Thursday, January 23, 2020

THE BIGGEST SHORT & THE SPECTACULAR LONG

by Egon Von Greyerz, Gold Switzerland:

The astonishing Fed again proved the consistency of its inconsistency.

Since its creation in 1913, and especially after WWII, the Fed has always been behind the curve. It is hard to believe that this is just incompetence. The recent change of policy hardly seems to be part of a plan but rather another reaction to events. Looking back at the Fed’s policy decisions, it is clear that virtually all are reactive rather than proactive.

Eat Gold

0

by Torgny Persson, BullionStar:

A popular phrase in segments of the mainstream financial media is that “You Can’t Eat Gold”. We don’t know who first uttered this comment, but it was more than likely a talking-head or Wall Street analyst on CNBC or Bloomberg.

The disparaging claim seems to be based on concluding that in a financial or monetary crisis, if you own gold, that “You Can’t Eat It”. And so, according to the logic of whoever came up with the phrase, this would make gold useless during a financial crisis.

In addition to the misleading and irrelevant nature of the comment, which we will discuss below, the claim that “you can’t eat gold” is actually factually wrong. And that is because you can eat gold. And also drink it.

Eating and Drinking Gold

While gold can be eaten, it cannot be digested. But it is non-toxic to the human body. And it does not react chemically in the human body. That is why gold can and does appear safely in a number of foods and drinks, not surprisingly foods and drinks which are predominantly at the luxury end of the market.

Some readers will have heard of Goldschläger, a Swiss/Italian liquor which has flakes gold suspended within it. On a similar note, a Swiss gin called ‘Studer Swiss Gold Gin’ also contains flakes of gold. Staying within Switzerland, you can also buy edible gold products including “Swiss chocolate truffles with gold flakes”. Not to be outdone by the Swiss, the Emirates Palace Hotel in Abu Dhabi (United Arab Emirates) offers a ‘Palace Cappucino” which is sprinkled with gold flakes.

In Selfridges department store in London, you can buy a “billionaires soft serve” ice cream cone topped with both sprinklings of gold leaf and a gold leaf covered flake. While in New York, in Manhattan’s Upper East Side, a high-end restaurant offers a “Golden Opulence Sundae” topped with gold leaf, for US$ 1000 a glass. Back in England, a specialist cheese producer in Leicestershire created Britain’s most expensive cheese – “Clawson Stilton Gold“, a stilton cheese interwoven with edible gold leaf and shot-through with gold liqueur. These uses of gold in food and beverages illustrate that gold is a sought after and prestigious substance, but also that gold is real, that gold is tangible and that gold is of value.

Wall Street’s Selective Focus

The logic of the “you can’t eat gold” comment, as well as being wrong, is also flawed. Because by extension, you can’t eat any of Wall Street’s favorite investment assets. Imagine chewing on financial securities or fiat currencies. But whoever coined the phrase “you can’t eat gold” conveniently failed to mention this on CNBC. We would challenge anyone, especially CNBC and MSNBC, to eat share certificates or bond certificates or the electronic equivalent thereof.

Nor can you eat the electronic coins of cryptocurrencies such as Bitcoin, Ethereum’s Ether or Litecoin. Real assets such as art, antiques, real estate, agricultural land, or vintage cars are also off the menu. A possible exception is that can drink an expensive investment wine collection, but would you really want to do this, as then you would be consuming your principal investment?

  Wall Street analysts fail to mention that you can't eat stocks and ETFs
Wall Street analysts fail to mention that you can’t eat stocks and ETFs

Gold’s Many and Varied Benefits

But beyond the fact that you can in fact eat gold, and that Wall Street never points out the non-edibility of stocks and bonds, there are many beneficial reasons to buy and own investment grade physical gold of which we recently pointed out in 28 reasons to buy and own physical gold. What we are talking about is real physical gold in the form of gold bars and gold coins. This is true both during times of financial crisis, and also over the long-term as a form of investment and savings.

Gold is without doubt the ultimate safe haven asset. In times of financial crisis and turmoil, investors and savers flock to gold as a wealth preservation strategy. The reason for investing in gold during times of crisis is based on the fact that investors instinctively know that the gold price behaves differently to the prices of other assets, particularly during crises. This is because the gold price moves independently of economic and business cycles.

In times of war and social upheaval, physical gold’s benefits also come to the fore. Since gold has a high value to weight ratio, significant personal wealth can discreetly be carried in the form of gold across borders and frontiers and within areas of conflict.

Since gold is a universal money supported by a highly liquid global market, it will always be accepted everywhere at the going gold price. Gold can easily be sold. Gold can easily be traded or even bartered with, especially in non-functioning economies where the local paper currency has collapsed or has become worthless. The fact that gold coins are regularly issued to elite military personnel in areas of conflict attests to gold’s critical benefits in times of monetary crisis and localized economic collapse.

Gold as Store of Value

But gold is not just of use during financial crises. It is also an essential asset to own over the long-term as a strategic form of saving and investment. Physical gold retains its purchasing power over long periods of time. This is in contrast to fiat currencies issued by the world’s central banks, which generally lose most of their purchasing power over time. In other words, gold is a great hedge against inflation, as the gold price adjusts upwards to offset inflation. The gold price even adjusts to inflation expectations, hence it is sometimes called an inflation barometer and is watched like a hawk by central bankers because the gold price signals future inflation.

Read More @ BullionStar.com

Deliberately Looking Away – Ted Butler

by Ted Butler, Silver Seek:

There are two great evolutions underway in the world of commodities that, while in full view, are misunderstood or overlooked by most observers. So important are these two developments that they threaten serious market upheaval when they are addressed, as must inevitably occur.  Most remarkably, indisputable data published by the primary federal commodities regulator, the CFTC, prove beyond a doubt both occurrences are underway, even as the agency, along with the US Department of Justice, refuse to confront what is a clear violation of US commodity and antitrust law.

A2A with Dave Kranzler of Investment Research Dynamics

by Turd Ferguson, TF Metals Report:
After a few weeks away, the award-winning webinar series “Access to Access” returns today with an update from our pal, Dave Kranzler of Investment Research Dynamics.

It’s always great to have Dave on as a guest and once again he did not disappoint. Over the course of this 54-minute call, Dave addresses a wide range of topics, including:

the developments today at Tahoe Resources
the current CoT structure and its implications for price
why Mother and her Goons are moving to raise the FF rate
possible gold and silver confiscation
how the mining shares may trade in a general equity bear market
and a whole lot more!
Please be sure to give this a listen and thanks again to Dave for all of his time.

Click HERE to Listen

Gold and Silver Price Goals For Year End – Craig Hemke (11/12/2018)

0

by Craig Hemke, Sprott Money:

Each of the past five years, we’ve predicted a year-end and new-year rally in precious metals. And for each of the past five years, the market has performed as forecast. So, what can be expected as 2018 becomes 2019?

Let’s begin with the past. As mentioned above, each of the past five years have seen year-end gold and silver price rallies. These rallies have begun around the time of the December FOMC, they have persisted through any remaining tax-loss selling, and they extended into the new year. Specifically,

  • COMEX gold saw a mid-December 2013 low of $1190. By early March 2014, it traded as high as $1388.

China Officially Re-Joins Gold-Buying Spree

from Russia Insider:

After China’s official gold reserves rose for the first time in around two years (since Oct 2016) in December, Beijing appears to have joined the global gold rush, increasing its gold reserves for the second month in a row in January to 59.94 million ounces.

As we previously notedChina has long been silent on its holdings of gold as many countries are turning away from the greenback.

SILVER – GOLDEN OPPORTUNITY

0

by Egon Von Greyerz, Gold Switzerland:

There is one spectacular investment opportunity today that virtually no one talks about. It represents less than 0.1% of global financial assets. This investment has a potential upside of 36x or 3,500%. The downside is extremely limited since supply is finite and demand strong. It is selling at around production cost and has a real intrinsic value. It has also been money for thousands of years.

Russia’s Shift to Gold Reserves Could Protect Sanctioned Economy – Scholar

from Sputnik News:

Russia is renouncing the dictate of the dollar by purchasing gold and selling US Treasury bonds, according to an article published in Die Welt. The article cites the author and political advisor James Rickards as saying that President Putin had a strategic plan and gold was the perfect investment to protect against dollar sanctions.

Sputnik discussed the increase in gold purchases by Russia amid US sanctions with Dr Dan Steinbock, global economic and policy analyst.