Category Archive: 6a) Gold & Monetary Metals

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The Fake Economy, Report 21 Jul

2019-07-23

Folks in the liberty movement often say that the economy is fake. But this does not persuade anyone. It’s just preaching to the choir! We hope that this series on GDP provides more effective ammunition to argue with the Left-Right-Wall-Street-Main-Street-Capitalists-Socialists.

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How to Fix GDP, Report 14 Jul

2019-07-16

by Keith Weiner

2019-07-16

Last week, we looked at the idea of a national balance sheet, as a better way to measure the economy than GDP (which is production + destruction). The national balance sheet would take into account both assets and liabilities. If we take on another $1,000,000 debt to buy a $1,000,000 asset, then we have not added any equity.

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More Squeeze, Less Juice, Report 7 Jul

2019-07-08

by Keith Weiner

2019-07-08

We have been writing on the flaws in GDP: that it is no measure of the economy, because it looks only at cash and not the balance sheet, and that there are positive feedback loops. “OK, Mr. Smarty Pants,” you’re thinking (yes, we know you’re thinking this), “if GDP is not a good measure of the economy, then what is?!”

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All this borrowing to consume is unsustainable and the bill is overdue

2019-07-06

by Claudio Grass

2019-07-06

June has been an interesting month for gold, as geopolitical events, market fluctuations and developments on the monetary policy front fueled an exciting ride for the precious metal. As long-term investors with a strict focus on the big picture, short-term moves and speculative angles are largely irrelevant in and of themselves, but they do provide important signals that, without fail, confirm the strategic superiority of precious metals holdings...

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GDP Begets More GDP (Positive Feedback), Report 30 June

2019-07-02

by Keith Weiner

2019-07-02

Last week, we discussed the fundamental flaw in GDP. GDP is a perfect tool for central planning tools. But for measuring the economy, not so much. This is because it looks only at cash revenues. It does not look at the balance sheet. It does not take into account capital consumption or debt accumulation. Any Keynesian fool can add to GDP by borrowing to spend. But that is not economic growth.

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Gold boosted by dovish central banks

2019-06-26

by Luc Luyet

2019-06-26

Gold Bullion and Market Capitalisation of Global Negative Yielding Debt

Bar a further major escalation in trade tensions, it is hard to see much more upside for gold in the short term. We remain more upbeat over the medium term.The gold price soared to a fresh five-year high on 20 June following a dovish Fed monetary policy meeting. Indeed, the dovish shift among major central banks (with the sole exception of the Norges Bank) and high global uncertainty have pushed global yields lower recently, reducing the...

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What Gets Measures Gets Improved, Report 23 June

2019-06-25

by Keith Weiner

2019-06-25

Let’s start with Frederic Bastiat’s 170-year old parable of the broken window. A shopkeeper has a broken window. The shopkeeper is, of course, upset at the loss of six francs (0.06oz gold, or about $75). Bastiat discusses a then-popular facile argument: the glass guy is making money (to which all we can say is, “plus ça change, plus c’est la même chose”).

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The Elephant in the Gold Room, Report 16 June

2019-06-17

by Keith Weiner

2019-06-17

We will start this off with a pet peeve. Too often, one is reading something about gold. It starts off well enough, discussing problems with the dollar or the bond market or a real estate bubble… and them bam! Buy gold because the dollar is gonna be worthless! That number again is 1-800-BUY-GOLD or we have another 1-800-GOT-GOLD in case the lines on the first number are busy!

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Irredeemable Currency Is a Roach Motel, Report 9 June

2019-06-10

by Keith Weiner

2019-06-10

In what has become a four-part series, we are looking at the monetary science of China’s potential strategy to nuke the Treasury bond market. In Part I, we gave a list of reasons why selling dollars would hurt China. In Part II we showed that interest rates, being that the dollar is irredeemable, are not subject to bond vigilantes.

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Dollar Supply Creates Dollar Demand, Report 2 June

2019-06-03

by Keith Weiner

2019-06-03

We have been discussing the impossibility of China nuking the Treasury bond market. We covered a list of challenges China would face. Then last week we showed that there cannot be such a thing as a bond vigilante in an irredeemable currency. Now we want to explore a different path to the same conclusion that China cannot nuke the Treasury bond market.

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The Crime of ‘33, Report 27 May

2019-05-28

by Keith Weiner

2019-05-28

Last week, we wrote about the impossibility of China nuking the Treasury bond market. Really, this is not about China but mostly about the nature of the dollar and the structure of the monetary system. We showed that there are a whole host of problems with the idea of selling a trillion dollars of Treasurys: Yuan holders are selling yuan to buy dollars, PBOC can’t squander its dollar reserves If it doesn’t buy another currency, it merely tightens...

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