{"id":60796,"date":"2021-12-06T06:58:19","date_gmt":"2021-12-06T11:58:19","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60796"},"modified":"2021-12-06T06:58:40","modified_gmt":"2021-12-06T11:58:40","slug":"davos-is-making-the-central-bank-case-for-gold","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60796","title":{"rendered":"Davos is Making the Central Bank Case for Gold"},"content":{"rendered":"
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Davos is Making the Central Bank Case for Gold<\/a><\/h3>\n<\/header>\n
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A few months ago\u00a0I talked about the upcoming changes to the way adoption of Basel III\u2019s new bank reserve rules\u00a0<\/a>would alter the gold market. In short my conclusion was similar to that of Alistair MacLeod\u2019s and others, that Basel III should collapse the egregious manipulation of the gold market through the use of using futures and unallocated gold as bank reserves.<\/p>\n

In May I wrote:<\/p>\n

In effect, Basel III, if implemented in its current form, would change the gold market from a speculative one based on perceptions of the efficacy of monetary policy to control real interest rates to one that should force price discovery in an almost purely physical market. As I told my\u00a0Patrons in May 16th\u2019s Market Report video<\/a>, physical gold will go from being the\u00a0price taker\u00a0<\/em>to the\u00a0price maker. \u00a0\u00a0<\/em><\/p><\/blockquote>\n

I didn\u2019t then nor do I think now that will happen immediately after Basel III goes into effect in the U.K. on January 1st. But I do think the recent weakness in gold has been an early sign of stress within the gold market brought on by the upcoming rules implementations.<\/p>\n

And that has sent gold lower in recent weeks despite rising inflation and falling real interest rates. Of course this is because the markets have been overpricing the \u2018transitory inflation\u2019 argument put forth by the major central banks.<\/p>\n

So, when Jerome Powell came out, in his first important statement post-reappointment announcement, and put a fork in \u2018transitory\u2019 inflation the markets were properly shocked. This happened on the heels of OmicronVID-9\/11 dominating the headlines and also creating some overblown market reactions thanks to poorly-programmed headline trading algorithms.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Davos is Making the Central Bank Case for Gold A few months ago\u00a0I talked about the upcoming changes to the way adoption of Basel III\u2019s new bank reserve rules\u00a0would alter the gold market. In short my conclusion was similar to that of Alistair MacLeod\u2019s and others, that Basel III should collapse the egregious manipulation of […]<\/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":[124,193,303,374,20914,2908,2909,16963,3650],"class_list":["post-60796","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-davos","tag-fed","tag-gold","tag-gold-goats-n-guns","tag-gold-market","tag-gold-market-manipulation","tag-tom-luongo","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60796","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=60796"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60796\/revisions"}],"predecessor-version":[{"id":60797,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60796\/revisions\/60797"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}