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  • Peter Schiff Has It Totally Backwards - Gold Is Not Going 'To The Moon' [View article]
    He predicted the housing crash of 2007/08. What have you predicted?
    Jun 13, 2013. 08:22 AM | 57 Likes Like |Link to Comment
  • End Of An Era For Gold Investors [View article]
    If the author argues that negative interest rates are not sustainable, that means that the bonds market is going to crash. There is no other way as rates are so low and the FED is not going to let inflation come down.
    The arguments in the article are from a person who doesn't understand gold. Gold has been a store of value of 6000 years and the fist coins were struck more than 2500 years ago. It has preserved its value very well over the centuries. The average life of a fiat currency is 27 years. By that definitions, the dollar has aged a lot. The FED has absolutely no other bullets but currency debasements.
    Aug 3, 2012. 04:17 PM | 24 Likes Like |Link to Comment
  • George Soros' remarkable speech on the "political bubble" of the EU: "The (current) political dynamic makes the disintegration of the EU just as self-reinforcing as its creation has been ... (however) the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery, but also for Germany." He gives the Germans 90 days to come around. Worth the full read.  [View news story]
    You must be joking. Soros became a billionaire from nothing and you call him naive. Soros knows exactly what he is saying. I assume that he has some trades on that would benefit from what he is saying, at least that is the idea. When MF Global collapsed, Soros bought their portfolio of European bonds. Then he was talking how Europe should do this and that ... he just wanted his bonds to go up in value and they did. Maybe he still has some Italian and Spanish bonds or perhaps something else. You can never trust Soros. He only says things that would benefit him financially.
    Jun 3, 2012. 10:37 AM | 23 Likes Like |Link to Comment
  • Has Paul Krugman Gone Too Far This Time? [View article]
    Krugman is not too stupid. His job is to simply tell the world that politicians are right to print money. He just does what he is paid to do. This is why he got a Nobel prize as well. He is just an average moron who knows where the chocolate is and keeps helping himself with both hands. This is all.
    Nov 12, 2012. 03:32 PM | 20 Likes Like |Link to Comment
  • Don't Bet On Gold [View article]
    Gold is cheap at current levels, that much is pretty clear to people who look at money supply numbers. $2 trillion was printed since 2008 and the US has ~ $500 billion of a current account deficit and ~1.3 trillion of a budget deficit annually, while all the gold mined in the world in one year is worth less than $150 billion. A lot of the gold mined never sees the market as places like China and Russia are big producers (China is the world's biggest) but do not export any gold. The dollar has been a currency in its current purely fiat form since 1971. This means that the dollar as it is now has only 40 years of history. Gold has a 6000 years of history as a store of value, while the first gold coins were minted 2500 years ago by Croesus, the Lydian king.
    The world doesn't need to come to an end in order for gold to do well compared to fiat money. Let me give an example. In late December 2003, the Grand National Assembly of Turkey passed a law that allowed for redenomination by the removal of six zeros from the Turkish lira, and the creation of a new currency. Turkey is viewed now as a EM country with big economic potential. What is likely to happen is that savers and the middle class get decimated over time as the fiscal policies that devalued the Turkish lira, Russian Ruble, Mexican Peso and a few other currencies are now being actively pursued by the Developed World. Then the Developed World may become more competitive and start building new middle classes and wealth.
    May 11, 2012. 02:22 PM | 20 Likes Like |Link to Comment
  • U.S. Investors Show New Interest In Gold And Silver [View article]
    Of course, the manipulation on the Comex managed to move the price lower in 2013. The idea was that buyers would get scared and stop buying. That worked on Western investors and they unloaded 900 tons of gold in ETF's. It worked in reverse on buyers in China, Turkey and others where the demand went and still is through the roof. To understand what happened to gold, lets look at some elements of supply.
    In 2013 the UK exported ~ 1500 tons of gold (and produced 0), the US exported ~ 750 tons of gold and produced a bit over 200 tons. BIS (Bank for International Settlement) also sold some of its gold. These three entities together supplied the market with a total of ~ 2400 tons of gold. This is equal to all the gold mined in the world outside China. Nobody knows what China mines but they claim more than 400 tons.
    The latest demand numbers have gone up again. Buying is the name of the game in China, India, Russia, Turkey. Thailand, the Middle East and more. The 2400 tons that the US, UK and BIS supplied last year wouldn't be enough to keep the price low in 2014. These three entities would need more than 2500 tons (maybe more than 3000 tons) of gold coming from somewhere to suppress the price around current levels.
    Of the 2400 tons supplied last year, 900 tons were ETF's, 200 tons (maybe a bit more) was gold mined in the US and the rest 1300 could only have come from the vaults of central banks (the FED, BOE and BIS). These central banks are selling their reserves to keep the price low and distract people from their irresponsible money printing policies. Since the UK and the US also consumed gold last year, the 1300 tons that I estimate to have been sold by Central Banks is actually a low estimate. 1500 tons and higher is more likely.
    I doubt that they can repeat the same with the rest of the holders of GLD in 2014 ... there must be some strong hands there but maybe they get some gold out of GLD. Still, the FED, BOE and BIS would need to sell more than 2000 tons of their reserves to keep the price down (maybe as much as 3000 tons). I don't know if they are prepared to do that but my guess is that the BOE blinks first and gets out of that rigged game because they risk the status of London as a world financial center if it gets out that they play such dirty games.
    With all that gold getting exported by the US and UK, you would think that finding gold is easy. So, why did Germany got only 35 tons of the reserves that they asked to be returned to them and will they get any more?
    The real problem that the FED has in gold is that the Chinese import in excess of 2000 tons and keep all the gold mined in China. That leaves 400 tons for the rest of the world and India itself consumes more than 1000. Where is the gold going to come from? My estimate is that the fair price of gold ~ 2500 or higher. This is half of current levels. Gold is very volatile due to constant interventions in the market ... these interventions happens several times per day every day. People with long term view are likely to be well reward for holding some gold. Do your homework and decide but stay away from ETF's (who knows what they have) and especially stay away from the Comex futures - this is a totally rigged game. Focus on physical metal.
    My estimate is that this year the demand will be much higher due to attractive prices and also India is coming back to the market - they are finding ways to import gold through various channels and their is a lot of pent up demand there. Think about the Prohibition, more alcohol was consumed during that time than before. The same is happening with the consumption of gold in India.
    Jan 19, 2014. 12:38 PM | 18 Likes Like |Link to Comment
  • The Slippery Slope Of Silver [View article]
    First, I need to correct a couple of technical errors. The article talks about $42 price being a record high for silver - this is incorrect (honest mistake I assume). The other error is that while talking about silver volatility the article talks about May and September only. It is a fact that silver is very volatile. This is not something new but has always been there. Silver is a much smaller market than gold and there are speculative positions (both short and long), which causes volatility. Also, I believe that the last two price drops were engineered. I think that the first price collapse in May was engineered 100% and the second in September was made much more severe due to the same price manipulation. What I mean by that is that well timed margin hikes + selling to hit stop loss orders started the sell off in May and in September the same technique was used to make the price moves much bigger. In May the initial selling started in Asia at a time when the liquidity in the market was minimal. The idea was that selling at that time would cause the biggest price move and the perpetrators were correct. It seems that the Comex is quite happy to help the big banks make some money by hiking margins exactly at the time when these banks really need such hikes to push the price of silver down. I've watched the market and the timing of the margin hikes was perfect to cause the maximal damage to the longs in the futures market. It is quite shocking that something like that can be done on an exchange. How can that be legal?
    I don't know what Barclays and the rest think about silver but my personal view is that silver is very undervalued. We are likely to see 150-200 price by 2015. This is just my opinion where silver can get to in order to reach fair value but here are some reasons:
    1) Silver is perhaps the most useful industrial metal. Electronics, solar energy, medicine ... the uses go on and on. Since silver is used in small amounts, many of these applications do not depend on the price and substitutions are very difficult.
    2) Silver is a monetary metal and an excellent store of value. For example, the Romans used silver for their coins.
    3) Silver mined in the world is only 9 times more than the amount of gold mined (in terms of weight), while the price ratio is 52 - silver is a cheap hedge to protect investors from money printing central banks.
    4) Value of annual silver production is ~ $25 billion = 1 week of US budget deficit for fiscal year 2010 - 2011. This is a very small number and the amount of silver above ground (stored) is very small. Most of the silver that has been mined has already been used. Only about ~ $32 billion worth of silver is available above ground. Silver is rarely recycled as the price is too low to justify that.
    5) Investor demand is there and people are buying physical silver. China and India are buying and I believe that they find it cheap at current prices. This may eventually cause a problem for industrial companies if there is a shortage (there are many speculations about whether or not we have a shortage already).
    My conclusion is that silver is a very good investment with good upside potential. It is very volatile and not for everybody but it is a solid long term investment. Hardly anybody has invested in silver - the market is tiny and this is definitely no bubble. The right strategy is buy and hold as Comex ''silver attacks'' can cause volatility and only long term views are likely to work. If you can afford to hold a position for say 5 years, the upside is significant. Silver is more volatile than gold as its sensitivity to the economy is higher (being both an industrial and monetary metal). Last, I will mention that both silver and gold prices will depend on monetary policies. My view is that we are going to see easy money for years to come, negative real yields and more QE aka money printing, which is a major reason why I am bullish on silver.
    Oct 24, 2011. 12:11 PM | 14 Likes Like |Link to Comment
  • Gold And Gold Stocks Readying For Upturn Against Equities [View article]
    It doesn't matter who wins the elections. Both parties have the same policies. They are virtually identical and the differences are too small to make a difference. Just look at the past and the huge deficits and money printing that went on during the Bush years.
    Oct 13, 2012. 08:10 AM | 13 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Well, congratulations to Wisconsin for doing the right thing. Wonder if others will follow which is really the only way to go.
    Jun 6, 2012. 07:51 AM | 13 Likes Like |Link to Comment
  • 'Civilized People Don't Buy Gold' [View article]
    I get it. Civilized people don't buy gold. They buy silver. Is that why Warren tried to corner the world silver market. In the late 1990's he bought 130 million ounces of silver.
    May 6, 2012. 03:05 AM | 13 Likes Like |Link to Comment
  • Why Buffett Dislikes Gold [View article]
    Buffett has become a crony capitalist. Part of his job being a crony capitalist and getting the government to bail out financials institutions (he is a big investor in financials) is that he talks against gold. He keeps talking the party line and gold keeps going up because the Asians have better things to do than listen to him.
    Feb 20, 2012. 05:09 PM | 13 Likes Like |Link to Comment
  • China: The Gold Market's 'Elephant In The Room' [View article]
    There are many buyers, fewer sellers and the amount mined every year is limited. This is why prices have gone up. The government of China is very clever about how it buys gold. The Chinese aim to buy a lot of gold and to optimize the price. When gold comes down and people are desperate to get out of speculative longs, China steps in and buys in size. Funds get excited and buy as the market goes up. China then steps out of the market and goes quiet waiting for the next pullback. When that happens, they are back in the market buying in size again. Seems to work well in this volatile market with the Western Central Banks and media talking gold down and trying to convince their citizens to sell their gold to China at low prices.
    Gold is volatile, just like the price of natural disaster insurance can be volatile, but it is a safe haven in the sense that it is likely to protect its holder from the man made disaster of currency devaluation and debasement via money printing. Gold is an excellent insurance for that and one that has no maturity date!
    Silver is a different animal as most silver is consumed by industry: electronics, medical, solar panels and more. The supply/demand for 2011 is here
    You can see that at current prices only $25 billion worth of silver is mined in the entire world. More silver is used in industry than mines provide. At some point the silver market is likely to go into serious deficit and prices can go anywhere. Of course, the risk is that prices go down like in May and September, mostly due to coordinated attacks by banks and the COMEX exchange, but eventually these attacks are not going to work and we are going to see much higher prices. My view is that we can see 2500 gold this year and 50 silver. By 2015, gold should be at 5000 and silver 150-200. We are going to see massive volatility on the way.
    Feb 13, 2012. 05:24 AM | 13 Likes Like |Link to Comment
  • No One Knows How Much Gold China's Central Bank Is Buying [View article]
    I assume that China has 3,000 to 4,000 tons of gold. They don't just import a lot but also happen to be the biggest gold producer in the world. They also buy mines (not just gold mines) and whatever gold is produced there is shipped directly to China. They are basically getting out of the dollar to the extent that they can.
    Feb 10, 2013. 01:15 PM | 12 Likes Like |Link to Comment
  • Yes - Something Did Change Last Week In Precious Metals Markets [View article]
    The 7.5 million ounces of silver coins sold in January were sold even though the Mint closed shop and didn't sell any silver for 10 days or so. Without that, 10 million would've been an easy number to get to. Going forward, they will ration sales. Before the financial crisis, 10 million ounces was the amount sold in an entire year. Now it only takes a month or so. Keep in mind that all silver available for investments (after subtracting industrial applications) is only ~ 300 to 350 million ounces. Other silver coins are also minted in the western world: Austria, Canada, etc. Of course, there are the ETF's and physical bullion. Keep in mind that the big demand for silver investments is not in the west but in the east - China, India and so on. The Chinese trick is to buy whole mines. Once they buy a mine, you never see any of its production ever again. It all gets shipped straight to China. I expect that over time we will see different prices for physical silver and futures as the charade on the COMEX continues unabated. They will stop physical deliveries at some point and move to cash settlements as they only have 37 million ounces to deliver (registered silver on the Comex). I think that the bullion banks are short futures equivalent to 250 million ounces of silver (most of that is J.P.Morgan). Where would they get that? It is impossible to tell when the rigged market will blow up on the Comex but it is getting there.
    Feb 3, 2013. 01:58 PM | 12 Likes Like |Link to Comment
  • The Keynesian Depression [View article]
    If one looks at the world we live in, one sees that the exact same problems can also be found in Japan, the UK and the Eurozone. Virtually all of the developed world has been affected, with the likes of Australia and Canada doing a bit better. In my opinion, the crisis hasn't even started yet. When it does start, things will be very unpleasant unfortunately. It is extremely difficult to predict the timing of that crisis but my guess is within 5 years. Who knows, it can be 10 but I view that as way too long for the current unstable system to survive in its current form. Would be good if we manage to avoid a global war. 1970's inflation is guaranteed and I think that the world will be lucky to get away with that, avoiding other, more unpleasant scenarios.
    Dec 4, 2012. 05:56 PM | 12 Likes Like |Link to Comment