Posted on 05/07/2014 1:08:09 PM PDT by Olog-hai
Gold is falling after Federal Reserve Chair Janet Yellen gave an upbeat assessment of the U.S. economy and said that inflation remains low. […]
Yellen’s comments suggest that the Federal Reserve is set to continue reducing its economic stimulus, lessening the threat of rising prices. Investors typically buy gold as a hedge against inflation. …
(Excerpt) Read more at hosted.ap.org ...
I’m starting to change my opinion on gold. Because of rising US oil production, I don’t think there’s a bullish case to be made for gold because of USA economic weakness or dollar weakness. USA annual oil production increases of 1 million barrels a day—shift capital flows around the world and fundamentally shift world wide perceptions about the future of the USA. This change is as big as the change brought by the Saudis when their giant CHEAP! (as in $.25-.50 @ barrel)production leaps of the late 60’s and 70’s killed US production (which had been rising steadily since wwII.)
Something else is going on in gold. There are three things that have happened recently.
the chinese have moved their port of entry for gold from hong kong to bejing. The result of this move will be that no one will know how much gold they have been purchasing. last year they purchased record amounts. Only a tiny fraction of chinese central bank reserves are currently in gold. US central bank gold reserves represent something like 60 percent of the central banks reserves. for china the last posted reserve was 1 percent. They’ll want to raise that number considerably—especially as they want to get out of their dollar reserves. (rising US oil production tends to force the dollar up—so a rising dollar discourages central bankers from ditching their dollars for gold.)
deutche bank pulled out their gold program. News is that their seat wasn’t worth much. this suggests that a seat that was once lucrative but is no longer—means that a trade is going to be ending.
another biggie. there is talk of some of the biggest gold miners merging. why now?
well the gold price is thought to be manipulated by several players including both the central banks and the gold miners.
If the shorting of gold were to end because of a rising dollar—then gold would respond more directly to supply and demand pressures — and gold would rise —especially because of the large demand from china. The chinese have been relying on western banks to hold down prices —something they won’t be able to do if western banks stop shorting gold.
Unless you are wasting your money on food, gasoline, electricity or other things you actually need and use.
I can verify that. I have decided to spend some money so have been buying stuff and doing stuff to our house. Just purchased a house full of really nice carpet, installation, pad, and furniture moving.....$3500. I paid the same amount 17 years ago. It has been done once again since then but was an insurance job so I don’t know what it cost.
Just got back from picking out granite for my kitchen. Total including demo and installation...$2500. First time I priced it years ago it was $5k. I recently bought a huge Ashley U shaped sectional with a chaise...$999 including delivery.
Of course my cost of gas has doubled, utilities have gone up 50% and groceries have doubled. Stuff we use every day.
Bump
US central bank gold reserves represent something like 60 percent of the central banks reserves.
Are you sure that the US has any gold reserves! Since the last audit was 1952, how can you make that statement.
US central bank gold reserves represent something like 60 percent of the central banks reserves.
Are you sure that the US has any gold reserves! Since the last audit was 1952, how can you make that statement.
..............
You can’t have the fiat money arguement both ways. It wouldn’t make any sense for the fed to sell their gold if they could just print the money to buy them back.
Audio of her reminds me of that Ruth Buzzie comedy character. Can’t remember the name.
That looks like a good source. Wish I lived closer for pick up.
I bought gold mining stocks for the first time in my life this year. Never thought I would be invested in gold. The nice thing about the mining stocks is that they pay a divvy while you wait as opposed to gold, and also the fact that they are high beta, assuming one has the stomach for it. Once they take off, they can really move.
Yep, lies. And Larry Kudlow is right, she’s chasing after solving problems (particularly in employment) that the Fed can’t solve. I don’t like her enthusiasm for inflation, either.
But her actions so far are something else: pulling back on the Fed’s shopping spree is the right direction and she’s headed there apace.
They are, never had a hiccup with their service or quality. I like their prices on silver 1 oz. bars as well, gold is great except if you don’t have smaller denominations for the little things you might need.
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