A number of people have asked me to expand on how the rapid expansion of money supply leads to an effect the opposite of that intended: a fall in economic activity. This effect starts early in the recovery phase of the credit cycle, and is particularly marked today because of the aggressive rate of monetary inflation. This article takes the reader through the ev... read more
“This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.” — Gold refiner quoted by John Dizard in his Financial Times column this weekend
Note: This post is a follow-up to last weekend’s read more
On the back of dismal data this morning merely compounding the belief that whatever happens, there will be no Taper anytime soon (and record high physical premiums over spot as Indian demand surges), gold prices broke back above $1360 this morning to five-week highs. Of course, that 'rise' was very quickly squelched as stocks POMO'd higher from the US open; but, as Citi's FX technicals group no... read more
Gold gained for the third straight session after factory production in the U.S. rose less than forecast, reviving prospects for an extension of economic stimulus by the Federal Reserve.
Output at factories rose 0.1 percent in September, trailing the 0.3 percent estimate in a Bloomberg survey of economists, figures from the Fed showe... read more
Doing more of what failed spectacularly will not save the day a second time, as the scale required to create yet more phantom collateral and more asset bubbles will collapse the system.
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Low inflation is not good for the economy because very low inflation increases the risks of deflation, which can cause an economy to stagnate. The evidence is that falling and low inflation can be very bad for an economy.
- B.S. Bernanke, Chairman of the Federal Reserve, read more
While the precious metals and mining space posted a strong week of gains, sentiment among experts remains conflicted, with the vast majority of investors expecting further downside pain.
In weekend commentary, technical gold trader Gary Savage posted an interesting read more
In testimony in front of the Senate banking committee in July, Ben Bernanke made an unusual comment; 'nobody really understands gold prices and I don’t pretend to understand them either'. That's a surprising admission, because, as head of the central bank that controls the word's reserve currency, we think Bernanke should understand gold. Because gold, in our view, is a critical barom... read more
Gold analysts are bullish for a second week on speculation that prolonged U.S. stimulus and a weakening dollar will boost demand for the metal as a haven.
Seventeen analysts surveyed by Bloomberg News expect prices to advance next week, nine are bearish and six neutral. The Bloomberg U.S. Dollar Index, a measure against 10 currencie... read more
How many ounces of gold can $1000 buy?
The answer over time is instructive. Here is some knowledge about money.
It is remarkable how few economists really understand this, and what it means, what it implies.
Here is Paul Krugman's opinion on the currency war and the US dollar in a recent piece called ... read more
