The Money Bubble

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

the Federal Reserve issued up to 2½-times more receipts than gold

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

The Fear Index is useful to measure gold’s true value. The Index’s average over the near-century covered in the above chart is 7.09 percent, compared to 2.27 percent in late 2013, which indicates that gold is undervalued. To return to the ‘norm’ – perhaps not the right word since most of the data measures an era of fiat currency – that this histori

Chinese proverb says wisdom begins with calling things by their right name.

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

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.

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

The national mints generally sell to wholesalers who sell to dealers who sell to individuals, which can result in a fairly high mark-up at the retail level. So while there are advantages to owning well-recognized forms of bullion like gold eagles or maple leafs (for example, they often are easier to sell), our advice is to get the most metal for yo