Does a big surge in silver coin sales worldwide indicate a price hike like 2009-2011 is coming?

Posted on 02 October 2015 with no comments from readers

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A recent Reuters report about surging silver coin sales all over the world (click here) has precious metal investors wondering if this is not an early sign of the sort of increased physical metal demand that would surely precede another big take-off in silver prices like in 2009 to 2011 when silver rocketed from $8.50 to $49.50 an ounce, still just short of its 1980 all-time high.

The US Mint today reported third quarter sales of silver eagle coins running at their highest level for 29 years. That might seem odd with the price of silver so low but then this price is set in the Comex futures exchange and so has more to do with paper trading that the real metal.

The mints quite fairly point out that there is a shortage of coin manufacturing capacity rather than a shortage of actual silver. Indeed, silver prices have slumped this year along with all other industrial metals due to the emerging recession in China and its impact on demand for the metal.

Low prices now

However, those stocking up on coins are not particularly worried by the higher and higher premiums now being paid on the spot price because they can see scope for a considerable advance in prices now down 70 per cent from their 2011 highs. Silver should be a very good candidate for a recovery in another bout of money printing after a more serious shake-out in stock markets.

Remember what happened back in late 2008 to March 2009 when stock markets bottomed out. Then as now silver prices also suffered bad falls. But when it came to the recovery phase nothing beat the advance in silver prices with a 700 per cent surge over the next two years. Gold was quite a long way behind and the stock market nowhere near silver.

Of course buyers now could be buying the shiniest metal too early. Maybe the stock market will tank and take commodity prices even lower, although to be honest it is equally plausible to argue that the bombed out commodities sector has already had its big crash and it will be stocks next.

Last time around money printing did much more for commodity prices than stocks in the aftermath of the global financial crisis. Some bears are already talking about negative interest rates and a QE4 program. Nothing would light a fire under precious metal prices more quickly.

Smart investors?

So who says the smaller investors all round the world buying silver coins are behaving irrationally. Surely the irrational ones are those who still have their money in a stock market in the early phases of a bear market, or bonds that pay very low yields.

Still you can’t expect professional investment analysts to get things right all the time. They missed silver entirely last time and will do so again.

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No logical reason left not to buy gold and silver as the Fed’s bluff on interest rates is over

Posted on 25 September 2015 with no comments from readers

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Investors have no logical reason left not to buy gold and silver. The Federal Reserve is clearly involved in a failing bluff on interest rates that it dare not raise because the global economy is entering a recession.

Meanwhile, gold prices have already bounced $80 off the lows of last month which was the completion of a four-year, 50 per cent retracement of the gold bull market, a classic market pattern before a big price lift-off that even a blind man can see.

Absent interest rate rises there is no logical reason for gold prices to stay at these levels. They only got this low because interest rates were supposed to be going up. Now they are not and so gold prices have a lot of room to increase. The Fed’s bluff is over. Janet Yellen was practically carried off the stage last night.

Thing to buy

Other asset classes are not in this position. Share, bond and real estate prices are already over-extended and ripe for a fall because of the upcoming global recession and its inevitable impact on most asset prices. Just look at how Caterpillar shares got whacked yesterday because it is firing 10,000 staff due to the global business slump.

Indeed, looking forward and what we must have on the horizon is a more accommodative monetary policy, not tightening. Interest rate rises will not happen next year.

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Far from it, we should be considering the impact of negative rates and some kind of QE4 money printing program.

This is what will follow the inevitable share crash that is coming this autumn as the economic reality of international business becomes only too apparent. Caterpillar is just the first casualty. It will not be the last. In a recession most businesses will shed jobs.

We are also going to see bankruptcies and business failures. Then there is the impact on the banks who have lent them money. What about the many hundreds of billions of dollars that Western banks have lent to Chinese corporates? This is the stuff of a major banking crisis.

Global crisis of confidence

Now where do people put their money when they can’t trust banks or governments? They flee into precious metals. And as they do so the demand for gold and silver rises sharply while the supply is necessarily constrained by limited stockpiles and falling production levels.

So the price will go up. Not by $20 like it did yesterday but $100 in a matter of days, and this will compound to gold and silver prices nobody can even commit to print at the moment. Who would have said the S&P 500 would triple when it hit the bottom in March 2009?

Well gold hit its bottom last month, and now the only way is up. There is no logical reason left not to buy gold and silver.

Martin Armstrong’s Armageddon scenario looms as Fed has now lost control: $5,000+ gold anybody?

Posted on 21 September 2015 with no comments from readers

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The man who forecast $5,000+ gold prices for 2016 back in 2009 (click here), and whose cycle model predicts a big disruption in global financial markets at the close of this month, has spoken out against the Federal Reserve’s decision to keep interest rates on hold last week.

‘There is a lot of speculation about why the Fed seems so reluctant to ‘normalize monetary policy’, he writes on his website. ‘There are of course the typical domestic issues that there is low inflation, weak wage gains in the face of strong job growth, a hike will increase the Federal deficit and then there is the argument that corporations that now have $12.5 trillion in debt.

Market forces

‘All that is nice, but with corporate debt, our clients are locking in long-term at these levels, not funding anything short-term. Those clients who have listened are preparing for what is to come unlike government which has been forced to shorten the average duration of their debts blind to what happens when rates rise, which will be set in motion by the markets – not Yellen.

‘The Fed is really caught between a rock and a very dark place. Yes, they have the IMF and the world pleading with them not to raise rates for it will hurt other debtors who borrowed excessively using dollars to save money.

‘The Fed is also caught between domestic policy objectives that dictate they MUST raise rates of they will bankrupt countless pension funds and international where emerging markets will go into default because commodities have collapsed and they have no way of paying off this debt that has risen to about 50 per cent of the US national debt.

‘By avoiding the normalization of interest rates (hikes), the Fed has encouraged government to spend far more than they realize because money is cheap. This will eventually light the fire under the economy helping to fuel the sovereign debt crisis. There appears to be no hope for the Fed and they will be forced to raise rates only when they see asset inflation in equities. Then they will have no choice.’

Man who made a billion on Black Monday in August says this is just the beginning for volatility

Posted on 19 September 2015 with no comments from readers

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Mark Spitznagel won’t confirm or deny the rumors that he made a billion dollars on Black Monday last month through effective hedging. He talks to Fox Business anchor Maria Bartiromo and says this is just the beginning for volatility to come.

He thus is not concerned about any short term movements in the market.

Every trader will trade in the market with a different set of mind and they will react differently to the same situation.

Understanding the compounding effect in the market is important. compounding is when the money grows and where the gains from the last years  gets reinvested for the next year.

So suppose that you had invested 100 in a particular year at a rate of interest of say 20%. Then at the end of the year you will have 120 in your account. You have two options at the end of the year. You may either reinvest the 120 back or take out the 20 profit that you earned this year.

You decide that you do not want to withdraw the money but instead plan to reinvest it. When you calculate the amount at the end of the 2nd year it has grown to 144. This 144 grows to 173 at the end of the third year and this keeps going on and on. If you had withdrawn the 20 at the end of the first year then you would have earned just 60 profit at the end of the third year.

But because you had decided to not withdraw your money but to stay invested you gained 13 or 21.7% over the 60 that you may have made had you withdrawn your profits. This is the compounding effect.

As per the compounding effect the longer you stay invested the faster you will see your money grow. When you invest in the market based on fundamental analysis you will be advised to stay invested for a longer term. So before you start to invest in the market understand your mindset.

The question that comes to mind is that whether investing actually works. Investing can be compared to growing a plant where if you give the plant the right amount of care then it is sure to grow. All this is published here in great detail.

How do you allocate capital is such an environment? Something like cash in the short run…

‘Mini-perfect storm’ for gold and a positive hurricane brewing for silver

Posted on 18 September 2015 with 1 comment from readers

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Gold futures climbed again on Friday and eyed a solid weekly gain of around three per cent or higher, with analysts giving the credit to the Federal Reserve’s decision to keep interest rates at historically low levels.

‘Gold seems to be holding on to gains, and perhaps this is a mini-perfect storm for gold,’ said William Adams, head of research for Fastmarkets, explaining that ‘prices are low, other asset classes are relative high and interest rates will stay down for longer.’

Silver hurricane?

But then if gold was doing well its volatile sister was outperforming to the upside with prices set for gains of more than five per cent for the week, and a positive hurricane seems to be brewing in the silver camp. Remember 2008-11 when silver jumped from $8 to $48.50 an ounce?

Gold for December delivery was up two per cent to $1,140 an ounce at the time of writing on Friday, while December silver had leapt to $15.40 an ounce.

Analysts led by Goldman Sachs had previously emphasized that higher interest rates would hurt gold because it doesn’t pay interest, meaning some investors would step away from it. Plus, higher rates lift the dollar and a stronger greenback can weigh on dollar-denominated commodities as they become pricier for holders of other currencies.

In the event the Fed was having none of this, and the weary business of trying to anticipate when it will finally raise rates must start again. However, more stormy global economic clouds ahead could now kick rate rises into the very long grass.

Great expectations

To turn Goldman’s somewhat dubious logic – as gold has often risen with interest rates in the past – on its head, then surely gold and silver prices have only one way to go absent interest rate rises.

Hedge funds and other momentum traders are always on the look out for trading positions like this, where you just buy and ride the momentum upwards. Could it be that stocks will now continue to head downwards while precious metals step up into the great blue yonder?

The trend is your friend, until it is not.

QE4 is coming warns ‘Dr. Doom’ Marc Faber so buy gold!

Posted on 09 September 2015 with 7 comments from readers

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The original ‘Dr. Doom’ Marc Faber is warning that the Fed’s raising of interest rates will cause such an almighty crash that it will be forced to revert to money printing with QE4.

He remembers how Fed policy reversed the 2008-9 slump in equities but the biggest gainer in the next two years was precious metals. Could history be about to repeat itself again?

 

What is QE?

Quantitative easing is an unusual financial policy. In this, a central bank can purchase some government as well as few other securities from the market. This is done to boost the money supply as well as to lessen the interest rates. QE has been implemented a few times recently. The global economic crisis of 2007-08, The Federal Reserve, the central bank of U.S has implemented series of quantitative easing. Similarly, other Banks as the European Central or the Bank of Japan has been seen executing QE.

Stock markets react to every small or big change happening globally. Quantitative easing lowers the interest rates affecting the returns on normally safe investments including certificates of deposit, money market accounts and highly rated bonds. These situations leave investors no choice but to take few risks in order to get a return. They tend to take their portfolios to the equities hoping to push the stock market prices.

The gold market is also affected by Quantitative easing depending on the investor’s viewpoint. During the financial disaster of 2008, Quantitative easing had a good impact on gold. But soon after in QE2 in 2011 as the U.S. economy improved, the gold price was dropped. But gold has proved to be the investor’s safe haven from times. Not only because gold is rare or that its value is high, gold has many other properties that make it almost impossible to replace. Same goes for the other precious metals like gold. Gold is in the stock market for long but it has proved it can not only survive alone but can be working well with other emerging revolutions like the cryptocurrencies.

In times like this, it is recommended to do a thorough study of all the investments instead of just considering the effects of quantitative easing. It is recommended to diversify the installments using the emerging systems as Qprofit System. Please read the related articles in dept to know if Qprofit System is not a scam.

 

Video link click here!

Mike Swanson: US stocks lined up for 40-50% crash like 1929,1974,1987, 2001, 2007-9

Posted on 08 September 2015 with 1 comment from readers

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US stock markets will not just stop at their recent correction but now go on to a full blown crash with share indexes off 40 to 50 per cent from peak valuations, according to this latest video from market tipster Mike Swanson with David Skarica.

The predictions for the year were not all bright right from the starting, but were not this worse. The reason behind this last-minute may be the lack of any early or pre-timed initiatives to widen the share market and its factors or to exert any significant steps to save the grace of the Treasury assets. The result became a clearer picture when the forecasts modified into reports of falling Treasury assets more than what could be saved to keep them as safe as they can be. When the benchmarks are rendered insecure, there is no point in mentioning about other assets, the equities and bonds to the least.

The bitcoins may be thriving in popularity and takers and the efficiency of mining software might be adding to the favorable winds, but a single, but firm voice asking Is Bitcoin Trader a scam can rattle the enthusiasm of the miners for quite some time. It may eventually fade off or continue to grow and create havoc in the cryptomarket.

Some of the crashes in the history before either started off in the US and spread to other economies as well and the others started locally and then rattled the balance of the US. The ultimate aim of all the stock owners and shareholders is to perform fairly in the US stock market. Any significant alteration in the financial regulations of the trade and business in other countries will not die out without leaving a relative impression on the share values in the US economy and market. For example, if there is a tariff increase in the goods imported from the US, it triggers off a chain reaction up to the manufacturing structures.

These guys have been spot-on so far this summer with their warning of a July break and further weakness in August. Unlike many commentators they now see a much bigger sell-off coming this autumn. Here they explain why…

Posted on 08 September 2015Categories: Banking & Finance, GCC Stock Markets, Hedge Funds, Investment Gurus, Investment Management, Personal Finance, SMEs, Sovereign Wealth Funds, US Stocks, Video Channel

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Don’t dismiss the EU investigation into alleged gold and silver price fixing

Posted on 03 September 2015 with 6 comments from readers

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Goldbugs are bemused by reports that the European Union competition watchdog is investigating alleged ‘anti-competitive behavior’ by participants in the precious metals market.

But anybody who remembers how the EU broke up the cement cartel a couple of decades ago will know that this is a watchdog that has very powerful teeth. It’s fines can bankrupt even very large companies or banks.

Prior evidence

True the goldbugs have watched and waited in the past when various investigations into alleged precious metal price fixing have been launched in the US, UK and Germany. These investigations have quietly concluded that nothing was wrong, despite some very convincing evidence from market watchers and industry experts.

Market watchers help investors to decide the right time for all the financial transactions. But sometimes even the expert market watchers fail to give the correct analysis. This is where the professional systems like Crypto Code come into the picture. Please feel free to refer to Crypto Code review for further details.

The general view in the gold community is that the central banks themselves manipulate the gold price to help dampen inflation expectations. And the central banks are above the law in such matters.

However, they may have met their match in the EU competition watchdog. According to the Treaty of Rome and its later additions, EU law is the supreme authority, and even central banks are subservient to its law.

The European Union is particularly strong on maintaining a level playing field in terms of business competition and market pricing. There was a time big cement firms thought they were above EU law, until one day investigators turned up first thing in the morning to seize documents and take away computers.

After rather a short period of time the huge fines were made, hundreds of millions of dollars that really hurt profits. The cement cartel collapsed and prices fell, and so did their share prices.

EU calling

Could the bullion banks be the next to get that knock on the door early one morning? The EU investigators could do worse than start by reading back pages of the zerohedge.com website which regularly documents the false trades used to depress gold prices that are so blatant a blind man in a coal cellar could see them.

Why are these trades initiated? Who does it? On who’s orders are they operating? What is the benefit to them of these blatant price manipulations.

These are a few of the awkward questions the EU competition guys might like to put to those few players who count in the precious metals market. Could this be another cement cartel for them to bust? Why not? It is just as obvious.

Marc Faber: buy gold and gold stocks and short the Hong Kong dollar

Posted on 02 September 2015 with no comments from readers

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Always a controversial contrarian investment guru and Gloom, Boom & Doom Report editor Marc Faber now says to short the Hong Kong dollar as the devaluation of the yuan puts its peg to the US dollar under pressure.

The Sage of Chiang Mai is also keen on gold and gold shares as the only safe investment left in the world…

As per the leading debaters, the global economy is in crisis. There are very few safe havens for the investors. The Cyprus bank crisis has left investors thinking that even the bank deposits are not safe. While talking about the unemployment in Europe and its impacts, the precious metals and the economic slowdown of China they also shared their thoughts on investments in such unpredictable times. Their suggestion was to diversify the investments and not to rely on a single entity. Investing in multiple markets as real estate, equities, gold and other precious metals as well as bonds is the best go.

Investors can also look for emerging economies like exchange-traded funds or ETFs. Investing in stocks market has always been risky. But earning quick money comes with risks. With the Cyprus bank crisis, investors cannot even keep the money safe in banks too. In such crucial times, it is very important to diversify the investment and keep studying the market trends. For this, we need systems that can take in the current as well as the historical data and give us the proper analysis of the market trends. There are many such trading robots available in the market as of now. Ethereum Code is one of the leading. Check the latest research to understand is the Ethereum Code legit.

In volatile times markets can look distorted. With the extent of debt of GDP and the low economic standards, it is highly recommended to own gold. Gold has been in the market for ages as the investor’s popular choice. And there is no chance it is going to go away any time soon. Also, gold’s influence on the economy depends on how safe the other investments are turning out to be. When the markets are shaky investors see gold as their safe haven. Price of gold is considered the trademark for determining the health of the economy. Lower the gold price more stable the economy is.

Though nobody can predict how the markets will turn it is always advisable to diversify the investment for a better outcome.

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Why gold was the best buy in 2008-9 crash and will be this time too

Posted on 26 August 2015 with 1 comment from readers

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What was the best asset class to buy for the recovery that followed the 2008-9 crash in global financial markets? Step forward gold whose rise was only exceeded by silver.

Precious metals not only delivered the fastest recovery from that huge sell-off but offered increases way above the pre-crash levels. Gold tripled from its low in the crash, while silver went on to record an eight-fold increase, still just shy of its 1980 all-time high.

Deja-vu all over again

It is not hard to see history repeating itself all over again. Just look at the Chinese central bank this week cutting interest rates, just like the Fed had to do in 2008-9.

Back then that lit a fire under precious metals because of the inflation that was likely to follow. And inflation certainly did follow if you think about house prices and stock market prices but they were slower to deliver returns to investors than gold and silver up until 2011 when precious metal prices peaked.

They have now endured a four-year bear market and are perfectly positioned at much lower levels for a very strong rebound. On the other hand, global financial markets are still overvalued, even after the corrections of the past couple of months.

In that same time we have seen the gold price bottom out, advance $90 an ounce and then come back $40. All financial assets are currently very volatile but gold is still up in price and not down like stocks.

Going up or down?

The only reason that investors are hesitating to pile into precious metals is that they recall the 2008 collapse in their prices during the global financial crisis and hope that this will happen again to provide them with an even better entry point.

Will markets really be that kind to them? The prudent investor says it might be wise to start buying gold now in case it does not go down this time, and if the anti-gold camp on Wall Street has one single valid point it is that gold and stocks do not correlate.

The best option to buy gold is to trade it for other paperless currencies like the crypto currencies. The pair trade between these two has shown great results. As gold can be bought or exchanged for crypto and or the other way round. To trade the Bitcoins we can choose from a variety of options available. Please check Bitcoin Code review for more details.

Those Wall Street commentators dancing on the grave of gold have perhaps got the wrong funeral here: ask not for whom the bell tolls, it tolls for thee…