Gold Editorials & Commentary

Many years ago when I was a teenager, my late father had a friend who was in his sixties. His name was Johnny and he was overweight.

One of investors’ biggest fears over the Fed’s monetary stimulus (QE3) is that it will cause runaway inflation.  While there are reasons for believing this fear could come to pass in the years following the upcoming 120-year cycle bottom in late 2014, the evide

I was honored to be in St. Paul’s Cathedral attending Margaret Thatcher’s funeral last week.

The last three major bull markets of the Dow were followed by some type of economic crisis and a major bull market in gold. This is no coincidence, since these massive bull markets have been mostly driven by the huge expansion of the money supply.

Many economists believe the price of gold has fallen because institutional investors have become more interested in owning the general stock market.

 

So we saw gold fall a hundred plus dollars in a day and I say, it’s fine.

There's a lot of confusion about money and about what does and does not form part of the money supply. Our goal in this short discussion is to reduce the confusion.

Gold prices have managed to recover more than $ 80 an ounce from its recent low as demand for the physical metal explodes.

The cyclical recovery that began in March 2009 has been impressive but is getting long in the tooth.  Investors wonder when it will end, and while this can’t be known with precision there are signs that its terminus isn’t far away.

In the years following the global financial crisis, economists and investors have gotten very comfortable with very high, and seemingly persistent, government debt.

Here are the historical bull and bear markets for Gold since 1972 (post Bretton Woods) through 2007.

Here are the historical bull and bear markets for Gold since 1972 (post Bretton Woods) through 2007.

I covered municipal bond yields last year as they approached their second anniversary of an amazing and historic yield inversion.  Geeze Louise, muni-bonds pay tax-free income, yet since November 2011 they have yielded more than Barron’s Best Grade Bonds.  Ther

Have a good look at the following two charts.

I have never appealed to the so-called conspiracy theories in trying to explain the strange world of fluctuations in the price of monetary metals.

Explanations for this gold selloff abound everywhere and nearly all of them are inane and incorrect.

There are likely, at minimum, half a dozen reasons for the swift correction in precious metals over the past week. The real reason might be one, two, or even all of what I’m going to lay out below.

The recent drop in gold and silver is not critical to buyers of physical metals. Instead, it is an opportunity – to buy more at lower prices; at worst, it is an irritation, since it means a longer wait.

On Friday we witnessed a great plunge in gold (almost $80 – from $1560.30 to $1480.50) and silver (almost $1.7 – from $27.58 to $25.89) and we are seeing even lower prices this week.

That was the question I asked myself after being 100% cash into the last hour yesterday and seeing the bottom fall out on the gold stocks once again. Classic trading methodology teaches that you do not try to catch a falling knife.

To me, at least, times are fascinating as much as they are disturbing. The take down we have seen in gold and silver beginning on Friday and still continuing on Monday is breathtaking.

I have come across the above item on eBay. It is selling at $60 for a 2 pound bag. It is not an illegal drug and it would not be much good for smoking either.

The threat of war against the United States is making headlines and roiling investors’ nerves.  While full-scale war is likely not imminent, it’s something worth considering in light of where we stand in the long-term War Cycle.