{"id":26184,"date":"2017-09-27T18:54:26","date_gmt":"2017-09-27T23:54:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26184"},"modified":"2017-09-27T18:54:26","modified_gmt":"2017-09-27T23:54:26","slug":"the-only-variable-that-matters-to-the-price-of-gold","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26184","title":{"rendered":"The ONLY Variable That Matters To The Price Of Gold"},"content":{"rendered":"

The ONLY Variable That Matters To The Price Of Gold<\/a><\/h3>\n

 <\/p>\n

There are all sorts of positive fundamentals when it comes to the price of gold. There are the positive supply\/demand fundamentals. The gold market is in a supply deficit. Mine reserves are at a 30-year low <\/a>. The price of gold is below what is necessary to sustain the gold mining industry <\/a>.<\/p>\n

There are the positive geopolitical fundamentals. The world\u2019s two most-unstable leaders \u2013 Kim Jong-un and Donald Trump \u2013 have been constantly trading threats and insults. And both of these people have nuclear weapons at their disposal. There is the endless \u201cWar on Terror\u201d.<\/p>\n

There are the positive economic fundamentals. Western real estate bubbles <\/a>in major urban centers are at never-before-seen levels of insanity. Western markets are generally also at bubble levels, with U.S. markets representing bubbles on steroids <\/a>. Western governments are bankrupt<\/a>.<\/p>\n

In relative terms, none of these fundamentals count <\/strong><\/b>.<\/p>\n

There is one more important fundamental for the price of gold. Not only is it the most important fundamental, but it involves a variable which dwarfs all other fundamentals in magnitude — combined.<\/p>\n

Regular readers have heard many times before that gold (and silver) is \u201ca monetary metal\u201d <\/a>. The definition is simple. Gold is money. Therefore the price of gold must<\/u> change proportionate to changes in the supply<\/em><\/i>of other forms of \u201cmoney\u201d (i.e. currency).<\/p>\n

This is not a theory. It is a function of simple arithmetic. An elementary numerical example will illustrate this principle.<\/p>\n

Suppose (in the entire world) there was a total of 10 oz\u2019s of gold. Suppose also (in this hypothetical world) that there was a total of only $10,000 U.S. dollars. And in this hypothetical world, the price of gold is $1,000\/oz.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The ONLY Variable That Matters To The Price Of Gold   There are all sorts of positive fundamentals when it comes to the price of gold. There are the positive supply\/demand fundamentals. The gold market is in a supply deficit. Mine reserves are at a 30-year low . The price of gold is below what […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1361,1799,374,2908,6354,6355,763,16190,16191,864],"class_list":["post-26184","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankruptcy","tag-bubbles","tag-gold","tag-gold-market","tag-jeff-nielson","tag-sprott-money","tag-supply-demand","tag-supply-deficit","tag-us-markets","tag-war-on-terror"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26184"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26184\/revisions"}],"predecessor-version":[{"id":26185,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26184\/revisions\/26185"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}