Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Lack of GLD Demand, Silver Supply Glut Unfolding

Commodities / Gold and Silver 2011 Jul 13, 2011 - 09:26 AM GMT

By: Ned_W_Schmidt


Best Financial Markets Analysis ArticleCoins always have to sides. We all are familiar with well-worn story of heads I win and tails you lose. Maybe this time the coin may be far more desirable. Perhaps it is now heads we win, tails the politicians lose. Maybe the markets are telling us that indeed the era of Keynesian socialism is now becoming part of history. Another chapter in the book of dead and failed economic and political ideologies may be in the process of being written.

June 2010 was Peak. Down 100 tonnes since then.

In the above chart of GLD's holdings of Gold we can find no rush to buy policies to insure against possible debt defaults by Greece, Spain, Portugal, Italy, U.S. et al, until this week. On Tuesday, panic buying developed on the Street. Such panic buying by the lemmings of the Street never happens at a bottom.

If the financial threat from these Keynesian induced financial disasters were as dire as the commentary suggests, the markets would be sending a far different message. Of course, the ensuing poverty that would develop from such defaults could be causing individuals to hoard cash, rather than investing in insurance.

Discussions on Greece now seems focused on two alternatives, a managed default and an actual default. In a plan that now seems to be moving forward, a managed default would occur. In such a plan investors would have to share some of the loss on that government debt.

This development would be, as they say, a "game changer." With rare exception, for example Argentina which has been a serial defaulter, the world has not allowed sovereign debt to default. In the new game, markets would become the strict disciplinarian for governments with a bad case of Keynesian miseconomic policies. That development may be good news, and we explore that topic more in our July newsletter.

As the cases of the European PIGS are being resolved, the far more important battle on the survival of Keynesianism is taking place in the U.S. Never in 70+ years has a public discourse taken place on whether or not to continue the failed Keynesian policies of the past. Whatever the outcome of the debate on the U.S. debt ceiling, a new game, unlike any before, is unfolding. And the presumption that Gold and Silver price would rise in a U.S. default is likely in error.

This discussion will decide whether Keynesianism withers and dies a slow death, or is marched to the guillotine. Failure to raise the debt limit to a level providing comfort for the ruling junta to win reelection in 2012 may not mean default. Rather, it might mean an end to unlimited spending to buy votes in the U.S. Whatever happens, the world will actually be a financially better place

The above may help to explain why demand for financial insurance, demand for $Gold, has not risen, and why the price remains rather stagnate.

Above chart is for $Silver, a secondary form of financial insurance. While many comments float around on the demand for Silver, price is the ultimate manifestation of the supply/demand for any commodity. Chart formation portrayed might be described as the "squirrel on a limb" pattern.

We have observed on occasion a squirrel moving far out on a limb, in pursuit of some quest only known to it. At some point, the limb fails to provide adequate support, or breaks, plunging the squirrel to the ground far below. Investors may want to get off that limb before the plunge in Silver, moving into Gold, Chinese Renminbi, or Rhodium. Such a move is especially appropriate as near glut conditions will likely develop in Silver during the next couple of years.

Finally, we note with sadness the announced retirement of Representative Ron Paul. He will leave some big boots unfilled, but the record is clear. Ron Paul: 1 Keynesians: 0

Valuation table can be found below.

By Ned W Schmidt CFA, CEBS

Copyright © 2011 Ned W. Schmidt - All Rights Reserved

GOLD THOUGHTS come from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report , monthly, and Trading Thoughts , weekly. To receive copies of recent reports, go to

Ned W Schmidt Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


13 Jul 11, 23:18
you will be a disappointed

You have been dead wrong for so long and yet you are still at it.

I am sticking my neck out to predict that you will end up a very disappointed with regards to gold and silver.

12 Dec 11, 20:03
Track record

Whats this guys track record like?

It's not another "Picture of a patient" guy that used to post articles on Kitco - what was his name, ah yes. The Rosen Market Timing Letter.

Post Comment

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

6 Critical Money Making Rules