Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Omniscient Federal Reserve Captures The Capital Market, For Now. Gold Beckons

Commodities / Gold and Silver 2014 Oct 28, 2014 - 05:40 PM GMT

By: GoldCore

Commodities

A cursory glance at the various financial news media this morning shows nothing particularly unusual for these unusual times. The ECB have paraded a list for stress tested banks and the market shrugged. However, there is a disturbing thread running through most of the stories to which we have become immune but which would have been considered highly unusual at almost any time in the twentieth century. And that thread is the influence of the Federal Reserve in practically every key market in the world. 


The markets have become increasingly captured by Federal Reserve policy, watching what might be and what might change. “Schrodinger's Cat” is the name given to the idea that the observer (Federal Reserve) of an experiment can by virtue of their very presence affect the subject (Markets) being observed. The Federal Reserve is far, far from a passive influence within the markets, poised to prop up the market should an unthinkable catastrophe threaten, no, now they are THE market.

They control almost every facet of the market directly or in most cases indirectly. They have almost limitless power to monetise debt and force their will on the market for as long they wish or along as enough people believe in them in the absence of alternative. And therein lies the keys: market confidence and acceptable alternative monetary systems.
Reuters report that, among other factors, last week's slight weakness in gold was caused by fears that the Fed might signal their intention to raise rates at the conclusion of their two-day meeting tomorrow. This, despite the Fed signalling last week that rates may have to remain at their current rate in light of the situation in Europe. Bloomberg reports that the Fed is expected to keep rates stable. The Wall Street Journal doesn't offer an opinion on the outcome but regards the issue as one of great importance.

What we find odd is how a central bank, whose function is to act as lender of last resort to banks in times of crisis has expanded its mandate to micromanage the economy itself. During the twentieth century such a scenario could never have occurred in the U.S. and Western Europe. It would have been equated with the Marxism and central planning of the Soviet Union.

Robert Fitzwilson defined capitalism succinctly in his interview with KWN on Sunday: "Capital used to be derived solely from hard work, ingenuity and productivity as a surplus after costs. That surplus capital was utilized for reinvestment by the owner or sent through financial intermediaries such as banks to people in need of capital for productive purposes." He went on to explain how this principle has been undermined: "That centuries-old system has been virtually made irrelevant by the modern ability of the central banks to create and supply unlimited amounts of what serves in our day as capital, fiat currency." 

Now, this new style of capitalism may be viable - we wouldn't claim to know - but it depends entirely on the honour and integrity of the people managing the system. Marxism was similarly dependent. And if "by their fruits you shall know them" then it is quite clear that the system is being managed by oligarchs on behalf of their cronies. Noam Chomsky muses over how the cures prescribed by the rich for the poor always fail but still seem to have the unforeseen consequence of making the rich even more wealthy. Over the weekend Hillary Clinton echoed the claim made by president Obama that it was the federal government and not businesses who create employment as reported by Zerohedge. Are we in the midst of the transition from free-market economy to a centrally planned one? Is this the dawn of the U.S.S.A.?

In Europe the situation is no different. The experience of peripheral nations like Ireland and Greece show that the so-called troika have taken upon themselves the job of managing national economies (while reneging on their duties such as acting as a lender of last resort). The ECB removed democratically elected scoundrel Berlusconi from office in Italy only to replace him with a former Goldman Sachs banker.

So what does this mean for owners of gold and those considering acquiring it? We cannot begin to speculate. But we would look at the experience of every other centrally planned economy in history and note that it ended in currency collapse, massive wealth destruction and tears. Our usual prescription still applies. We advise clients to own gold in fully segregated and fully allocated accounts in ultra-secure vaults in the safest jurisdictions in the world.

See Essential Guide to  Storing Gold In Switzerland here

GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,228.25, EUR 967.58 and GBP 762.23 per ounce.
Yesterday’s AM fix was USD 1,230.50, EUR 970.58 and GBP 764.29 per ounce.
Gold and silver both finished last week down at 0.53% and 0.52%.
 
Spot gold closed at $1,226.38 yesterday and spot silver closed at $17.11 per ounce. A Bank Holiday was observed in Ireland on Monday.

Investors and traders are focused on the U.S. Federal Open Market Committee (FOMC) regular meeting today and tomorrow. Wednesday afternoon’s policy statement will be very closely scrutinized by the market place. Most believe the Fed will formally end its monthly bond-buying program, called QE(quantitative easing)3.

A delay in any interest rate rise by the U.S. Fed could boost gold, a non-interest-bearing asset.

In London, gold in Swiss storage traded up 0.2% at $1,227.86 an ounce by 1033 GMT, off an early low of $1,222.20 an ounce, its lowest since October 15th. U.S. gold futures for December delivery were down $1.40 an ounce at $1,227.90. In other precious metals, spot platinum was up 0.3% at $1,251.90 an ounce and spot palladium gained 1% to $785.25.

Data reported yesterday showed China's net gold imports from Hong Kong jumped to a six-month high in September as purchases ramped up ahead of its National Day holiday.

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules