Whoosh!
Gold is up 46.5% since this time last year.
In US dollars.
The rush to real money is on.
The 9.1% surge over just the past four weeks also qualifies as stoutly overbought. So a selloff should be expected at any moment. My guess is traders will try to notch the ballyhooed $3000 target first … though almost anything is possible … this is literally uncharted territory.
Year to date, gold is up 10.7%. The media’s favorite explanation however has more holes than Swiss cheese. Over the same time frame, copper is up 17.3%. Had gold merely maintained parity with copper so far this year, it would already be around $3090.
So either central banks are secretly stockpiling massive quantities of copper or the media are missing something big.
Guess either way, they’re missing something big.
After central bank buying, second in trendy media explanations for gold’s dramatic rise is tariffs. I dispatched that popular delusion in Gold Soars To New Record.
So both of these media nuggets are inadequate to the task. It’s not that there isn’t a lot of central bank buying and it’s not that there isn’t a lot of tariff news. It’s that correlation is not causation. If it were, then where were the tariffs during gold’s record advance last year? In 2001-2011? And as alluded to above, where is the big central bank buying of copper?
No, it’s much bigger than either central bank gold buying proclivities or tariffs.
Fiat currency is dying.
What do last year and this have in common? The Fed has either been cutting interest rates or talking about cutting rates the whole time. More fiat.
Central banks have gone off the deep end producing the stuff, and holding interest rates too low for too long. And this has enticed politicians into behaving as if debt is much less costly than it really is, with the result that governments have gone off the deep end with them.
This in turn will pressure central banks to do more of the same, as governments flood the world with debt and market buyers increasingly reticent to soak it up. As central banks step in as buyers of last resort, this will mean still more production of fiat. This is the “something big” … the self reinforcing spiral that is killing fiat and sending the world headlong into real money.
Speaking of the media, we’re still seeing copious analysis that concludes that gold mining stocks are undervalued. The logic goes something like this: Historically, they are levered to gold prices by some multiple, and that in this bull market they so far haven’t risen according to that historical leverage, so have a lot of catching up to do.
This logic is faulty because it fails to consider whether mining stocks were overalued before. The possibility that they have’t exhibited their usual moxy because valuations have been normalizing from excessive levels has to be grappled with before concluding that they’re undervalued now. Mining stocks could outperform, but this kind of analysis doesn’t make the case.
Bitcoin, incidentally, is flat on the year to date, steeply underperforming gold. Bitcoin buffs will retort that it has outperformed over the last ten years. To which I would respond, how has it done over the last hundred?
As the legal boilerplate in every prospectus citing historical performance says, past performance does not represent future results. But that flat performance in dollar terms may be representative in the sense that bitcoin and dollars are both forms of man made money. As such, they are designed as wealth transfer media. From new acquirers to the insiders. Nature made money, in contrast, is a wealth preservation medium.
Bitcoin may be approaching constraints imposed by the law of large numbers. Its eye-popping record since its introduction reflects an evolution from novelty item to mass adoption. Once mass adopted, that source of appreciation is exhausted.
More realistically, its recent lackluster performance demonstrates its correlation to stocks, especially tech stocks. This highlights a practical rap, that on a statistical basis, it lacks diversifying power versus stocks. You may as well just own more stocks.
In fact, the stock market increasingly offers implicit bitcoin exposure as companies hold it on their balance sheets. Bloomberg just reported a couple of new Microstrategy wannabes. The upshot is that if you own stocks, you have not only statistical bitcoin exposure, but actual bitcoin exposure.
Gold, in contrast, has shown far less correlation with stocks, and exhibits a safe haven behavior that bitcoin doesn’t. Not even other physical commodities can match its diversifying power.
Slow start today…………..may be a pull back later………poor Silver cant get a break
I just bought a bit of silver … apparently not quite enough to move the market;-)
As long as I can remember it’s been ready to roar, but doesn’t. It just won’t keep up, at least not since that 2011 moonshot that fizzled just as quickly. I long ago concluded that most of the analysis out there is wishful thinking, Especially the vaunted silver:gold ratio. The market just doesn’t care much about it. I’ve been writing about platinum almost as long; but the market doesn’t care about my opinion either. I keep some of each – silver and platinum – but mostly concentrate on gold and to a lesser extent copper.
A key utility of gold is its low correlation to stocks. The last few weeks are a case in point. Gold has been outperforming as stocks have been underperforming.
Gold is just unique. There is no “poor man’s” version. Not that this is the whole answer, but at least part of it comes down to correlations with stocks. Yeah, I know, statistical arcana makes a lot of people’s eyes glaze over, but I’ve personally crunched the numbers. Over every time frame tested, silver, platinum, and copper add little to nothing to a portfolio of stocks.
Gold does.
meantime in Blighty
Bailey warns against unravelling financial regulations amid growth push
The Governor of the Bank of England has cautioned against unravelling regulation as the Prime Minister scrambles to cut red tape and secure growth amid the threat of US tariffs.
Andrew Bailey insisted there was “no trade-off between economic growth and financial stability” as he acknowledged there was a “reaction taking place against regulation, and the responses to the GFC (global financial crisis).”
His speech at the University of Chicago Booth School of Business in London comes after the Prime Minister vowed to “clear out the regulatory weeds” to spur on economic growth.
Sir Keir Starmer criticised the “morass of regulation that effectively bans billions of pounds” of investment in the UK, describing “thickets of red tape” that he said have spread through the economy.
Government plans to cut red tape in the financial sector have included sending “growth-focused remit letters” to regulators and urging them to “tear down regulatory barriers”.
But Mr Bailey said: “We must not forget the lasting damage done by the GFC. There is no trade-off between economic growth and financial stability.”
What do you think about that?
My two cents is Starmer has a point. Bailey’s objection about maintaining regulation due to lack of tradeoff between growth and financial stability assumes that regulation ensures financial stability. The classic Scottish rebuttal applies:
Not proved.
To the contrary, regulation tends to allow imbalances to accumulate to the point where they become crisis level threats. Regulation is rigidifying and embrittling. The US for example hardly suffered the GFC for lack of regulation. Government involvement through the Federal Reserve and giant housing finance agencies caused it. It produced a false sense of security and encouraged excessive speculation.
Regulation needs to be clean and simple, and carefully crafted to avoid producing perverse incentives. You either need explicit leverage limits or for it to be made abundantly clear that there will be no bailouts of speculators and that they will bear the full consequence of risk taking. No excuses. No exceptions.
Deregulation has to be done evenhandedly. No backstops, guarantees, or insurance, except in exchange for strict limits on leverage. We suffered the S&L crisis not because of deregulation per se, but because it was forgotten that FDIC deposit insurance involved a quid pro quo … the insurance was extended in exchange for accepting strict limits on risk taking. Deregulation relaxed limits but left the insurance in place. It was a disaster waiting to happen.
If there’s anything certain in the world of finance, it’s that if you leave out the trough, don’t be surprised when the pigs show up.
Gordon Brown said “Regulate with light touch” (Allow them to commit fraud)…& we got 2008!
This is just a rerun
It’s probably not terribly meaningful to characterize regulation just by degree … one has to consider kind. US repealed Glass-Steagall in 1999 – while leaving deposit insurance in place – which contributed to 2008. Glass-Steagall basically put a wall between speculative finance and federally insured banking. Then we had the “Volcker Rule” which was supposed to be a milder version. But even that got watered down. Bottom line, putting in a government backstop without corresponding regulation is asking for trouble.
Regulation that stifles the creation of business is more problematic. Also regulation that hits individuals like overly complex tax and social security rules are a huge economic cost with little benefit to show for it.
History suggests that political and economic trends tend to span borders. The Reagan-Thatcher era comes to mind, not to mention the reaction to socialism and globalism in Europe. What was it Churchill said about America? You can count on it to do the right thing … after it’s tried everything else? Maybe that’s what’s going on over there…
The big risk to watch out for with gold is the opposite of what’s been driving it higher … accelerating inflation finally makes its way into consumer price stats and the Fed responds by tightening policy. That risk is mitigated if it’s accompanied by weakening employment stats, because it would give the Fed cover to continue its inflationary ways even in the face of rising consumer price inflation.
The combination of rising consumer inflation with strong employment data would likely produce a material setback for gold prices. Just today Powell’s comments about being in no rush to cut further took a little starch out of gold. Watch how it responds to tomorrow’s CPI release. Expect setbacks to be temporary though, because federal debt isn’t going away and neither will the pressure to monetize it.
Key thing to bear in mind … gold doesn’t go up after consumer prices go up … it goes up before. Investors who wait for inflation to show up in consumer prices to buy gold will be disappointed. The other implication is that the big rally in gold prices over the past year likely foreshadows big consumer price inflation in the coming months.
So CPI came in hotter than expected this morning, and a little more starch came out of gold. If I am right and this is just one data point of accelerating consumer prices, it is not good for gold prices. Counterintuitive, maybe, but at the margin it means a tighter Fed.
The Fed has been wrong since it started talking about rate cuts, got wronger when it actually did them, and is now being dragged kicking and screaming into walking back its wrongness.
Ah Churchill…………………..what a winner
went to war to “save” Poland from the Germany, only to hand it to USSR!…….& bankrupt Britain in the process……….& finish off the British Empire.
Mike
JPM adds 2.5 tons to bring it up to 800 tons, still in London……..it sez it might ask the BOE to store some of it for it………….in other words its been frozen by BOE!
Mike
Trump & Putin to meet
Trump talked of the shared history of both nations, he gave a few examples but not the one that’s most important……the Civil war.
The French & British scum were backing the South, Russia sent her navy to New York harbour & San Francisco to protect the North.
Mike
Most of Europe backed the South early on in the Civil War. If it was right for the Colonies to declare their independence, then why not the South? Wily Lincoln then turned what had been a trade war (Fort Sumter was a duty collection station) into one about slavery. The Emancipation Proclamation came only after two years of war … but was effective in weakening Europe’s (which had ended slavery peacefully) support of the South. Lincoln thus established the principle of “government by consent of the governed” by military force.
Love the way Trump sez “Where is our money?” to Ukraine………..then demands that Ukraine pays in Rare Earth wealth……knowing FULL well that Ukraine has already signed away that wealth to the British (City of London scum)……..in other words he giving the British the finger!
Mike
Zelensky reportedly asked for $300B in frozen (confiscated) Russian assets to buy US arms with. If Trump means what says about ending the war …
https://www.youtube.com/watch?v=hThY8l3n8jw
If, as I expect, this CPI acceleration turns out to be a developing trend, cash and bonds … short term … are the likely beneficiaries. It implies a tightening Fed and a strong dollar. The kind of market behavior we saw in 2022 would be a template.
This assumes the Fed does indeed tighten. To the extent it drags its feet, the usual inflation hedges (stocks, commodities), remain relevant.
https://www.youtube.com/watch?v=saIYLJXRKFc
“UK DEMANDS to be in the peace talks”
Ho Ho Ho You Limey F**ks
Mike
At least now somebody is trying to end the war. We got nothing but escalation from the last administration.
Maybe it’s a good thing it’s not up to me, but if it were, I’d offer to Putin, in exchange for a cessation of all hostilities, that the US will immediately cease all military aid to Ukraine, return all seized Russian assets, end sanctions and normalize relations, and most importantly, that Ukraine is permanently neutral. NATO expansion ends here. War over. I don’t know enough about the history to opine on the status of acquired territory, but would propose a referendum … let the people who live there decide which government they want.
Trump just hit the UK May be with an extra £24 billion taxes because we charge VAT
The Hits just keep coming, he come off the ropes like Ali!
Mike
WTF? The first I’ve heard of that. Must be open season on everywhere. But I doubt it will last. The strategy seems to be shoot first and ask questions later … and then moderation will feel like relief.
Red Metal On Fire
Gold may be getting most of the metals headlines, but copper is leaving it in the dust. Up over 18% just since New Year’s.
Its coming
Something is in the works for sure. This makes me think gold and silver may not be as far out there as the dollar denominated charts make it look. Copper isn’t immune to speculation, but with its industrial anchor is probably less so. So gold has actually declined in terms of copper, leaving some mean reversion potential in the bank.
Silver especially should have legs. It tends to trade as a hybrid between copper and gold, and has yet to catch up.
https://www.youtube.com/watch?v=RkPcKjtQO3o
The British got PLAYED
bloody Hell
https://x.com/Megatron_ron/status/1890144935959228515?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
Couldn’ta said it better myself. So what’s the theory here? If peace breaks out in Ukraine, then Russia will just start absorbing Europe, country by country? Ukraine today, Germany tomorrow?
That’s paranoid bordering on schizo. It completely ignores the history behind this war. And what’s the cost of finding out? The West draws a line Russia can’t accept and starts a world war and possibly nuclear catastrophe. Or we wait and see … if Russia does threaten Europe then get tough and respond with war.
The first way WWIII is almost guaranteed. The second way it’s a distant possibility.
Sounds like a no-brainer to me.
The very same liars and idiots who, in the first one or two years of the war in Ukraine, insisted that Ukraine was winning and Russia is totally inept militarily are now claiming that Russia will conquer all of Europe if more hundreds of billions of dollars aren’t poured into the corrupt cesspool that is Ukraine.
After the truth can no longer be hidden due to Ukraine’s utter failure and a substantial change in government in the U.S., who do these bozos think will continue believing their outrageous lies? The remaining 60,000 people who watch CNN, MSNBC, and Rachel Maddow?
While I did not state it in a public forum, I had predicted from the very start of the war that it was impossible that Russia would lose unless NATO (American) troops entered the war which could risk escalation to a nuclear conflict in which case everybody loses.
That Russia did not more quickly defeat Ukraine is not a sign of Russian military incompetence but restraint on the part of Putin to limit losses on both sides of the conflict. (There’s a part of me Russia lost more lives because of this restraint). Don’t believe me? Let me tell you how a quick victory (one of Sun Tzu’s key objectives to any war) could have been achieved by Russia using no nuclear weapons.
Launch missiles and bombers to destroy ALL airports, electrical generation, natural gas pipelines, and water infrastructure in Ukraine. Destroy all roads that lead to the war front to prevent any sort of NATO assistance from reaching the Ukrainian military. Launch warships and submarines to blockade Ukrainian ports from receiving any sort of shipments. This violates Geneva Convention? That’s not a valid argument considering the propaganda insisted that Putin is a “brutal dictator.” Are we to expect that brutal dictators will agree to not wage war between 3:00 PM – 4:00 PM so that everyone can break for tea and biscuits? Ridiculous.
Russia is the bulk of the former Soviet Union that held the U.S. in a form of stalemate for nearly 50 years during the Cold War when both sides were justifiably fearful of a nuclear armageddon. Is the public supposed to believe that, at the height of its economic and military power where just the Ford Motor Company alone was churning out one bomber per day, that for 50 years the economically, industrially, and militarily mighty U.S. was unwittingly afraid of a blind mouse?
For the people calling for a continuation of the war and claiming that Trump is the new Neville Chamberlain, perhaps an oft-used joke from the old television series “Hogan’s Heroes” should be used. General Burkhalter: “You people who want to continue the war, you’ve been a great dissappointment over the past few years. Perhaps sending *you* and *your family* to the Russian front will toughen you up.”
… with the implication that Putin is the new Hitler.
The worst liars of them all are the media. At least people expect politicians to lie; it’s the media’s job to ferret out the truth.
It’s blatant propaganda. From the beginning, every mention of the war was phrased in terms like “Russia’s war in Ukraine” or “Putin’s unprovoked war of aggression”. This kind of language is a sleazy way of stating conclusions without bothering with supporting facts or reasoning. And the whole of the mainstream media used the same words, as if following orders from the same dark authority.
And why does the media have no problem finding an expansionist imperialist agenda everywhere but NATO? Let anybody covet more territory, and its evil incarnate. Let NATO actually add whole new countries, and there’s nothing to even examine.
You can also expect a steady stream of Zelensky quotes, photo ops, and interviews, almost none of Putin. Why would a fair and balanced, in-search-of-truth media present only one side of a story? Simple … already been decided. Readers, listeners and viewers – voters whom in a democracy politicians are supposedly taking directions from – aren’t allowed to make such determinations. Or maybe democracy has nothing to do with it. It’s a spaghetti western with good guys in white hats and bad guys in black hats.
No wonder public trust in the news media is probing all time lows.
With regards to the Russia discussion.
1. The best outcome for Ukraine is a cessation and loss of land & no membership of Nato.
2. I totally agree it’s farfetched that Putin would carry on after Ukraine into Western Europe but it’s amazing how ingrained that belief is.
3. I know many Russian speaking Ukraineans from Eastern Ukraine;mostly through the Homes for Ukraine refugee scheme in the UK (90 % are women) . They are most definitely Ukrainean, and have no desire to be part of Russia. Many refuse to speak Russian now. Almost all were shocked when the invasion took place as they just thought Putin was sabre rattling and genuinely had no animosity to Russia. Numerous polls that have taken place since independence in the Eastern oblasts also support the view that they want to be Ukrainean. This is the case even in the majority Russian speaking areas.
4. The Russian invasion has hardened that view but the appetite for war has softened significantly. Almost all were pro-fighting but as time has gone on and casualties risen there is an even split in the people I’ve spoken to.
5. Russia underestimated Ukrainean resistance and messed up supplies which is why they failed at the beginning. Amazingly for a Brit like me, Boris Johnson is seen as a bit of a hero by the Ukraineans for being supportive at the start of the war.
6. This war has shown that military might is closely linked to economic might in terms of production. The supposedly super efficient West is being outproduced by Russia.
7. Despite inflation (and Western media) the Russian population are not particularly struggling according to a couple of people I know who have visited their families in Russia.In fact they told me how surprised they were by how little the war seemed to be discussed/having an impact. The people I know are going back home to visit family again this month so it will be interesting to note if there is any change from their last visit.
Nothing to see, move along
https://www.youtube.com/watch?v=zszp1uh3yVM
Left unexplained:
Why moving gold from Point A to Point B should make the price go up.
Why gold prices soared long before Trump came into office.
In other words, it’s not tariffs, it’s the possibility that BOE is having trouble getting its hands on enough gold to meet claims. That could make the price go up.
So possibly there is just so much demand it’s straining logistics. But …
https://dailyreckoning.com/missing-metals-the-big-gold-squeeze/
Germany NOT HAPPY
https://x.com/Megatron_ron/status/1890457984595050536?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
Trump & Putin
https://www.youtube.com/watch?v=JuRBU8UVhDU&t=3s
1812 again?
https://news.sky.com/story/ukraine-still-on-irreversible-path-to-joining-nato-starmer-tells-zelenskyy-13309097
All morning we had two stories running on the UK Press.
BOE FULL of GOLD………………….GOLD is about to crash & burn.
Clock ticking
Hmmm
Not sure its right………
https://nitter.privacydev.net/angeloinchina/status/1890426491240100305#m
UPDATE!
Euro Nazis + City of London scum are to hold an emerancy meeting in France tomorrow….
Ho Ho HO Motherf**kers
Mike
Wow!
https://nitter.privacydev.net/peacemaket71/status/1891159039624544324#m
Michael Hudson talks about the relatively recent sharp rise in the price of gold. I’m somewhat surprised that Hudson believes that the price of gold has been, until very recently, fairly successfully suppressed. The talk of gold price suppression is usually something that groups such as GATA talk about but despite their claims being made public, the suppression never seemed to fail.
Perhaps there haven’t been enough gold bugs in the world with respect to the supply of gold but it’s always been known that taking delivery of a commodity is exactly how you corner a market or break shorts. The Hunt brothers took physical delivery of silver in their cornering of the sillver market in the late 1970s and the only thing that broke them, if I remember correctly, is that the government removed the Hunts’ counterparties’ requirement to deliver physical silver and instead settle in cash.
https://www.youtube.com/watch?v=9Bvr2SZm-NM
Re gold price suppression, there’s smoke, but it’s not clear there’s fire. If there’s been an organized effort, it’s been spectacularly unsuccessful. Gold has beaten the crap out of stocks so far this century, and there’s at least as good a case for an effort to inflate stock prices.
Virtually every market has some manipulation going on. Whatever manipulation has been going on with gold though is more than one-sided; you could call central bank buying manipulation too, just in the upward direction.
https://www.youtube.com/watch?v=DZ2hFUZLvY0&t=10s
PANIC
The game IS up!
https://www.youtube.com/watch?v=YrAZ3Cz88D8
British establishment in FULL DE-NILE
https://x.com/Megatron_ron/status/1892281645052400115?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
Hits keep coming!
Europe put $200 Billon in, but unlike America was PROMISED a return!
In other words “Ziggy” sold Ukraines natural resources to Europe & America gets bugger all!
Mike
GAME OVER!
https://x.com/Megatron_ron/status/1892303451779981718?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
It’s a recurring theme of history. An institution is formed to achieve an objective. Then when the objective is met, it doesn’t just fold up its tent and go home; it denies its success, expands its mission … the survival and even growth of the institution becomes its new purpose. It acquires vested interests and they feed on it; it’s become an industry.
https://x.com/Megatron_ron/status/1892333633349796131?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
NO CHANCE!
Hey Fin
You need to start a new post on ALL these news
Mike
Haha Mike I was thinking the same thing. Got my hands full atm with a contractor wanting decisions on a home reno project; will get a fresh post out there soon!
Meanwhile don’t forget it’s not just the latest post that’s active. Posts stay open for comment for sixteen weeks, and comments continue to appear frequently in the latest few.
Last year( Jan 2024) Swiss shipped 2 tons of Gold to USA, this year (Jan 2025)they shipped
193 TONS…………………..Just saying
https://www.zerohedge.com/geopolitical/liz-truss-calls-elon-his-nerd-army-investigate-british-deep-state
Truss … Farage … morning again in Britain?