Tag Archives: Federal Reserve

A soaring gold price is a vote of "no confidence" in the central bank and the dollar [and]... reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of Congress and the administration to reign in runaway spending. Words: 1911

The World Gold Council published its monthly Gold Market Commentary for August this week. Gold surged by 3.6% in August, reaching $2,513 per ounce, driven by a weaker U.S. dollar and lower Treasury yields. Investors are positioning for potential rate cuts by the U.S. Federal Reserve and the uncertainties surrounding the U.S. election. Demand also saw a boost from a reduction in gold import duties in India, contributing to strong buying interest. Meanwhile, gold-backed ETFs extended their four-month inflow streak. As traders brace for a volatile second half of 2024, gold remains a key hedge against risk, with global economic uncertainties and U.S. political developments fueling the demand.

Over the past five years, gold and gold-related ETFs have experienced significant fluctuations due to economic events, changing interest rates, and shifting market sentiment. This article reviews the performance of gold, the SPDR Gold Trust (GLD), VanEck Gold Miners ETF (GDX), and VanEck Junior Gold Miners ETF (GDXJ). Gold rose by over 60%, while GLD closely mirrored this increase. In contrast, GDX and GDXJ significantly underperformed, with GDX up only 30% and GDXJ up just 12%. This analysis highlights the varying risks and returns associated with different gold-related investments.

What's an individual investor to do to make sure that his investments will not be completely wiped out in the coming financial Armageddon? Gold is the answer.

The United States has seen four different gold confiscations — the last of which was in 1933. Few people realize that when the freedom to own gold was restored in 1972, the President retained the power to require us to surrender our gold which he can do again any time (probably on a Friday) with the mere stroke of a pen. That means all confiscated gold could possibly be compensated at only $42.22 per 1oz. and not at the world market price. Don’t take this decision lightly. It was another blatant warning that the government may be contemplating grand larceny — AGAIN. Words: 1740

The Federal Reserve system is an imperfect, but rather innovative, clearinghouse. Its structure as, “independent within government,” makes it hard to decipher precisely who owns it but here's my understanding of what it actually is.

The debate over deflation/inflation continues as some of our most astute economic observers take sides. Frankly, I think that both sides are missing part of the picture. The debate concentrates on the after shocks of inflation/deflation: prices instead of the money supply and the demand for it. Words: 721

World Bank president Robert Zoellick has stirred up a hornet's nest with his recent call for a return to a gold anchor in the global financial system. The usual suspects immediately denounced him - Keynesian Brad DeLong has [gone so far as to] anoint Zoellick the "Stupidest Man Alive" - [and I would like to add my voice to the chorus by explaining] the dangers of Zoellick's gold proposal, and why fans of the classical gold standard should be wary. Words: 1708

Inflationary periods are highly unjust. They undermine the ethics of hard work and thrift. They destroy solidarity, lead to widespread hardship and often to social unrest. Gold, in contrast, has been the best hedge as investors seek to protect themselves against the large purchasing power losses of inflated currencies.

Pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations, yet the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out. Words: 1096