Tag Archives: Gold

Guaidó is Gone But London Keeps the Gold, by John McEvoy

Somehow a disproportionate share of global gold ends up in London. From John McEvoy at consortiumnews.com:

The U.K. stripped the assets of a foreign state and transferred them to political actors engaged in regime change, John McEvoy reports. The result has been a form of collective punishment for people in Venezuela.

Bank of England in London, 2020. (It’s No Game. Flickr, CC BY 2.0)

In late December, Venezuela’s leading opposition parties voted to oust Juan Guaidó as “interim president” and dissolve his parallel government.

This was clearly not the ending the U.K. government had in mind.

Four years ago, the British government made the bold decision to recognise Guaidó as Venezuelan president and proceeded to facilitate his legal battle to seize roughly $2 billion of gold held in the Bank of England.

Indeed, the U.K. government insisted at every turn that it recognised Guaidó — and not Nicolás Maduro — as Venezuelan president. In turn, Guaidó’s lawyers argued that he was authorised to represent and control the assets of the Central Bank of Venezuela held in London.

Throughout this time, Guaidó paid his U.K. legal costs by drawing on millions of dollars of his country’s assets originally seized by the U.S. government. In other words, Guaidó tried to seize Venezuelan state assets with looted Venezuelan state assets.

Meanwhile, it seems certain that the Foreign Office also used a significant amount of public funds to sustain its backing of Guaidó.

Now that Guaidó has been ousted, the legal argument for transferring the gold to the Venezuelan opposition has effectively disintegrated. Despite this, the gold remains frozen in the Bank of England, with no clear resolution in sight.

Whatever happens next, this case sets a precedent which could have far-reaching consequences: the U.K.’s coup weapons now include asset stripping a foreign state, and transferring those assets to political actors engaged in regime change.

This will surely serve as a warning to any state which plans to store its gold in the Bank of England.

Feb. 25, 2019: Juan Guaidó with Brazil’s Vice President Hamilton Mourão in Bogotá, Colombia. (Gabriel Cruz, CC BY 2.0, Wikimedia Commons)

The recognition of Guaidó was a key prerequisite for the Bank of England’s refusal to release Venezuela’s gold.

Guaidó had never run for presidential office. Yet on Jan. 23, 2019, he swore himself in as Venezuelan “interim president,” using Article 233 of the Venezuelan constitution to declare that Maduro had abandoned his post and thereby left an “absolute vacuum of power.”

This vacuum, claimed Guaidó, would have to be filled by the president of Venezuela’s National Assembly — a post he occupied.

Without the support of the U.S. government, Guaidó’s legal gymnastics would probably not have gotten him very far. However, the Donald Trump administration moved quickly to recognise Guaidó and began pressuring the so-called international community to follow suit.

The day after Guaidó’s self-swearing in, then U.K. Foreign Secretary Jeremy Hunt visited Washington and met key members of the Trump administration including Secretary of State Mike Pompeo, Vice President Mike Pence and National Security Advisor John Bolton.

[Related: Pompeo — A Monster Slaying Monsters Abroad]

The political crisis in Venezuela was high on the agenda. Before meeting with Pompeo, Hunt told the press that “the United Kingdom believes Juan Guaidó is the right person to take Venezuela forward. We are supporting the U.S., Canada, Brazil and Argentina to make that happen.” This was a strong statement – but not yet recognition.

Documents obtained by Declassified show that Hunt was privately thanked by Pompeo and Bolton for this. However, Britain’s contribution to toppling Maduro would go further.

Continue reading→

Is Gold the Last Freedom Train? By T.W. Thiltgen

It is the last freedom train, and it’s not too late to get on board. From T.W. Thiltgen at schiffgold.com:

Most people believe the Federal Reserve stabilizes the economy and our money. In reality, the central bank incentivized debt and destroys wealth. Is there a way to sidestep the destructive forces of central banking and fiat money?

T.W. Thiltgen believes there is a freedom train we can escape on — gold.

The following guest post was written by T.W. Thiltgen. The opinions expressed are his and don’t necessarily reflect those of Peter Schiff or SchiffGold.

I pose this question to you so that you can begin to consider that there is currently a macroeconomic problem that is more important than all other problems this country faces. That macro condition is the relentless destruction of capital throughout the world and the US in particular.

Merriam-Webster Dictionary defines capital as “accumulated possessions to bring in income.”

For our purposes here, I will just call it SAVINGS.

In economics, one of the important identities is S=I or Savings = Investment.

You cannot invest if you have not saved, and you will be able to invest less if your savings fall. This may seem obvious but bear with me.

Your savings can be destroyed by other than your own bad investment decisions. Negative real interest rates (interest rates adjusted for inflation) are the central driver in the destruction of capital for at least the last 14 years from the start of the 2008-2009 collapse.

By keeping interest rates below the rate of inflation, the Federal Reserve has destroyed saving on an unimaginable scale. Even today, US Treasury interest rates are still 3% points below the rate of inflation. And that’s using the government’s numbers. The real inflation rate using the methodology of the 1980s would put today’s inflation rate near 15%. Either of these numbers is disastrous, but taking the average of the number between 7% and 15% or 11 ½ % means that the value (purchasing power) of your savings is being destroyed in a very short number of years. Even if inflation falls back to 3 – 4%, your real inflation-adjusted saving will decline at a rate that will ultimately lower your standard of living.

Continue reading→

Japan Is Perhaps the Most Important Risk in the World, an Interview with Jim Grant and Christoph Gisiger

The Japanese bond market is a financial time bomb whose fuse has been lit. From Christoph Gisiger and Jim Grant at themarket.ch:

Speculation is mounting that the Bank of Japan is losing control of the bond market. Jim Grant, editor of «Grant’s Interest Rate Observer», believes this could trigger a shock to the global financial system. He also explains why he expects further surges in inflation and why gold should be part of your portfolio.

The news caught markets off guard: On December 20th, the Bank of Japan surprisingly extended the target range for the yield on ten-year government bonds to plus/minus 0.5%. A move that not a single economist had expected.

This week, the Bank of Japan could announce a major policy shift amid rising government bond yields and a strengthening yen. Although barely a month has passed since the BoJ’s last meeting, the bond market is already testing the new upper limit of the yield curve control regime.

«To us, Japanese interest rate policy resembles the Berlin Wall of the late Cold War era, a stale anachronism that must sooner or later fall,» says Jim Grant. For the editor of the iconic investment bulletin «Grants’ Interest Rate Observer,» recent developments in Japan pose an underestimated risk to global financial markets. Not least because virtually no one is talking about it.

In an in-depth interview with The Market NZZ, which has been slightly edited for clarity, Mr. Grant explains what it means for financial markets if the Bank of Japan is forced to scrap its yield curve control policy. But first, he says why he doesn’t believe inflation will end soon, why bonds may be at the start of a long bear market, and why he believes gold is the best choice as a store of value.

«If the past is prologue and if the great bond bull market is over, then on form, we are looking at what could be a very prolonged and perhaps gradual move higher in interest rates»: Jim Grant.

«If the past is prologue and if the great bond bull market is over, then on form, we are looking at what could be a very prolonged and perhaps gradual move higher in interest rates»: Jim Grant.

What do you observe when you look at the financial world today?

Well, it’s always the same, and – here’s the catch – it’s always a little different. The trick is to identify the unique or unusual feature of a familiar cycle. In this regard, it helps to know a little bit of financial history, and to just that extent it helps to be a little old. But what is not helpful is to mistake the past for a certain roadmap to the future.

Continue reading→

3 Things Most People Don’t Know About Gold, Bitcoin, and Money, by Nick Giambruno

In the coming collapse, Bitcoin may be a better way to transact and preserve wealth than gold. Or it may not, but it’s a good idea to learn as much as possible about both. From Nick Gaimbruno at internationalman.com:

Bitcoin has been likened to the platypus… which sounds like an odd comparison.

The platypus is a strange duck-billed mammal with webbed feet and a furry body like a beaver. It has characteristics of birds, mammals, and reptiles. Females lay eggs but also nurse their young with milk. Males produce a potent venom.

When Europeans discovered the platypus in Australia in 1798, they wrote letters to folks at home to describe this bizarre new animal. People thought the platypus was a joke or a hoax—because it didn’t fit into the classification of animals at that time.

But it was a real animal.

People just didn’t understand it because it was a new thing that didn’t fit into the established paradigms.

Bitcoin is much the same. It doesn’t fit into the framework of traditional financial analysis metrics.

There is no P/E (price-to-earnings) ratio because Bitcoin has no earnings.

There is no P/B (price-to-book) ratio because Bitcoin has no book value.

Bitcoin has no CEO, no marketing department, and no employees.

Bitcoin is an entirely new asset people are adopting as money because of its superior monetary properties, namely its resistance to inflation.

The monetization of a new global money is genuinely unlike anything anyone alive has ever seen before. There is nothing else comparable.

Like the platypus, Bitcoin is an entirely new animal. That’s why Bitcoin confuses many people, including prominent investment professionals.

Continue reading→

The Truth About Gold and Silver, by Jeffrey Tucker

Gold and silver are real money; everything else is credit. Gold and silver are not debt obligations (see Real Money, SLL). From Jeffrey Tucker at dailyreckoning.com:

In the midst of all this incredible political and economic chaos, I was tasked with packing up my mother’s things to prepare for her move to assisted living. It’s a gravely emotional experience for anyone, as I’m sure you know.

I adore that woman. It’s hard to see her get old. Also, that house contained 100 years or more of family history. All this stuff takes up space. With everyone on the move, it’s hard to find a good home for things anymore. We had to make some hard choices.

Anyway, along the way, I opened a small safe and found a lockbox, and opened it. It was my father’s collection of coins. What was in there hadn’t been seen by anyone for perhaps 25 years (he died rather young).

It was startling and amazing to see. It was like finding buried treasure. There were coins from all over the world, gold, and silver. I’m not sure that I knew that he was a collector.

There were all the usual gold and silver bullion coins from all lands, all worth the price of their metal content. All are vastly up in value from when he bought them. There were also hundreds of silver dimes. And there were plenty of numismatics too and because I don’t know my way around this world, I’ll let the experts determine their value.

Good as Gold

I won’t tell you the total value for reasons of privacy but I will say that he made a very good investment. Stocks are fun and swing this way and that but these coins are stable, true, and always faithful. Dad knew that. He was right.

Continue reading→

Gold in 2023, by Alasdair Macleod

What will be the fates of real money (gold) and fake monies (currencies) in 2023? From the Internet’s best economist, Alasdair Macleod, at goldmoney.com:

his article is in two parts. In Part 1 it looks at how prospects for gold should be viewed from a monetary and economic perspective, pointing out that it is gold whose purchasing power is stable, and that of fiat currencies which is not. Consequently, analysts who see gold as an investment producing a return in national currencies have made a fundamental error which will not be repeated in this article.

Part 2 covers geopolitical issues, including the failure of US policies to contain Russia and China, and the consequences for the dollar. By analysing recent developments, including how Russia has secured its own currency, the Gulf Cooperation Council’s political migration from a fossil fuel denying western alliance to a rapidly industrialising Asia, and China’s plans to replace the petrodollar with a petro-yuan crystalising, we can see that the dollar’s hegemonic role will rapidly become redundant. With about $30 trillion tied up in dollars and dollar-denominated financial assets, foreigners are bound to become substantial sellers — even panicking at times.

The implications are very far reaching. This article limits its scope to big picture developments in prospect for 2023 but can be regarded as a basis for further debate.

Part 1 — The monetary perspective

Whether to forecast values for gold or fiat currencies

This is the time of year when precious metal analysts review the year past and make predictions for the year ahead. Their common approach is of investment analysis — overwhelmingly their readership is of investors seeking to make profits in their base currencies. But this approach misleads everyone, analysts included, into thinking that precious metals, particularly gold, is an investment when it is in fact money.

Most of these analysts have been educated to think gold is not money by schools and universities which have curriculums which promote macroeconomics, particularly Keynesianism. If their studies had not been corrupted in this way and they had been taught the legal distinction between money and credit instead, perhaps their approach to analysing gold would have been different. But as it is, these analysts now think that cash notes issued by a central bank is money when very clearly it has counterparty risk, minimal though that usually is, and it is accounted for on a central bank balance sheet as a liability. Under any definition, these are the characteristics of credit and matching debt obligations. Nor do the macroeconomists have an explanation for why it is that central banks continue to hoard massive quantities of gold bullion in their reserves. Furthermore, some governments even accumulate gold bullion in other accounts in addition to their central banks’ official reserves.

Continue reading→

Doug Casey’s #1 Speculation for 2023

Doug Casey likes gold and uranium. From Casey at internationalman.com:

Doug Casey #1 Speculation

International Man: Will 2023 be the year of central bank digital currencies (CBDCs)? Or will this terrible idea be consigned to the dustbin of history?

Doug Casey: CBDCs are a disastrous idea. But that’s never stopped “the elite” in the past. First, they did zero interest rates and negative interest rates, which I thought was metaphysically impossible. But they did it. Then they went to massive “quantitative easing,” a dishonest euphemism for money printing.

The next thing is going to be Central Bank Digital Currencies (CBDCs), which will give them unprecedented control over the finances of the average person.

On the one hand, it should be cause for a revolution because it will actually turn people into serfs. But on the other hand, the average American has almost no understanding of economics. He has little grip on what’s going on and believes propaganda.

We’re going to get CBDCs in 2023, and this is one of the scariest things on the horizon.

International Man: Will 2023 be the year uranium really takes off?

Doug Casey: Let’s recall the last uranium boom, which we were fortunate enough to catch back in 2001 to 2007. Uranium ran from $10 a pound up to $140 a pound. And that was in the days when the Russians and the Americans still had large nuclear weapon stockpiles, from which they recaptured lots of U-235 for use in reactors. That’s gone.

Continue reading→

History Lesson: Trust Gold Rather than Sovereigns, by Matthew Piepenburg

Gold never started a war or did any of the other heinous things that governments have done. From Matthew Piepenburg at goldswitzerland.com:

Below, we consider a blender of history, simple math, sober facts and comical arrogance to better understand gold’s loyalty in a time of disloyal financial stewardship.

Hubris Comes Before the Fall

History (whether on battle fields or sports fields) is riddled with tragi-comical examples of human blundering (and hubris) in the face of otherwise obvious and self-inflicted risk—you know: The final swagger just before imminent defeat.

Remember “Mission accomplished”?

Like well-dressed officers steaming the Titanic at full speed ahead despite repeated ice warnings, the arrogant yet misguided faith our central planners/bankers have in their “unsinkable” financial (i.e., Keynesian) models and verbal platitudes is astonishing.

If the financial model, for example, says “raise rates to fight inflation,” then the model must be right—especially given the credentials of our elite “model followers,” all collectively swimming within an echo-chamber of model-making, yes-saying, self-selecting and PhD-affirming back-slappers from MIT to Stanford, U-Chicago to Harvard Yard.

Continue reading→

Doug Casey’s Top 4 Predictions for 2023

Doug Casey doesn’t see things getting any better next year. From Casey at internationalman.com:

Doug Casey predictions

International Man: What important trends do you see unfolding in 2023?

Doug Casey: Perhaps the biggest turning point in recent modern history will turn out to be 2020. Governments and their minions found novel ways to gain huge amounts of control. These things were well underway before 2020, but since Covid, they’ve all gone hyperbolic. That trend will accelerate this year—albeit with some much-delayed pushback.

Four areas stand out.

First, a relatively inconsequential flu, followed by a vaccine hysteria, got far more voluntary compliance to all manner of extreme measures than most anyone could have imagined. The powers that be found that the public is vastly more likely to do as they’re told if the rationale is health rather than politics, ideology, economics, or the like. So we can count on many replays of this tune, including mandatory vaccine passports and lockdowns.

Second, the drumbeat against the newly-minted enemy element, carbon, has reached manic levels. A substantial part of the population, and a large majority of youth, have been convinced that Global Warming will destroy the planet unless we go Green, stop using fossil fuels, and attempt to run an industrial civilization on windmills and sunshine. It stands a chance of destroying civilization.

Third, central banks are racing to impose CBDCs, while governments run multi-trillion dollar deficits and bailouts, doubling and tripling debt levels with little discussion. This is unprecedented.

Fourth, the widespread acceptance of Wokism, racial quotas, aggressive LBGT++ promotion, ESG, and DIE. There are serious discussions of race reparation payments and a Guaranteed Annual Income. It’s part of an accelerated general collapse of traditional moral values.

What’s happening will, I think, be seen as a turning point greater than either WW1 or WW2. And there’s an excellent chance we’re looking at something akin to WW3 in the bargain. I don’t doubt that the era before 2020 will soon be referred to as the “Before Times,” a phrase that’s been used in dystopian science fiction. And the future could resemble dystopian sci-fi.

Continue reading→

U.S. Double-Speak Will Not Stop Gold’s Imminent Surge, by Egon von Greyerz

You can’t fool all the markets all of the time. From Egon von Greyerz at goldswitzerland.com:

Propaganda, lies and censorship are all part of desperate governments actions as the economy disintegrates.

We are today seeing both news and history being rewritten to suit the woke trends that permeate society at every level, be it covid, the number of genders, the Ukraine war or government finances.

I have in many articles covered the explosion of money printing and debt which is an obvious sign that the global financial system is approaching collapse and default . The consequences will be  far reaching to every corner of the globe and all parts of society.

See my recent article “In The End The Dollar Goes To  Zero And The US Defaults” which outlines the probable course of events in 2023 and afterwards.

Later on in this article, I will look at the consequences in relation to markets and what ordinary people (investors?) can do to prepare themselves.

ORWELL PREDICTED THE FALSIFICATION OF HISTORY 73 YEARS AGO

Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.George Orwell, 1984

Let’s just look at government finances. As we are entering the end of an era with deficits and debts running out of control, the truth becomes an inconvenience to governments and must therefore be suppressed or rewritten.

Continue reading→