Tag Archive: Gold co-basis

The Prodigal Parent, Report 9 Dec 2018

2018-12-10

by

2018-12-10

Gold and Silver Price
The Baby Boom generation may be the first generation to leave less to their children than they inherited. Or to leave nothing at all. We hear lots—often from Baby Boomers—about the propensities of their children’s generation. The millennials don’t have good jobs, don’t save, don’t buy houses in the same proportions as their parents, etc.

Read More »

Inflation, Report 2 Dec 2018

2018-12-03

by

2018-12-03

Gold and Silver Price
What is inflation? Any layman can tell you—and nearly everyone uses it this way in informal speech—that inflation is rising prices. Some will say “due to devaluation of the money.” Economists will say, no it’s not rising prices per se. That is everywhere and always the effect. The cause, the inflation as such, is an increase in the quantity of money. Which is the same thing as saying devaluation.

Read More »

A Golden Renaissance, Report 25 Nov 2018

2018-11-26

by

2018-11-26

Gold and Silver Price
There is the freedom of speech battle, with the forces of darkness advancing all over. For example, in Pakistan, there are killings of journalists. Saudi Arabia apparently had journalist Khashoggi killed. New Zealand now can force travellers to provide the password to their phones so the government can go through all your data, presumably including your gmail, Onedrive, Evernote, and WhatsApp.

Read More »

The Ultimate Stablecoin, Report 18 Nov 2018

2018-11-19

by

2018-11-19

Gold and Silver Price
A long time ago in a galaxy far, far away we wrote a series of articles arguing that bitcoin is not money and is not sound. Bitcoin was skyrocketing at the time, as we wrote most of them between July 30 and Oct 1 last year. Back in those halcyon days, volatility was deemed to be a feature.

Read More »

The Failure of a Gold Refinery, Report 12 Nov 2018

2018-11-13

by

2018-11-13

Gold and Silver Price
So this happened: Republic Metals, a gold refiner, filed bankruptcy on November 2. The company had found a discrepancy in its inventory of around $90 million, while preparing its financial statements. We are not going to point the Finger of Blame at Republic or its management, as we do not know if this was honest error or theft.

Read More »

Wizard’s First Rule, Report 4 Nov 2018

2018-11-06

by

2018-11-06

Gold and Silver Price
Terry Goodkind wrote an epic fantasy series. The first book in the series is entitled Wizard’s First Rule. We recommend the book highly, if you’re into that sort of thing. However, for purposes of this essay, the important part is the rule itself: “Wizard’s First Rule: people are stupid.” “People are stupid; given proper motivation, almost anyone will believe almost anything.

Read More »

What Can Kill a Useless Currency, Report 28 Oct 2018

2018-10-29

by

2018-10-29

Gold and Silver Price
There is a popular notion, at least among American libertarians and gold bugs. The idea is that people will one day “get woke”, and suddenly realize that the dollar is bad / unbacked / fiat / unsound / Ponzi / other countries don’t like it / . When they do, they will repudiate it. That is, sell all their dollars to buy consumer goods (i.e. hyperinflation), gold, and/or whatever other currency. Redemptions Balanced With Deposits No national...

Read More »

Useless But Not Worthless, Report 21 Oct 2018

2018-10-22

by

2018-10-22

Price of Franc vs Swiss M0
Let’s continue to look at the fiasco in the franc. We say “fiasco”, because anyone in Switzerland who is trying to save for retirement has been put on a treadmill, which is now running backwards at –¾ mph (yes, miles per hour in keeping with our treadmill analogy). Instead of being propelled forward towards their retirement goals by earning interest that compounds, they are losing principal.

Read More »

You Can’t Eat Gold, Report 14 Oct 2018

2018-10-15

by

2018-10-15

Gold and Silver Price
“You can’t eat gold.” The enemies of gold often unleash this little zinger, as if it dismisses the idea of owning gold and indeed the whole gold standard. It is a fact, you cannot eat gold. However, it dismisses nothing. This gives us an idea. Let’s tie three facts together. One, you can’t eat gold. Two, gold is in backwardation in Switzerland. And three, speculation is a bet on the price action.

Read More »

The Toxic Stew, Report 7 Oct 2018

2018-10-08

by

2018-10-08

Swiss 10 year Bond History
Last week, we shined a spotlight on a crack in the monetary system that few people outside of Switzerland (and not many inside either) were aware of. There is permanent gold backwardation measured in Swiss francs. Everyone knows that the Swiss franc has a negative interest rate, but so far as we know, Keith is the only one who predicted this would lead to its collapse (and he was quite early, having written that in January 2015).

Read More »

Yield Curve Compression – Precious Metals Supply and Demand

2018-10-03

by

2018-10-03

Gold and Silver Price
The price of gold fell nine bucks last week. However, the price of silver shot up 33 cents. Our central planners of credit (i.e., the Fed) raised short-term interest rates, and threatened to do it again in December. Meanwhile, the stock market continues to act as if investors do not understand the concepts of marginal debtor, zombie corporation, and net present value.

Read More »

Permanent Gold Backwardation, Report 30 Sep 2018

2018-10-01

by

2018-10-01

CHF Gold Basis, 2018-2019
Sometimes, one just needs to look in the right place. And often in those cases, it just takes a conversation to alert one where to look. We had a call with a Swiss company this week, to discuss gold financing for their business. They reminded us that there is a negative interest rate on Swiss francs. And then they said that a swap of francs for gold has a cost. That is, the CHF GOFO rate is negative (the dollar based 12-month MM GOFO™ is +2.4%).

Read More »

Why Are Wages So Low, Report 23 Sep 2018

2018-09-25

by

2018-09-25

Income Inequality Infographic Workers Middle Class and CEOS get Compared
Last week, we talked about the capital consumed by Netflix—$8 billion to produce 700 shows. They’re spending more than two thirds of their gross revenue generating content. And this content has so little value, that a quarter of their audience would stop watching if Netflix adds ads (sorry, we couldn’t resist a little fun with the English language).

Read More »

Never Mind the Bollocks, Here’s the Avocado Toast, Report 16 Sep 2018

2018-09-17

by

2018-09-17

Gold and Silver Price
For about ten bucks a month, Netflix will give you all the movies you can watch, plus tons of TV show series and other programs, such as one-off science documentaries. They don’t offer all movies, merely more than you can watch. Oh, and there are no commercials. They don’t just give you old BBC reruns, which you know they can get for a pittance.

Read More »

Why the Fed Denied the Narrow Bank, Report 9 Sep 2018

2018-09-11

by

2018-09-11

Gold and Silver Price
It’s not every day that a clear example showing the horrors of central planning comes along—the doublethink, the distortions, and the perverse incentives. It’s not every year that such an example occurs for monetary central planning. One came to the national attention this week. A company called TNB applied for a Master Account with the Federal Reserve Bank of New York.

Read More »

Illicit Arbitrage Cut by Tax Cuts and Jobs Act, Report 3 Sep 2018

2018-09-04

by

2018-09-04

Gold and Silver Price
This week, we are back to our ongoing series on capital destruction. Let’s consider the simple transaction of issuing a bond. Party X sells a bond to Party Y. We will first offer something entirely uncontroversial. If the interest rate rises after Y buys the bond, then Y takes a loss. Or if the interest rate falls, then Y makes a capital gain. This is simply saying that the bond price moves inverse to the interest rate.

Read More »

Another Gold Bearish Factor, Report 26 August 2018

2018-08-27

by

2018-08-27

Gold and Silver Price
Last week, we said that the consensus is that gold must go down (as measured in terms of the unstable dollar) and then will rocket higher. We suggested that if everyone expects an outcome in the market, the outcome is likely not to turn out that way. We also said that this time, there is likely less leverage employed to buy gold and that gold is less leveraged as well.

Read More »

Submerged Lighthouse Syndrome – Precious Metals Supply and Demand

2018-08-22

by

2018-08-22

Island Light
Last week, the lighthouse went down 24 meters (gold went down $24), or 50 inches (if you prefer, silver went down 50 cents). However, let’s take a look at the only true picture of supply and demand. Are the fundamentals dropping with the market price?

Read More »

In Next Crisis, Gold Won’t Drop Like 2008, Report 19 August 2018

2018-08-20

by

2018-08-20

Gold Basis Continuous, 2004-2008
Last week, we discussed the tension between forces pushing the dollar up and down (measured in gold—you cannot measure the dollar in terms of its derivatives such as euro, pound, yen, and yuan). And we gave short shrift to the forces pushing the dollar down. We said only that to own a dollar is to be a creditor. And if the debtors seem in imminent danger of default, then creditors should want to escape this risk.

Read More »

Fundamental Price of Gold Decouples Slightly – Precious Metals Supply and Demand

2018-08-18

by

2018-08-18

Gold and Silver Price
Keith Weiner’s weekly look on Gold. Gold and silver prices, Gold-Silver Price Ratio, Gold basis and co-basis and the dollar price, Silver basis and co-basis and the dollar price.

Read More »