We began this Gold Commentary in January 1996.
Due to many requests, we began to archive them in May 2000.
December 31 - Year End - "In $US Terms - Gold's Best Year Since 1979"
"In 2008, Gold is poised to BEGIN to reflect the inflation of the last three decades. And that means levels for Gold above the 1980 highs in US Dollar terms. How far above? That depends on how long it takes for monetary sanity to raise its long suppressed head. The longer it takes, the higher Gold will go."
December 21 - "The Limits To Credit Expansion?"
"Subprime loans, CDOs, "Alt A mortgage paper" and all the rest were the fodder for the last gasp of the credit expansion, the US and global housing bubble. All of this paper was created, packaged, and sold to "investors" all over the world as the last gasp of the credit creation."
December 14 - "The Highest 'Inflation' Since 1973"
"Since the credit freeze hit in August, Central Banks everywhere have been INFLATING - increasing the total stock of money" - at a rate never seen before. Now, the EFFECTS of this inflation are coming out, as witness the quantum leap in November US wholesale prices announced this week."
December 7 - "WHO Is Mr Bush Bailing Out Here?"
"But these people are NOT "homeowners". The homeowners are the financial institutions which lent the mortgage money in the first place. THESE are the people who Mr Bush's plan and Mr Paulson's plans and Mr Bernanke's interest rate cutting plans are intended to bail out."
November 30 - "Melting The Credit Ice - What Works And What DOESN'T?"
"Today, what is the "cure" for a US Dollar under pressure? As far as the present day Fed under Mr Bernanke is concerned, it is injecting an ocean of new liquidity into the system and LOWERING official US rates. This is the exact opposite of what happened at the end of the 1970s."
November 23 - "An Almost Universal State Of Denial"
"The big story in the financial world today is the "resurgence" of the credit crunch centred in the US. The credit crunch never went away. What has surged again this week is fear about the implications of this credit crisis (which is not confined to the US, it is global) and the growing realisation that the situation is not getting "better", it is getting worse"
November 16 - "It IS The Last Resistance Point, After All"
"Of course, few people have paid any attention to Gold's all time highs in terms of all these "other" currencies. None of the "powers that be" in the (paper) financial world have paid any attention to them at all. For them, and for most people, the only Gold "price" which matters is the $US Gold price."
November 9 - "On The Verge Of $US 850"
"Is there a "correction" in the wings for the $US Gold price? Of course there is. The only question is will it come here or will it come at a price above the highs set in 1980. Either way, a "correction" in a bull market is a quite normal event."
November 2 - "After Almost Twenty-Eight Years - $US 800 Gold"
"On November 2, the spot future Gold price jumped $US 14.80 to close at $US 808.50. This is the fifth highest close EVER for the spot future price, and the highest close since January 22, 1980."
October 26 - "If You Can't (Or Won't) Fix It - Pretend It Ain't Broke!"
"Wall Street pundits, money center banks, the Fed, the Treasury, the US government itself - both the Administation AND the Congress, are all pretending that the diving Dollar presents no impediment to "'business as usual'".
October 19 - "Another Week - Another High For $US Gold - Another Low For The USDX"
"The Bush Administration wants the US Dollar to retain its status as the world's major reserve currency, which it reserves only by "grace" of the massive foreign buying of US Dollars. At the same time, they want the Chinese to let their currency appreciate. The problem (and US markets are making this clear for anyone who has eyes to see) is that they can't have it both ways."
October 12 - "Why Gold Is Still Below The Investment Horizon For Most People"
"This chart should make it crystal clear that the big Gold price rise over the past seven weeks has been, in the main, a "reciprocal" action to the falling US Dollar. In terms of the Canadian Dollar, which recently regained parity with the US Dollar and has risen further from there, Gold is still BELOW where it was at the start of the year."
October 5 - "The Power Of Positive Delusions"
"What is now happening on financial markets and in the world of economic "analysis" is not new. It has happened many times before. The "players" are in denial. After watching a quarter of a century of ever increasing inflation, they refuse to even entertain the thought that it could ever come to a bad end."
September 28 - "A Dark Day For The US Dollar"
"The difference with THIS debt ceiling increase as against almost all the previous ones is not that this time there is a global financial "credit crisis". It is that this time, the epicentre of that global credit crisis IS IN THE US ITSELF."
September 21 - "It's Not Supposed To Work Like This!"
"Ironically, Mr Paulson made his obligatory remark about the "strong Dollar policy" in Canada - on the day when the Canadian Dollar reached parity with its American counterpart for the first time since 1976. Even more ironically, Mr Paulson was in Quebec as the US representative at a G-7's "Financial Stability Forum(!?)" meeting."
September 14 - "The British Want Their Money Back"
"The news about the run on the Northern Rock, a major British bank which has 1.4 million retail depositors and 800,000 mortgage customers, is all over the internet. British TV news programs ran pictures of customers lined up from the tellers' windows in some cases out into the streets."
September 7 - "A New High For Gold!"
"Yes we know that the spot future Gold close for September 7 was $US 703.20. Yes we know that the bull market high spot future close remains $US 721.50 set way back on May 11, 2006. Nonetheless, we have a new high for Gold this week - as measured against the "trade weighted" US Dollar index, or USDX."
August 31 - "Oh No - It's Labor Day!"
"When Mr Bush implies, and Mr Bernanke states in so many words, that their role is to "protect the economy from the financial markets", they are trying to tell anyone who will listen to them that a crisis in one does not necessarily lead to any ill effects in the other. This is absurd on the face of it."
August 24 - "Government Debt - Toxic Sludge"
"And, of course, the vast amount of "liquidity" that was shoved into short-term Treasury paper on August 20 was not hauled out of the system, it was merely pushed into what the SYSTEM regards as "cash". Treasury debt is the ultimate form of perceived "safety" within the modern debt-based and "backed" financial system."
August 17 - "'Calamity Bill'"
"On Wednesday, August 15, in an interview with Bloomberg TV, the President of the St. Louis Federal Reserve, Mr William Poole, made the statement that only "a calamity" would justify the Fed cutting interest rates now."
August 10 - "$US 140 - 180 Billion - And Counting"
"When the ECB made their surprise announcement on August 9, the rush into liquidity spiked to new highs in the volatility which has overtaken markets in the past three weeks. Nothing could be immune, and Gold (and Silver) duly sold off in a rush to free up cash or near cash to meet pressing obligations."
August 3 - "The Rush To 'Liquidity' Continues"
"The FOMC meets next Tuesday (August 7). The clamour is increasing for them to start LOWERING official US rates again, if not at this meeting, then certainly at the one scheduled for September. The ominous lack of demand for credit, specifically by US consumers whose borrowings account for about three-quarters of US GDP, is getting worse."
July 27 - "The Rush To "Liquidity" Begins"
"The business of funding economic "growth" with ever larger tranches of every riskier debt came to a crashing halt this week. It is too early to say how quickly this is going to worsen or how bad it is going to get on the paper money markets, but the ramping up of risk aversion has taken a quantum leap in the past three trading days."
July 20 - "Can't Borrow - Can't Spend - Can't 'Grow'"
"The subprime fiasco in the US, and its mirror images which are now popping up all over the world - notably in the UK and in Australia - has done something that most insititutional borrowers had forgotten was even possible to occur. For the first time in over a decade, it has made lenders rediscover the concept of 'risk'."
July 13 - "The Perils Of Chasing 'Yield'"
"Please note that in May 2006 when Gold reached its $US 721 bull market high, the USDX stood at 84.07. Today, with Gold at $667, the USDX stands at 80.39. This means that (with the exception of the Japanese Yen which has fallen from 103 to 122 against the $US), Gold is down against all major world currencies over that period."
July 6 - "'Value Investor' - Look No Further Than Gold"
"On the chart above, Gold is clearly in an "inverse" head and shoulders formation. In the vast majority of cases, this formation is resolved when the price breaks out ABOVE the right "shoulder" and goes on to set new highs."
June 29 - "A Central Bank In Extremis"
"And ever since the US Dollar started its slide at the beginning of 2002, the situation has worsened. Five and a half years later, the Dollar is once again threatening to fall below the lowest point reached in the entire "floating currency" era."
June 22 - "A Year Without A Rate Rise"
"It is interesting, in this context, that this year in which the Fed has stood pat on official US interest rates is also a year (actually more than a year) during which Gold has failed to hit a new high in US Dollar terms."
June 15 - "A Well Honed Sense Of The Ridiculous"
"A well-honed sense of the ridiculous is a very helpful thing to have. There is a great and most understandable tendency to choke with indignation in the face of what is going on at present. It is counter-productive. The best reaction to all chartlatans is a combination of derisory laughter and dismissive contempt."
June 8 - "Rates Are Going Up Everywhere - SELL GOLD!!"
"But all this is being ignored in US analyses now, the whole focus of which is to convince Americans that rising US interest rates are GOOD for the US Dollar. This has, of course, a surface plausibility. Higher interest rates mean a larger rate of return on US debt instruments. That must be good for the Dollar, right?"
June 1 - "April UP - May DOWN - June ????"
"Seasonally, Gold prices usually rise between mid March and late April - early May and almost always fall, quite often abruptly, as May wears on. That was certainly true last year when Gold hit a high of $US 721 on May 11 only to plummet all the way down to $US 637.50 less than two weeks later."
May 25 - "The Rain's Not All From Spain"
"At present, there is a globally shared interest in dissuading the US by any means possible from taking the incredibly dangrous and potentially disastrous step of invading Iran. The US has been trembling on the verge, without actually tipping over it, for two months now."
May 18 - "The Line Has Been Drawn At $US 690"
"Spain, and to a lesser extent Portugal and Greece, are now confirmed to have sold a LOT of Gold (and foreign reserves) over the past two months to pay for out of control current account deficits. For Spain, the figure is 80 Tonnes of Gold. And while they were at it, they have spent their foreign exchange reserves down to a level which covers only twelve days of their huge current account deficit."
May 11 - "Politics - Economics - And Gold As The Meat In The Sandwich"
"There is no absolute PROOF that the Gold sell-off this week was part of this effort, but all the signs point towards it. Let us fervently hope it succeeds. There are no guarantees, and we would still put an eventual US attack on Iran as being much more likely than it NOT happening at all. But the longer the US delays, the harder it gets and the more costly the delay becomes."
May 4 - "The $US Gold Bull Market High Nears Its First Anniversary"
"The most dangerous adversary of the US Dollar is not any other global paper currency, it is REAL money, and that is Gold (and also Silver). As their power and control slips in more and more areas, their efforts to maintain it grow proportionally. And so far, they have been successful in controlling the precious metals."
April 27 - "Recession Numbers - But No Recession?"
"And were THAT to happen, any further pretense that the US Dollar still filled the role of a global RESERVE currency would become impossible to maintain. Without that reserve currency status, the US would have to pay for its imports with exports - of REAL goods. This it is literally not in a position to do."
April 20 - "A Look At The Gold Charts"
"Last week, spot future Gold got within $US 1.80 of its 2007 high on April 13. This week, Gold has closed above the $US 690 level twice, on April 16 and again on April 20. Thus, Gold is now at new 2007 highs"
April 13 - "Nearly There"
"Of course, the Fed avoids any talk - in public or in private - about the REAL level of US inflation, as exemplified by the $US 262.7 Billion (see above) which the Federal government spent in March. They also avoid hinting in any way that this blowout in government spending - and deficits - might have something to do with the increasing weakness of the US Dollar."
April 6 - "American Dream Ends In Property Market Crash"
"Go back to the headline with which we began this piece. The "American Dream" is not ending with a property crash. The property crash is just the beginning. What we are seeing is the beginning of the end of the modern "American Dream", shared by people all over the world, that there is such a thing as something for nothing."
March 30 - "Australia Hits The TRILLION"
"Australia has very high levels of consumer debt, comparably low levels of government debt, and runs big trade deficits. The US has gartantuan levels of both consumer and government debt and runs gigantic trade deficits. Australia exports raw materials (REAL economic goods) of all descriptions. The US exports little except armaments and US Dollars."
March 23 - "Sometimes The Inevitable Takes A Long Time"
"In 1975, Irwin Schiff (see the book list above) using actuarial accounting methods, calculated the total (funded AND unfunded) debt of the US federal government to be $US 3.36 TRILLION. In 2007, David A Walker, US Comptroller of the Currency, puts the figure at $US 71 TRILLION"
March 16 - "They're Losing Their Touch"
"But the powers that be in the US, whether they are trying to control the US empire or the domestic US financial system, have little choice left but to be blatant. Neither the mess which the Bush Administration has made of their Middle East "policy" or the debt riddled edifice which is all that remains of what was once (a long time ago) the world's strongest economy is "fixable"."
March 9 - "Nobody Knows The Money I've Seen"
"A moment's thought should be enough to unearth the fact that "defining" inflation as rising prices is ridiculous. HOW DID THEY RISE? The answer is that they rose because the amount of MONEY circulating in the economy rose."
March 2 - "Are Lemmings 'Risk Averse'?"
"The last time that investor complacency came under this much pressure was in the wake of the big US stock market sell off which lasted from 2000 to 2002. As you know, that marked the beginning of the current precious metals bull market. We are now seeing all the evidence of another and potentially MUCH bigger loss of complacency."
February 23 - "The 'System' Is Fraying At The Edges"
"What is happening is that just as the Bush Administration has lost control of the global geo-political agenda, the Fed and the financial establishment of Wall Street is slowly but surely losing control of the global geo-economic agenda."
February 16 -"The Beginning Of The End?"
"An economy based on debt must be able to sell debt paper to function. It must be able to sell ever increasing amounts of it to continue to preserve an apperance of healthy economic "growth". The higher the debt levels become, the lower the interest rates at which this debt can continue to be "comfortably" serviced."
February 9 - "A Gold Breakout"
"In such a situation, there is little wonder that Gold has all of a sudden begun to surge upwards once again. And as the situation worsens, as it inevitably will, it is going to be VERY difficult to keep the Gold "price" in check."
February 2 - "The Money Economy Vs the Productive Economy"
"Please note this carefully. In 1932 and 1933, the last time that the US experienced a negative savings rate for two consecutive years, there was no US welfare state. Neither "social security" nor "medicare" yet existed. Government was not (yet) the "nanny state". Fast forward to the present."
January 26 - "Ignorance Breeds Contempt - A Tale Of A Clueless 'Economist'"
"Move that scenario forward to January 2007 and pin a PhD on the caveman and you have the mentality of those who think that the production of economic goods is wasteful and unnecessary when all that is required to gain anything one wants or needs is to wave what you call "money" in front of the nose of those who DO produce REAL economic goods."
January 19 - "The Political Pressure Mounts - Just Look At The Gold Price"
"Every draconian piece of legislation, every new boot heel ground into the face of the US Constitution, every "signing statement" - has been "justified" because the US is "at war". The Democrats went along with the lot. They could afford to, they were in the minority in Washington."
January 12 - "A Political Crisis Waiting To Happen"
"And the FIRST lie, the one that made all the others possible, was the one that the US needed an "elastic currency" to meet the needs of business. That one led to the political control of what the US and the world uses as its MONEY. Political control rests, always, on the control of the "currency"."
January 5 - "They're Quick Out Of The Gate, Aren't They?"
"With the pressures so vast, a holding action was ESSENTIAL. We have seen it over the first trading week of 2007, exemplified by the crash dive in the price of Gold, Silver, and oil and in the miraculous recovery of the US Dollar. How long will this last? There is no way of knowing."