"Everything you need to know about gold"
GOLD LEAVES SILVER BEHIND
Complicated and convoluted technical analysis, inflamed fundamentals, never-ending last chance warnings and all the supposed evidence to the contrary – there is nothing that justifies the ultra-bullishness of silver stackers and investors. We might say “gold leaves silver behind, waiting, and in the dust.
COST OF PRODUCING GOLD
Ever wonder how much it costs to produce an ounce of gold? Most of us tend to focus on the market price for gold since that is what we hear referenced on a daily basis.
That makes sense. However, investors and owners of gold mining stocks have valid reasons to pay more attention to production costs of gold in addition to the market price. After all, you have to get the gold out of the ground first, before it can be refined and sold.
NEW HIGHS FOR GOLD?
All of the talk about new highs in the gold price seem to be wishful thinking unless one is focused on only nominal prices. Below is a chart of monthly average closing prices for physical gold since the summer of 2020…
DID THE FED CAUSE THE 2008 RECESSION?
A review of the history regarding Fed interest rate policy yields information that says “yes”.
On June 30, 2004, the FOMC began to tighten policy by increasing the Fed Funds target rate to 1¼%. By June 2006, two years later, the target rate was at 6 1/4%. It remained at that level for the next year – well into 2007.
IS BITCOIN STILL THE NEXT BIG THING?
Remember when Bitcoin and other cryptocurrencies were the “next big thing”? For most investors, it was only because the prices were going up in radical fashion.
The anticipation of hitting it big coupled with FOMO (fear of missing out) overcame fundamental analysis and common sense. Aside from the techno geniuses who created them, and maybe a few savvy ‘miners’, who else could explain the process?
SILVER IS A BARGAIN
Silver fever is rising. Calls for $100 silver (see $100 Silver Has Come And Gone) and higher echo loudly. With its price close to $25 oz. after being as low as $18 oz. last fall, now would be a good time to review how well silver has responded to past predictions of impending higher prices.
FED’S GAME PLAN IS ALWAYS CHANGING
“Inflation is likely to take longer to return to our price stability goal than previously expected” Fed Chair Jerome H. Powell March 16, 2022
BANKING CRISIS = LIQUIDITY CRISIS = DEMAND FOR MONEY
Events this past week are indicative of what could be a more formidable problem for the Fed, investors, and the economy. Before we talk about that, lets first emphasize the key point made in my article SVB, MMT, TNT.
What happened at Silicon Valley Bank, Signature Bank, and now, Credit Suisse and First Republic banks, are not individual issues. All of them are the obvious signs of banking system fragility due to the practice of fractional-reserve banking. Therefore…
What has been termed a banking crisis is actually a liquidity crisis; and the loss of liquidity translates to a DEMAND for money.
SVB (Silicon Valley Bank)
The Silicon Valley Bank fiasco is an in-your-face example of the systemic risk inherent in fractional-reserve banking. (see Elephant In The Room)
You cannot reliably expect to avoid indefinitely the results of reckless behavior. That should be apparent to all of us after 2008 – 2011. Sooner or later, the full onboard cost will be paid.
END OF INFLATION IS INEVITABLE
At first, the statement above may seem counterintuitive; especially in light of the ongoing increase in the cost of goods and services experienced recently that seem to have no limit.
Besides, inflation never stops. All governments, with the help of central banks, intentionally inflate and destroy their own currencies. There are changes in momentum, of course, but an ever-expanding supply of money and credit leads to continual loss in purchasing power of the currency (i.e., U.S. dollar).