Sunday, February 26, 2017

Gold Performance During Inflation and Deflation

Many observers acknowledge that gold is a good hedge against inflation, as currencies are debased by central bankers. What they don't understand is that gold performs even better with deflation, which accompanies monetary disorder. They don't realize that gold is a safe haven asset when confidence in other asset classes dissipate, as they eventually do with government over-indebtedness and reckless currency and credit creation.

In other words, in a time of crisis, gold isn't just a commodity. It's a sound currency which will maintain its value, unlike fiat currency backed by nothing tangible.

Look at the chart of equities (S&P 500) vs. gold. Since 2001, the global economy has experienced two deflationary (or at least disinflationary) wipe outs. Inflation has been dormant--at least according to official CPI statistics (which is another boondoggle). Gold should have underperformed in that type of environment, according to conventional wisdom. Yet, during this time period of deflation, stocks have doubled, while gold has surged 3 1/2 fold. So the answer to the question: "when should one hold gold: to hedge against inflation or deflation?", is simple. It's both.

Jay Sekulow: Obama Should Be "Held Accountable" For The "Soft Coup" Against Trump

Saturday, February 25, 2017

Alan Greenspan in Testimony with Ron Paul about Gold

Ron Paul: Gold essentially has been demonetized and it’s proceeding—even the Swiss now are talking about selling half of their gold. And if this is the case, would you advise that we should seriously think now about getting rid of our gold, getting rid of it out of the IMF, get rid of it out of our Treasury?  Why hold it if we demonetized it? Milton Friedman would agree with this, and he’s pretty good at monetary policy.

Alan Greenspan: I agree with virtually everything Milton Friedman usually says. This is one of the few times I don’t.

Ron Paul:Why do we need it?

Alan Greenspan: Well, it’s a very interesting issue. This issue, incidentally, was debated in the United States in 1976, and the conclusion was that we should hold our gold. And the reason is that gold still represents the ultimate form of payment in the world. It’s interesting that Germany in 1944 could buy materials during the war only with gold. Fiat money paper in extremis is accepted by nobody, and gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency.
And that historically has always been the reason why governments hold gold.

The How's and Why's of Gold Manipulation

We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K.  - Eddie George, then Governor of the Bank of England, 1999

Monday, February 20, 2017

The World Now Faces A Devastating Endgame And How “They All Sold At The Absolute Bottom”

If the smartest guys in the room (sovereign finance ministers, central bankers, and prime ministers) are so smart, why are their actions so stupid?  Google Brown's bottom.

Even though the Swiss have a centuries-old tradition with gold, their finance ministers made untimely gold sales.   And the staid Norwegian finance authorities are making mistakes in real-time.  The Saudis?  Their budget deficits are soaring, unleashing social unrest in the House of Saud.

Why is this important?  Because it signals the end of the petrodollar, as the Saudis no longer receive payment in USDollars from China, Russia, Turkey and other oil customers.  That eliminates the demand for USDollars in global trade, thus reducing the dollar's value.

Import prices will rise for ordinary Americans, as the purchasing power of the dollar decreases.  Our standard of living will decline.

Tulsi Gabbard vs. ‘Regime Change’ Wars

Wednesday, February 15, 2017

World’s 2nd largest stockpile of gold leaves the United States

Anybody who has a bank account, a brokerage account, or insurance policy should read this article and understand what counterparty risk is. The Bundesbank, Germany's central bank does. So does UTIMCO, the University of Texas endowment fund, which manages over $37 billion in assets.

Coming Soon to a City Near You: The U.S. Military’s Plan to Take Over America

Tuesday, February 7, 2017

‘Trump makes sense to a grocery store owner

As usual, Taleb is spot on.   His contrarian track record of making accurate predictions is remarkable.  His Ivy League pedigree is impressive--even if he is derisive toward his elitist peers.  He has a foot in the Establishment door (as a trader and academic), but he is decidedly and independently anti-Establishment.

Another anti-globalist example he could have used is the elimination of mom-and-pop shops due to the parabolic growth of hegemonic WalMart stores.