Schizophrenic markets and why the US may be the last to fall



This week:
  • Schizophrenic markets
  • Webinar replay reminder
  • Eric Sprott’s presentation at the Gold Symposium
  • This weeks other articles

Schizophrenic markets

As usual up one day, down the next, is the only thing we can count on.

Big surprise – the US super-committee charged with cutting expenditure has failed to come up with a plan and so markets took a dive yesterday big time.  It was only a matter of time before the US debt situation came back into the picture.  The odds are they’ll need to raise the “debt ceiling” again before too long.  We are reminded of a chart we posted a few months ago showing how the gold price has risen in step with the US debt ceiling being raised.

Focusing on any one region is a mistake

But it’s a mistake to focus on only one region as being where the problem lies.  The problem is too much debt the world over.  While Europe has taken centre stage the current monetary system has bred imbalances the world over, be it USA, Europe, or China.

US may be the last to fall

We think it’s a common misconception that it’s all about the US dollar and we were reminded of this fact by a comment by Egon von Greyerz of Matterhorn Asset Management at the Sydney Gold Symposium.  It was something along the lines of a collapse happens from the periphery inwards.  We believe he means that with the USA being the centre of the current system (i.e. they have the reserve currency), it is likely that it will be the last domino to fall.  This is backed up by the fact that there is still a rush back into US treasuries and the USD at the moment.

Anyway our point is it’s not just about the US of A or just about Europe.

Eric Sprott’s presentation at the Gold Symposium

Speaking of the Gold Symposium, if you’d like to hear just what Eric Sprott had to say, we’ve written up a detailed summary of his presentation as one of this weeks articles.

We’re just putting the finishing touches on some other reports from the other Key Note speakers at the symposium, so they’ll be out soon too.

Other articles this week

If you like a bit of history then we’ve got a great account of paper money and banking from Darryl Schoon this week.

If you worry about the short term moves in gold this weeks other article looks at corrections in gold over the past decade.  If you look at prices other than on a daily basis the corrections have been somewhat surprisingly few and far between.

(Links at the end of this column to this weeks articles)

Keep you eye on the right ball

As we mentioned earlier there is a rush back into the US dollar and treasuries at the moment.  Shown by the NZ dollar weakening markedly this week.

So again make sure you watch the NZD gold and silver prices.  As even with yesterday’s plunge in gold and silver in USD, in NZD the price of gold is actually still pretty close to the recent highs in the $2300’s.  Remember we’ve got the local NZ prices and charts on the site…

If you’d like a quote give David a call on 0800 888 465 (09 281 3898 if outside NZ) or email

Have a golden week.

Glenn (and David)
Gold Survival Guide


Don’t Sweat the Correction in Gold
2011-11-20 21:25:04-05 If you worry about the day to day fluctuations in gold then the following set of charts should help ease your mind a great deal.  They show the corrections gold has had over the last decade plotted on a daily, monthly, quarterly and annual basis.  They’ll help really add some perspective.  The charts actually show […]
read more…
2011-11-22 04:15:22-05 It’s been a while since we featured anything from Darryl Schoon.  We always enjoy his writings as we pick up a few bits of monetary history we’ve previously not heard.  In this article he runs through the history of paper money and its travel from East to West and now back again.  Why do we […]
read more…
Gold Symposium Sydney – Eric Sprott: Mania, Manipulation, Meltdown
2011-11-22 05:21:54-05 Like trying to be “the prettiest horse in the glue factory” was how Eric Sprott described the various paper currencies of the world today.  Eric Sprott, head of Sprott Asset Management was the first of the “big names” to speak at the Gold Symposium in Sydney last week. He certainly has a quick wit and […]
read more…


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