Author Archives: Keith Weiner

     

 

 

How to Earn Money that Will Soon be Worthless Real Quick

There is a often-promoted plan to grow your wealth. Here’s the background. The dollar is going to be worthless. Soon! The reason is because [their peeps in high places tell them / the Chinese / end of the petrodollar / historical fiat currencies / Rothschild Jekyll Island Master Plan Private Fed / Fed printing] will cause the dollar to collapse and gold will rocket to $50,000.

 


The many ways of getting rich quick… sometimes it a bit takes longer than anticipated, as the panel to the right indicates. Getting rich off inflation is not impossible of course, but pulling it off in practice it is actually a lot more tricky than is generally believed. [PT]

 

Read the rest of this entry »

     

 

 

The Problem with Mining

If you can believe the screaming headline, one of the gurus behind one of the gold newsletters is going all-in to gold, buying a million dollars of mining shares. If (1) gold is set to explode to the upside, and (2) mining shares are geared to the gold price, then he stands to get seriously rich(er).

 

As this book attests to, some people have a very cynical view of mining…  We would say there is a time for everything. For instance, when gold went  from $270 to $320 in 2001-2002, the HUI index went from 35 points to 150 points, in a show of rather noteworthy outperformance (something similar happened in 2016).  The “sweet spot” for gold mining shares is usually early in gold rallies, before input prices catch up (empirically, gold has a habit of leading price moves in the main mining inputs) [PT]

 

Read the rest of this entry »

     

 

 

The Wrong Approach

This question is no longer moot. As the world moves inexorably towards the use of metallic money, interest on gold and silver will return with it. This raises an important question.

Which interest rate will be higher?

 

It’s instructive to explore a wrong, but popular, view. I call it the purchasing power paradigm. In this view, the value of money — its purchasing power —is 1/P (where P is the price level). Inflation is the rate of decline of purchasing power.

 

American economist Irving Fisher, of “permanent plateau” fame. He inter alia came up with the “quantity theory of money” and the infamous “equation of exchange” (as Hayek once remarked, every student of economics should know about these, and then immediately forget about them again; we know exactly what he meant to convey…).  Fisher was quite the busybody. Like so many economists of his time, he became fascinated by the possibility to collate statistics and “measure” things in the economy. We have to thank him for index numbers like CPI as well, and it is probably fair to say that Fisher is the bedrock on which much of US mainstream economics rests (only things he was right about are rejected). In the early 20th century the erroneous idea began to take hold that economics should become more akin to the natural sciences. The data of economic history (i.e., statistics), would so the speak provide the numerical wherewithal to put some flesh on equilibrium equations previously only used as theoretical constructs which were understood not to apply to the real world of constant change. Why did economists so readily fall for this methodological lunacy? It was yet another momentous error – the growing belief that the economy had to be steered, or somehow centrally planned by “wise men”. No doubt tempting for those imagining themselves to be among the planners, and a catastrophe for the rest of us. [PT]

 

Read the rest of this entry »

     

 

 

Frexit Threat Macronized

The dollar moved strongly, and is now over 25mg gold and 1.9g silver. This was a holiday-shortened week, due to the Early May bank holiday in the UK.

The lateral entrant wakes up, preparing to march on, avenge the disinherited and let loose with fresh rounds of heavy philosophizing… we can’t wait! [PT]

 

Read the rest of this entry »

     

 

 

Election Effect Debate

Last week, we talked about the effect of the French election on the gold and silver markets, and noted:

 

Of course, traders want to know how this will affect gold and silver. As we write this, we see that silver went down 30 cents before rallying back up to where it closed on Friday. Gold went down about $20, and then half way back up.

At this point, we are not sure if the metals are supposed to go up because more printing. Or go down because the euro constrains France from printing. Or silver at least should go up because the economy is going to be better with France remaining in the Eurozone. Or go down because the ongoing malaise will only progress as it has been. Or some other logic… and the price gyrations this evening show that traders don’t agree either.

 

French precious metals terrorizers sow discord among traders [PT]

Photo credit: Christian Hartmann / Reuters

 

Read the rest of this entry »

     

 

 

The Mathematics of Frexitology

This was also a holiday-shorted week. As we write this, the big news comes from the election in France. The leading candidate is a banker named Emmanuel Macron, with about 24% of the vote in a 4-candidate race. The anti-euro Marine Le Pen came in second with just over 21%. From the sharp rally in the euro, which was up about 2% at one point, we assume that observers believe the odds of France leaving the euro have just gone down.

 

The political program of Emmanuel Macron: ”Hamon is lost – Fillon is burned – It’s either me, or the blonde of the FN” – “Obviously, if you look at it like that…”  A concise summary of how one becomes president in France these days – provided the polls are not in error. It wouldn’t be the first time – don’t forget the “Bradley Effect”, which is probably even stronger in Le Pen’s case than it was in Trump’s. [PT]

 

Read the rest of this entry »

     

 

 

A Force Like Gravity

This was a holiday-shorted week, due to Good Friday, and we are posting this Monday evening due to today being a holiday in much of the world. Gold and silver went up the dollar went down, +$33 and +$0.53 -64mg gold and -.05g silver. The prices of the metals in dollar terms are readily available, and the price of the dollar in terms of honest money can be easily calculated.

 

Curved space-time… eventually, it will get you. The image above depicts the binary system PSR J0348+0432 – a neutron star orbited by a white dwarf in the constallation Taurus, discovered in 2007 [PT]

Illustration by John Antoniadis

 

Read the rest of this entry »

     

 

 

Input Data Errors

Dear Readers,

I owe you an apology. I made a mistake. I am writing this letter in the first person, because I made the mistake. Let me explain what happened.

 

The wrong stuff went into the funnel in the upper left-hand corner…

 

Read the rest of this entry »

     

 

 

Orders of Preference

Last week, we discussed the growing stress in the credit markets. We noted this is a reason to buy gold, and likely the reason why gold buying has ticked up since just before Christmas.

Many people live in countries where another paper scrip is declared to be money — to picture the absurdity, just imagine a king declaring that the tide must roll back and not get his feet wet when his throne is placed on the beach — not real money like the US dollar.

 

Holding back the tides is serious business… apart from his odd obsession with the waves, King Cnut the Great, son of Sweyn Forkbeard, King of all England and Denmark and the Norwegians and of some of the Swedes, is reportedly known to historians as the most effective Danish King England ever had [PT]

 

Read the rest of this entry »

     

 

 

Careening from Crisis to Crisis

Back in the old days, homes had fuse boxes. Today, of course, any new house is built with a circuit breaker panel and many older homes have been upgraded at one time or another. However, the fuse is a much more interesting analogy for the monetary system.

 

Electricity for the adventurous. [PT]

Photo via lievielectric.com

 

Read the rest of this entry »

     

 

 

Probabilistic Technical Analysis vs. the Mechanics of Arbitrage

We talk about the supply and demand fundamentals every week. We were surprised to see an article about us this week. The writer thought that our technical analysis cannot see what is going on in the market. We don’t want to fight with people, we prefer to focus on ideas. So let us compare and contrast ordinary technical analysis with what Monetary Metals does.

 

April 2017 gold futures contract (black line) vs. spot gold (green line) – click to enlarge.

 

Read the rest of this entry »

     

 

 

Rumor-Mongering vs. Data

The question on the lips of everyone who plans to exchange his metal for dollars—widely thought to be money—is why did silver go down? The price of silver in dollar terms dropped from about 18 bucks to about 17, or about 5 percent.

 

Reportedly silver was already assassinated in the late 19th century… so last week they must have assassinated its corpse. [PT]

Illustration taken from ‘Coin’s Financial School’

 

Read the rest of this entry »

Most read in the last 20 days:

  • The Coming Debt Reckoning
      Licking the Log American workers, as a whole, are facing a disagreeable disorder.  Their debt burdens are increasing.  Their incomes are stagnating.   There are many reasons why.  In truth, it would take several large volumes to chronicle all of them.  But when you get down to the ‘lick log’ of it all, the disorder stems from decades of technocratic intervention that have stripped away any semblance of a free functioning, self-correcting economy.   Happy...
  • How to Stick It to Your Banker, the Federal Reserve, and the Whole Doggone Fiat Money System
      Bernanke Redux Somehow, former Federal Reserve Chairman Ben Bernanke found time from his busy hedge fund advisory duties last week to tell his ex-employer how to do its job.  Namely, he recommended to his former cohorts at the Fed how much they should reduce the Fed’s balance sheet by.  In other words, he told them how to go about cleaning up his mess.   Praise the Lord! The Hero is back to tell us what to do! Why, oh why have you ever left, oh greatest central planner of all...
  • India: Why its Attempt to Go Digital Will Fail
      India Reverts to its Irrational, Tribal Normal (Part XIII) Over the three years in which Narendra Modi has been in power, his support base has continued to increase. Indian institutions — including the courts and the media — now toe his line. The President, otherwise a ceremonial rubber-stamp post, but the last obstacle keeping Modi from implementing a police state, comes up for re-election by a vote of the legislative houses in July 2017.  No one should be surprised if a Hindu...
  • The Triumph of Hope over Experience
      The Guessers Convocation On Wednesday the socialist central planning agency that has bedeviled the market economy for more than a century held one of its regular meetings.  Thereafter it informed us about its reading of the bird entrails via statement (one could call this a verbose form of groping in the dark).   Modern economic forecasting rituals.   A number of people have wondered why the Fed seems so uncommonly eager all of a sudden to keep hiking rates in spite...
  • What is the Buffet Indicator Saying About Gold?
      Chugging along in Nosebleed Territory Last Friday, both the S&P 500 and the Nasdaq composite indexes closed at record highs in the US, with the Dow Jones Industrial Average only a whisker away from its peak set in March. What has often been called the “most hated bull market in history” thus far continues  to chug along in defiance of its detractors.   Can current stock market valuations tell us something about the future trend in gold prices? Yes, they actually...
  • Moving Closer to the Precipice
      Money Supply and Credit Growth Continue to Falter The decline in the growth rate of the broad US money supply measure TMS-2 that started last November continues, but the momentum of the decline has slowed last month (TMS = “true money supply”).  The data were recently updated to the end of April, as of which the year-on-year growth rate of TMS-2 is clocking in at 6.05%, a slight decrease from the 6.12% growth rate recorded at the end of March. It remains the slowest y/y growth since...
  • The 21st Century Has Been a Big, Fat Flop
      Seeming Contradiction CACHI, ARGENTINA – Here at the Diary we have fun ridiculing the pretensions, absurdities, and hypocrisies of the ruling classes. But there is a serious side to it, too. Mockery makes us laugh. And laughing helps us wiggle free from the kudzu of fake news.   Is it real? Is it real? Is it real? Above you can see what the problem with reality is, or potentially is, in a 6-phase research undertaking that has landed its protagonist in a very disagreeable...
  • A Cloud Hangs Over the Oil Sector
      Endangered Recovery As we noted in a recent corporate debt update on occasion of the troubles Neiman-Marcus finds itself in (see “Cracks in Ponzi Finance Land”), problems are set to emerge among high-yield borrowers in the US retail sector this year. This happens just as similar problems among low-rated borrowers in the oil sector were mitigated by the rally in oil prices since early 2016. The recovery in the oil sector seems increasingly endangered though.   Too many oil...
  • Will Gold or Silver Pay the Higher Interest Rate?
      The Wrong Approach This question is no longer moot. As the world moves inexorably towards the use of metallic money, interest on gold and silver will return with it. This raises an important question. Which interest rate will be higher?   It’s instructive to explore a wrong, but popular, view. I call it the purchasing power paradigm. In this view, the value of money — its purchasing power —is 1/P (where P is the price level). Inflation is the rate of decline of...
  • Rising Oil Prices Don't Cause Inflation
      Correlation vs. Causation A very good visual correlation between the yearly percentage change in the consumer price index (CPI) and the yearly percentage change in the price of oil seems to provide support to the popular thinking that future changes in price inflation in the US are likely to be set by the yearly growth rate in the price of oil (see first chart below).   Gushing forth... a Union Oil Co. oil well sometime early in the 20th century   But is it valid to...
  • Silver Elevator Keeps Going Down – Precious Metals Supply and Demand
      Frexit Threat Macronized The dollar moved strongly, and is now over 25mg gold and 1.9g silver. This was a holiday-shortened week, due to the Early May bank holiday in the UK. The lateral entrant wakes up, preparing to march on, avenge the disinherited and let loose with fresh rounds of heavy philosophizing... we can't wait! [PT]   The big news as we write this, Macron beat Le Pen in the French election. We suppose this means markets can continue to do what they wanted...
  • Warnings from Mount Vesuvius
      When Mount Vesuvius Blew   “Injustice, swift, erect, and unconfin’d, Sweeps the wide earth, and tramples o’er mankind” – Homer, The Iliad   Everything was just the way it was supposed to be in Pompeii on August 24, 79 A.D.  The gods had bestowed wealth and abundance upon the inhabitants of this Roman trading town.  Things were near perfect.   Frescoes in the so-called “Villa of the Mysteries” in Pompeii, presumed to depict scenes from a...

Support Acting Man

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com