Lloyd’s of London: Biggest Risk to Auckland and Wellington is a Market Crash

This Week:

  • How China Will Blow Up Australia (and NZ?)
  • Ronni Stoeferle’s Latest Gold Chartbook
  • Lloyd’s of London: Biggest Risk to Auckland and Wellington is a Market Crash
  • Why we Should Talk About the Price of the Dollar

 

Prices and Charts

Spot Price Today / oz Weekly Change ($) Weekly Change (%)
NZD Gold $1760.25 – $30.12 – 1.68%
USD
Gold
$1107.20
$27.00

2.36%
NZD
Silver
$23.29 +
$0.03
+
0.54%
USD
Silver
$14.65
$0.08

0.12%
NZD/USD 0.6290 – 0.0045 – 0.71%

As we have been expecting gold in NZ dollars pulled back over the week, although the weakening Kiwi dollar dampened the fall to 1.68%. We are now out of overbought territory but could well fall further yet with the Kiwi dollar possibly due a bounce higher before long.

Gold in NZ Dollars remains firmly in a uptrend while in US Dollar terms it is just the opposite this year (See bottom half of chart for US Dollar gold).

NZD Gold Chart

Silver in NZ Dollar terms continues to trade in a more and more compressed range as can be seen below. The wedge formation it is in will have to be broken out of soon.
As always it’s a case of which way?

Will it continue in the upwards trend from late last year? If we knew we wouldn’t be writing this email to you!

NZD Silver Chart

RBNZ Cuts OCR by 0.25%. 0.75% More Still to Come?

As noted already the NZ dollar fell from .6395, before this mornings 0.25% interest rate cut by the RBNZ, to .6266 as we type.

NZ Dollar Chart

At some point this down trend will change.

However for our money it seems most traders aren’t pricing in the possibility of a recession in NZ yet. Some of the bank economists we’ve read have talked about the possibility but that is what it remains according to them, a possibility but not in their forecasts. The BNZ seems the most gloomy but even they are saying they expect annual gross domestic product (GDP) to grow 1.7%.

The RBNZ press release finished with:

“A reduction in the OCR is warranted by the softening in the economy and the need to keep future average CPI inflation near the 2 percent target midpoint.  At this stage, some further easing in the OCR seems likely.  This will depend on the emerging flow of economic data.”

Most of the bank economists are also expecting just one more 0.25% rate cut to 2.5%.

However buried in “Box D” of the accompanying RBNZ September Quarter Monetary Policy Statement was the following:

“Although financial market volatility has increased in recent weeks, at this stage a sharp deterioration in global economic conditions appears unlikely. However, if global economic conditions weaken further, there could be material implications for domestic economic activity and monetary policy.

Weaker global economic conditions would reduce demand for New Zealand’s exports, resulting in a more prolonged period of low export commodity prices and lower export volumes. Business and consumer confidence would decline further. In addition, global financial markets may become disrupted as risk aversion increases.”
Source.

The statement goes on to say this scenario would justify “further monetary policy stimulus” and so the 90-day interest rate could then decline to around 2 percent over the next year.

Our pick is that this scenario is the one that plays out, rather than just being the distant possibility that the RBNZ lays out. So we’ll see interest rates fall even further than most expect.

2% here we come?

NZ Heavy Traffic Data Indicates Economy Slowing

The ANZ truckometer ‘is a measure of economic activity using real time traffic data from around the country. Traffic data is a good indicator of economic activity, as a large portion of freight in New Zealand is transported by road.

Looking at the Heavy Traffic Index first, ANZ points out it has declined during seven of the last eight months, declining in August further to a 0.3% drop in July.”
Source.

This is perhaps NZ’s version of what is referred to in the US as “The Trann1es”.

No nothing to do with cross-dressing, rather the Dow Jones Transportation index.

This has been steadily ticking lower all year, even while the broader US stock market continued to rise. The argument being that transportation of goods is a leading indicator of how well the economy is doing. So ‘The Transports” were forewarning of falls in the rest of the US stock market. Which recently as you’ll have heard, turned out to be accurate. See the chart below.

Industrial Transports Average Chart

So keep an eye on how the ANZ truckometer goes in the next few months we’d say.

How China Will Blow Up Australia (and NZ?)

The Australian economy certainly seems to be slowing on the back of sharply reduced exports to China. Some non-mainstreamers we’ve read are picking their interest rates to head to zero like much of the rest of the developed world.

We’re part way through reading Vern Gowdie’s book “The End of Australia” which is being heavily promoted by the Daily Reckoning Australia.

Vern is not the only one with a pessimistic view on Australia.

How China Will Blow Up Australia (and NZ?)Mike Maloney put out a video “How China Will Blow Up Australia” that we posted on the site this week. He outlines why he thinks Australia will go into recession and have its property bubble popped as a result.

He also has some comments on New Zealand. So check out that video (just 7 mins). At the end of it we also take a look at some of the measures he discusses and compare the NZ numbers to that of Australia. And try to gaze ahead to what a slowing China and Australia mean for NZ.

How China Will Blow Up Australia (and NZ?)

—– OFFER FROM OUR SISTER COMPANY: Emergency Food NZ —–

Preparation also means having basic supplies on hand.
Are you prepared for when the shelves are bare?


Emergency Food Pack

For just $265 you can have 1 months long life emergency food supply.

Learn More.
—–

 

Ronni Stoeferle’s Latest Gold Chartbook

We received an email this week from Ronni Stoeferle with details of his latest report. He states:

“an update of our views on recent market developments. In our view, things look very much in line with our “Scenario 1”, that we described in Chapter 10 “Valuations, Scenarios and Price Targets” (page 118 of the report).”

Here is Scenario 1 in case you haven’t read the last In Gold We trust report:

“Scenario I: The current economic cycle nears its end and the fairy tale of a self-sustaining recovery is increasingly questioned by market participants. This leads to a significant devaluation of the US dollar relative to commodities, since the Fed – as it has stressed time and again – will once again employ quantitative easing or similar interventions if occasion demands it. In this case gold would benefit significantly from wide-ranging repricing in financial markets. A stagflation-type environment would become a realistic alternative in this scenario, something that is currently on almost no-one’s radar screen.” 

Back to Ronni’s recent email:

“Nothing has changed since beginning of July regarding the Incrementum Inflation Signal: Deflation is the name of the game and in fact, deflationary pressure has even strengthened further! In our view the markets are in the midst of a paradigm shift: Deflationary forces are increasingly spilling over from commodity into equity markets. The low volatility period on equity markets has likely come to an end!

Some of the key takeaways our new Chartbook are:
•    The FED is NOT out of bullets, it is just very reluctant to use them before we are at least close to a full fledged crisis; currency swaps, QE and negative interest rates are all on the table.
•    We therefore expect increasing market turmoil before the FED reverses course!
•    Shorting equities is a tricky business in an increasing volatility environment but could prove to be an interesting macro play until the FED gives in.
•    Traditional protection for equities (puts) by now are somewhat expensive, especially in comparison to some short term interest rates (eurodollar). In our opinion it is quite a safe assumption, that the FED would reverse course if US equities sold off further 10-15%.
•    A major deflationary event and (potentially internationally coordinated) reaction of central banks could finally be the trigger for the transition from deflation to stagflation!”

The chartbook can be downloaded below. If you haven’t read the In Gold We trust report from earlier this year, or thought it looked too long, then definitely have a skim through the Chart Book instead.

In Gold We trust ChartBook

Lloyd’s of London: Biggest Risk to Auckland and Wellington is a Market Crash

Interesting NZ Herald article last week about a recent Lloyd’s Global Threat Analysis “examining the possible financial fallout from an oil price shock, floods, volcanoes, pandemics, storms and other disasters”.

Interestingly the study cites a sharemarket crash as the biggest threat by a country mile to both Aucklands and Wellingtons economies.

New Zealand, these are things you should be worried about

“That is predominantly the effects on the share market from extreme movements in share prices and we’re talking about the value of the interruption to economic activity as a result of a market crash over five years,” Galloway said.

The index estimated $11.84 billion of New Zealand GDP was at risk from many man-made and natural threats during the next decade.”

You can also click through to Lloyd’s interactive site to profile threat levels by Location, City, and Threat type.

Here are the top 5 threats and links to the Lloyd’s data for Auckland & Wellington:

Top 5 Auckland Threats

  1. Market Crash
  2. Flood
  3. Oil Price Shock
  4. Volcano
  5. Human Pandemic

Read More About Auckland Threats

Top 5 Wellington Threats

  1. Market Crash
  2. Earthquake
  3. Flood
  4. Oil Price Shock
  5. Human Pandemic

Read More About Wellington Threats

For most of these risks you need to have your household prepared with Food, Water, Emergency Lighting etc. Check out our sister site Emergency Food NZ for any of that. We’ve added a few new products in recent weeks.

In terms of a stock market crash, the two assets with no counterparty risk Gold and Silver will likely hold you in good stead for that occurrence.

Get in contact if you’d like a quote for either.

We were a bit busier today, perhaps the interest rate cut this morning got people thinking about what lies ahead?

Free delivery anywhere in New Zealand and Australia

We’ve still got free delivery on boxes of 500 x 1oz Canadian Silver Maples delivered to your door via UPS, fully insured.

Todays price is $14,980 and delivery is now about 7-10 business days.
— Prepared for Power Cuts? —

[New] Inflatable Solar Air Lantern

Solar Air Lantern

Check out this cool new survival gadget. 

It’s easy to use. Just charge it in the sun. Inflate it. And light up a room.

6-12 hours of backup light from a single charge! No batteries, no wires, no hassle. And at only 1 inch tall when deflated, it stores easily in your car or survival kit.

Plus, it’s waterproof so you can use it in the water.

See 6 more uses for the amazing Solar Air Lantern.

This Weeks Articles:

Is NZ a “ticking time bomb” according to Antifragile author  Nassim Nicholas Taleb?

Is NZ a “ticking time
bomb” according to Antifragile author Nassim Nicholas Taleb?

2015-09-03
01:47:03-04

This Week: How to Make Sure the Government Can’t Freeze
Your Bank Account, Should Financial Literacy Lessons be Compulsory in NZ
Schools? & Is NZ a “ticking time bomb” according to
Antifragile author Nassim Nicholas Taleb?

Read More…
How China Will Blow Up Australia (and NZ?)

How China Will Blow Up Australia
(and NZ?)

2015-09-07
00:38:14-04

How China Will Blow Up Australia (and NZ?) We’ve been
keeping an eye on China over the past year or 2 in particular as New Zealand
(like Australia but to a lesser extent than them) has its wagon firmly
hitched to China in terms of exports. As Mike Maloney discusses in the video
below, Australia […]

Read More…
A Flyspeck of Gold

A Flyspeck of Gold

2015-09-09
18:46:15-04

Our favourite billionaire returns explaining why we should
turn our thinking on it’s head and talk about the “price of a
dollar” not the “price of gold”, in order
to demonstrate how the dollar has performed over the past
decades… A Flyspeck of Gold By Hugo Salinas Price – Originally
published on Plata.com.mx The idea of a “Dollar price […]

Read More…
As
always we are happy to answer any questions you have about buying gold or
silver. In fact, we encourage them, as it often gives us something to write
about. So if you have any get in touch.

  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

Today’s Spot
Prices
Spot Gold
NZ
$ 1760.25 / oz
US
$ 1107.20 / oz
Spot Silver
NZ
$ 23.29 / oz
NZ $ 748.77 / kg
US
$ 14.65 / oz
US $ 470.98 / kg

 


7 Reasons to Buy Gold & Silver via
GoldSurvivalGuide

Today’s Prices to Buy
1oz NZ 99.99% pure gold
bar

1oz NZ Gold Ingot
$1820.10
1kg NZ 99.9% pure
silver bar

1 Kilo NZ Silver Bar
$846.11
(price is per kilo for orders of 1-4 kgs)
$829.96 
(price is per kilo only for orders of 5 kgs or more)
order now
1oz PAMP Suisse 99.99%
pure gold bar

PAMP Gold
$1960.20
1kg PAMP 99.9% pure
silver bar

PAMP Silver
$873.65
1oz Canadian Gold Maple
99.99% pure gold coin

gold coinGold Maple
$1892.27
1oz Canadian Silver
Maple 99.99% pure silver coin (Minimum order size tube of 25
coins)

Silver Maple Silver Box
Tube of 25
$774.39
Box of 500
$14,980

(Fully insured and delivered)
order now

Note:

  • 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
  • Note: Your funds are deposited into our
    suppliers bank account only. We receive a finders fee direct from them
    only.

order now

Can’t
Get Enough of Gold Survival Guide?
If once a week isn’t enough sign up to get daily price alerts every
weekday around 9am Click here for more info

Our
Mission

  1. To demystify the concept of protecting and increasing ones
    wealth through owning gold and silver in the current turbulent economic
    environment.
  2. To simplify the process of purchasing physical gold and silver
    bullion in NZ – particularly for first time buyers.

We
look forward to hearing from you soon.Have a golden week!David (and Glenn)
GoldSurvivalGuide.co.nz Ph: 0800 888 465From outside NZ: +64 9 281 3898

email: orders@goldsurvivalguide.co.nz

Follow us on Twitter Find us on Facebook G+

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.
Copyright
© 2015 Gold Survival Guide.All Rights Reserved.

Get Free Gold & Silver Tips and Deals!

  • Get weekly news and tips on buying, storing, and selling gold and silver.
  • Be the first to know about limited quantity gold and silver deals.
  • Get our free 19 Nuggets on Buying Gold and Silver guide right away to help you become a bullion expert.
Email Address *
First Name
*Required Fields
Note: It is our responsibility to protect your privacy and we guarantee that your data will be completely confidential.

3 thoughts on “Lloyd’s of London: Biggest Risk to Auckland and Wellington is a Market Crash

  1. Pingback: Biggest Threats to Auckland and Wellington - According to Lloyd's of London

  2. Pingback: How the China Slowdown Will Impact NZ - Gold Survival Guide

  3. Pingback: NZD Silver has broken out of a 4 year downtrend - Gold Survival Guide

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to Track Gold & Silver Prices Every Day?

Get a daily price alert every weekday.

 

Along with free charts and analysis of what the price may do.

Email Address *
First Name
*Required Fields

You have Successfully Subscribed!