Overnight gold and silver have both backed off a bit further and coupled with a stronger NZ dollar above 80 cents again, prices are cheaper in NZ today.
As you can see in the gold chart below the 2nd of the 2 levels we mentioned last week, $1700 has just been reached today. This is also the 50 day moving average. NZ gold is at NZ$1695.73, down $68 or 3.87% from a week ago.
Silver has also backed off nicely since last week. Silver in NZ dollars is at NZ$28.60 per oz, down $1.13 or 3.8% from last Thursday. Or in Kgs, NZ$919.54 versus NZ $956. But as you can see below unlike gold it has yet to reached its 50 day moving average.
So that’s the short term view for both metals. What about the bigger picture?
Are the lows of June the actual bottom for gold and silver?
This weeks feature article looks back at what we wrote in May to see how close to the mark we were and also tries to answer the question as to whether the bottom might actually be in now. So instead of repeating ourselves here head on over and check that article out…
2 Videos This Week
If you’re more audio-visually inclined we have two videos we’ve come across to share this week.
First up an excellent interview with the author of our favourite book on monetary matters. G. Edward Griffin author of “The Creature from Jekyll Island: A Second Look at the Federal Reserve.”
A very smart guy who predicted much of what has come to pass over the past almost 2 decades since the book was first published. If you haven’t read it go out and find yourself a copy.
Next, if you’d like the gaps filled in on monetary history of the past couple hundred years, this one should be a good watch.
Trouble Continues in Emerging Markets
The BRICS have been reported as putting together a $100 billion FX fund to “steady currency markets, Russia’s Vladimir Putin said on Thursday, but it looks unlikely to be in place soon enough to temper the effects of an expected pullback of U.S. monetary stimulus.”
But even if this was in place in time, realistically it pales in comparison to the US Federal Reserve’s $85 billion per month in bonds it purchases.
The article also mentions India “was liaising with other emerging countries on a plan to coordinate intervention in offshore currency markets. But it got little support and it seems the currency reserve pool will not be in place soon enough to help.”
So it seems India is on its own in dealing with it massively depreciating currency. The record high gold price in Indian Rupee (see chart below) shows what Indians really trust even with their government doing all it can to discourage them from purchasing gold.
Gold doing its job in India
As we said last week it’s a case of be careful what you wish for. Because these same same nations decried the US money printing policies when they began, wanting a weaker currency versus the US dollar. Now they are also complaining with the US talking of winding down money printing operations, with this money now leaving their shores in anticipation of the taper.
We still have major doubts that it will be as simple as just winding back on the pumps while experiencing a nice steady rise in interest rates for everyone to get used to. Odds instead, we reckon, are the US and other central banks will continue their “stimulus” for many years yet. Why?
Because someone has to keep buying the debt a.k.a. bonds. And as reported a few weeks back it seems that foreigners haven’t been so keen on US debt in the last few months. So if they don’t buy, it will fall back on the Fed.
And as Chris Mayer reported earlier this week the Fed may already be carrying most of the load when it comes to US debt (emphasis ours)…
“As John Williams at ShadowStats points out, the Federal Reserve has bought 110% of the net issuance of U.S. Treasury this year. Meaning, the Federal Reserve Bank has bought every new dollar of debt issued and then some. As Williams says, this is “a pace suggestive of a Treasury that is unable to borrow otherwise.”
By mid-October, the Federal Reserve’s purchases should be approaching 140%, by his calculations. This is clearly absurd and can’t go on forever. (If for no other reason than the Fed will eventually own the entire federal debt market. As it stands now, it owns about a third of it!) When it ends, interest rates will likely rise. That could also bring the easy-money party to a close.”
Yikes. So our pick remains if there is a taper announced it will be a small one. What the troubles in the emerging nations show is that without the cheap funds from the Fed, we could see the next round of a global crisis as the emerging nations now make up about half the global economy. So if they hit the wall en masse there will be after effects felt worldwide. As we said last week – “Rock, meet hard place.”
Gold Wins Regardless
Peter Schiff thinks gold wins in the long run regardless of what the Fed does next week. In a piece headed A Win-Win for Gold he comments:
“What media analysts are missing is that gold stands to benefit no matter what the Fed does.
If quantitative easing continues – which is where I’m placing my bets – then inflation will continue to rise and investors will need hard assets as a safe haven.
Even if the Fed does taper before year-end, the ensuing carnage in the bond market will cripple the housing market and the broader economy, forcing the Fed to reverse course. An about-face on tapering will cause the Fed to lose face with the markets, as the fragility of the phony recovery will finally be laid bare.
Western economies balance precariously on global confidence in the dollar. But the dollar is now structured like a Ponzi scheme – investor confidence is being abused to print dollars to paper over economic problems, thus perpetuating investor confidence. Just as with Bernie Madoff, once the new outside money stops coming in – and it is slowing right now – the whole scheme will collapse spectacularly.
Gold has a very strong outlook as it heads toward the last quarter of the year. Physical demand is traditionally very good in the fall season, which will bolster the already astounding demand statistics for 2013.
More importantly, the economic balancing act supported by misplaced trust in the dollar is beginning to lose its footing. Before long, the current bargain prices of physical precious metals will be remembered like a long-lost dream. Those who refuse to join the race will be left in the dust.”
So if you agree with Peter Schiff that the last quarter of 2013 looks like being a good one for gold (and by association for silver), then get in touch. And as we reported in this weeks feature article we are possibly approaching some good zones for buying in the long run.
1. Email: email@example.com
2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
3. or Online order form with indicative pricing
Have a golden week!
Glenn (and David)
Ph: 0800 888 465
From outside NZ: +64 9 281 3898
This Weeks Articles:
|Could NZ Take a Pounding Like Emerging Market Currencies?|
|2013-09-05 03:44:24-04Gold Survival Gold Article Updates September 05,2013 This Week: Gold and Silver Charts Does War Affect the Gold Price? Another Approaching Day of Reckoning Could NZ Take a Pounding Like Emerging Market Currencies? Free Ticket to See Ronald Stoeferle live in Auckland First up a reminder in case you missed last week’s email, that […]read more…|
|A 200+ Year Timeline of America’s Monetary System|
|2013-09-09 21:01:37-04A.K.A. A Timeline of America’s Decline Here’s an informative video if you’d like a fast run down on the history of money in the United States over the past 2 and a bit centuries since the writing of the US constitution. And why the monetary system will eventually lead to the USA’s downfall. It covers […]read more…|
|G. Edward Griffin: How You can END THE FED|
|2013-09-10 04:11:21-04Here is a great interview with G Edward Griffin, author of the famous book (and probably one of our favorites) “The Creature from Jekyll Island: A Second Look at the Federal Reserve.” If you haven’t yet read it you really should, but this is a good primer for some of what the book (that reads […]read more…|
|NZD Gold and Silver Update: Is the Bottom in this Time?|
|2013-09-10 19:54:47-04It’s been over 2 months now since the late June lows for gold and silver so we thought it worth a look back at what we wrote a month prior to this to see how things have played out since the initial massive plunge in April. With the benefit of hindsight lows are much easier […]read more…|
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We are not financial advisors, accountants or lawyers. Any information we provide is not intended as investment or financial advice. It is merely information based upon our own experiences. The information we discuss is of a general nature and should merely be used as a place to start your own research and you definitely should conduct your own due diligence. You should seek professional investment or financial advice before making any decisions.
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