Thursday, December 19, 2013

An Early Christmas Present in Gold

One day after the Fed announce it would slow QE from well over $1 Trillion per year to a slightly less obscene $900 Billion per year gold was hammered down $45. Its now retesting its July lows.

Its been another crushing year for those who believe in fundamentals. Last quarter showed slowing earnings with most companies failing to meet earnings expectations. Never mind. The stock market keeps going up. Meanwhile, the Fed printed $1 Trillion in new money, devaluing our US dollar. Yet gold continues going down. It makes absolutely no sense from any sort of macro economic perspective. But it makes perfect sense if you are the Federal Reserve. From their perspective, they want to see the stock market higher to create an artificial wealth effect that will spur consumers to go out and spend more, stimulating the economy. What they don't want, is for people to bail on their currency and move into an unproductive alternative currency like gold or silver. For that reason, I think we have seen the Fed is intentionally blowing a stock bubble while suppressing the price of precious metals. That artificially low price is a gift to people who know this will all end very badly.

Wednesday, December 18, 2013

The Printing Continues (But just a little less)

The Fed today announced it will reduce its QE of $85 Billion per month to a mere $75 Billion per month beginning next month. The stock market jumped 292 points on the news the printing party would go on. Of course, this news was celebrated as "evidence" the recovery was well under way. But the Fed said no such thing and positioned themselves to either increase or decrease the printing depending on future economic data points,

Michael Pento, pictured above said it well in a KWN interview:
Eric King:  “Michael, as the economy rolls over in Europe and in the United States, how will they (the Fed) keep the taper on without a full blown collapse?”

Pento:  “They won’t be able to.  In fact, a reporter asked Mr. Bernanke what would happen if the economy were to falter in 2014, precisely due to the taper, and he said, ‘The taper could be reversed and asset purchases could be increased.’....

Saturday, December 7, 2013

200k New Jobs is Good News? You've Got to be Kidding Me?

Recently you may have heard about fast food workers striking, asking for higher wages and President Obama endorsing an increase to the minimum wage to $10.10 per hour. And why not? After all we were told the "good news" that 200k jobs were created last month! Never mind that most of those jobs were part time. The main stream media celebrated the "great" numbers a s a sign the economy is picking up, even speculating that the Fed may begin tapering their $85 Billion per month printing spree.

But haven't we been told this by the same media outlets for the last five years? Do the media have any credibility after years of cheer leading the economy? Does our government have any credibility now that we know the Census Bureau cooked the books just before the 2012 election? 

Let's set aside the BS happy talk and look at some unpleasant reality shall we?

I Just Had to Share This.

You can read more about it here. But I think you get my point.

Wednesday, December 4, 2013

Selling Bitcoins and Buying Gold

This is interesting.

Both gold and Bitcoins are in demand by people seeking a sound currency that cannot be debased by governments. But it would seem that despite the growing popularity of Bitcoin, ultimately people prefer to own the currency with the 5,000 year history vs the new up and comer.

From Business Insider:
Gold and silver bullion was apparently among the biggest selling items on Bitcoin Black Friday.
According to Bitpay, one of the largest Bitcoin payment processors, the top-three online retailers on November 29 were KnCMiner (whose gonzo order volume for its latest mining device we told you about yesterday), Gyft, and Amagi Metals.
Amagi Metals chief Stephen McAskill told BI in a separate interview that his site processed $900,000 worth of bitcoin between Thanksgiving and Sunday. The biggest selling items were silver and gold coins and bars, he said. 
"To me it makes sense," he said. "A lot of bitcoin enthusiasts are interested in sound money, money that doesn't lose value."
But there are still enough users who think bitcoin will someday retain the value of gold, he said.
We asked Gyft, a gift card site, for any more data about what people bought with Bitcoin, and spokesman Ian Chaffee could only say electronics and food.
For the month of November, Bitpay processed 55,288 bitcoin transactions. They did not provide us with a total dollar figure for the month. Here's a chart:
bitpay chart 
 This is why I believe the ultimate currency is gold in the form of Goldbulliondebitcard .

Once physical gold can be spent in tiny increments of milligrams and paid with the convenience of the global debit card network, we will have an independent currency able to make transactions anywhere in the world. A truly international currency.

Tuesday, December 3, 2013

Crazy Markets And Where We Are Now ( And Graphs That WIll Shock You)

With the year coming to an end and gold retesting its July low around $1,150 per ounce I just thought I'd review where we are in markets relative to each other and what we should expect going forward into 2014.

Currently the US stock market as represented by the S&P 500 is up nearly 28% while gold is (ironically or purposely?) the mirror opposite at a loss of nearly 28%. Meanwhile the US Fed as left unchanged their unprecedented purchases/ printing of $85 Billion per month of monetary expansion.