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Wednesday, June 30, 2010

Obama and Bernanke try to talk it up . . .

Unfortunately they are not directing a movie, where they can set the scene and the tone. I would suggest that they are truly worried by what they see to come up with such tripe. See this article for a taste. The American Tragedy continues with a combination of head-in-the sand, soothing words and fighting the symptoms (rigging markets, sometimes known as "interventions"). I'm as worried as ever.

Friday, June 18, 2010

The Bogus Bullion-ETF's

Stay away from bullion ETF's! At some point, these ETF's will disintegrate like Lehman's. Why? Because many of the same leverage tactics are being employed with lots of clever derivative instruments while the required gold or silver-backing is simply not there. You are buying paper gold, nothing else. When the @3%** hits the fan, these ETF's have little chance of being honored.

See this excellent article for more detail.

Tuesday, June 8, 2010

Gold Acting as a Currency

As markets and currencies gyrate, gold seems to be getting steadily firmer, even against the surging $US. Yet many commodities are well off their peaks. That's because many around the world are looking upon gold as not just a safe haven but as the premier currency of the world, one which central banks can't debase through reckless printing, monetization, quantitative easing or whatever euphemisms are in vogue to arbitrarily create more and more of any given currency.

That is not to say that certain Central Banks, Treasuries and their agents haven't tried to manipulate gold lower. They have and they are but with less and less success. But as more of the world's citizens seek out physical gold, the manipulation of the paper gold markets becomes less effective. It may, in fact, be creating a potential slingshot move for gold at some point.

Anyway, the "barbaric relic" is acting more and more like the most senior currency out there and slowly gaining the respectability that comes with it.