I've been somewhat surprised at the relatively low level of resistance to the proclivity of governments and the banking system to move rapidly toward a cashless society.
When looking through comment sections of blogs and news sites, one of the major responses to the concerns is people from the U.S. will allude to the words on our currency that says it's a "legal tender," as if that will stop the forward motion of what has become a global initiative in many nations.
Immediately below is a list of the reasons I have been able to find as to why we should move towards a cashless society. They are from a variety of nations, and not all are given as reasons from any one country.
Stated reasons:
Fight terrorism
Tax evasion
Black market
Costs of currency production
Improve credit rating of country (Uruguay)
Encourages underground economy
Money laundering
Reductions in armed robbery
Counterfeiting
read more ...
Showing posts with label Gold Investing. Show all posts
Showing posts with label Gold Investing. Show all posts
Monday, May 11, 2015
Friday, November 5, 2010
Peter Schiff Is Right on Gold, QE
Peter Schiff has been mocked by the clueless pundits at CNBC and other financial media outlets for his consistent opposition to the Federal Reserve inflating and the need to acquire gold for investors to protect themselves from the Fed's disastrous policies, but he's getting the last laugh.
Although the stated reason by the Federal Reserve to is to jump-start the economy, Schiff believes the motives of the Fed aren't as altruistic as that.
Schiff states, “The true purpose of QE2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.”
If that is true, it would make sense as to why the Fed and Bernanke are introducing another round of quantitative easing when their last one failed miserably.
Of course there is absolutely nothing else the Fed can do, as printing money is pretty much their major economic weapon, along with controlling interest rats.
Schiff concludes: “If the truth were known, a real panic would ensue. So, the Fed pretends buying treasuries is simply part of its master plan to boost the economy, even though, in reality, it is simply acting as the buyer of last resort."
For years Schiff has said the Fed doesn't have the will or nerve to raise interest rates, as it would result in the collapse of the stock market, the bond market, and burst the real estate bubble, even though the latter already happened in spite of low interest rates.
He also said bankruptcies would ensure in a big way, even though, again, it happened in a low interest rate environment.
Schiff's conclusion is that easy money policies of the Fed hide the true weakness of the economy, and that has proven correct as the trillion plus in spending has resulted in little effect, and once removed, showed the economy to be in the anemic state it really is.
Although the stated reason by the Federal Reserve to is to jump-start the economy, Schiff believes the motives of the Fed aren't as altruistic as that.
Schiff states, “The true purpose of QE2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.”
If that is true, it would make sense as to why the Fed and Bernanke are introducing another round of quantitative easing when their last one failed miserably.
Of course there is absolutely nothing else the Fed can do, as printing money is pretty much their major economic weapon, along with controlling interest rats.
Schiff concludes: “If the truth were known, a real panic would ensue. So, the Fed pretends buying treasuries is simply part of its master plan to boost the economy, even though, in reality, it is simply acting as the buyer of last resort."
For years Schiff has said the Fed doesn't have the will or nerve to raise interest rates, as it would result in the collapse of the stock market, the bond market, and burst the real estate bubble, even though the latter already happened in spite of low interest rates.
He also said bankruptcies would ensure in a big way, even though, again, it happened in a low interest rate environment.
Schiff's conclusion is that easy money policies of the Fed hide the true weakness of the economy, and that has proven correct as the trillion plus in spending has resulted in little effect, and once removed, showed the economy to be in the anemic state it really is.
Friday, October 15, 2010
Peter Schiff On Gold, Dollar, Inflation, Fed and China
Peter Schiff is known for his justified criticism of the Federal Reserve and the disastrous policies they've enacted which is the destroying the economic life of the United States and its citizens, and ultimately affects nations around the world.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Wednesday, September 22, 2010
Should We Worry About Gold Now?
A growing number of investors, individual and institutional, have started to get worried about whether or not gold is in bubble territory.
There is nothing to justify those fears, as until the reasons for such strong support for gold are over, gold has every reason to continue on its upward climb, and it will.
That's not to say there won't be any corrections, as there is sure to be one on the horizon sometime soon, probably after a season of time which gold incrementally continues to move up to a point where profits are taken and some type of temporary, supposed positive economic news from somewhere helps the selling along.
But there is nothing in the short term, or mid-term for that matter, that suggests gold is too high, and will come plummeting down to earth.
Even if there was a gold correction stronger than expected, that does nothing to change the underlying fundamentals, and it'll again resume its climb until those things change.
Some of those fundamentals include inflation, deficits, weak U.S. dollar, weak global economy and the sovereign debt crisis in Europe. And even if there is deflation, it would be another reason to own gold.
All these solid reasons are making some investors nervous, as it sounds like too solid of a case, and too predictable.
It's hard to see anything short term which could stop the rise of gold, and that is also worrying to a growing number of people.
It seems the fundamentals supporting gold prices are strong, and there is nothing that could perceivably happen that will change that in any surprising way.
Now over the long term, whenever interest rates are increased again, along with a real economic recovery, that would be a time to seriously look at selling gold.
A secondary, but easy to identify possibility, would be if the regular man on the street starts to irrationally invest in gold without knowing why, other than his friend or neighbor is going it.
In that case, even the reason for high gold prices could be outrun by their exuberance, and bring gold to very high levels which couldn't even in our economic environment be justified.
But again, that won't matter in the long run, as until the fundamentals are no longer in place, gold prices will rise, even if there are significant peaks and valleys along the way.
There is nothing to justify those fears, as until the reasons for such strong support for gold are over, gold has every reason to continue on its upward climb, and it will.
That's not to say there won't be any corrections, as there is sure to be one on the horizon sometime soon, probably after a season of time which gold incrementally continues to move up to a point where profits are taken and some type of temporary, supposed positive economic news from somewhere helps the selling along.
But there is nothing in the short term, or mid-term for that matter, that suggests gold is too high, and will come plummeting down to earth.
Even if there was a gold correction stronger than expected, that does nothing to change the underlying fundamentals, and it'll again resume its climb until those things change.
Some of those fundamentals include inflation, deficits, weak U.S. dollar, weak global economy and the sovereign debt crisis in Europe. And even if there is deflation, it would be another reason to own gold.
All these solid reasons are making some investors nervous, as it sounds like too solid of a case, and too predictable.
It's hard to see anything short term which could stop the rise of gold, and that is also worrying to a growing number of people.
It seems the fundamentals supporting gold prices are strong, and there is nothing that could perceivably happen that will change that in any surprising way.
Now over the long term, whenever interest rates are increased again, along with a real economic recovery, that would be a time to seriously look at selling gold.
A secondary, but easy to identify possibility, would be if the regular man on the street starts to irrationally invest in gold without knowing why, other than his friend or neighbor is going it.
In that case, even the reason for high gold prices could be outrun by their exuberance, and bring gold to very high levels which couldn't even in our economic environment be justified.
But again, that won't matter in the long run, as until the fundamentals are no longer in place, gold prices will rise, even if there are significant peaks and valleys along the way.
Monday, August 23, 2010
Why Goldman's (NYSE:GS) "Conflicting Gold Advice" is Irrelevant
Some people obsessed with Goldman Sachs (NYSE:GS) have nothing better to do than attempt to dig up dirt to portray them in a negative light, and in some cases that is well-deserved, but the recent faux scandal, where they're accused of offering conflicting gold advice to clients based on their wealth is an exercise in ignorance concerning the overall money-management sector and how it has always operated.
Of course clients are offered differing advice in general, as everyone has completely different risk and comfort levels, as well as goals.
The gist of the story is Goldman advised wealthy clients they the possibility of deflation makes it better to get rid of gold, while telling people with less net worth that the price of gold could rise as high as $1,300 over the next six months.
The highly unlikely deflationary scenario was a reference to the Federal Reserve standing back, along with other central banks, and staying on the sidelines in the current economic conditions.
Goldman said, "We see gold as being vulnerable to central bank inactivity in the face of rising deflation risk."
What is going on here, is high-net-worth clients are always more concerned about preservation of principle than those with lower net worth.
So any threat or possibility of losing money is part of the strategy of managing their accounts. Others aren't so worried about that, as they're willing to take more risk in order to build their net worth, as it's not to the level of their goals.
With that in mind, this isn't contradictory whatsoever, but laying out possibilities to two completely different mindsets and goals of people and institutions with different financial strategies.
Strategies of preservation deal with protection, while strategies of growth deal with more risk. It's not exactly rocket science, and only the clueless and those outside the financial management industry could make the silly, unwarranted and ignorant statements made in this case.
Goldman may deserve castigation in a number of areas, but this is one which reveals the writer has no idea of how the industry works, and makes him and his media outlet look stupid.
Of course clients are offered differing advice in general, as everyone has completely different risk and comfort levels, as well as goals.
The gist of the story is Goldman advised wealthy clients they the possibility of deflation makes it better to get rid of gold, while telling people with less net worth that the price of gold could rise as high as $1,300 over the next six months.
The highly unlikely deflationary scenario was a reference to the Federal Reserve standing back, along with other central banks, and staying on the sidelines in the current economic conditions.
Goldman said, "We see gold as being vulnerable to central bank inactivity in the face of rising deflation risk."
What is going on here, is high-net-worth clients are always more concerned about preservation of principle than those with lower net worth.
So any threat or possibility of losing money is part of the strategy of managing their accounts. Others aren't so worried about that, as they're willing to take more risk in order to build their net worth, as it's not to the level of their goals.
With that in mind, this isn't contradictory whatsoever, but laying out possibilities to two completely different mindsets and goals of people and institutions with different financial strategies.
Strategies of preservation deal with protection, while strategies of growth deal with more risk. It's not exactly rocket science, and only the clueless and those outside the financial management industry could make the silly, unwarranted and ignorant statements made in this case.
Goldman may deserve castigation in a number of areas, but this is one which reveals the writer has no idea of how the industry works, and makes him and his media outlet look stupid.
Thursday, August 12, 2010
Investors Flee to Gold For Safety as Economy is in Shambles
Very few people seem willing to admit the U.S. and global economy is under extreme pressure. Investors know it though, and fled to gold as a safe haven today, pushing gold futures up to their highest level in eight weeks.
The words "unexpected" continue to come from economic writers concerning jobless claims rising, Europe not being as strong as asserted, and China's production falling.
Even today economic writers use terms like the "recovery is slowing," as if there ever really was an economic recovery.
Jobless claims climbed to a five-month high today, while industrial production in Europe and China both fell. In the case of China, it plummeted to an 11-month low.
This doesn't include the horrid sovereign debt crisis of Europe, which is being ignored or covered up by the mainstream press, who seem to believe a few turns of the knob over and everything was magically turned around.
Governments and the press seem to be attempting to hold up the global economy by wishful thinking and Disney-like hopes and dreams, rather than the harsh realities that should be brought out into the open so it can be understood and prepared for by people.
The fact that the Federal Reserve "changed it mind" concerning dropping its monetary stimulus points to the real condition of the economy. They committed to doing whatever it takes to deal with the weak economic conditions recently, again revealing there are extreme concerns about what is really happening.
Gold investors should rejoice, as the Treasury and Federal Reserve can't help themselves. They're going to continue to print money and buy U.S. debt in efforts to artificially prop up the economy.
What don't they get about it not working in the recent past? How much they going spend? Two trillion this time?
Either way, they are going to do the very predictable, and we can count on that. That means gold prices are going to take off again, as they have today.
The words "unexpected" continue to come from economic writers concerning jobless claims rising, Europe not being as strong as asserted, and China's production falling.
Even today economic writers use terms like the "recovery is slowing," as if there ever really was an economic recovery.
Jobless claims climbed to a five-month high today, while industrial production in Europe and China both fell. In the case of China, it plummeted to an 11-month low.
This doesn't include the horrid sovereign debt crisis of Europe, which is being ignored or covered up by the mainstream press, who seem to believe a few turns of the knob over and everything was magically turned around.
Governments and the press seem to be attempting to hold up the global economy by wishful thinking and Disney-like hopes and dreams, rather than the harsh realities that should be brought out into the open so it can be understood and prepared for by people.
The fact that the Federal Reserve "changed it mind" concerning dropping its monetary stimulus points to the real condition of the economy. They committed to doing whatever it takes to deal with the weak economic conditions recently, again revealing there are extreme concerns about what is really happening.
Gold investors should rejoice, as the Treasury and Federal Reserve can't help themselves. They're going to continue to print money and buy U.S. debt in efforts to artificially prop up the economy.
What don't they get about it not working in the recent past? How much they going spend? Two trillion this time?
Either way, they are going to do the very predictable, and we can count on that. That means gold prices are going to take off again, as they have today.
Friday, May 14, 2010
European Run on Physical Gold
Europeans have been caught by surprise over the announcement that not only is the EU going to bail out Greece, but they put just under $1 trillion on the table to redistribute to the other socialist countries in the region.
Warnings of the consequences to the euro have went unheeded, and now Europeans are not only pouring money into gold, they're also ordering gold bullion at a pace of demand that can't be met, and already some gold dealers have shut down orders in response to the demand, as they simply can't supply it.
The actions of the EU leaders over the last month just over Greece is part of the problem, as it was highly contested as to whether or not they were going to provide them with a bailout. That seemed to imply it was questionable as to whether or not that was going to happen. And now seemingly out of nowhere the announcement comes they're ready to bail out every country that needs help, or at least says they need help.
This is why so many rushed to gold, as they were caught off guard with now generous the EU was going to be with their money, and how that would drive down the value of the euro, and eventually bring it to an end.
Something stinks in how this has happened, and to abruptly turn around and not only bail out Greece, but offer the type of funds that were offers, seems to imply this may have all been orchestrated by politicians and central bankers over a period of time, as it doesn't really make much sense in how it burst upon the scene the way it did, as if there was this huge, inner battle going on, and suddenly everything is okay, and they'll add an additional $800 billion to the pot for good measure.
If there had really been that much resistance, it's doubtful this is how it would have played out.
It must be understood what is happening here. This really isn't a bail out of the nations, this is a bail out of the banks that bought the bonds of these nations.
What this means is these bankers were supporting these socialist, welfare, entitlement societies for many years, which were created by the politicians to garner favor in order to remain in office, and funded by the outrageous acquisition of debt that had no way of being repaid as it was played out. Now it has come home to roost and is being exposed as the fraud it is.
Next step? American and other westerners are going to be called on again to bail out banks, but this time banks which helped created socialist, entitlement cultures where people believe they deserve to be taken care of for nothing, and unions run by these socialists demanding extraordinary pensions and perks with very little in the way of productivity to pay for them. This is why socialism needs to be completely and totally abandoned, along with Keynesianism, which provides the theoretical and intellectual justification for this type of spending.
For Europeans and other western countries, they're again being asked, no forced, by their governments and central banks to bail out these losers, robbing our children and grandchildren of their inheritance so these others can live the easy live at our expense.
The Federal Reserve is already trying to cover its rear-end by saying they aren't going to provide funds so these socialists can live the good life, rather they're bailing out the banks, who I guess, are still too big to fail. What a nuthouse.
Europeans are starting to understand the threat, and since Germans have had this experience in the past, I'm sure they're leading the way in trying to buy physical gold in order to hold onto their wealth, which is slipping away with the failure of the euro.
Warnings of the consequences to the euro have went unheeded, and now Europeans are not only pouring money into gold, they're also ordering gold bullion at a pace of demand that can't be met, and already some gold dealers have shut down orders in response to the demand, as they simply can't supply it.
The actions of the EU leaders over the last month just over Greece is part of the problem, as it was highly contested as to whether or not they were going to provide them with a bailout. That seemed to imply it was questionable as to whether or not that was going to happen. And now seemingly out of nowhere the announcement comes they're ready to bail out every country that needs help, or at least says they need help.
This is why so many rushed to gold, as they were caught off guard with now generous the EU was going to be with their money, and how that would drive down the value of the euro, and eventually bring it to an end.
Something stinks in how this has happened, and to abruptly turn around and not only bail out Greece, but offer the type of funds that were offers, seems to imply this may have all been orchestrated by politicians and central bankers over a period of time, as it doesn't really make much sense in how it burst upon the scene the way it did, as if there was this huge, inner battle going on, and suddenly everything is okay, and they'll add an additional $800 billion to the pot for good measure.
If there had really been that much resistance, it's doubtful this is how it would have played out.
It must be understood what is happening here. This really isn't a bail out of the nations, this is a bail out of the banks that bought the bonds of these nations.
What this means is these bankers were supporting these socialist, welfare, entitlement societies for many years, which were created by the politicians to garner favor in order to remain in office, and funded by the outrageous acquisition of debt that had no way of being repaid as it was played out. Now it has come home to roost and is being exposed as the fraud it is.
Next step? American and other westerners are going to be called on again to bail out banks, but this time banks which helped created socialist, entitlement cultures where people believe they deserve to be taken care of for nothing, and unions run by these socialists demanding extraordinary pensions and perks with very little in the way of productivity to pay for them. This is why socialism needs to be completely and totally abandoned, along with Keynesianism, which provides the theoretical and intellectual justification for this type of spending.
For Europeans and other western countries, they're again being asked, no forced, by their governments and central banks to bail out these losers, robbing our children and grandchildren of their inheritance so these others can live the easy live at our expense.
The Federal Reserve is already trying to cover its rear-end by saying they aren't going to provide funds so these socialists can live the good life, rather they're bailing out the banks, who I guess, are still too big to fail. What a nuthouse.
Europeans are starting to understand the threat, and since Germans have had this experience in the past, I'm sure they're leading the way in trying to buy physical gold in order to hold onto their wealth, which is slipping away with the failure of the euro.
Tuesday, April 20, 2010
George Soros' Gold Bubble Stupidity
Earlier in the year George Soros made the ridiculous comment that gold was in a bubble, but not only that, it was "the ultimate bubble," said Soros.
Of course he's been proven to be completely wrong, as the fading former investing star obviously was playing investors in an attempt to influence gold on his behalf, as he had invested millions in gold companies not too long before he made the statement.
It's quite possible he had shorted the position and was hoping investors would flee gold and prices would plunge. He could make a ton of money that way, or he may have been trying to get people to sell their positions in gold mining companies and then buy up a bunch of shares at depressed prices.
Either way, it didn't work, and gold continues to have support, and there's little in the near future that will change that, and in the long term it seems that will be the case as well.
Of course when interest rates are ultimately raised, we'll see at that time how far gold has decoupled from the U.S. dollar and if it's standing on its own in a way it hasn't for a long time.
There are so many variables at this time, it's impossible to see very clearly, even in the short term, and with the U.S. government, and other governments around the world, interfering and influencing markets in major ways, it's hard to tell what they may do to upset things, as it's usually something stupid with the normal unintended consequences.
Even if there is a major gold correction, I don't think we'll be seeing it fall far below $1,000 an ounce any time soon, and even if it does, the economic climate we live in and the inevitable economic challenges we're going to continue to face in the near future, gold will remain one of the few safe places people will run to, and that isn't even bringing inflation into the picture, which is happening in a number of sectors already, such as iron ore and copper prices.
Of course he's been proven to be completely wrong, as the fading former investing star obviously was playing investors in an attempt to influence gold on his behalf, as he had invested millions in gold companies not too long before he made the statement.
It's quite possible he had shorted the position and was hoping investors would flee gold and prices would plunge. He could make a ton of money that way, or he may have been trying to get people to sell their positions in gold mining companies and then buy up a bunch of shares at depressed prices.
Either way, it didn't work, and gold continues to have support, and there's little in the near future that will change that, and in the long term it seems that will be the case as well.
Of course when interest rates are ultimately raised, we'll see at that time how far gold has decoupled from the U.S. dollar and if it's standing on its own in a way it hasn't for a long time.
There are so many variables at this time, it's impossible to see very clearly, even in the short term, and with the U.S. government, and other governments around the world, interfering and influencing markets in major ways, it's hard to tell what they may do to upset things, as it's usually something stupid with the normal unintended consequences.
Even if there is a major gold correction, I don't think we'll be seeing it fall far below $1,000 an ounce any time soon, and even if it does, the economic climate we live in and the inevitable economic challenges we're going to continue to face in the near future, gold will remain one of the few safe places people will run to, and that isn't even bringing inflation into the picture, which is happening in a number of sectors already, such as iron ore and copper prices.
Saturday, April 10, 2010
China and Future of Gold
There are so many interesting things that China brings to the table reference to gold in the years ahead, it's hard to know where to start.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
Wednesday, April 7, 2010
Jim Rogers: Commodity Bull Market Continues
Jim Rogers on Commodities
Jim Rogers reiterated again recently that the commodity bull market will continue on its run, as demand for raw materials continues to rise and supply fights a losing battle to keep up with it.
Rogers added that gold investors should hold on to their positions in the metal, as he maintains it'll continue to rise on through the next decade.
While he acknowledges China and India have huge markets that will continue to grow, they alone cannot carry the rest of the world on its economic shoulders, and other countries will need to grow if we're to eventually experience a sustainable recovery ... and I would add, whenever that recovery actually begins.
Gold soared to a 3-month high Wednesday, as ongoing concerns over the Greece debacle continue, and liquidity seems to be the problem again, as consumers and others pull their money out, with banks doing their repo thing with Greek banks.
Although the dollar and yen will continue to be thought of in terms of places of safety, gold is becoming more and more to be thought of as an alternative currency which is far safer than any other in the world.
The U.S. dollar isn't really thought of as safe, just the lesser of evils between all paper currencies.
Jim Rogers on Commodities
Jim Rogers reiterated again recently that the commodity bull market will continue on its run, as demand for raw materials continues to rise and supply fights a losing battle to keep up with it.
Rogers added that gold investors should hold on to their positions in the metal, as he maintains it'll continue to rise on through the next decade.
While he acknowledges China and India have huge markets that will continue to grow, they alone cannot carry the rest of the world on its economic shoulders, and other countries will need to grow if we're to eventually experience a sustainable recovery ... and I would add, whenever that recovery actually begins.
Gold soared to a 3-month high Wednesday, as ongoing concerns over the Greece debacle continue, and liquidity seems to be the problem again, as consumers and others pull their money out, with banks doing their repo thing with Greek banks.
Although the dollar and yen will continue to be thought of in terms of places of safety, gold is becoming more and more to be thought of as an alternative currency which is far safer than any other in the world.
The U.S. dollar isn't really thought of as safe, just the lesser of evils between all paper currencies.
Jim Rogers on Commodities
Saturday, March 27, 2010
Jim Rogers: No Currency Trustworthy
Jim Rogers on Currencies
In an interview on CNBC, Jim Rogers was asked about the lesser of evils concerning paper currencies, and he responded at this time there is no currency that stands in a strong position.
Rogers added he could foresee a time in the not-too-distant future where we may have to hold all of our money in real assets.
"All governments around the world are debasing their currencies," said Rogers, and even when looking for the best among the worst, Rogers, there isn't one that is "attractive on a fundamental basis."
As far as what he would hold at this time, Rogers said he's looking for cheap raw materials, and natural gas and and silver fit that bill nicely at this time.
On the other hand, speculators have entered the gold and oil markets, and Rogers said with the price of gold and oil going up so quickly, it's better to let them "consolidate and rest" for now.
In an interview on CNBC, Jim Rogers was asked about the lesser of evils concerning paper currencies, and he responded at this time there is no currency that stands in a strong position.
Rogers added he could foresee a time in the not-too-distant future where we may have to hold all of our money in real assets.
"All governments around the world are debasing their currencies," said Rogers, and even when looking for the best among the worst, Rogers, there isn't one that is "attractive on a fundamental basis."
As far as what he would hold at this time, Rogers said he's looking for cheap raw materials, and natural gas and and silver fit that bill nicely at this time.
On the other hand, speculators have entered the gold and oil markets, and Rogers said with the price of gold and oil going up so quickly, it's better to let them "consolidate and rest" for now.
Friday, March 19, 2010
Gold Reserve Currency Says Citigroup (NYSE:C) Analyst
Gold as reserve currency
In an extraordinary statement, Citigroup (NYSE:C) analyst Dennis Gartman said the major reason for the unique behavior of gold in regard to its usual inverse relationship with the U.S. dollar has changed, is people are now considering gold to be a real reserve currency, equal to the U.S. dollar.
Of course for some that follow these things closely, they've believed that for years, but to see this in the mainstream media is a major story, to say the least.
So when the U.S. dollar goes up and gold goes up with it, that's a sign that many investors now consider gold as much of a reserve currency as the dollar is. And Gartman added this isn't just a fad, but a "trend [that] shall continue months, if not years, into the future."
Gold as reserve currency
In an extraordinary statement, Citigroup (NYSE:C) analyst Dennis Gartman said the major reason for the unique behavior of gold in regard to its usual inverse relationship with the U.S. dollar has changed, is people are now considering gold to be a real reserve currency, equal to the U.S. dollar.
Of course for some that follow these things closely, they've believed that for years, but to see this in the mainstream media is a major story, to say the least.
So when the U.S. dollar goes up and gold goes up with it, that's a sign that many investors now consider gold as much of a reserve currency as the dollar is. And Gartman added this isn't just a fad, but a "trend [that] shall continue months, if not years, into the future."
Gold as reserve currency
Wednesday, March 17, 2010
Gold Responding to Interest Rates
One thing this super recession has taught people, and if nothing else, it could be a great silver lining to some of the pain people have gone through, and that is, interest rates exist for a certain purpose, and they aren't always safe, and there are other factors to consider when deciding whether to invest in something with interest rates, or consider another option.
Just look at municipal bonds as an example. Who would have used the term risk and municipal bonds in the same sentence three years ago? Now though, there are a growing number of financial advisers urging their clients to get out of them, as they are highly toxic at this time, and could be for years, depending on a lot of factors; like the financial health of the city issuing them and the project the money is being raised for.
So many people think when the Federal Reserve finally raises interest rates, people will flock out of gold and other commodities and get the higher returns offered through those types of investments. Most believe that won't happen until the latter part of 2010 at the earliest. The Federal Reserve held things right where they're at today concerning interest rates, and gold responded in a nice upward movement.
Anyway, what are the potential consequences of interest rates going up for holders of gold? The real question will be how much more does the average investor on the street understand the fundamentals of gold as it relates to monetary policy and its effects on the economy. If they at least have a general understanding of that, there won't be much of a move out of gold, although the majority of holders continue to be seasoned or institutional investors. If the average person starts investing in gold, that will be a major factor in the overall impact on gold.
Another key element is the same question, but being directed toward institutional investors. Are they any more in the know than the average, individual investor? In many, if not most cases, they aren't. They are Keynesian's, even if they don't understand what that means, and they will operate based on certain assumptions that probably are no longer viable in the post-recession world, once there is a post-recession that is.
Inflation is going to be held off much longer. Money will eventually be released into the markets, and the pent-up demand is extraordinary, and we could see amazing surges in commodity prices as a result. Look at iron ore this year based on demand, and as far as globally, we're far from what could be called a recovery in any meaningful way.
Another big part of the puzzle is the bond market. Once that collapses, which it almost assuredly will, even more investors will pour money into commodities, especially gold. At that time all bets are off as to how high gold prices will go.
Once that happens, we will then finally enter into a possible gold bubble, but that's not here, and won't be until these other events line up.
Gold won't be going away any time soon as a solid investment and place of safety. I think we're really just getting started, and while exact timing and events could take some interesting turns and twists, we will ultimately arrive, and those positioned in gold will benefit greatly while protecting their wealth and spending power.
Just look at municipal bonds as an example. Who would have used the term risk and municipal bonds in the same sentence three years ago? Now though, there are a growing number of financial advisers urging their clients to get out of them, as they are highly toxic at this time, and could be for years, depending on a lot of factors; like the financial health of the city issuing them and the project the money is being raised for.
So many people think when the Federal Reserve finally raises interest rates, people will flock out of gold and other commodities and get the higher returns offered through those types of investments. Most believe that won't happen until the latter part of 2010 at the earliest. The Federal Reserve held things right where they're at today concerning interest rates, and gold responded in a nice upward movement.
Anyway, what are the potential consequences of interest rates going up for holders of gold? The real question will be how much more does the average investor on the street understand the fundamentals of gold as it relates to monetary policy and its effects on the economy. If they at least have a general understanding of that, there won't be much of a move out of gold, although the majority of holders continue to be seasoned or institutional investors. If the average person starts investing in gold, that will be a major factor in the overall impact on gold.
Another key element is the same question, but being directed toward institutional investors. Are they any more in the know than the average, individual investor? In many, if not most cases, they aren't. They are Keynesian's, even if they don't understand what that means, and they will operate based on certain assumptions that probably are no longer viable in the post-recession world, once there is a post-recession that is.
Inflation is going to be held off much longer. Money will eventually be released into the markets, and the pent-up demand is extraordinary, and we could see amazing surges in commodity prices as a result. Look at iron ore this year based on demand, and as far as globally, we're far from what could be called a recovery in any meaningful way.
Another big part of the puzzle is the bond market. Once that collapses, which it almost assuredly will, even more investors will pour money into commodities, especially gold. At that time all bets are off as to how high gold prices will go.
Once that happens, we will then finally enter into a possible gold bubble, but that's not here, and won't be until these other events line up.
Gold won't be going away any time soon as a solid investment and place of safety. I think we're really just getting started, and while exact timing and events could take some interesting turns and twists, we will ultimately arrive, and those positioned in gold will benefit greatly while protecting their wealth and spending power.
Thursday, March 11, 2010
NovaGold Resources (AMEX:NG) Hold Any Gold?
NovaGold Resources Gold Reserves
It's hard to tell what it is that's driving up the share price of NovaGold Resources (AMEX:NG), as there seems to be nothing to indicate the company has much if anything in reserves, as noted by the difference in classification between them and Barrick Gold (NYSE:ABX) over their jointly owned Donlin Creek property.
NovaGold claims 60 percent of the resources at Donlin are reserves, while Barrick lists the property as having no reserves. Someone's wrong there.
NovaGold has had a scandalous past, and taking into consideration they haven't had positive revenue and continue in negative cash flow from 2004 to 2009, you have to wonder what's going on there and if it's a shell company with no assets.
NovaGold Resources Gold Reserves
It's hard to tell what it is that's driving up the share price of NovaGold Resources (AMEX:NG), as there seems to be nothing to indicate the company has much if anything in reserves, as noted by the difference in classification between them and Barrick Gold (NYSE:ABX) over their jointly owned Donlin Creek property.
NovaGold claims 60 percent of the resources at Donlin are reserves, while Barrick lists the property as having no reserves. Someone's wrong there.
NovaGold has had a scandalous past, and taking into consideration they haven't had positive revenue and continue in negative cash flow from 2004 to 2009, you have to wonder what's going on there and if it's a shell company with no assets.
NovaGold Resources Gold Reserves
Tuesday, March 9, 2010
Newmont Mining (NYSE:NEM), IAMGOLD (NYSE:IAG) Sell Silidor Mine
IAMGOLD and Newmont Mining sell Silidor Project
Newmont Mining (NYSE:NEM) and IAMGOLD (NYSE:IAG) sold their stakes in the Silidor property to Visible Gold Mines.
The acquisition will be through the issuing of common shares to the two companies by Visible Gold Mines, with Newmont receiving 55 percent and IAMGOLD 45 percent.
The entire stake is being sold, as Visible Gold Mines takes over the entire property. Visible is a natural resource mining company.
Newmont Canada Corporation, the actual company selling its stake, is a subsidiary of Newmont Mining.
IAMGOLD and Newmont Mining sell Silidor Project
Newmont Mining (NYSE:NEM) and IAMGOLD (NYSE:IAG) sold their stakes in the Silidor property to Visible Gold Mines.
The acquisition will be through the issuing of common shares to the two companies by Visible Gold Mines, with Newmont receiving 55 percent and IAMGOLD 45 percent.
The entire stake is being sold, as Visible Gold Mines takes over the entire property. Visible is a natural resource mining company.
Newmont Canada Corporation, the actual company selling its stake, is a subsidiary of Newmont Mining.
IAMGOLD and Newmont Mining sell Silidor Project
NovaGold Resources Inc. (TSE:NG) Completes Stock Offering
NovaGold Resources Common Shares Offering
NovaGold Resources Inc. (TSE:NG) announced it has completed and closed it common share stock offering, raising $100 million ($99,999,999) from the $5.50 a share they received for them.
Paulson & Co. bought the shares in a non-brokered deal. The financing will officially close on March 11.
NovaGold said they'll use the capital primarily for development and exploration of several of their properties, Ambler property, Donlin Creek, Galore Creek and Rock Creek.
Some of the funds could be used for future acquisitions by the company as well.
NovaGold Resources Common Shares Offering
NovaGold Resources Inc. (TSE:NG) announced it has completed and closed it common share stock offering, raising $100 million ($99,999,999) from the $5.50 a share they received for them.
Paulson & Co. bought the shares in a non-brokered deal. The financing will officially close on March 11.
NovaGold said they'll use the capital primarily for development and exploration of several of their properties, Ambler property, Donlin Creek, Galore Creek and Rock Creek.
Some of the funds could be used for future acquisitions by the company as well.
NovaGold Resources Common Shares Offering
Barrick Gold (TSE:ABX) and Kinross Gold (TSE:K) Down
Barrick Gold and Kinross Gold Share Price
Barrick Gold (TSE:ABX) and Kinross Gold (TSE:K) were down some yesterday, as lower gold prices put downward pressure on the gold production companies.
Much of this was related to those moving out of their hedging positions in relationship to the very volatile currency market, along with some technical selling which took place.
Barrick Gold and Kinross Gold Share Price
Barrick Gold (TSE:ABX) and Kinross Gold (TSE:K) were down some yesterday, as lower gold prices put downward pressure on the gold production companies.
Much of this was related to those moving out of their hedging positions in relationship to the very volatile currency market, along with some technical selling which took place.
Barrick Gold and Kinross Gold Share Price
Sunday, March 7, 2010
Goldcorp's (NYSE:GG) Competitive Advantage
Goldcorp's Competitive Advantage
Goldcorp (NYSE:GG) has positioned itself strongly at the best time, as the gold production company has lower costs and the right properties to continue performing strongly in the years ahead for gold investors.
At a time when most gold companies are struggling to create value, Goldcorp stands out, as over the last 15 years the company has generated close to 20 percent in returns for shareholders during that time.
Goldcorp just about has everything going for it. Scale with their numerous gold mining properties, cost control because of some low cost regions they have properites, and overall operating in stable regions where the likelihood of turmoil or geopolitical problems aren't likely to happen.
The best thing about Goldcorp is it's only costing them about $350 an ounce to produce the gold, at a time when it's probably gold won't be dropping below $1,000 an ounce for years to come.
Couple that with ongoing economic woes around the world, and Goldcorp is poised to bring investors solid returns for many years into the future.
Goldcorp's Competitive Advantage
Goldcorp (NYSE:GG) has positioned itself strongly at the best time, as the gold production company has lower costs and the right properties to continue performing strongly in the years ahead for gold investors.
At a time when most gold companies are struggling to create value, Goldcorp stands out, as over the last 15 years the company has generated close to 20 percent in returns for shareholders during that time.
Goldcorp just about has everything going for it. Scale with their numerous gold mining properties, cost control because of some low cost regions they have properites, and overall operating in stable regions where the likelihood of turmoil or geopolitical problems aren't likely to happen.
The best thing about Goldcorp is it's only costing them about $350 an ounce to produce the gold, at a time when it's probably gold won't be dropping below $1,000 an ounce for years to come.
Couple that with ongoing economic woes around the world, and Goldcorp is poised to bring investors solid returns for many years into the future.
Goldcorp's Competitive Advantage
Friday, March 5, 2010
New Gold (AMEX:NGD): Gold Production Increasing
New Gold Production
Gold production from New Gold (AMEX:NGD) has been revised upwardly from between 330,000 to 360,000 ounces for 2010. That is in contrast to 310,773 ounces in 2009.
New Gold has operational mines in the U.S. and Australia, and projects are being developed in Canada and Chile.
In their recent quarterly report, New Gold said gold production in the fourth quarter reahced 111,672 ounces, an increase of 41 percent from the year before at the same time.
Revenue exploded for the company in fourth quarter, surging to $131.8 million, a big increase from the $36.7 million. Much of that was attributed to higher gold prices and increased production at their Mesquite mine.
New Gold Production
Gold production from New Gold (AMEX:NGD) has been revised upwardly from between 330,000 to 360,000 ounces for 2010. That is in contrast to 310,773 ounces in 2009.
New Gold has operational mines in the U.S. and Australia, and projects are being developed in Canada and Chile.
In their recent quarterly report, New Gold said gold production in the fourth quarter reahced 111,672 ounces, an increase of 41 percent from the year before at the same time.
Revenue exploded for the company in fourth quarter, surging to $131.8 million, a big increase from the $36.7 million. Much of that was attributed to higher gold prices and increased production at their Mesquite mine.
New Gold Production
Thursday, March 4, 2010
Yamana Gold (NYSE:AUY) Misses Profits On Executive Bonuses
Yamana Gold Executive Bonuses
Yamana Gold (NYSE:AUY) said it missed its profit numbers in the fourth quarter because of Executive bonuses, which drove up the selling, general and administrative costs of the company for the quarter.
Revenue was also down in the quarter, coming in at around $400 million when analysts had been looking for over $420 million.
More concerning for Yamana is the gold it claims is under the earth they dig didn't increase in 2009, giving the obvious impression they miscalculated the amount of provable reserves there in the first place.
Still, from an operational standpoint that's encouraging in that they were on top of costs in general because they were able to pay out bonuses while only missing the profit target per share by a penny.
Yamana Gold Executive Bonuses
Yamana Gold (NYSE:AUY) said it missed its profit numbers in the fourth quarter because of Executive bonuses, which drove up the selling, general and administrative costs of the company for the quarter.
Revenue was also down in the quarter, coming in at around $400 million when analysts had been looking for over $420 million.
More concerning for Yamana is the gold it claims is under the earth they dig didn't increase in 2009, giving the obvious impression they miscalculated the amount of provable reserves there in the first place.
Still, from an operational standpoint that's encouraging in that they were on top of costs in general because they were able to pay out bonuses while only missing the profit target per share by a penny.
Yamana Gold Executive Bonuses
Subscribe to:
Comments (Atom)