Are Positive Economic Numbers Merely the Result of Rising Prices?

Prices and Charts

NZD Gold Lower This Week But Then Bounced Back

Gold in New Zealand dollars was down since last week. It did get as low as $2500 before bouncing back. We’ve only marked it on the USD gold chart, but gold may be trying to carve out an inverse head and shoulders pattern – see the S’s and H. If so we would see gold head back towards US$1825 or NZ$2650.

Silver Falls Sharply Again

While silver was again underperforming gold. Dropping almost 4% in NZ dollar terms. NZD silver touched the horizontal support line at $32, but bounced back today. So now that silver has fallen back to the November low, is that finally the bottom in this corrective phase?

NZ Dollar Also Falling Sharply

The New Zealand dollar has also continued its fall this week. Down nearly 80 basis points from last Wednesday. The pullback after the recent very rapid rise has continued. Now that the Kiwi has reached the 50 day moving average we may see it consolidate around these levels.

Need Help Understanding the Charts?

Check out this post if any of the terms we use when discussing the gold, silver and NZ Dollar charts are unknown to you:

Gold and Silver Technical Analysis: The Ultimate Beginners Guide

Continues below

The Fourth Turning and Gold: What’s Still to Come in This Crisis?

It’s been 18 months since the outbreak of the Corona-panic. Some parts of the world seem to be returning to some semblance of normality. For example this week Denmark removed all restrictions and even the requirement for vaccine passports for travel.

But here in New Zealand we seem a long way off any return to something close to normal. Our healthcare (a.k.a. sickness) system is already bulging at the seams and that is with very few hospitalisations linked to Covid19.

While Sweden was tarred and feathered a year ago as the worst example to follow. Now seems to be doing better than anyone else in surviving the dreaded delta variant. Could it be that natural immunity actually works? A study we recently read out of Israel also seems to back this up.

However even if we get “back to normal” as far as the pandemic goes, there is still likely more to come in this crisis.

This week’s article looks at the unique book that is the Fourth Turning, and asks that very question: What’s still to come in this crisis?

Here’s what’s covered:

• What is “The Fourth Turning”?
• What the USA Should Have Done to Avoid the Current Crisis
• How Will the Crisis Play Out From Here?
• How Will The Crisis Conclude?
• Neil Howe on What to Expect Next – Creative Destruction
• But We’ll Stumble Through to the Other Side
• The Fourth Turning and Gold’s Coming Peak Valuation

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The Fourth Turning and Gold: What’s Still to Come in This Crisis?

Your Questions Wanted

Remember, if you’ve got a specific question, be sure to send it in to be in the running for a 1oz silver coin.

RBNZ: Rates Rises Will be Slower Than the Bank Economists Had Predicted

In a speech this week RBNZ Assistant Governor Christian Hawkesby said that the central bank will hike rates very slowly. So the 50 point rate hikes that were being predicted prior to the current lockdown seem very unlikely now.

ANZ noted that while markets were on Friday pricing in a 35-point hike, they’re now pricing in a hike of less than 25 points.

This gels with what Peter Schiff recently said about the US central bank “tightening”…

We reckon the same can be said of the RBNZ and interest rates here in New Zealand. There is so much debt that borrowers won’t be able to handle significant interest rate rises. It’s likely the central bank will err on the side of caution. Raises will be too little too late and they are likely to continue to inflate the bubble ever higher. Simply because to do otherwise is to bring the system down.

Are Positive Economic Numbers Merely the Result of Rising Prices?

Peter Schiff also had an interesting theory about recent supposed very rosy numbers out of the USA, where they got a much better than expected retail sales report for August.

1. Consumers buy a larger quantity of stuff.
2. The price of the stuff they’re buying goes up.

That seems to make good sense to us.

Perhaps we are also seeing the same factor at play with numbers here in NZ? Much hoopla was made of the “huge” rise in GDP for the June quarter of 2.8%. This big jump was what prompted the talk of a 50 basis point rate hike, before the latest lockdown put paid to that idea.

But maybe a fair bit of this rise is due to rising prices for goods we export? Fro example: “Economic activity in the primary industries rose 5.0 percent in the quarter”.

We believe the data report above is not “real” GDP, as in after inflation GDP. But even if it was, then because the official government inflation rates are so artificially low, we’d be unsure how “real” the real GDP figure is! That is before we even get into teh worth or otherwise of measuring GDP.

Anyhow, our overall theory gels with Schiff’s. That is that currently precious metals are not doing so well because the average person thinks central banks are about to “tighten”. However as Schiff says: “All they’re going to do is be a little less easy than they are right now.”

In the long run precious metals are likely to do very well as a result of this. Because real interest rates (after inflation) will remain low to negative. See: Real Interest Rates vs Gold Prices – What Can They Tell Us About When to Buy Gold in New Zealand? [2021 Update]

Local refinery operations have commenced again under Level 3. But dispatches and collections have been suspended as goods cannot be inspected, counted or signed for by the customer. Your orders will be stored and insured free of charge until it is safe to either collect them or when signatures can be obtained for proof of delivery.

Dispatches will stored and insured free of charge until it is safe again to dispatch them and signatures can be obtained. When we drop down a level, you will be advised when your order is ready to collect and to book in a collection time to ensure an adequate distance between customers.

Although, currently imported orders are continuing to be delivered via Fedex. So that is an option if you are looking to spend more than around NZ$10-15,000.

Please get in contact if you’d like a quote or have any questions:

1. Email: orders@goldsurvivalguide.co.nz
2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
3. or Shop Online with indicative pricing

— Prepared for the unexpected? —

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Shop the Range…

—–

1. Email: orders@goldsurvivalguide.co.nz
2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
3. or Online order form with indicative pricing

• Prices are excluding delivery
• 1 Troy ounce = 31.1 grams
• 1 Kg = 32.15 Troy ounces
• Request special pricing for larger orders such as monster box of Canadian maple silver coins
• Lower pricing for local gold orders of 10 to 29ozs and best pricing for 30 ozs or more.
• Foreign currency options available so you can purchase from USD, AUD, EURO, GBP
• Plus we accept BTC, BCH, Visa and Mastercard
• Note: For local gold and silver orders your funds are deposited into our suppliers bank account. We receive a finders fee direct from them. Pricing is as good or sometimes even better than if you went direct.
  

Have a golden week!

David (and Glenn)
GoldSurvivalGuide.co.nz
Ph: 0800 888 465
From outside NZ: +64 9 281 3898
email: orders@goldsurvivalguide.co.nz