Tag Archives: Gold

Robert Gore Said That? 10/10/18

On Septemeber 30, at Murphy, North Carolina, I addressed the Appalachian Network PATCON, a gathering of very bright people on the cutting edge of preparation for the coming catastrophe. The topic was: “How to Survive an Economic Collapse.”

Advertisements

Apocalypse, Or Not? by Alasdair Macleod

The end of the American government as we know will be traumatic, but it need not be the end of the world. From Alasdair Macleod at goldmoney.com:

Members of the American libertarian movement, particularly extremist preppers, are often associated with a belief that a complete breakdown in society is the only outcome from government economic policies and will lead to complete social disintegration. At the centre of their concerns is monetary destruction, with other issues, such as the erosion of personal freedom and the right to bear arms, important but peripheral. They cite history, particularly the hyperinflationary collapses, from Rome to Zimbabwe, and now Venezuela. They draw on Austrian economic theory, which fans their dislike of government and their expectation of total chaos.

Continue reading

What Turkey Can Teach Us About Gold, by Michael Lebowitz

Gold is one of the best insurance policies around against the depreciation of paper money. From Michael Lebowitz at realinvestmentadvice.com:

If you were contemplating an investment at the beginning of 2014, which of the two assets graphed below would you prefer to own?

In the traditional and logical way of thinking about investing, the asset that appreciates more is usually the preferred choice.

However, the chart above depicts the same asset expressed in two different currencies. The orange line is gold priced in U.S. dollars and the teal line is gold priced in Turkish lira. The y-axis is the price of gold divided by 100.

Had you owned gold priced in U.S. dollar terms, your investment return since 2014 has been relatively flat.  Conversely, had you bought gold using Turkish Lira in 2014, your investment has risen from 2,805 to 7,226 or 2.58x. The gain occurred as the value of the Turkish lira deteriorated from 2.33 to 6.04 relative to the U.S. dollar.

Continue reading

The Last Hurrah Before the Dark Years, by Egon von Greyerz

He’s probably right. From Egon von Greyerz at goldswitzerland.com:

This is it! The autumn of 2018 will be momentous in the world economy, markets and politics.
We are now seeing the Last Hurrah for stocks, bonds, the dollar and most asset markets.

The world economy has been living on borrowed time since the 2006-9 crisis. The financial system should have collapsed at that time. But the massive life support that central banks orchestrated managed to keep the dying patient alive for another decade. Lowering interest rates to zero or negative and printing enough money to double global debt seem to have solved the problem. But rather than saving the world from an economic collapse, the growth of debt and asset bubbles has created a system with exponentially higher risk.

Continue reading

Gold Yuan Crypto, by Raúl Ilargi Meijer

How will the world’s monetary system realign when the world must face the consequences of fiat currency and debt expanding at a rate far in excess of actual production? From Raúl Ilargi Meijer at theautomaticearth.com:

It’s been a while since we last heard from Dr. D, but here he’s back explaining why neither gold nor the yuan nor cryptocurrencies can or will replace the dollar as the reserve currency, but together they just might:

Dr. D: “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” –Ogden Nash

Over the last year or two there’s been discussion about the U.S. Federal spending moving beyond $4 TRILLION dollars, and whether a $1+ trillion dollar annual deficit, on top of a $20 Trillion national debt – Federal only – is sustainable. It isn’t.

“What can’t go on, doesn’t” is the famous quote of economist Herbert Stein. Since a spiraling deficit of $1 trillion deficit on a $20 trillion debt can’t go on, what will we replace it with when it very soon doesn’t? Historically gold. Whatever gold exists in the nation’s coffers, whether one coin or 8,000 tons, is used to as the national wealth, and fronted by paper to re-boot the currency. With some additions such as oil and real estate, this was the solution in Spain, France, Germany, and the Soviet Union among hundreds of fiat defaults. Why? Because at a time of broken promises — real goods, commodities that can be seen, touched, and used – are the tangible proof of wealth, requiring no trust, and from which the human trust system of paper and letters of credit can be rebuilt.

But in these complicated, digital times perhaps that’s too simplistic. Perhaps we have grown smarter than all our fathers and this time it will be different. Will it really be the same? Let’s look at how the system works now.

Before WWI, the world was on the gold standard. This had variations, exceptions, corruptions, but on the whole there was gold in the back that was fronted by paper promises issued by private banks. The paper moved, the promises were delivered by telegraph and telephone, and the gold remained in the vaults. It was only when men felt unsure of the truth of the promise they could and did demand delivery, called the bluff, and the bank did – or ominously didn’t – deliver the gold, and thereby keep the paper system in line with reality, with real wealth, and with the economy. This method kept men and nations honest, mostly.

The main part is that the gold didn’t move: it stayed in the same vaults and its ownership changed, just like today. It didn’t matter how much gold existed: it simply changed price, just like today.

To continue reading: Gold Yuan Crypto

 

The “Axis of Gold” Just Got Stronger, by James Rickards

Transacting in gold can be a nifty way around the US’s financial sanctions. From James Rickards at dailyreckoning.com:

As you probably know by now, President Trump backed out of the nuclear deal with Iran and is re-imposing harsh sanctions.

And just this morning, Trump announced that he’s canceling the much-anticipated nuclear summit with North Korean leader Kim Jong Un because of Kim’s recent belligerent comments.

What does that mean, aside from the added geopolitical risk to markets?

As you’re about to see, you can now expect what I call the “Axis of Gold” to get even stronger. And it has potential to accelerate the demise of the dollar-based international system.

The Axis of Gold includes Russia, China, Iran and Turkey. I would also include North Korea in that list, although as a junior member.

These countries are forming a trading and financial network revolving around gold and are acquiring massive amounts of physical gold to support it. They are steadily moving toward a gold-based balance of payment system.

Why is this happening?

Well, if you’re on the receiving end of American sanctions like Russia, Iran or North Korea, you want a way to work around these sanctions. And gold is a powerful alternative.

Let’s first consider North Korea.

With the summit called off, there’s every reason to expect that North Korea will only intensify its nuclear program.

But how can North Korea obtain the foreign nuclear and missile technology it requires to advance its program?

By using gold.

If a rogue state wants to acquire ballistic missile components or equipment to enrich uranium, it can’t buy them through SWIFT, the international payment system. But it can use gold.

Gold can’t be hacked or traced. Unlike digital money in bank accounts, it can’t be frozen. You just put it on a plane or ship and send it to its destination.

And new U.S. sanctions will once again lock Iran outside of the international payment system. But Iran does a lot of business with Russia and China. That’s where gold comes in.

To continue reading: The “Axis of Gold” Just Got Stronger

Doug Casey on Why Gold Could Go “Hyperbolic”

Precious metals may be the only refuge from systemic risk. From Doug Casey at caseyresearch.com:

Justin’s note: Volatility has come storming back.

Just look at the CBOE Volatility Index (VIX), which measures how volatile investors expect the market to be over the next 30 days.

It’s up 89% since the start of the year. Last week, it hit the highest level since 2016.

Investors aren’t used to this. After all, last year was the least volatile year ever for U.S. stocks. That lulled many investors to sleep. It led them to take risks they would normally never take.

Now, those same people are wondering what to do. They aren’t sure if this is just a run-of-the-mill pullback…or the start of something much worse.

To help answer this question, I called up Doug Casey. I knew he would have an interesting take on this matter…


Justin: Doug, U.S. stocks took a beating recently. Where do you see things going from here?

Doug: Well, I hate to make a firm prediction of timing. The fact that things have held together, against all odds, since 2009, has underlined the old saying about just because something is inevitable doesn’t mean it’s imminent. Predictions of disaster, and all these things unwinding, have been wrong over the last half a decade. And the smart bet is always for muddling through, in the direction of progress. But it seems that we’ve finally reached a peak, a major turning point.

Justin: So, what have you done to protect your wealth?

Doug: At the beginning of the year, I took all my original capital out of cryptos, plus 150% profits. I also took profits on crypto stocks. I got in late, and out a bit late. But it was a happy experience.

They were bubbly. Every company that could possibly do so has gotten into this game. Now XYZ ice cream company is XYZ blockchain company. That was one tipoff.

To continue reading: Doug Casey on Why Gold Could Go “Hyperbolic”