The Money Bubble

So in 2013 the industry adopted “all-in sustaining costs” as the preferred measure. As Chuck Jeannes, CEO of Canadian miner Goldcorp admitted in his company’s 2012 annual report, “The traditional measure of cash costs is not a realistic view. To produce an ounce of gold, we not only incur operating costs, but we spend sustaining capital at the site

organizations are suffering from “peak complexity,” a concept crucial to understanding the recent evolution – and coming difficulties – of the broader economy.

A handful of major banks sold gold futures contracts worth tens of billions of dollars on the Comex futures exchange, frequently at odd times when trading was thin. This pushed the “paper” price of gold through technical support levels, which activated sell programs of momentum-trading hedge funds. The resulting additional selling pressure forced g

As Figure 19.1 illustrates, when it takes about 20 or more ounces (622 grams) of gold to buy the Dow Jones Industrial Average, financial assets have become overvalued and are topping out, and it’s time to shift into real assets. Conversely, when less than two ounces (62 grams) of gold can buy the Dow Jones Industrials, then financial assets are che

A good resource for finding a dealer that is both reputable and reasonable is GoldPrice.org, http://www.goldprice.org, which compares prices across numerous dealers.

Shortly after his inauguration in 1933, President Franklin Roosevelt concluded that US problems were serious enough to warrant devaluation of the dollar, among other aggressive policies. Under Article I, Section 8 of the Constitution, only Congress had the power to “regulate” 6 the relationship between the dollar and gold, but FDR claimed that auth

To understand how the current system might spin out of control and where the unraveling might begin, look at where the complexity – aka systemic risk – is of late being concentrated most quickly. Post-2008, the two areas that stand out are government debt – which has been substituted for private debt as governments have borrowed unprecedented amoun

The world’s governments thus find themselves in an ever-shrinking box. And all it will take to trigger the crisis is a return to historically-normal levels of interest rates. As recently as 2000, 30-year Treasury bonds yielded over 6 percent and 30-year mortgages cost 7.5 percent. Let rates return to those levels and the global financial system imp

a “complex” system like a weather front, living organism, or pre-avalanche snow-covered mountainside contains numerous parts that do change in response to their communication and interaction. This process can create feedback loops begetting “emergent properties” that differ radically from the system’s constituent parts or its previous state.