Tuesday, September 17, 2019

Gold Price Framework Vol. 2: The energy side of the equation

by Alasdair Macleod, GoldMoney:

Building on our proprietary energy-proof-of-value gold price framework, we

a) present an improved gold price model;
b) provide an in-depth analysis of the energy exposure of the cost structure in gold mining and;
c) give an outlook for the gold market.

Our improved framework confirms our previous findings that energy is an important building block to understanding gold price formation. The in-depth bottom-up analysis here explains why. Given our positive forecast for longer-dated energy prices and our negative long-term view on real-interest rates, we believe that the outlook for gold prices is skewed strongly to the upside.

In Gold We Trust, 2018

by Pater Tenebrarum, Acting Man:

The New In Gold We Trust Report is Here!

As announced in our latest gold market update last week, this year’s In Gold We Trust report by our good friends Ronald Stoeferle and Mark Valek has just been released. This is the biggest and most comprehensive gold research report in the world, and as always contains a wealth of interesting new material, as well as the traditional large collection of charts and data that makes it such a valuable reference work for gold investors.

Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001

by Charles Hugh Smith, Of Two Minds:

Welcome to debt-serfdom, the only possible output of the soaring cost of living.

Long-time readers may recall the Burrito Index, my real-world measure of inflation. The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016). The Burrito Index tracks the cost of a regular burrito since 2001. Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the cost of a regular burrito at our favorite taco truck with great accuracy: the cost of a regular burrito has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

It’s time for an update: the cost of a regular burrito has now reached $7.50, triple the 2001 cost. That’s a 200% increase in 17 years. According to the federal government, inflation since 2001 has risen about 40%: what $1 bought in 2001 now costs $1.43, according to the BLS Inflation calculator.

Petrodollar loses another customer as India agrees to buy oil from Iran in Rupees

by Kenneth Schortgen, The Daily Economist:

2018 is quickly becoming the year that the Petrodollar likely ends, or at least loses more than half of its customers as on May 30, another tandem of nations have agreed to conduct oil purchases in a different currency.

Iran and India will soon conduct oil transactions in Rupees according to Iranian officials.

Death of the Great Recovery Part 3: Housing Collapse 2.0 Has Begun

by David Haggith, The Great Recession Blog:

It’s simple math — an equal and opposite reaction. After a long spell of QE took mortgage interest down to the lowest it has ever been, a long spell of QT (quantitative tightening) is going to take it back up again. That’s why I forecasted another housing collapse with confidence last year:

Rising mortgage rates will certainly cause housing sales to fall. Prices will follow for those houses that have to sell because, as mortgage interest rises, people won’t qualify for as large a mortgage as they do now. It’s all part of the developing Epocalypse in which multiple industries collapse into the final depths of the Great Recession as the fake recovery fades out of existence like a mirage.

What The London Gold Pool Offers About The Current Gold Market

by Chris Marcus, Miles Franklin:

While many remain skeptical that the precious metals markets are being manipulated (despite ample evidence provided by GATA, Ted Butler, and countless others), it’s worth considering that we’ve actually seen virtually the same scenario play out at least once before. Which provides fascinating insight into how the current situation might also ultimately unfold.

Over 45 years ago the world witnessed the collapse of what was known as the London Gold Pool, which shares amazing similarities to today’s gold market. As essentially the world’s economic powers were colluding to maintain a gold price of $35 per ounce, while at the same time the U.S. was rapidly expanding the supply of dollars.

Wall Street Banks Tank Yesterday as Contagion Threat Grows

by Pam Martens and Russ Martens, Wall St On Parade:

Big Wall Street bank stocks outpaced the decline in the markets yesterday by a big margin. That’s a serious problem but here’s a bigger problem: if you get your information from mainstream media, you have no idea this happened or what it portends for the U.S. economy.

Corporate media (a/k/a “mainstream” media) is obsessed with ratings, clickbait and celebrities behaving badly – which goes a long way in explaining why the U.S. has a billionaire celebrity in the oval office who publicly talks about television ratings when he greets hostages released by North Korea.

It’s also now clear why so many members of Congress claimed that nobody could have seen the 2008 financial crisis coming: mainstream media simply refused to heed and report on the many warnings. The same thing happened yesterday.

MAY 30 – Harvey Organ Blog

by Harvey Organ, Harvey Organ Blog:

In silver, the total OPEN INTEREST ROSE BY AN STRONG 2146 CONTRACTS FROM 205,464 UP TO 207,610 DESPITE YESTERDAY’S 16 CENT LOSS IN SILVER PRICING. WE ARE NOW WITNESSING OUR USUAL AND CUSTOMARY COMEX LONG LIQUIDATION AS WE ENTERED INTO THE ACTIVE DELIVERY MONTH OF MAY AS LONGS PACK THEIR BAGS AND MIGRATE OVER TO LONDON. WE WERE NOTIFIED THAT WE HAD A STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP :

Gold Production On The Cusp of Peaking

by Tom lewis, Gold Telegraph:

Gold is valuable because it is a finite resource. What happens when all available gold is mined and processed? There is still abundant gold deep within the earth, but it has not yet been found. Mining companies are unable, to dig deep enough. It is difficult for them to know where to locate this deep gold. All known locations have been depleting for years.

That is the reason mining gold has become more difficult and output is expected to begin decreasing steadily. The precious metal is becoming harder to find.