Tag Archive: gold silver ratio
Gold Leads the Way for Silver
Last week we wrote about the gold to silver ratio. Our points were that it measures the price of one metal against the other, just as we use the dollars per ounce to measure daily metals prices, and just as we use ounces per Corvette to measure purchasing power preservation.
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Wealth Consumption vs. Growth – Precious Metals Supply and Demand
GDP – A Poor Measure of “Growth” Last week the prices of the metals rose $35 and $0.82. But, then, the price of a basket of the 500 biggest stocks rose 62. The price of a barrel of oil rose $1.63. Even the euro went up a smidgen. One thing that did not go up was bitcoin. Another was the much-hated asset in the longest bull market. We refer to the US Treasury.
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Open Letter to John Taft, Report 17 Dec
Dear Mr. Taft: I eagerly read your piece Warriors for Opportunity on Wednesday, as I often do about pieces that argue that capitalism is not working today. You begin by saying: “Financial capitalism – free markets powered by a robust financial system – is the dominant economic model in the world today. Yet many who have benefited from the system agree it’s not working the way it ought to.”
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The End of an Epoch, Report 8 Dec
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
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Money and Prices Are a Dynamic System, Report 1 Dec
The basic idea behind the Quantity Theory of Money could be stated as: too much money supply is chasing too little goods supply, so prices rise. We have debunked this from several angles. For example, we can use a technique that every first year student in physics is expected to know. Dimensional analysis looks at the units on both sides of an equation.
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Raising Rates to Fight Inflation, Report 24 Nov
Physics students study mechanical systems in which pulleys are massless and frictionless. Economics students study monetary systems in which rising prices are everywhere and always caused by rising quantity of currency. There is a similarity between this pair of assumptions. Both are facile. They oversimplify reality, and if one is not careful they can lead to spectacularly wrong conclusions.
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The Perversity of Negative Interest, Report 17 Nov
Today, we want to say two things about negative interest rates. The first is really simple. Anyone who believes in a theory of interest that says “the savers demand interest to compensate for inflation” needs to ask if this explains negative interest in Switzerland, Europe, and other countries. If not, then we need a new theory (Keith just presented his theory at the Austrian Economics conference at King Juan Carlos University in Madrid—it is...
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What’s the Price of Gold in the Gold Standard, Report 10 Nov
Let’s revisit a point that came up in passing, in the Silver Doctors’ interview of Keith. At around 35:45, he begins a question about weights and measures, and references the Coinage Act of 1792. This raises an interesting set of issues, and we have encountered much confusion (including from one PhD economist whose dissertation committee was headed by Milton Friedman himself).
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Targeting nGDP Targeting, Report 3 Nov
Not too long ago, we wrote about the so called Modern Monetary so called Theory (MMT). It is not modern, and it is not a theory. We called it a cargo cult. You’d think that everyone would know that donning fake headphones made of coconut shells, and waving tiki torches will not summon airplanes loaded with cargo. At least the people who believe in this have the excuse of being illiterate.
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Bitcoin Myths, Report 27 Oct
Keith gave a keynote address—the only speaker with an hour to cover his topic—at the Gold and Alternative Investments Conference in Sydney on Saturday. Said topic was the nature of money.
“Money is a matter of functions four: a medium, a measure, a standard, a store.”
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Wealth Accumulation Is Becoming Impossible, Report 20 Oct
We talk a lot about the falling interest rate, the too-low interest rate, the near-zero interest rate, the zero interest rate, and the negative interest rate. Hat Tip to Switzerland, where Credit Suisse is now going to pay depositors -0.85%. That is, if you lend your francs to this bank, they take some of them every year. Almost 1% of them.
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Motte and Bailey Fallacy, Report 13 Oct
This week, we will delve into something really abstract. Not like monetary economics, which is so simple even a caveman can do it. We refer to a clever rhetorical trick. It’s when someone makes a broad and important assertion, in very general terms. But when challenged, the assertion is switched for one that is entirely uncontroversial but also narrow and unimportant.
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A Wealth Tax Consumes Capital, Report 6 Oct
It seems one cannot make a name for one’s self on the Left, unless one has a proposal to tax wealth. Academics like Tomas Piketty have proposed it. And now the Democratic candidates for president in the US propose it too, while Jeremy Corbyn proposes it in the UK. Venezuela finally added a wealth tax in July.
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The Purchasing Power of Capital, Report 29 Sep
We discuss capital consumption all the time, because it is the megatrend of our era. However, capital consumption is an abstract idea. So let’s consider some concrete examples, to help make it clearer. First, let’s look at the case of Timothy Housetrader. Tim has a small two-bedroom house. Next door, his neighbor Ian Idjit, owns a four-bedroom house which is twice the size.
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Treasury Bond Backwardation, Report 22 Sep
Something happened in the credit market this week. A Barron’s article about it began: “There have been disruptions in the plumbing of U.S. markets this week. While the process of fixing them was bumpy, it was more of a technical mishap than a cause for investor concern.” Keep Calm and Carry On. So, before they tell us what happened, they tell us it’s just plumbing, it’s been fixed, and that we should not be concerned.
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Why Are People Now Selling Their Silver? Report 15 Sep
This week, the prices of the metals fell further, with gold -$18 and silver -$0.73. On May 28, the price of silver hit its nadir, of $14.30. From the last three days of May through Sep 4, the price rose to $19.65. This was a gain of $5.35, or +37%. Congratulations to everyone who bought silver on May 28 and who sold it on Sep 4.
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How Is Negative Interest Possible? Report 8 Sep
Germany has recently joined Switzerland in the dubious All Negative Club. The interest rate on every government bond, from short to 30 years, is now negative. Many would say “congratulations”, in the belief that this proves their credit risk is … well … umm … negative(?) And anyways, it will let them borrow more to spend on consumption which will stimulate … umm… well… all of the wasteful consumption for which governments are rightly...
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Asset Inflation vs. Consumer Goods Inflation, Report 1 Sep
A paradigm is a mental framework. It has a both a positive pressure and a negative filter. It structures one’s thoughts, orients them in a certain direction, and rules out certain ideas. Paradigms can be very useful, for example the scientific method directs one to begin with facts, explain them in a consistent way, and to ignore peyote dreams from the smoke lodge and claims of mental spoon-bending.
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Directive 10-289, Report 25 Aug
Everyone must ask himself the question. Do you want the world to move to an honest money system, or do you just want gold to go up (we italicize discussion of apparent moves in gold, because it’s the dollar that’s moving down—not gold going up—but we sometimes frame it in mainstream terms).
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More from this category
- Long Term Gold Price Prediction
22 Jul 2022
- Gold Leads the Way for Silver
10 Sep 2021
- Wealth Consumption vs. Growth – Precious Metals Supply and Demand
3 Jan 2020
- Open Letter to John Taft, Report 17 Dec
18 Dec 2019
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10 Dec 2019
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3 Dec 2019
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26 Nov 2019
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18 Nov 2019
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12 Nov 2019
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5 Nov 2019
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28 Oct 2019
- Wealth Accumulation Is Becoming Impossible, Report 20 Oct
22 Oct 2019
- Motte and Bailey Fallacy, Report 13 Oct
15 Oct 2019
- A Wealth Tax Consumes Capital, Report 6 Oct
7 Oct 2019
- The Purchasing Power of Capital, Report 29 Sep
1 Oct 2019
- Treasury Bond Backwardation, Report 22 Sep
24 Sep 2019
- Why Are People Now Selling Their Silver? Report 15 Sep
17 Sep 2019
- How Is Negative Interest Possible? Report 8 Sep
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- Asset Inflation vs. Consumer Goods Inflation, Report 1 Sep
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- Directive 10-289, Report 25 Aug
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Long Term Gold Price Prediction
2022-07-22
by Stephen Flood
2022-07-22
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