Apr 11, 2012
- Bernanke The Hero?
- The Rain in Spain
- This weeks articles
- Thumbs up for NZ from the IMF
- Interested in hearing Chris Powell from GATA speak here in NZ?
- Latest Gold and Silver Charts
Bernanke The Hero?
Even though it’s been a week, we still can’t help but continue to mull over the sheer absurdity of last week’s comments from the Fed minutes. Or rather the result of these comments. It’s amazing that the mutterings of a few men move the markets so dramatically. We do scratch our heads and wonder at how short peoples memories are. This is the same Ben Bernanke who repeatedly in the lead up to 2008 said there was no housing bubble and no real risk to the global economy! Unfortunately for him we live in the age of youtube where his comments can be immortalised for all to see. Having him appear on a magazine cover with “The Hero” emblazoned across it as he did on this month’s cover of The Atlantic is rather sickening. But at least we have Mish Shedlock to remind us of just how incorrect Bernanke has been… Atlantic Magazine Cover Proclaims Ben Bernanke “The Hero”
So with that grumble off our chests, it’s important to step back and take the big picture view. Just what has changed in the past few weeks? Not a lot it seems to us. We don’t know how this will all play out or what the timing of it will be, but the global financial system still seems very precarious to us. It just could be that it takes a while longer for the next downdraft to begin.
This weeks articles
On the topic of the big picture, a couple of this week’s articles make for very timely reading we reckon. First up is Gold’s Critical Metric: The One Indicator to Watch.
This looks in depth at real interest rates which are a key driver in influencing people to buy gold. Simply put this is the interest rate less the rate of inflation. When this is very low, i.e. less than 2% gold does well as there is nothing to be gained by keeping money in the bank.
So after reading this you may come to the conclusion that it is still a good time to buy gold but if so when exactly is the best time to buy? Well this next article actually looks at the best specific days of the month and week to buy on average. Where and When to Place Your Investment Bets
And finally if you’re worried about a further downturn in the global economy and how it will affect gold then check out How Will Gold Perform if We Enter a Recession or Depression?
The Rain in Spain
Actually on the topic of what has changed, maybe something has. The Europe “fix” may already be unravelling. Spanish bonds yields have risen markedly over the past few weeks to a 4 month high. And they’ve got a lot of debt to auction off this year so it will be interesting to see how they get on.
The big deal about Spain is that unlike Greece it makes up a significant percentage of the Eurozone GDP – I think something like about 10% versus Greece’s 2%. For more on Spain and a take suggesting it could be the first to leave the Eurozone see this article. Spain Will Exit the Eurozone First – This Year
As we’ve said before – more bailouts to come, it’s when not if that is the question.
Also this week we read a great article from Ambrose Evans-Pritchard, one of the few journalists in a mainstream media organisation worth paying much heed to we reckon. Gold Crash on Fed tightening and Euro Salvation Looks Premature
Interested in hearing Chris Powell from Gold Anti-Trust Action Committee Inc. (GATA) speak here in NZ?
A friend of ours is checking if there is much interest from Kiwis in coming to hear Chris Powell, Secretary/Treasurer of the Gold Anti-Trust Action Committee Inc. (GATA) – see http://www.gata.organdhttp://www.gata.org/taxonomy/term/3%2B4%2B20for more information if you are not familiar with GATA or Chris Powell.
Mr Powell will be speaking in Hong Kong in late June and our friend is considering the possibility of organizing an event here in NZ (Auckland most likely) for him to speak at before he returns to the US. It would be just after the 28th of June.
Simply go to our contact form and please let us know if you would be interested to attend, promote or sponsor such an event. If not, but you know someone who might be interested, please also let us know. No obligation of course. We’re just after a rough indication to see if it would be worthwhile to get him here. The more people say yes, the better the odds so speak up!
Thumbs up for NZ from the IMF
A riveting report from the IMF on NZ released 2 April suggests all is well aboard the good ship Kiwi.
However yet again we think this misses the point as it is our total external debt that is the key factor. Our read is that our total debt to overseas lenders is actually over 100% of GDP (over $240 billion). This is the number to watch as it puts us at risk in the case of a global funding shock. To their credit the IMF does also mention this but downplays the risk somewhat we think.
Also on the topic of the IMF we as a nation have also been asked to help out with the small matter of just $500 billion.
At least we get to split it with another 186 countries – so just small change.
This financial fiasco is a long way from over. That said I think even we will be surprised as to how long the powers that be can keep things afloat. There’ll be many more bailouts to come is our guess.
Latest Gold and Silver Charts
Gold in NZ dollars dip down briefly under $2000 intraday last week but remains above $2000 still. We are sounding like a broken record on this one!
Silver had a big fall last week and is now pretty close to support at $37.50, and then the next level below that would be around $35NZ an ounce.
Odds are these levels will be good in the long run. Patience is likely to be the key this year for precious metals.
Give David a call, email, or livechat and he can get you a specific quote.
1. Email: firstname.lastname@example.org
2. Phone: 0800 888 GOLD ( 0800 888 465 )
Have a golden week!
Glenn (and David).
Gold Survival Guide
This Weeks Articles:
This week: – More Fed “Jaw Boning” – Gold’s performance in NZD for first quarter 2012 – So how’s silver looking? More Fed “Jaw Boning” Overnight the release of Federal Reserve’s FOMC last meeting minutes talked down the chances of further monetary manipulations… From Bloomberg… “The minutes of the meeting show decreased urgency to add [...] read more…
Two years ago we wrote an article When will you know it’s time to sell gold? In this article we touched on 7 indicators to keep an eye on. Well, the following article goes into significant depth on one of these indicators and as it is probably the most crucial gold indicator to track, makes [...] read more…
Anecdotal evidence seems to point to many people sitting on the sidelines at the moment when it comes to purchasing gold (and silver). From what we have heard the common view is that gold and silver will fall further yet as it seems to them the global economy is improving (if you listen to Bernanke [...] read more…
It seems to us that many people are sitting on the sidelines trying to pick the bottom of the current correction in precious metals. This is definitely an “easier said than done” activity. This article discusses one method that makes a lot of sense to us when it comes to buying gold and silver and [...] read more…
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.