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In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract. These contracts were priced in yuan, but convertible to gold, raising the prospect that “the rise of the petroyuan could be the death blow for the dollar.”

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995.

Also last week, Peter Thiel warned “Bitcoin should also be thought [of] in part as a Chinese financial weapon against the US… It threatens fiat money, but it especially threatens the U.S. dollar.”

All of which sets the stage for the dramatic headlines that hit this morning, as Reuters reports that China has given domestic and international banks permission to import large amounts of gold into the country,

The People’s Bank of China (PBOC), the nation’s central bank, controls how much gold enters China through a system of quotas given to commercial banks.It usually allows enough metal in to satisfy local demand but sometimes restricts the flow.

In recent weeks it has given permission for large amounts of bullion to enter, the sources said.

“We had no quotas for a while. Now we are getting them … the most since 2019,”said a source at one of the banks moving gold into China.

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

The Mainstream Is Wrong About Rising Bond Yields and Gold

April 7, 2021

The Mainstream Is Wrong About Rising Bond Yields and Gold

Prices are going up. The Federal Reserve is printing money at an unprecedented rate. The US government continues to borrow and spend at a torrid pace. As Peter Schiff put it in a recent podcast, we’re adrift in a sea of inflation. Gold is supposed to be an inflation hedge. So, why isn’t the price of gold climbing right now?

In a nutshell, rising bond yields have created significant headwinds for gold. And the mainstream is reading rising yields and their relationship to gold all wrong.

It really comes down to expectations. Most people in the mainstream view rising yields as an inflation signal, and they expect the Federal Reserve to respond to this inflationary pressure in a conventional way. They expect the Fed to tighten monetary policy, raise interest rates and shrink its balance sheet.

As Peter Schiff has explained on numerous occasions, this won’t happen. The Fed won’t fight inflation because it can’t. It will ultimately surrender to inflation.

Right now, the markets sense that inflation is going to be moving higher. And maybe even higher than what the Fed is acknowledging. But I think the markets still believe the Fed — that the Fed will be able to contain the inflation problem before it really runs out of control. So, it’s the expectation that the Fed’s going to fight inflation by raising rates — that’s what’s pressuring gold. But the markets are wrong. The Fed is not even going to attempt to fight inflation. It’s going to surrender. Inflation is going to win without a fight…

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

MICHAEL MAHARREY, schiffgold, inflation, money printing, credit expansion, central banks, qe, quantitative easing, peter schiff, fed, us federal reserve, gold,

Disoreder Will Come–As Confucious Warned

April 5, 2021

DISORDER WILL COME – AS CONFUCIUS WARNED

When bubbles burst, we will discover how very few superior men there actually are – as defined by Confucius:

“The superior man, when resting in safety, does not forget that danger may come. When in a state of security he does not forget the possibility of ruin. When all is orderly, he does not forget that disorder may come. Thus his person is not endangered, and his States and all their clans are preserved.” – Confucius

Superior man can exist at many different levels in society, not necessarily linked to money or investments. There will be many people without money who are prepared at an intellectual or psychological level. These people are probably the happiest since sadly many wealthy people worry about their money all the time rather than enjoy it.

In this piece I am talking primarily about preparedness in relation to one’s wealth.

PS Important Postscript at the end of the article.

FOCUS ON WEALTH PRESERVATION

The investors we meet in our business are people who are risk averse and therefore very much focus on wealth preservation. These investors buy physical gold because they are concerned about the excessive risks in markets. They want to protect and insure their wealth against unprecedented financial and currency risk. Like ourselves, these investors consider physical precious metals, stored outside a fragile banking system, as the ultimate form of wealth preservation.

But investment gold represents less than 0.5% of world financial assets. This means that a minuscule percentage of investors insure their wealth in gold. This is clearly surprising bearing in mind that over 5,000 years gold is the only money that has survived.

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

Egon von Greyerz, gold switzerland, inflation, risk, gold, precious metals, wealth, financial bubble, bubble, currency, banking system

Gold Will Emerge Stronger Than Ever From the Post-Pandemic Environment: CPM Group

April 1, 2021

Gold Will Emerge Stronger Than Ever From the Post-Pandemic Environment: CPM Group

Mining Review Africa

We’ve often heard that gold is a primary beneficiary of crises unlike any other, when investors and the average person alike wondered what would happen tomorrow. Now, when at least some of the fear has diminished, CPM Group took a look at how the crisis aggravated existing problems that have been turning people to gold for decades.

In their Gold Yearbook, CPM highlighted sovereign and private debt, government deficits and loose monetary policies as the drivers that will position gold exceptionally well over the medium and long-term. The scramble for money to keep their economies afloat by both the U.S. and governments around the world have worsened these issues in monumental fashion. Growth was already contracting prior to the crisis, and CPM believes low growth could be the biggest consequence of the official sector’s liquidity rush.

With many countries appearing to adopt even more protectionist policies, CPM points to the long-standing trade conflict between the U.S. and China as something to look out for. The group also noted that many economies are projected to post a much slower recovery than that of the U.S. Regarding gold price, CPM doesn’t expect any major rushes such as the one seen last year. Instead, its analysts think investors will become more attracted to the metal over a longer period of time, slowly buying gold whenever a dip occurs. (More in line with the behavior expected of buy-and-hold investors rather than speculators’ constant turnover.)

Their sentiment agrees with many reports asserting that money managers are reassessing the traditional portfolio model and coming to view gold as a necessary inclusion…

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

birch gold group, gold, precious metals, pandemic, money, wealth, cpm,

When “Unallocated” Becomes Unavailable

March 24, 2021

When “Unallocated” Becomes Unavailable

For the past ten years, we’ve railed against the Bullion Bank fractional reserve and digital derivative pricing scheme. The solution has always been the removal of physical metal from the hands of the Banks and the Mints. Are we finally making some progress?

Before we begin, it is crucial that you understand this basic point: The globally recognized prices of gold and silver are not determined through the exchange of actual physical metal. Price is instead determined by the exchange of derivative contracts. Thus, the supply and demand of physical metal has very little day-to-day bearing on the derivative price. Instead, it is the supply and demand of the derivative itself that determines price.

About four years ago, I wrote the article linked below with the purpose of explaining, in as simple terms as possible, how and why this digital derivative pricing scheme benefits The Bullion Banks that have monopolistic control of these “markets”. If you’ve never read this post, please do so now:

Econ 101 — Silver Market Manipulation

The key pillars in maintaining this fraudulent pricing scheme are the market activities in New York and London. The CME-owned COMEX and the LBMA collective work together to manage price and the flow of physical metal that is needed to legitimize it. To understand this hand-in-glove approach, consider that Michael Nowak—the recently indicted former head of global precious metals trading for JPMorgan—also sat on the board of directors of the LBMA:

LBMA in “discussions” with JPMorgan following fraud indictment

For precious metal investors everywhere, it is vital that we one day force this pricing scheme to collapse. Since The Scheme is built upon leverage and hypothecation, the only way we can win this fight is if we can force a deleverage of the fractional reserve system…

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

Gold vs. the stock market

March 18, 2021

Gold vs. the stock market

More than 3,000 years ago in the early 12^th century BC, Greco-Roman legend tells us of a mythical pair of monsters located in the Strait of Messina in southern Italy.

The monsters were named Scylla and Charybdis. And both Homer’s Odyssey and Virgil’s Aeneid describe the terror of sailors who came into contact with them.

Scylla was on one side of the Strait, and Charybdis on the other. But because the Strait is so narrow, it was impossible for sailors to avoid both of the monsters, essentially forcing the captain to choose between the lesser of two evils.

In Homer’s narrative, for example, Odysseus is advised that the whirlpools of Charybis could sink his entire ship, while Scylla might only kill a handful of his sailors.

So Odysseus chooses to sail past Scylla: “Better by far to lose six men and keep your ship than lose your entire crew.”

The story is a myth. But the idea of having to choose between two terrible options is very real.

It appears that the Federal Reserve has landed itself in this position.

In its efforts to boost the economy during the pandemic, the Fed slashed interest rates so much that the average 30-year mortgage rate for homebuyers reached an all-time low of 2.65% earlier this year.

Similarly, AAA-rated corporate bond yields reached record low 2.14% last summer.

The US government 10-year Treasury Note dropped to a record low 0.52%.

And the 28-day US government Treasury Bill rate actually turned negative for a brief period– something that has never happened before.

The effects of such cheap rates are obvious.

With corporate borrowing rates so low, the stock market has boomed. With consumers able to borrow money so cheaply, home prices have surged to an all-time high.

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

Antal Fekete, Gold, and Central Banks

March 10, 2021

Antal Fekete, Gold, and Central Banks

On the fourteenth of October 2020, Antal E. Fekete, the Hungarian-Canadian economist who saw himself as a monetary theorist following the tradition of Carl Menger, died in Budapest. Behind him was an eventful and fruitful life which was quite typical of the crazy last century. His experiences eventually filled Fekete with dark forebodings for the current century. We can only hope that this crazy year won’t become characteristic of an entire era, as his year of birth did.

Antal Endre Fekete was born on the eighth of December 1932 in Budapest. Mass unemployment was rife in the midst of a deep global economic crisis. Hungary was heading towards National Socialism on the back of a severe banking crisis. The totalitarian, anti-Semite Gyula Gömbös had taken over the government shortly before Fekete’s birth. All around, belief in the omnipotence of politics was leading to a spiral of interventionism and polarization which would ultimately lead to the old Europe being destroyed by totalitarianism and war. Monetary policy played a role in this that is underestimated to this day.

Fekete was one of the few old Europeans to recognize the central role of money, on the positive side as a means of amicable division of labor, on the negative side as a casualty and lever of political intervention spirals. This led the mathematician to monetary theory, in which he sought to expand and update the old Austrian school of economics. As with all original contributions, it is too soon to definitively assess whether he introduced new errors and what these errors were. Yet his prominence as a sharp thinker who combined theory with profound historical knowledge is undervalued. This is partly due to his quarrelsome personality, which came between him and almost all of his comrades in arms and companions…

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

Forbes: Excessive Monetary Stimulus Leaves Gold “Greatly Undervalued”

March 9, 2021

Forbes: Excessive Monetary Stimulus Leaves Gold “Greatly Undervalued”

Historic Money Supply Great for Long-Term Gold Prices

Harrison Hill, USA Today

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: How the expansion of money supply is boosting gold’s allure, an overview of last year’s precious metals imports to the U.S., and U.S. Mint releases final batch of American Gold Eagle coins with current design.

Historic monetary stimulus is casting a bright light on tangible assets

The multi-trillion dollar stimulus appears to have achieved the desired effect, at least in the short term. The influx of freshly-printed, free floating money encouraged risk-on sentiment, increased bond yields and caused money managers to once again turn away from gold.

Yet, as Forbes columnist Frank Holmes points out, the pressures coming down on gold right now could turn out to be its most powerful tailwind further down the line.

According to the Forbes article, M1 (the amount of readily-available or liquid money in circulation) should be approached the same as any other asset class. This is usually the case; many investors treat cash as a part of their portfolios. Therefore, the law of supply and demand should also be applied to cash. In light of the recent monetary expansion, cash quickly starts to look overabundant in the economy.

Holmes notes that M1 has expanded by 355% year-on-year, marking the highest annual rate increase on record by a wide margin. Unsurprisingly, inflation expectations for the next five years based on the Treasury breakeven rate have risen to their highest level since 2011, when gold posted its previous all-time high. Today’s gold price may be some ways off from August’s peak of $2,070, but there are plenty of analysts calling for a retrace this year, and Holmes thinks inflation could kickstart the next round of gold price gains.

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

U.S. Mint Rations Bullion Coins – Why Aren’t Prices Rising, Too?

February 17, 2021

U.S. Mint Rations Bullion Coins – Why Aren’t Prices Rising, Too?

U.S. Mint Rations Bullion Coins – Why Aren't Prices Rising, Too?

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The disconnect between gold and silver bullion demand and price, we could be months away from $50 silver, and trove of antique Roman silver coins unearthed in Turkey.

Why bullion prices don’t seem to be in line with demand

Despite record demand for gold and silver bullion coins month after month, the prices of both metals continue to linger within limited ranges. Gold even pulled back to just above $1,800 during Friday’s trading session. So what’s going on? Why isn’t the clearly-demonstrated demand driving prices higher?

U.S. Mint director Ed Moy, whose tenure stretched from 2006 to 2011, recognizes today’s situation and draws many parallels to the start of 2008:

The last time demand was this high was during the [2008-2009] financial crisis. People were panicking and buying into gold, and prices were shooting up. Then the government started injecting both fiscal and monetary stimulus, and you saw gold correct down maybe 20-30%. And then, over the next three years, gold began to climb until it set a new record of $1,925 in 2011. Afterward, gold didn’t decline until it became clear that the economic recovery was going to be slow, which eliminated the uncertainty. The Fed also had the time to mop up all the excess liquidity before it caused inflation.

The former director explained that, besides overloaded mints and supply chain disruptions, there are several other factors that could play an interesting role in shaping up gold’s price over the coming months and years. Moy believes that perhaps the biggest reason for the disconnection between price and demand lies in Wall Street’s shorting of the metals.

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

U.S. Mint Sold Out of Gold & Silver Coins

February 10, 2021

U.S. Mint Sold Out of Gold & Silver Coins

U.S. Mint sold out of gold and silver coins

REUTERS/Shannon Stapleton

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: U.S. Mint can’t keep pace with demand again, Goldman chief calls silver a supercharged version of gold, and amateur prospector unearths a long-lost golden treasure from Medieval times.

U.S. Mint runs out of gold and silver coins

Just when we’d hoped the U.S. Mint might’ve worked its way through the pandemic-driven backlog of gold and silver coins, a new surge in demand worsened supply shortages. Last year, the U.S. Mint saw a 258% increase in purchase of gold coins and a 28% increase in silver coins, with heavy buying continuing into 2021. They probably didn’t plan for what happened next…

On the heels of Reddit’s wallstreetbets triumphant (if brief) GameStop frenzy, the day traders searched for a new target. Some have settled on silver. Amid claims that silver’s price should be closer to $1,000 than $25, day traders have flocked to both gold and silver. This made the ongoing supply crunch even worse.

While silver’s price is still trading around $27, the supply dynamics tell a different tale. The U.S. Mint sold 220,500 American Eagle gold bullion coins in January 2021, a staggering 290% year-on-year increase from last January. It’s not just unexpected demand that’s causing problems, though.

As noted by a retailer of precious metals coins, “There was going to be a backlog in the silver bullion supply chain that rendered silver eagles more scarce either way.” This is because the U.S. Mint is currently changing designs for its American Eagle gold and silver coins, expected to debut this summer. Once available, the U.S. Mint will ration distribution of gold, silver and platinum coins to dealers due to heavy demand.

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

What Does A Silver Panic Look Like?

February 3, 2021

What Does A Silver Panic Look Like?

Veteran precious metals dealer recounts past buying frenzies

Has the #silversqueeze already fizzled out?

Hard to know at the moment. Prices are being hammered down this morning as the CME hiked COMEX margin requirements by 18%.

But according to this interview last night with Robert Mish, an independent precious metals dealer with nearly 60 years of experience in the industry, inventories have been overwhelmed by the wave of retail buyers making purchases over the past few days.

As a result, the price of physical silver is currently MUCH higher than paper silver.

If this buying pressure continues, he sees the price of paper silver being pushed up into the $35-50/oz range in the near term. But that’s only if the army of retail buyers keeps at it.

How will we know if the #silversqueeze army is successful in creating a true silver shortage?

Robert shares his war stories from previous panics in the ’60, ’70s and 1980 to give us a sense of what one will look like if it indeed happens:

Something Big Just Happened in the U.S. Mint Gold Eagle Market

January 27, 2021

SOMETHING BIG JUST HAPPENED IN THE U.S. MINT GOLD EAGLE MARKET

Something BIG just happened in the U.S. Mint Gold Eagle Market this month. Not only have Gold Eagle sales in the first three weeks of January surpassed last year’s total by a factor of three, but it’s also the highest figure since the 2008-2009 Financial Crisis. While Silver Eagle sales have been the main focus of precious metals investors in the past year, Gold Eagle sales are now the new spotlight.

In my last update on Jan 14th, Gold Eagle Sales reached 141,000 oz, compared to 60,000 oz in the same month last year.

Thus, Gold Eagle sales on Jan 14th were already more than double the previous year, with still two weeks remaining in the month. When the U.S. Mint updated their figures earlier today, they reported 62,500 oz sold in the past week. Remarkably, the U.S. Mint sold more Gold Eagles in the last week than they did for the entire month last year. The total Gold Eagle sales as of Jan 25th are 203,500 oz.

As we can see, the U.S. Mint has already sold more Gold Eagles this month than they did for the past three January’s combined. Folks, this is a BIG DEAL. Investors are concerned about the crazy Fed and Central bank money printing and stimulus that will continue to be pumped into the markets to prop up the U.S. and global economies. The fundamentals for the precious metals will only get stronger.

However, we believe the metals and miners’ market prices will fluctuate due to HOW THE MARKET TRADES. We provide updates on the technicals on the markets and metals to better understand the price movements. Unfortunately, most precious metals analysts only forecast HIGHER PRICES. This is a disservice to investors. Nothing goes up in a straight line.

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

StoneX: Gold to “Maintain High Prices” on Inflation, Slow Recovery, Low Yields

January 26, 2021

StoneX: Gold to “Maintain High Prices” on Inflation, Slow Recovery, Low Yields

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: StoneX’s bullish outlook for gold in 2021, low interest rates to support gold for years to come, and a rare gold coin fetches $9.36 million at Texas auction.

StoneX: Expect gold to trend up for at least another six months

In their outlook for 2021, commodities and foreign exchange trader StoneX said that gold should continue trending upwards throughout the first half of 2021 on the back of numerous powerful drivers. These include economic risks and uncertainty as well as geopolitical turmoil, both domestic and international.

As the firm noted, last year saw precious metals emerge as the best-performing commodity group with a 27% rise year-on-year. Silver and gold supported each other’s prices as investors looked for a hedge amid conditions that seem to have very much poured over into the new year. In particular, StoneX sees additional stimulus by global central banks and the accompanying rise in inflation expectations as prominent vehicles for an extension of the bull run.

“The United States, the European Central Bank, and the Bank of Japan have all been active with combined asset growth of over $7 trillion last year. With Congress’ approval of a $900 billion virus relief package in the United States (tied to the $1.3 trillion government funding program) there is more liquidity coming; Europe may follow suit, while Japan is looking to extend support for the corporate sector,” explained the firm.

More than inflation on its own, StoneX noted that its effect on real rates will continue driving money managers to utilize gold as a hedge, especially due to the threat of a stock market correction…

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

Bloomberg Analysts: “Gold the Asset to Beat in 2021”

January 12, 2021

Bloomberg Analysts: “Gold the Asset to Beat in 2021”

Bloomberg: Gold to outperform S&P 500 & Bonds in 2021

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: Gold to spearhead precious metals’ outperformance in 2021, why 2020 was a very good year for national mints, and birdwatcher unearths biggest-ever hoard of Celtic gold in Britain.

Bloomberg analysts: A $2,000 price tag will make gold the asset to beat in 2021

Among traditional assets, it would be difficult to beat gold for the title of top performer in 2020. Having hit a new all-time high of $2,070 in August, the metal has traded around its previous all-time high of $1,911 ever since. And though gold has appeared somewhat rangebound over the previous months, Bloomberg Intelligence senior commodity strategist Mike McGlone sees this as a stepping stone on the way towards an even better year.

According to McGlone, the $2,000 level that gold appears to have had difficulty recapturing is poised to become the metal’s next support, making it the asset to beat once again. “In an investment landscape increasingly dominated by how low — or negative — central banks will set base rates, along with rising debt-to-GDP and QE, we see the foundation solidifying under the price of gold. Resistance at about $2,000 an ounce in 2020 is set to transition to support in 2021,” he explained.

McGlone added rising volatility to the list of reasons why he can’t imagine gold’s price rise stopping, especially as the metal has held steadfast to its upwards-pointing 12-month moving average. In what has by now become a common scenario, McGlone expects gold to continue outperforming the record-setting S&P 500 along with sovereign bonds.

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

The End Game

December 27, 2020

The End Game

Dear Investors:

Markets are cyclical. Today, stocks trade at record high valuations while commodities are historically undervalued in relation. The setup is in place for a macro pivot in the relative performance of these two asset classes. Comparable conditions were present with the 1972 Nifty Fifty and 2000 Dotcom bubbles as we show in the chart below.

As capital seeks to redeploy towards the highest growth and lowest valuation opportunities, we expect analytically minded investors will soon be rotating, if not stampeding, out of expensive deflation-era growth equities and fixed income securities and into cheap hard assets, creating a reversal in the 30-year declining trend of money velocity.

Today’s Modern Monetary Theory world with its double barreled fiscal and monetary stimulus is crashing head on with an accumulation of years of declining investment in the basic industries such as materials, energy, and agriculture. In our analysis, the “end game” for the Fed’s twin asset bubbles in stocks and bonds is inflation. We can already see it developing on the commodity front.

The scarcity of jobs and abundance of debt were factors preventing the economy from reaching its full growth potential even before Covid-19. Such have been the concepts underlying the output gap, the theoretical paradox that is thought to have held inflation in check over the course of the last business cycle. But based on comparable historic periods, the macro setup for inflation is more likely to be kicked off by an input gap, i.e., shortages in the primary resources needed for both a strong reserve currency and economic growth at the same time as policy makers pull out their biggest bazookas yet to boost aggregate demand. We expect a new wave of rising commodity prices, set up by past underinvestment in basic resources, to soon ripple through the global supply chain creating a headwind for real living standards. Welcome to the Great Reset.

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

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