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Gold never changes; it’s the world around it that does. Why is it that we see a renewed interest in gold now? And more importantly, should investors buy this precious metal?

Key attributes in a ‘changing world’ that may be relevant to the price of gold are fear and interest rates. Let’s examine these:

Gold & Fear
When referencing ‘fear’ driving the markets, most think of a terrorist attack, political uncertainty or some other crisis that impacts investor sentiment, and sure enough, at times, the price of gold moves higher when this type of fear is observed. While that may be correct, I don’t like an investment case based on such flare-ups of fear, as I see such events as intrinsically temporary in nature. We tend to get used to crises, even a prolonged terror campaign or the Eurozone debt crisis; whateveras the ‘novelty’ of any shock recedes, markets tend to move on.

Having said that, I believe fear is under-appreciated – quite literally, although in a different sense. Fear is the plain English word for risk aversion. When fear is low, investors may embrace “risk assets,” including stocks and junk bonds. A lack of fear suggests volatility is low; as such, investors with a given level of risk tolerance may understandably re-allocate their portfolios so that the overall perceived riskiness of their portfolio stays the same. While retail investors might do this intuitively, professional investors may also do the same, but use fancy terminology, notably that they may target a specific “value at risk,” abbreviated as VaR. Conversely, our analysis shows that when fear comes back to the market – for whatever reason – ‘risk assets’ tend to under-perform as investors reduce their exposure.

Assuming you agree, this doesn’t explain yet why gold is often considered a ‘safe haven’ asset when the price of gold is clearly volatile.

…click on the above link to read the rest of the article…

Currency And The Collapse Of The Roman Empire

February 19, 2016

Currency And The Collapse Of The Roman Empire

At its peak, the Roman Empire held up to 130 million people over a span of 1.5 million square miles.

Rome had conquered much of the known world. The Empire built 50,000 miles of roads, as well as many aqueducts, amphitheatres, and other works that are still in use today.

Our alphabet, calendar, languages, literature, and architecture borrow much from the Romans. Even concepts of Roman justice still stand tall, such as being “innocent until proven guilty”.

So, as Visual Capitalist’s Jeff Desjardins’ asks, how could such a powerful empire collapse?

…click on the above link to read the rest of the article…

Collapse Of The Paper Gold & Silver Market May Be Close At Hand – Steve St. Angelo

February 18, 2016

Collapse Of The Paper Gold & Silver Market May Be Close At Hand – Steve St. Angelo

There is something seriously wrong taking place in the markets today. This is also true in the paper gold and silver markets as well. For a paper precious metals futures market to function properly, there has to be ample supplies of physical metal. However, the ongoing trend of falling precious metal inventories points to big trouble in the paper gold and silver markets.

We must remember, a collapse does not happen overnight, but the endgame does. This can be clearly seen in the collapse of the Roman Monetary System:

As we can see from the chart above, the devaluation of the Roman coin, the Silver Denarius, started slowly about 50 AD. This continued until the silver value of the Denarius plummeted in 241. This had a profound impact on the population of Rome, shown in the chart below:

You will notice the population of Rome peaked at approximately 1.6 million people about 100 AD, started to slowly decline, and fell off a cliff at the end of the 5th century. The population of Rome fell from over one million people to 12,000 in a very short period of time. Thus, the collapse of the Roman Monetary System paralleled the disintegration of Rome itself.

What took place in Ancient Rome, is also taking place in our global modern high-tech world. When Nixon dropped the convertibility of the U.S. Dollar into gold in 1971, a few years later… the gold futures markets started trading. No longer was the world’s reserve currency backed by gold, instead the Dollar was valued against the gold price traded on the futures exchanges.

Number Of Owners Per Ounce Of Registered Gold Goes Exponential

Again, to have a properly functioning futures exchange, there has to be available supply of metal. However, if we look at the long-term trend of Registered Gold inventories at the Comex, something looks painfully wrong here:

…click on the above link to read the rest of the article…

They Broke the Silver Fix

February 10, 2016

THEY BROKE THE SILVER FIX

Editor’s Note: Keith is testifying today before the Arizona Senate Financial Institutions Committee on a gold legal tender bill, which he also helped draft. There is also interest in his gold bonds proposal.

Last Thursday, January 28, there was a flash crash on the price chart for silver. Here is a graph of the price action.

The Price of Silver, Jan 28 (All times GMT)

If you read more about it, you will see that there was an irregularity around the silver fix. At the time, the spot price was around $14.40. The fix was set at $13.58. This is a major deviation.

Many silver bugs are up in arms about how unfair the new silver fix is. That’s nothing new. They were up in arms about the old one. The old one was supposedly manipulated.

One thing is for sure, tactical manipulations can occur. A gold trader in London was found to have pushed the price down in the gold fixing by a few pennies. He had sold a multimillion dollar option, and he wanted it to expire worthless to avoid having to pay. Right after the fix, he bought back the gold he sold, pushing the price back up to where it was. He took a loss on the round trip of the gold, of course, but saved millions on the option which he did not have to pay.

This is not the long-sought proof that nefarious forces are keeping gold from attaining $20,000.

Anyways, because the silver and gold fixes were deemed to be benchmarks by regulatory changes post the LIBOR manipulations, a new process for the gold and silver fixes was implemented. Before we look at what changed, let’s consider why there is a fix price. Couldn’t they just take the price at 12:00 noon?

…click on the above link to read the rest of the article…

Legendary Investor Jim Rogers Warns: “Most People Are Going To Suffer The Next Time Around”

February 8, 2016

Legendary Investor Jim Rogers Warns: “Most People Are Going To Suffer The Next Time Around”

Back in the 1970’s as recession gripped the world for a decade, stocks stagnated and commodities crashed, investor Jim Rogers made a fortune. His understanding of markets, capital flows and timing is legendary.

As crisis struck in late 2008, he did it again, often recommending gold and silver to those looking for wealth preservation strategies – move that would have paid of multi-fold when precious metals hit all time highs in 2011. He warned that the crash would lead to massive job losses, dependence on government bailouts, and unprecedented central bank printing on a global scale.

Now, Rogers says that investors around the world are realizing that the jig is up. Stocks are over bloated and central banks will have little choice but to take action again. But this time, says Rogers in his latest interview with CrushTheStreet.com, there will be no stopping it and people all over the world are going to feel the pain, including in China and the United States.

We’re all going to suffer… I can think of very few places that won’t suffer. But most people are going to suffer the next time around.

(Watch at Youtube)

Central banks will panic. They will do whatever they can to save the markets.

It’s artificial… it won’t work… there comes a time when no matter how much money you have, the market has more money.

…

I don’t know if they’ll even call it QE (Quantitative Easing) in the future… who knows what they’ll call it to disguise it… they’re going to try whatever they can… printing more money or lowering interest rates or buying more assets… but unfortunately, no matter how much P.R. or whitewashing they use, the market knows this is over and we’re not going to play this game anymore.

…click on the above link to read the rest of the article…

Silver Market In Disarray After Benchmark Price Fix Manipulation

January 28, 2016

Silver Market In Disarray After Benchmark Price Fix Manipulation

The LBMA Silver Price – the crucial daily benchmark used by producers and traders around the world to settle silver products and derivatives contracts – was set at $13.58 per ounce.

At the time of the auction, which begins at 12 noon London time, the spot price was at $14.42 per ounce while the futures price on the CME was at $14.415, leaving a number of market participants extremely confused as to what has happened.

“Unfortunately, it is not [a mistake],” Ole Hansen, head of commodity strategy for Saxo Bank, told FastMarkets. “This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.”

The difference between the two was nearly six percent but the benchmark cannot be changed,a person familiar with proceedings told FastMarkets.

Another source also suggested that the continued existence of the fix has been put in jeopardy by the huge discrepancy in today’s price, adding that many producers – who still use the price as their daily reference – may have lost significant amounts of money if any contracts have been settled according to the fix.

“A huge number of contracts are still settled on that price,” another said. “This will no doubt cause significant problems.”

The matter is being investigated internally,FastMarkets understands, so CME has no official comment at this time.

This is how the market reacted to this clear manipulation…

As we have detailed previously, the ‘fix’ or ‘benchmark’, as it is now known, is still the global benchmark reference price used by central banks, miners, refiners, jewellers and the surrounding financial industry to settle silver-based contracts.

As Bulliondesk.com’s Ian Walker reports, the silver market was thrown into disarray on Thursday after the LBMA Silver Price was set 84 cents below the spot and futures price this morning.

…click on the above link to read the rest of the article…

Betting on Deflation May Be a Huge Mistake. Here’s Why…….

January 24, 2016

Betting on Deflation May Be a Huge Mistake. Here’s Why…….

Precious metals investors heading into 2016 worry the dollar will continue marching ahead, right over the top of gold and silver prices. The Fed is telegraphing additional rate hikes throughout the year, and commodity prices – led by crude oil – are falling. There have been tremors in the biggest beneficiary markets of all when it comes to the Fed’s QE largesse – U.S. equities and real estate. And the possibility of a recession is growing, both in the U.S. and around the world.

There are plenty of reasons we might see even lower official inflation numbers and a stronger dollar in 2016. But don’t think for a second that consumer prices or living costs will fall. They haven’t, they aren’t, and they never will in a sustained way – thanks to the Fed’s creation in 1913. This is where the deflationists have it wrong.

The impact of further disinflationary forces or even a deflationary episode on precious metals prices is a bit harder to predict.

The bear case for precious metals is rather simple. Should metals trade like commodities, they are likely to follow other raw materials lower. If we get a liquidity crunch akin to the 2008 financial crisis, just about everything will be sold as investors raise cash to meet margin calls or flee to the dollar as a perceived safe-haven.

There is also the possibility that metals prices will simply be managed lower. Growing numbers of investors realize that Wall Street is not a bulwark of free markets. Major banks have admitted to rigging markets against their own customers, and the Federal Reserve aggressively intervenes in markets in its quest to centrally plan the world economy. Why wouldn’t the Fed also be active in trading precious metals? Those dismissing the notion that metals prices are manipulated are naive.

…click on the above link to read the rest of the article…

Trapped Inside The Zero-Bound: Crossing The Economic “Event Horizon”

January 14, 2016

Trapped Inside The Zero-Bound: Crossing The Economic “Event Horizon”

A friend of mine, a very successful tech CEO who is also profoundly astute in matters of finance, once asked his economics prof during a lecture on interest rates in his university days “could interest rates ever go negative?”.

The professor, gazing over his glasses and down his nose at what obviously had to be an imbecile in his lecture hall calmly set aside a second of his podium time to shoot the idea down: “No.”, he said quite simply, as if he couldn’t believe he had to be explaining this to university level students, “it has to be a positive number….”.

My colleague believed him. After all, being in technology he was familiar with the computer code analogy of a negative interest rate, that being the dreaded divide by zero error. Coders take great pains to avoid these because if it actually happens, the currently running program basically “shits the bed” and all bets are off.

If the currently running program was generating a balance sheet, it may set the line printer on fire instead. If it’s deploying an airplane’s landing gear it may jettison everything in the cargo bay. It’s impossible to guess what will happen. So when people who viscerally understand the kind of consequences the ERR:DIV0 can cause extrapolate it out to an entire economy, they’re the ones that end up “shitting the bed”. It’s really bad.

I always knew that ZIRP was bad, but I just thought it would be normal, run-of-the-mill bad. You know, where most normal people get screwed for a long time, and then “suddenly” everything comes unglued and the financial system implodes, followed by a government intervention while the usual suspects (free markets and capitalism) get hung from telephone poles.

…click on the above link to read the rest of the article…

This Is What Gold Does In A Currency Crisis, China Edition

January 10, 2016

This Is What Gold Does In A Currency Crisis, China Edition

Chinese citizens, meanwhile, are anxiously awaiting tomorrow’s market open while mentally repeating the same three lines:

Sure am glad I bought that gold last year.

Wish I’d bought more gold last year.

Wonder what I’ll have to pay for gold next week…

Here’s what that looks like in graphical form:

If China does spring a 15% devaluation on the already-wound-too-tight leveraged speculating community, the impact should be, well, amusing for sure, but otherwise a little hard to predict. About the only thing that can be said with near-certainty is that the above chart will have to be updated with much higher left and right axes.

The Government Must Stop Printing Phony Money

January 10, 2016

THE GOVERNMENT MUST STOP PRINTING PHONY MONEY

If advocates of freedom were to make up a list of New Year’s resolutions for 2016, one of the most important items should be ending government’s monopoly control over money. In a free society, people in the marketplace should decide what they wish to use as money, not the government.

For more than two hundred years, practically all of even the most free market advocates have assumed that money and banking were different from other types of goods and markets. From Adam Smith to Milton Friedman, the presumption has been that competitive markets and free consumer choice are far better than government control and planning – except in the realm of money and financial intermediation.

This belief has been taken to the extreme over the last one hundred years, during which governments have claimed virtually absolute and unlimited authority over national monetary systems through the institution of paper money.

At least before the First World War (1914-1918) the general consensus among economists, many political leaders, and the vast majority of the citizenry was that governments could not be completely trusted with management of the monetary system. Abuse of the monetary printing press would always be too tempting for demagogues, special interest groups, and shortsighted politicians looking for easy ways to fund their way to power, privilege, and political advantage.

The Gold Standard and the Monetary “Rules of the Game”

Thus, before 1914 the national currencies of practically all the major countries of what used to be called the “civilized world” were anchored to market-based commodities, either gold or silver. This was meant to place money outside the immediate and arbitrary manipulation of governments.

…click on the above link to read the rest of the article…

Betting on Deflation May Be a Huge Mistake. Here’s Why…

January 5, 2016

Betting on Deflation May Be a Huge Mistake. Here’s Why…

Precious Metals Market Update

The impact of further disinflationary forces or even a deflationary episode on precious metals prices is a bit harder to predict.

…click on the above link to read the rest of the article…

Insider: “Very Sophisticated High Net Worth Investors Are Buying Up Physical Precious Metals”

January 4, 2016

Insider: “Very Sophisticated High Net Worth Investors Are Buying Up Physical Precious Metals”

According to the CEO of one of the world’s top primary producers of silver, looming precious metals shortages could drive the price of gold to $5000 and silver to $100 over the next three to five years. Keith Neumeyer, who oversees First Majestic Silver and is also the Chairman of mineral bank First Mining Finance, says that with commodity prices in capitulation mining companies around the world are either reducing operations or outright shutting down, the consequence of which will be a supply crunch across the industry and a resurgence in precious metals prices.

And Neumeyer isn’t the only one who sees the trend developing. Well known investment billionaires like George Soros and Carl Icahn are rushing into gold. Soros is so convinced that a paradigm shift is in the works that after warning of financial collapse and violent riots in America he sold his holdings in major U.S. banks and allocated more of his portfolio into gold mining firms.

And here’s a little known secret Neumeyer shares in an interview with SGT Report – high net worth individuals aren’t just buying paper. Neumeyer says that the coin shortages being reported by national mints around the world are the result of direct buying of physical gold and silver from sophisticated market players:

I’m seeing the numbers coming out of the the Canadian Mint, Australian Mint and the U.S. Mint… the numbers are quite high for silver coins and to a lesser degree gold coins… I think, personally, that the commercials are buying them… I think that very sophisticated high net worth investors at banks and institutions are buying them.

Supply and demand fundamentals aside there appears to be another significant reason that major players like billionaires and central banks are shifting their holdings into precious metals.

…click on the above link to read the rest of the article…

Exclusive: “And It’s Gone… It’s All Gone” – The One Gold Scandal That Goes To The Very Top

December 25, 2015

Exclusive: “And It’s Gone… It’s All Gone” – The One Gold Scandal That Goes To The Very Top

Long before Turkey was flagrantly arming and funding the CIA-created “terrorist organization” known as ISIS, there was another, far more elaborate way in which Turkey was flaunting international sanctions against an ostracized state – in this case Iran – which involved an epic gold smuggling triangle of Hollywood-thriller proportions, all made possible thanks to the United Arab Emirate city of Dubai.

Best known known for its luxury shopping, ultramodern architecture including the world’s tallest building, a lively nightlife scene, and a facade of openness and decorum, what Dubai is less known for is its unprecedented seedy underbelly of corruption and untouched criminality among the handful of billionaire oligarchs, princes, sheiks and sultans, who quietly dominate the local (and global) power and financial structure.

But first, a little history.

It may seem like a distant memory now, but just a few short years ago, instead of a close ally of Barack Obama, Iran was a pariah state subject to international financial sanctions due to its nuclear program development, one which Israel had repeatedly (and famously) threatened would attack preemptively to prevent Iran from obtaining a nuclear weapon.

Iran, of course, had no choice but to find ways to keep its economy going, and in order to circumvent these sanctions, it resorted to the oldest form of trade known to man: gold.

This, in itself, is not surprising. What is surprising is how and with whom Iran collaborated to breach the international embargo in order to obtain this valuable and much needed gold, which it could then barter with other countries – notably those along the Pacific Rim – in exchange for any and all needed products and services.

…click on the above link to read the rest of the article…

The Screaming Fundamentals For Owning Gold

December 9, 2015

The Screaming Fundamentals For Owning Gold

We’re at a moment of historic opportunity

Risky Markets

As the world’s central banks perform increasingly bizarre and desperate maneuvers to keep the financial system from falling apart, the most frequently asked question we receive is: What should I do?

Unfortunately, there’s no simple answer to that question. Even seasoned pros running gigantic funds are baffled by the unusual set of conditions created by 4 decades of excessive borrowing and 7 years of aggressive money printing by central banks. We expect market conditions to be even more perilous in 2016 as they are here in December 2015. Worse, we fear a major market correction — if not a financial/banking accident of historic proportions — could easily happen in the not too distant future.

In short: this is a dangerous time for investors. At a time like this, we believe it’s prudent to focus more on protecting one’s wealth rather than gambling for capital gains.

The Opportunity In These Strange Times

In 2001, as we witnessed the painful end of the long stock bull market, like many of you I imagine, I began to grow quite concerned about my traditionally-managed stock and bond holdings. Other than a house with 27 years left on a 30-year mortgage, these paper assets represented 100% of my investing portfolio.

So I dug into the economic data to discover what the future likely held. What I found shocked me. The insights are all in the Crash Course, in both video and book form, so I won’t go into all of that data here. But one key takeaway for me was: the US and many other governments around the world are spending far more than they are taking in, and are supporting that gap by printing a whole lot of new money.

…click on the above link to read the rest of the article…

Resilience As The Key To Crisis-Proof Wealth

December 7, 2015

Resilience As The Key To Crisis-Proof Wealth

Some highlights from our recent media tour

Given Friday’s important swing low in the precious metals, we’re hard at work this weekend finishing up a lengthy analysis of the fundamentals ahead for gold & silver.

But in the interim, we want to make sure that our podcast listeners don’t go without their weekly fix.

So below are several recent interviews Chris and/or I have given as we’ve been getting the word out about our new book Prosper!: How to Prepare for the Future and Create a World Worth Inheriting:

Greg Hunter: Everybody Knows This Economy Is Unsustainable

Jay Taylor: Prospering and Creating a World Worth Inheriting

James Howard Kunstler: KunstlerCast 272 — A Conversation with Chris Martenson and Adam Taggart

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