The drop was out of proportion and did not reflect the actions in the stock market nor in the metals. The fact that the miners have been leading bullion up since August, raises the question if this marks a structural shift in the direction of the shares and the metals, or if both assets will start moving separately in the coming weeks and months.
This article explains the answers on these questions based on the gold cycle analysis. It is an excerpt from The Financial Tap, a service specialized in cycle research (for more detailed insights, readers are invited to consider a free 15-day trial). In a nuthsell: the author is worried about the mining shares but is quite bullish on the metals.
Majority think they know what money is, but after reading this, they understand they were wrong. Essential reading (including the links). Via Golem XIV.
There is a particular scene in the film “It’s a wonderful life” in which the hero of the story is trying to prevent a run on the Bailey Savings and Loan. In an effort to calm the anxious savers wanting to withdraw their money George Bailey cries out “you’ve got it all wrong, the money’s not here, well your money’s in Joe’s house, that’s right next to yours, and the Kennedy house and Mrs Maitland’s house and a hundred others”.
As films go it is a genuine classic. But unfortunately it has perhaps unwittingly perpetuated a whopping misrepresentation of how banks actually work; a little white lie that the IMF have recently just driven a sledgehammer right through.
Their working paper, titled “The Chicago Plan revisited”, seems to have slipped under the mainstream media attention (and most of ours!) during the summer lull. That is until Ambrose Evans-Pritchard of the Telegraph picked it up a few weeks ago. At the core of the IMF paper is a deep seated analysis of how banks actually function in the economy and their role in the money supply. It is nothing short of revolutionary in that the paper gives full acknowledgement of, and support for, an intellectual movement that has doggedly criticised the very nature of money. Criticism that has so far been completely ignored and dismissed by mainstream economics.
With Gold showing relative strength during this week’s risk off, we would like you to remind the real reasons behind buying Gold. Courtesy SK Options.
Gold serves numerous functions as an investment. Traditional reasons for investing in gold include:
- Investment market declines
- Burgeoning national debt
- Currency failure
- War or other extreme events
- Social unrest
Some would argue these entire phenomenon are related. For instance investment market declines can lead to war which can be followed by inflation which can lead to currency failure – just look to Germany in the 1920s for proof of this (albeit in a mixed order of events).
Basically, gold is protection against various ugly or undesirable societal, political, economic and financial occurrences. That reasoning broadly explains gold’s rise from $650 in 2007 to approximately $1800 today. Gold has risen over the last few years on the back of uncertainty and weakness in major global economies.
But of all the reasons given to invest in gold, the most common traditionally and the one we hear most often is protection against inflation. Inflation is often a consequence of increases in the supply of money that don’t coincide with an increase in the output of goods and services – basically, higher prices as a result of excess money competing for a fixed number of goods.
Guest post by Jessie.
“You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.”
I have closed out the ‘short stocks’ portion of my stocks-bullion hedged trade today. There may be more downside ahead for equities, but it looks to be a bit overdone, at least in the short term. I also took some of the bullion positions down as I had taken it to a maximum on that big decline shortly before the US Presidential election. Now it is at a more comfortable ‘running’ level. As always, this is with regard to my ‘trading positions’ as I do not touch or even look at my long term holdings.
Gold has moved very nicely through the resistance around 1720 and ‘stuck a close’ for today over 1730. We *might* see a test of that resistance at 1720, which is now support below the current price. But if this is a handle in a cup-and-handle formation, then that does not matter, and it is playing out very well. However a clear break above 1800 is key.
The central banks are printing money to rescue the Western banking system. There is an enormous macro event taking place in the global currency as the US dollar reserve currency agreement, in place since World War II, has been changing for at least the past ten or more years, first slowly but soon with increasing speed.
Very few people understand what is happening, even amongst economists. Those who stand against this sort of change will find themselves swimming against a rather powerful secular tide. There is nothing cyclical about this financial crisis or the economic ills that have accompanied it in the conventional economic sense, unless one wishes to start looking at very long, generational cycles of human wickedness and folly.
Guest post by Gold Silver Worlds.
Michael MacDonald and Christopher Whitestone did a superb Q&A with GoldSilverWorlds. In their book “The Silver Bomb” (available on Amazon.com), they wrote about their views on the world and the markets. They have summarized it and enriched with recent facts and figures.
The markets are completely bought and paid for, corrupt, and manipulated … “a farce”. We are in a corruption bubble, the largest corruption bubble the world has ever seen in modern history and perhaps in all history. This is the first time that the world has been united within instant communication, instant information, instant deposit or receipt of funds into any bank account or financial institution. Michael says: “I believe that we are already a one world order. I actually think we are already there, electronically certainly. I also think that a lot of the debates, wars and conflicts are manufactured, very similar to the presidential debates which are also manufactured. I believe we live in a one-world system, which financially is already completely manipulated.”
We don’t live in a free market. We haven’t lived in a free market for decades, if not since 1913. We have the most powerful agency in the world, the Federal Reserve, setting the interest rates and the value of the world’s reserve currency. Everything that stems from that is built upon deceit and fraud. This doesn’t bode well for the entire financial system as a whole and right now, we are seeing the ramifications of that deceit.
We are in the lengthening of this financial market topping. A lot of things are happening that point to any one of several large enough dominos falling over which is going to have a splash and pullover effect. Within three years we are going to see this farce imploding. Michael thinks that we will have something completely different and unrecognizable to what we currently have.
Guest post via Gold Silver Worlds.
During an interesting interview on PracticalBull.com, David Morgan made the statement that the silver supply squeeze of 1980 could look like a warm-up compared to what could be coming in the not too distant future. The bull run in the 70’s took the price of silver from less than $5 to almost $50 dollar. Of course, there is nothing shocking to this statement for long term followers of the precious metals markets or for people that understand today’s monetary catastrophe that is unfolding. But still it’s worth one’s time to look at the analysis of a respected person like David Morgan which leads him to such a conclusion. His analysis is based on today’s demand / supply structure and the dynamics in the silver market.
On the demand side, the driving forces are the industrial and investment demand. David Morgan points to the fact that 54% of the silver market comes from industrial demand. That’s huge and raises the question what would happen in case of an economic recession or depression. In David’s view, the demand for silver will fall but not significantly like most people think. The key driver behind that thinking is the fall will be offset by a faster rise in the demand for wealth preservation. Moreover, as 70% of silver today is obtained via base metal miners (through copper, lead, zinc mining and related base metals), decreasing economic activity will lead to less demand for base metals and hence less supply. Even under very bad economic conditions most miners will continue their activities (even if they are operating with losses) although less mining would be the result, because it’s cheaper to operate with losses compared to closing a mine. Important insights from the expt!
In case of economic contraction, the run to assets that are free of counterparty risk (like gold and silver) will outpace the decline in industrial demand.
When it comes to sleepless nights, Toimi Soini of Finland originally set the record by using the “toothpicks under the eyelids” method for 11 straight days. In hindsight, Toimi was an amateur. You wouldn’t know it, but the nice people running the Bank of Canada have gone sleepless since 2003 – that’s 3,564 days without sweet dreams. Yet, that’s nothing compared to the very private folks at the Swiss National Bank. These super-secretive bankers have surpassed over 4,660 sleepless nights – despite living in Zzzzzzurich. This, of course brings us to the World record for sleepless nights. At 5,025 nights and counting, the always polite and well dressed chaps over at the Bank of England are reigning champions. Toimi Soini was not a banker and this was his downfall. As for the Canadians, Swiss and British – yes they are all bankers, but not just any bankers. This terrific trio have the displeasure of forever being known as the bankers who sold their gold. The irony of course, is the action of the World’s central bankersthemselves is the reason why gold is destined to remain golden forsometime to come. And with gold sitting near $1700/oz, and with noend to the money printing games, the sleepless nights are destined tocontinue.