Author Archives: Keith Weiner

     

 

 

How Not to Predict Gold Prices

Sometimes, we think that every story in the gold community has the same template:

 

  1. I have inside information to share with you
  2. My peeps are telling me that <XYZ> will happen
  3. If <XYZ> happens, then the gold price will go ballistic
  4. (<XYZ> will happen, I just know it)
  5. So buy gold now, to front-run <XYZ>
  6. If you, you will make lots of money
  7. (Money is not gold, but dollars)
  8. Unless The Dark Cabal acts in their old nefarious ways
  9. If The Dark Cabal does, then don’t blame us
  10. Like the last time we predicted $200 silver or $30,000 gold

 

tinker-tailor-soldier-spy-nop-briexSecret gold bug information is passed on…

Illustration by Nop Briex

 

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The Quality of Money

 

“The problem with central banks is that they increase the quantity of money in the same way that the problem with piping sewage into a swimming pool increases the quantity of water.”

 

the-gasp-dollarThe doubleplus-ungood FRN.

 

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Illusory Riches, Obvious Impoverishment

I address this essay to two groups. One group is those among the liberty movement, who believe that there’s nothing wrong with inequality. These are often Objectivists, who unknowingly defend a regime that artificially suppresses working people.

 

steal

And suddenly, you feel much lighter…

 

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Big News

The big news this week is that Donald Trump was elected to be the next president of the United States. Whether due to his comments about restructuring the government debt, tariffs on imported goods, or other economic concerns, many expected news of his election to push up the price of gold. They were wrong.

 

chart-1-december-gold-aDecember gold, 60 minute chart. Those expecting a Trump victory to lead to a rise in gold prices were right for about 2 ½ hours – but market participants reassessed numerous initial market reactions once it was clear the election was a clean sweep for the Republican party – the dollar reversed course and rose sharply, and gold declined commensurately  [comment by PT] – click to enlarge.

 

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First Rule

This week the prices of the metals, as measured in terms of the much-abused and much-hated but much-preferred US dollar, went up. +$28 and +0.66 respectively.

 

set_of_shiny_gold_coins_money_imageWinning! Sometimes…

 

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Confidence Speculation

Twice last week, the prices of the metals spiked. Once on early Monday due to a cause unclear to us. The second time on Friday late morning (Arizona time) due to, get this, additional problems for Democrat Hillary Clinton. The stock market dropped at the same time that the prices of the metals surged. Call it the confidence speculation.

 

clinton_comey_gnHillary Clinton and FBI chief James Comey. As absurd as this must appear to anyone looking at the situation in a detached manner, anything that might endanger Ms. Clinton’s election victory seems to be seen as negative for market confidence .

 

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Collectivism Across Party Lines

 

“There is nobody in this country who got rich on his own — nobody.” – Elizabeth Warren, campaign speech 2011

“If you’ve got a business – you didn’t build that. Somebody else made that happen.”

– Barack Obama, campaign speech 2012

 

BOSTON - JUNE 25: President Barak Obama with Senate candidate Elizabeth Warren during at a fundraiser in Symphony Hall on Monday, June 25, 2012If you acquire any possessions by economic means, this is to say by your own efforts, serving consumers in voluntary trade, they actually do not belong to you, according to these two elitist leftist politicians (who you may be interested to learn, are far from poor).  Only what the State graciously allows you to own is yours – provisionally.

Photo credit: Matthew J. Lee / The Boston Globe via Getty Images

 

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Central Planning – The Artificially Limited Debate

The monetary debate seems artificially limited. On one side is Federal Reserve policy based on discretion. On the other is policy based on rules. It’s Keynes vs. Friedman. It’s central planning of our economy based on the reactive whims of wise monetary planners vs. central planning of our economy based on the proactive rules written by… wise monetary planners.

 

keynesfriedKeynes and Friedman – their schools have a number of similarities, one of which is that both advocate central planning of money by an agency of the State, i.e., a central bank. Naturally, both sides believe to be in possession of the “better plan”, but there really is no such thing.

 

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Reassertion of Gravity

Another week without much major price action, gold +$16 and silver +$0.12. At least if you look at the closing prices. However on Monday after New York market hours, there was quite a spike in silver.

 

wile-e-coyote-in-airA famous brief moment of seeming weightlessness combined with a terrible flash of premonition that it won’t last…

Cartoon by Chuck Jones

 

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Fundamental Developments – Scarcity of Precious Metals Increases Slightly

Not much price action at the metals tables in the casino. Gold -$7, and silver -$0.10. Gold to silver ratio unchanged.

This will be a brief report, due to the rigors of travel this week.

 

silver

 

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Don’t be a Spruiker

On 18 September we said, “the market is in the grips of a mini silver mania (we would not dare say bubble, at least not without trigger warnings).” Since then, we have warned every week that the fundamentals of silver were lousy.

 

1-silverSilver has a tough week – click to enlarge.

 

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Are Bank Woes a Good Reason to Buy Silver?

Last week, it was the Fed’s magic boosting up the price of silver. This week, the slow slide in the silver price resumed, going all week except during peak fear about the woes of Deutsche Bank.

 

dbDeutsche Bank HQ in Frankfurt – the bank is under assault from heavy regulatory fines

Photo credit: Vyborg

 

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Most read in the last 20 days:

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

 
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