Gold news


How bubbles pop and how to hedge against them

  • 15 Settembre 2018
  • by Blogger

Does it make sense that bubbles have nothing to do with central banks? According to popular thinking, an asset bubble is about a large, above historical average, increase in asset prices. A price of a thing is the amount of dollars paid for it. This means that a bubble is about large, above the historical average, payment of dollars for various assets. As a rule for this to occur there must be an increase in the pool of dollars, or the pool of money. Therefore, if one were to accept the popular definition of what a bubble is one must also accept that without the expansion in the pool of money bubbles cannot emerge.

People no more regard gold as money, but fiat currencies will make change their mind

  • 12 Settembre 2018
  • by Blogger

Government manipulation of the monetary system is inefficient. This interference with consumer sovereignty over money through contract law must produce a misallocation of money, meaning capital. The present system will produce booms and busts in the capital markets and the consumer markets. Austrian economists stand on the sidelines and yell “stop” every time the central bank interferes with interest rates by increasing or decreasing the supply of “high-powered money” — mainly its holdings of government debt certificates.

"Engines", economics and free markets

  • 08 Settembre 2018
  • by Blogger

The economy is not an entity or organization with a will of its own. Instead, it is a self-organizing process of individuals and entities interacting with each other that involves constant adjustment by its participants. Individuals are constantly altering their needs and wants and adjusting to changing prices and choices. Entrepreneurs are continually adjusting to consumer preferences, and attempting to anticipate demand, in a world offering near unlimited options and combinations with which to create goods and services, but scarce resources. So why the desire by central planners to reduce the economy to a cold, faceless machine with a purpose of its own?

Why Austrian school economists consider gold as money

  • 01 Settembre 2018
  • by Blogger

Among professional economists, support of a gold coin standard is limited mainly to members of the Austrian School, which has been a tiny minority in the profession. There are a few supply-side economists who call for a government-run monetary system comprised mostly of credit money, which in turn is created by a government-licensed monopoly, the commercial banking system. Behind this monopoly stands another government-licensed monopoly, the central bank. The number of academic economists who believe that there should be laws against fractional reserve banking — that banks should not be allowed to loan out money long term that has been deposited short term, with a guarantee that the depositor can withdraw his money at any time — is probably under fifty, and may be under a dozen.

Exposing fiat money fraud can lead you to jail

  • 28 Agosto 2018
  • by Blogger

Sometimes, Americans get the silly idea that the words “legal tender” on American coins mean legal tender. Then they try this stunt. They pay workers in silver coins at face value. This reduces the workers’ income tax bracket.

Why do people accept paper fiat money?

  • 24 Agosto 2018
  • by Blogger

Originally, paper money was not regarded as money but just as a representative of money, which was gold. Various paper certificates were claims on gold stored with the banks. Holders of paper certificates could convert them into gold whenever it was deemed necessary. Since people found it more convenient to use paper certificates to exchange for goods and services, these certificates come to be regarded as money.

Why boom/bust cycles are common with fiat money and uncommon with a gold standard

  • 18 Agosto 2018
  • by Blogger

The key reason for boom-bust cycles is the loose monetary stance of the central bank. This loose stance results in the expansion of money out of “thin air”, which sets in motion an exchange of nothing for something.

On a pure gold standard, an increase in the supply of gold does not set in motion an exchange of nothing for something i.e. an act of embezzlement, but to an exchange of something for something. In the absence of an exchange of nothing for something, there is a very low likelihood of a persistent misallocation of resources, which culminates in boom-bust cycles.

What central planners always fail to understand: Real savings are the key for economic growth

  • 14 Agosto 2018
  • by Blogger

Contrary to popular thinking, the so-called strength of the economy as depicted by various economic data cannot counter the process of adjustment once it was set in motion by a tighter stance of the central bank.

If the central bank were to pursue an ever-aggressive loose monetary stance rather than reversing the loose stance, at some point in time the pool of real savings will start declining.

Can Gold Trade Above $2,000 An Ounce By June 2019?

  • 08 Agosto 2018
  • by Blogger


  • Gold sentiment is reaching for an extreme bearish low.
  • The drop in gold during the summer is largely explained by a stronger US dollar.
  • Lease rates continue to indicate tight short-term supplies.
  • The Dow-to-Gold ratio is very high, arguing for better relative gold quotes soon.
  • Gold is quite cheap adjusted to M-1 money supply growth and real-world inflation.

Admittedly, the idea of gold ever going up again, much less quickly, seems a little crazy today. However, when you look at the ultra-low valuations of gold today versus stock market prices, long-term paper money creation, and honest U.S. inflation rates, you start to see the potential for a big upmove in this “hard money” precious metal. While everyone is fascinated by the bitcoin mania of 2017-18, few are looking at the old relic of gold as a better investment alternative going into a future economic recession and/or stock market panic.


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