We’ll be a bit briefer than normal this week. David is down country so today so we’ve gotten a bit behind. Plus we haven’t come across a great deal to report on this week from a local NZ perspective. Although as usual there has been plenty going on in the world of gold and silver globally.
Of note are the calls out of Japan from likely next Prime Minister Abe that he will force the Bank of Japan to devalue the yen even further by printing unlimited amounts of Yen to keep it’s value low.
Japan has been printing but in the “race to debase” they’ve really just been entered as an amateur team to date. In comparison to the US Fed, the Bank of England, and multiple other Asian nations that have pegged their currencies to the ever weakening US dollar, their percentage of debasement has been quite small.
Japan has been stagnant for 2 decades but they have been saved, up to now at least, by being able to tap their vast internal savings to fund their deficits. But it seems they might finally be running out of options and resort to really turning on the monetary spigots.
We’ve read (but can’t recall where, King World News maybe?) that this move (even more currency printing) could prompt the Japanese to become gold buyers of some note to protect themselves from much greater currency depreciation.
Unlike in most other major currencies, gold when priced in Yen, is actually very close to record highs, so the existing money printing has already had an effect. In Euro’s and also in Indian Rupees Gold has also hit new highs in recent months. In the case of India the high price along with gold negative government tax changes has spurred many Indians to purchase silver in greater quantities instead.
“Given the high price of gold and the Indian government’s new regulation on buying gold and tax deductions at source, the sale of silver items at jewellery shops soared to a new high.”
So just another reason why silver might continue to outperform gold in coming years perhaps?
Sticking with the Race to Debase/Currency Wars theme and a bit closer to home, we read an interesting tidbit regarding how the Aussie Central Bank might actually be engaging in (albeit small) money printing of its own.
“’The Reserve Bank of Australia could already be printing Australian dollars and selling them directly to foreign central banks in an effort to reduce buying pressure on the currency, according to investment bank UBS.’
Would you believe it, the AFR beat us to the punch line: The RBA is printing money!
What’s going on here is that the RBA is creating dollars to provide them to foreign central banks. The question is whether the RBA is, somewhere else, doing the opposite to balance out the transaction.
If they aren’t, they’re creating brand spanking new money. And it looks like that’s just what’s going on. We won’t go into ‘Other Outright Transactions’, but you can get the nitty gritty here if you want to.”
So while this is on small scale the argument being made is that the RBA is sending the market a signal that it doesn’t like the high AUD and so could be a sign of more currency creation to come. Who knows, but an interesting area to keep an eye on we reckon.
All this talk of currency debasement has gets us thinking yet again – we wonder what the good old kiwi dollar will do in the long run? The idea of an ongoing steady rise against the US dollar seems to be a foregone conclusion so perhaps it could somehow do the opposite? What would happen if the NZ government changed tack and joined the race to debase at some point in the future? Odds are the rise against the US dollar would be stalled at least for a bit.
So, while there is “stuff” going on globally, in respect to actual precious metals prices we do seem to be in Limboland over the past week. (Actually you could say that about most every market at the moment).
Glancing at the NZ dollar charts for both metals, not a lot has changed over the past week really. You can see gold continues to hover just under the 50 day moving average (blue line), after the sharp rise from the dip down at the start of the month.
While silver has actually managed to break out above the 50 day MA and stay there so is looking pretty good from a technical point of view.
We haven’t featured anything from Casey Research’s Jeff Clark for a while, but if you have shares in gold miners or are thinking of buying some then this will be a useful read.
We had this on the agenda for a while, so have finally gotten around to turning one of our more popular articles into a short video. So if you are one of those people who prefer to watch and listen over read then be sure to check it out as it will help you when:
And if you’d like to see more videos from us, drop us an email with topics you’d like to see covered.
So once you decide if you want some locally refined gold or silver or some imported PAMP or even Canadian Maples then get in touch. (Or give us a call if you still can’t decide between the two and we might be able to help you make up your mind):
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!
This Weeks Articles:
|NZ Bank Failure Planning, BASEL III and Will Banks Buy Gold?|
This Week: Gold and Silver Charts Look Pretty What’s Wrong With the RBNZ’s Bank Failure Plans? Will NZ Banks Buy Gold? Heads They Print, Tales They Print Too Gold and Silver Charts Look Pretty We couldn’t come up with a better term than “pretty” sorry but both gold and silver in NZ dollars do look […]
|How to Play Your Gold Stocks Now|
We haven’t heard from Casey Research’s Jeff Clark for a while. Here he looks at the performance of gold and gold stocks for the year to date and what we might expect for the remainder of the year. After a year or more of depressed prices, gold and silver stocks reversed with a vengeance. GDX […]
|Choosing Between PAMP Suisse Gold & Silver vs Local NZ Gold & Silver Bars: Video|
We’ve written about this topic previously as it is a common question people have. How to choose between the local New Zealand silver and gold bars on offer and imported Suisse PAMP gold and silver bars? But for those people that prefer to watch and listen rather than read, we’ve finally also converted the previous […]
The Legal stuff – Disclaimer:
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.