central banks
The Survival Podcast’s Jack Spirko Predicts U.S. Boom, Then Bust Probably ‘10 Years Into The Future Or More’
The other podcast material I said I was going to talk about today comes from The Survival Podcast, hosted by modern survivalist Jack Spirko. Also selected as a “Resource Of The Week,” I wrote back in March 2011 about TSP:
I can’t remember how I first heard about the podcast- but I’m glad I did. Spirko publishes new episodes several times a week. And they’re chock-full of useful information for the novice through expert homesteader/prepper/survivalist- or someone who just wants to be more self-sufficient in their daily living.
But TSP doesn’t focus solely on preparedness/survival topics. Spirko tosses economics and finance in there as well. And listening to him for a few years now- he undoubtedly gets it. Big picture included.
And here’s what the host of The Survival Podcast had to say about the “big picture” back on May 9 in episode 1127, “Risk Assessments and Readiness Audits”:
I do believe our biggest threat is economic. I believe that this country is in store for an economic boom. Yeah, I said boom. If you’ve not been listening to me, I think we’re about to have one of the best periods ever in the history of the country from an economic standpoint. Sadly, it will be driven by both fake and real factors. Fake economic factors, real energy factors. But that can only go on so long. And sooner or later we are going to get to a point where inflation, the devaluation of money, the ridiculous level of debt and the interest there on it, do their full-scale, whole cancer-style damage, eat the patient from the inside, and we wake up to terminal financial illness as a nation.
But that’s not happening tomorrow. That’s not happening next year. That’s not even happening in the next 5 years. There could be recessions and things in the middle. But that day is probably at this point 10 years into the future or more.
And I don’t claim to be Nostradamus. I don’t know the exact timeline. I can just do math and can say with mathematical certainty this system at some point must fail.
“10 years into the future or more”
I think I just heard a collective sigh of relief from many readers.
Not so fast.
Regular readers of Survival And Prosperity know that I’ve been warning about a coming U.S. financial crash for almost 6 years (2007-2010 Boom2Bust.com included). I’ve never thrown a “start” date out there because I’m well-aware the central bankers excel at “kicking the can down the road.” Look at the “Panic of 2008” and how that was “papered over”- for the time being. Spirko knows that our “financial reckoning day” can keep getting pushed back- a lot longer than many of his listeners might think is possible. And I think that was what he was trying to convey with that “10 years into the future or more” bit. I’m pretty sure he didn’t throw that out there to say “all’s well,” or that any new preparedness plan and program should incorporate a 10-year timeframe until the economy and larger financial system hits the proverbial brick wall.
Like I said before- Jack Spirko gets it. If he thinks the U.S. is heading for a boom, then a bust a decade or so out, then it’s a forecast worth considering.
In the meantime, he’d probably agree with me when I say it might be wise to take advantage of the “good times” to get squared-away for what’s in store for us down the road.
You can listen to the podcast of episode 1127 here via The Survival Podcast website.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Former High-Ranking Treasury Official: Fed Ordered Attack On Gold
Speaking of manipulating the price of gold, there’s been a good deal of suspicion that the yellow metal has come under deliberate attack.
It doesn’t come as a surprise to me that some might think this, considering the following:
• A number of Federal Reserve officials keep blabbing on about how the central bank might dial back quantitative easing soon, helping to shore up the U.S. dollar when they do this while subsequently detracting from gold’s allure
• The seemingly-reformed financial news media (accused of being stock market cheerleaders in the 90s and early 2000s) has bared their true colors and have savaged gold with a barrage of negative press. Of course they fail to mention that “gold is still up by more than 400 percent from the lows in 1999, whereas the S&P is barely up 2 percent from their highs in 2000,” as Marc Faber reminded Yahoo! Finance viewers this morning.
• Then there’s that huge disconnect between the “paper” gold market- where traders are supposedly running for the hills- and the “physical” gold market, where buyers are paying significant premiums over spot to acquire tangible gold and dealers are describing current demand as being a buying frenzy, not seeing anything like this in years- even decades.
Enter Paul Craig Roberts, chairman of the Florida-based Institute for Political Economy. Roberts is a former associate editor and columnist for the Wall Street Journal who President Reagan appointed as Assistant Secretary of the Treasury for Economic Policy.
Roberts thinks the Federal Reserve has been orchestrating an attack on gold.
He wrote on the Institute’s website this past Saturday:
On Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.
The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.
Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.
Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.
Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.
Who can be unconcerned with losing money in this way? Only a central bank that can print it.
(Editor’s note: Italics added for emphasis)
Roberts isn’t the only one accusing the Fed of ordering an attack on gold. Back on April 29 I started off a post with the following April 17 statement from Ambrose Evans-Prtichard, international business editor over at The Telegraph (UK):
My view is that the US Federal Reserve and the Bank of Japan ‘caused’ the gold crash. The rest is noise…
The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. ‘There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,’ said Lars Christensen form Danske Bank.
The era of money printing is young yet. Gold will have its day again.
You can read the entire Roberts’ piece on the Institute for Political Economy’s website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Gold Price Takedown Leads To Buying Frenzy
“My view is that the US Federal Reserve and the Bank of Japan ’caused’ the gold crash. The rest is noise…
The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. ‘There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,’ said Lars Christensen form Danske Bank.
The era of money printing is young yet. Gold will have its day again.”
-Ambrose Evans-Pritchard, The Telegraph (UK), April 17, 2013
Since I started blogging nearly six years ago, if I had a dollar every time I read somewhere “gold is toast,” I’d be a millionaire by now.
Fine. I’d have a hell of a lot of singles.
And a raised eyebrow from my girlfriend.
Seriously though, what is it with people who absolutely detest the precious metal?
I’m not a big fan of paper assets, but I don’t make it my life’s mission to crucify them whenever I get the chance (website and blog comments come to mind here).
My take on investing is- keep an open mind. Lest you squander major money making opportunities. Certain asset classes simply perform better than others at different points in time.
There’s a time for stocks, bonds, currencies, what have you.
And for a number of global investors, now is the time for gold.
Sure, the precious metal really got hammered in the price department the other week. But this resulted in a buying frenzy of the physical bullion. John Noble reported on the Financial Times (UK) website on April 22:
Asia is witnessing one of the strongest waves of physical gold buying in 30 years, with bargain hunters using the drop in prices to secure jewellery and gold bars.
The feverish buying has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand. In Shanghai, the gold exchange saw volumes – often seen as a proxy for demand – rising to a record on Monday, while queues formed outside some jewellery shops in Beijing.
To give you an idea of just how crazy the demand is in China, Noble, who’s writing from Hong Kong, added:
Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold.
“In terms of volume, I haven’t seen this gold rush for over 20 years,” he said. “Older members who have been in the business for 50 years haven’t seen such a thing.”
The Times piece noted demand for the yellow metal is also strong in India. Something Biman Mukherji and Debiprasad Nayak confirmed on the Wall Street Journal website on April 23. They wrote:
Indian gold retailers are paying more in order to meet immediate demand, as customers scoop up every gold bar they can lay their hands on in the wake of a plunge in international prices.
Indian retailers say they are paying premiums of $8-$10 an ounce over the international gold price, which is around $1,425 a troy ounce. That’s four or five times the premium retailers usually pay for imported gold during periods of peak demand in India, according to traders.
“We have not seen this kind of premium on gold imports in years,” said Suresh Hundia, president emeritus of the Bombay Bullion Association.
Gold demand is not too shabby in nearby Australia either. Jake Lloyd-Smith reported on the Bloomberg website tonight:
Australia’s Perth Mint, which refines nearly all of the nation’s bullion, said that demand has jumped to the highest level in five years after prices plunged, with the factory kept open through the weekend to meet orders.
There’s been strong interest, including from the U.S., with buyers speculating that the metal will rebound from the decline, Ron Currie, sales and marketing director, said in a phone interview from Perth…
“We haven’t seen levels like this since the 2008 global financial crisis,” Currie said yesterday. “Compared to March sales, April sales have doubled or tripled,” he said, without providing figures.
On Friday, April 12, the afternoon fix gold spot price was $1,535.50 per ounce. The price tumbled to $1,380 an ounce by Tuesday, April 16. Today, the London P.M. fix was back up to $1,467.50.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Sources:
Noble, John. “Asian bargain hunters pile into gold.” Financial Times. 22 Apr. 2013. (http://www.ft.com/intl/cms/s/0/56244496-ab39-11e2-ac71-00144feabdc0.html#axzz2RuiP9ndw). 29 Apr. 2013.
Mukherji, Biman and Nayak, Debiprasad. “India Gold Premiums Soar as Demand Outstrips Supply” Wall Street Journal. 23 Apr. 2013. (http://online.wsj.com/article/SB10001424127887324874204578440242906344734.html). 29 Apr. 2013.
Lloyd-Smith, Jake. “Perth Mint Works Through Weekend as Gold Demand Surges on Price.” Bloomberg.com. 29 Apr. 2013. (http://www.bloomberg.com/news/2013-04-30/perth-mint-works-through-weekend-as-gold-demand-surges-on-price.html). 29 Apr. 2013.
Jim Rogers: ‘This Is Artificial Floating Of Assets And It’s Going To End Badly’
Lots of Americans these days probably think higher stock and home prices reflect the economic reality of the times.
A strong economic recovery in America?
Try fiat currency printing presses around the world working overtime.
The famous investor Jim Rogers sat down with CNN International’s Nina Dos Santos, host of World Business Today, last Friday. From their exchange:
ROGERS: It’s the first time in world history, recorded history, when all major central banks at the same time are printing a lot of money. The Japanese in December said “we will print unlimited amounts of money.” So the Americans said “we can do that!”
DOS SANTOS: You don’t agree with that strategy?
ROGERS: No, of course not. Debasing your currency sometimes works in the short-term. It has never worked in the long-term. And it doesn’t ever usually work in the medium-term. Debasing your currency- lots of politicians like to do it because it’s an easy way. But then the Americans said “we’ll print money.” And then the English said “well, we’ll print money.” And the Europeans of course. This is artificial floating of assets and it’s going to end badly.
“Rogers: Printing money is unsustainable”
CNN International Video
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Central Banks Continue To Stockpile Gold
Despite the price of gold getting pummeled recently, a number of the world’s central banks continue to acquire the precious metal. Sungwoo Park reported on the Bloomberg website yesterday:
The Bank of Korea added 20 metric tons in February, raising its gold reserves by 24 percent to 104.4 tons, it said in a statement today. Holdings rose about $1.03 billion by value to $4.79 billion at the end of last month, equivalent to 1.5 percent of total foreign exchange holdings, according to the statement. Prices advanced.
Russia and Kazakhstan expanded bullion reserves for a fourth straight month in January.
On February 11, I blogged that Russia is now the world’s biggest gold buyer, adding 570 metric tons of the precious metal to their holdings over the past decade.
Glenys Sim wrote on Bloomberg.com back on February 25:
Russian holdings climbed 12.2 metric tons to 970 tons last month after gaining 8.5 percent over 2012, according to International Monetary Fund data. Kazakhstan’s hoard grew 1.5 tons to 116.8 tons, following last year’s 41 percent expansion, data on the IMF website showed…
Central banks will again be strong buyers this year after they boosted purchases 17 percent to 534.6 tons last year, the most since 1964, according to the London-based World Gold Council.
The gold haters are out in full force these days. Yet, central banks keep stockpiling the yellow metal. Hmm.
Diversification? Or “something wicked this way comes?”
And there’s no shortage of stories in the American media of how poorly gold is doing. Even though it’s setting record highs in other countries. Brett Arends wrote on the MarketWatch website yesterday:
You won’t hear about it in the usual places. Everywhere you turn these days, all you hear is that gold is down, it’s finished, it’s heading for something called a “death cross,” which sounds terrifying. But away from the headlines, gold just rocketed to a new, all-time high.
In places like Argentina, Brazil, Iceland, India, and Japan.
Not bad for a “barbarous relic,” huh?
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Sources:
Park, Sungwoo. “Korea Joins Russia, Kazakhstan in Boosting Gold Holdings.” Bloomberg. 6 Mar. 2013. (http://www.bloomberg.com/news/2013-03-05/bank-of-korea-boosts-gold-reserves-as-central-banks-buy.html). 6 Mar. 2013.
Sim, Glenys. “Russia, Kazakhstan Increase Bullion Reserves for Fourth Month.” Bloomberg. 25 Feb. 2013. (http://www.bloomberg.com/news/2013-02-25/russia-kazakhstan-expand-gold-reserves-for-fourth-month-1-.html). 6 Mar. 2013.
Arends, Brett. “The secret bull market in gold.” MarketWatch. 6 Mar. 2013. (http://www.marketwatch.com/story/the-secret-bull-market-in-gold-2013-03-06). 6 Mar. 2013.
Gold Price Forecasts Gone Schitzo
Seeing that gold prices are somewhat schizophrenic these days, I thought I’d surf the Internet to see what some of the “big” financial institutions are predicting concerning the direction the precious metal might take. I found there to be no shortage of gold price forecasts out there. From the MarketWatch blog The Tell on Tuesday:
Goldman slashed its three-month gold-price forecast to $1,615 an ounce from $1,825, its six-month forecast to $1,600 an ounce from $1,805 and its 12-month forecast to $1,550 an ounce from $1,800…
Also on Monday, a BofA Merrill Lynch Global Research report said the larger bull trend for gold remains intact. “From the perspective of contrarian opinion analysis, a bottom and bullish turn in gold is close at hand.”
And Morgan Stanley said gold prices are “nearing the bottom of their trading range of US$1,540/oz to US$1,800/oz.”
At UBS, analyst Julien Garren said a major gold rally is coming in the third quarter.
Last week, though, Citi was talking price hibernation for gold, as news that George Soros and another big hedge fund were backing off gold.
There’s also this from Bloomberg on the Taipei Times (Taiwan) website yesterday:
An inevitable unwinding of gold’s 12-year bull market has begun, Credit Suisse Group AG said on Thursday in a report.
Geez. Even these forecasts are all over the place.
As far as I can tell, the underlying fundamentals behind gold’s generally steady rise are still intact. The world’s central banks have the printing presses going at full speed in what some are calling a new global currency war. And just this Tuesday Federal Reserve Chairman Ben Bernanke reaffirmed his support for the central bank’s $85 billion bond-buying program, or what’s come to be known as QE4.
Yep, the yellow metal still has some glimmer left to it it seems
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Sources:
“Gold forecast melee: Goldman joins in, slashes forecast to $1,550.” The Tell. 26 Feb. 2013. (http://blogs.marketwatch.com/thetell/2013/02/26/gold-forecast-melee-goldman-joins-in-slashes-forecast-to-1550/). 27 Feb. 2013.
“Gold’s price cycle likely to have turned: analysts.” Bloomberg. 27 Feb. 2013. (http://www.taipeitimes.com/News/biz/archives/2013/02/27/2003555794). 27 Feb. 2013.
Marc Faber Talks Stocks, Sees Opportunities In European Telecoms
Swiss-born investment advisor and fund manager Marc Faber is widely-known for shocking the Pollyannas on Wall Street. However, the publisher of the monthly investment newsletter The Gloom Boom & Doom Report has toned it down lately and has instead been discussing U.S. and foreign equities in various media outlets. Dr. Faber was on the phone with the Yahoo! Finance show Breakout this past Wednesday and told viewers:
What is happening with all central banks is that they have been essentially printing money. In other words, they’ve been increasing the quantity of money through asset purchases and expanding the balance sheet. And I suppose it won’t be that easy to find an exit strategy… they will continue to essentially print money in the years to come. Now could it be for a while they reduce the asset purchases or stop altogether? Yes, that’s a possibility…. But if the stock market went up very strongly as occurred in ’87, and the real economy does not participate- and as you know this recovery since June 2009 has bypassed, say, the majority of America- and if this happens, it would be a major embarrassment for the Federal Reserve.
The head of Marc Faber Limited shared this little nugget on the show:
I think there are some opportunities in European telecom stocks at the present time.
On Monday, Dr. Faber was also on India’s CNBC-TV18. Here is what he had to say about global equities on the show Bazaar:
My scenario for 2013 is this. Either the markets will make a peak relatively soon which will not be exceeded, or we have a correction of a month or two and then another strong rally into August such as we had in ’87 when the Dow Jones between January ’87 and August ’87 increased by 41 percent and then lost 40 percent in two months…
The more likely scenario is in my view actually a strong rally into the summer, but first a correction, and then this rally and then more significant tops in 2013 which will not be exceeded for a while.
You can watch Dr. Faber on Breakout here and on Bazaar here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Billionaire Investors Divided On Gold As Demand Hits Record Value Level In 2012
We’re on a roll today. Consider it make-up material for yesterday. Anyway, let’s turn our attention over to money. “Real” money like gold, that is. The precious metal had another solid year in 2012. From a press release today issued by the London-based World Gold Council, the gold industry’s market development organization:
2012 sees gold demand hit record value level
Q4 2012 up 4% year-on-year as India, China and central banks drive demand
In value terms, gold demand in 2012 was US$236.4bn – an all-time high. Gold demand in value terms for the final quarter of the year was 6% higher year-on-year at US$66.2bn, marking the highest ever Q4 total.
Global gold demand in Q4 2012 was 1,195.9 tonnes(t), up 4% on the same quarter in 2011. In Q4 2012, the average gold price reached a record level of US$1,721.8/oz, up 1% on the previous record average price in Q3 2011. The average price during 2012 was US$1,669.0/oz, up 6% from US$1,571.5/oz in 2011.
The key findings from the report are as follows:
• Whilst Indian full year demand was down 12% on the previous year, the market performed strongly in the final quarter with total demand at 261.9t, an increase of 41% on the same period last year. Both jewellery and investment demand reached their highest levels for six quarters. Demand for jewellery was up 35% year-on-year to reach 153.0t, and strong retail demand led to 108.9t of investment buying. In India the prospect of duty increases, which came in to force in January 2013, may have added to strong buying in the final quarter to beat the anticipated price rises.
• Chinese demand was flat year-on–year, reflecting the impact of economic slowdown. However looking at Q4, total demand was up 1% on the previous quarter to 202.5t. Jewellery demand was137.0t up 1% on Q4 2011 and investment demand was 65.5t, up 2% on the previous year. These increases may reflect the fact that the economic slowdown in China appears to have been shorter than expected.
• Central bank buying for the full year rose by 17% compared to 2011, totalling 534.6t, the highest level since 1964. Central bank purchases stood at 145.0t in Q4, up 29% on the corresponding quarter in the previous year, making this the eighth consecutive quarter in which central banks have been net purchasers of gold.
• Global investment in ETFs in 2012 was up significantly by 51% on the preceding year, though Q4 was down 16% to 88.1t when compared with the high levels recorded in Q3 2012.
“Gold Demand Trends: Full year and Q4 2012″
WGC Video
However, the price of gold hasn’t glimmered too much lately. Debarati Roy and Phoebe Sedgman reported on the Bloomberg website this evening:
Billionaire investors George Soros and Louis Moore Bacon cut their stakes in exchange-traded products backed by gold last quarter as futures dropped the most in more than eight years. John Paulson maintained his holding.
Soros Fund Management LLC reduced its investment in the SPDR Gold Trust, the biggest fund backed by the metal, 55 percent to 600,000 shares as of Dec. 31 from three months earlier, a U.S. Securities and Exchange Commission filing showed yesterday. Bacon’s Moore Capital Management LP sold its entire stake in the SPDR fund and lowered holdings in the Sprott Physical Gold Trust. Paulson & Co., the largest investor in SPDR, kept its stake at 21.8 million shares.
Roy and Sedgman noted gold prices fell 5.5 percent in the fourth quarter of last year, the most since the second quarter of 2004. Renewed optimism in the U.S. economy was the reason given by a number of observers cited in the piece.
Now, why is it that the “crash prophets” who saw the 2008 global economic crisis and “Great Recession” coming, such as Marc Faber, Jim Rogers, and Peter Schiff, are sounding the alarm about more hard times ahead of us, while those finance- and investing-types who never saw the financial storm approaching until it bit them and their clients in the rear-end are the same ones now predicting “all’s well” for the U.S. economy? Are they not aware of the financial manipulation that’s been required to get us this short-term, artificial prosperity?
My guess is that it registers, but they’re incapable of seeing the big picture.
All I know is this. While I’ll keep an open mind, I’m inclined to cast my lot with those guys who correctly-called the “Panic of ‘08” and have a knack of being correct on a consistent basis.
You can read the entire WGC press release on their website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
Source:
Roy, Debarati and Sedgman, Phoebe. “Billionaires Soros, Bacon Cut Gold Holdings on Decline.” Bloomberg. 14 Feb. 2013. (http://www.bloomberg.com/news/2013-02-14/billionaires-soros-bacon-reduce-gold-holdings-as-prices-slump.html). 14 Feb. 2013.
Behold The Golden Bear: Russia Now World’s Biggest Gold Buyer
For years I’ve heard the term “Russian Bear” being used to describe Russia and its might.
For example, “NATO better not put too many missiles in Eastern Europe, or they’re going to anger the Russian Bear.”
After reading this morning about Russia acquiring literally tons of gold over the last ten years, perhaps they should be referred to as the “Golden Bear” going forward.
Scott Rose and Olga Tanas reported on the Bloomberg website this morning:
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.
Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.
(Editor’s note: Italics added for emphasis)
I’m starting to see what legendary investor Jim Rogers was getting at regarding Russia.
While a number of “developed” countries are selling the precious metal these days- including economically-troubled France, Portugal, and Spain- “developing” nations are acquiring it with a fervor. Rose and Tanas added:
Quantitative easing by major economies to support financial asset prices is driving demand for gold in the emerging world, said Marcus Grubb, head of investment research at the World Gold Council. Before the crisis, central banks were net sellers of 400 to 500 tons a year. Now, led by Russia and China, they’re net buyers by about 450 tons, Grubb said by phone from London, where his industry group is based…
“That’s a very significant switch, and obviously a very positive one for the gold market,” Grubb said.
(Editor’s note: Italics added for emphasis)
Meanwhile, the price of paper gold is taking a hit this morning. Barbara Kollmeyer and Myra Saefong reported this morning on the MarketWatch website:
G-7 nations could release a statement this week reaffirming a commitment to “market-determined” exchange rates, responding to heated talk about a currency war…
The Group of 20 nations will meet later in the week, with currencies expected to be at the top of the agenda.
As gold has benefitted from currency devaluations, traders are wary of these developments.
In addition, light volumes due to Asia’s observance of the Lunar New Year and a lack of economic data being released today are fueling downward pressure on the gold price.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Sources:
Rose, Scott and Tanas, Olga. “Putin Turns Black Gold to Bullion as Russia Outbuys World.” Bloomberg.com. 11 Feb. 2013. (http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html). 11 Feb. 2013.
Kollmeyer, Barbara and Saefong, Myra. “Gold hit on worry of possible G-7 currency salvo.” MarketWatch. 11 Feb. 2013. (http://www.marketwatch.com/story/gold-edges-higher-as-dollar-weakens-2013-02-10). 11 Feb. 2013.
Jim Rogers: ‘Short Long-Term United States Government Bonds Right Now’
Thursday afternoon, investor, commentator, and author Jim Rogers sat down with CNBC’s Maria Bartiromo at the New York Stock Exchange. Predictably, the discussion focused on his thoughts about the U.S. economy and larger financial system- and where he thinks there are opportunities to make money. Rogers warned viewers:
It’s all artificial what’s going on right now. The Federal Reserve is printing money as fast as they can. But the Bank of Japan said “We’re going to print unlimited money.” And so you know what the Federal Reserve said? “We’ll match you, we’ll print money too!” I mean, this is insane… You think this is a sound economy?
(Editor’s note: Italics added for emphasis)
The Singapore-based investor, who “retired” at age 37 and proceeded to ride a motorcycle around the world- and then write about it- went on to share the following investment-related nuggets on Closing Bell:
• Rogers is shorting government bonds. Not only did he say “Short long-tern United States government bonds right now,” but he also revealed this was his main U.S. investment.
• Owns Japanese stocks
• Investing in Russia- “I’m buying the bonds, the currency, and stocks.”
• Short Apple
• Short JPMorgan calls- “I’ve been short JPMorgan calls. They all expire worthless. I’m still short a few, and they’re not expiring worthless. I may lose money on that.”
• Sees Russia as the single best investment opportunity right now.
• Or North Korea- “The only way to invest is to buy the stamps or the coins. And your viewers are not going to go out and buy North Korean gold and silver coins. But that’s a fabulous, fabulous opportunity.”
• Wouldn’t buy gold at these levels- unless they were North Korean gold coins.
“Jim Rogers: I’m Short US Government Bonds And Investing In Russia – CNBC 2/8/2013″
YouTube Video
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
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