Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Roubini - Faber Gold Debate

Commodities / Gold and Silver 2013 Jun 05, 2013 - 04:30 PM GMT

By: BATR

Commodities

Two of the most provocative and incendiary economic prophets are Nouriel Roubini and Marc Faber. As with most oracles, the denominational sect of doctrines often determines the forecasts. This especially applies to economic prognosticators. Roubini has evolved into an establishment darling working with central bank governors and finance ministers. Faber remains a contrarian investor earning his designation as the genuine "Doctor Doom". Who is right, depends on the immediate and final outcomes of the international financial troubles. Money markets volatility and fiscal debt obligations are integral components of commercial transactions and political economic policy.

The barometric gauge of financial health and stability has invariably been the price of gold. Often overlooked is that the price is reflected by the exchangeability into different currencies. Therefore, any valid assessment of the true value of gold must factor in the real purchasing power within the coinage of local tender.

The Business Insider provides a summary of Nouriel Roubini: Why Gold Will Plunge To $1,000.

Gold spikes during extreme crises. The crises are over.

Gold does well during periods when there's a risk of high inflation. That clearly is no longer a big worry, given how much central banks have unsuccessfully tried to stoke even modest inflation.

Now with the economy recovering, nobody wants to be in rocks that don't pay any dividends.

Real interest rates are rising. That kills gold.

Governments with debt issues are selling gold.

Gold was juiced by right-wing fanatics in the US. That boom is over.

Contrast this viewpoint with the Zero Hedge article, Marc Faber: "People With Financial Assets Are All Doomed"

"Faber explains, among other things, the fallacy of the Fed's help "the problem is the money doesn't flow into the system evenly, how with money-printing "the majority loses, and the minority wins," and how, thanks to the further misallocation of capital, "people with assets are all doomed, because prices are grossly inflated globally for stocks and bonds." Faber says he buys gold every month, adding that "I want to have some assets that aren't in the banking system. When the asset bubble bursts, financial assets will be particularly vulnerable."

The preliminary appraisal of what seemingly are contradictory positions is that both are correct, depending on the current location of the time continuum for world financial markets. The overriding ability of central banksters to paper over catastrophic crises and deflationary dislocations, seem to be unlimited. Coordinated rescue plans are frequently disguised by currency fluctuations and equity swings, but the real measure of maintaining financial solvency requires that bond rollovers and new floats be sold in the marketplace. With the immergence of the Federal Reserve purchase of government debt, as an essential resort to keep the funding game going, the era of rapid devaluation, has begun.

Does this necessity sound like an environment where the "crises are over"? As for the "risk of high inflation no longer a big worry", depends greatly on the credibility level of government reporting statistics. Just maybe Roubini’s incorporation into the Davos jet set means that his distance from middle class experiences reflect his newly found associations. Where is this vaulted economic recovery and a proliferation in the consumer spending? Dividends seldom trickle down to the vast numbers who abandoned Wall Street investments. If real interest rates were truly rising, when will the saver see a better return on their money? Roubini fails to mention that China and India have been buying gold, but in a recent article about Russia – we find out that the biggest country in the World might as well be the biggest buyer of gold. Finally, gold was juiced by right-wing fanatics in the US! Hence, we are supposed to believe that the globalists’ paper debt created system is rational and that Austrian School economics are extremists. So much for the wisdom of Roubini and the reason, the old Dr. Doom finds the moniker wearisome and says it no longer accurately reflects his opinions.
Coherent and objective analysis from The Economic Collapse argues in the Top 1% Own 39% Of All Global Wealth:

"So exactly how have the global elite accumulated so much wealth? Well, one of the primary ways is through the use of debt. There is about 190 trillion dollars of debt in the world but global GDP is only about 70 trillion dollars. Our debt-based global financial system systematically transfers wealth from us and our governments into the hands of the global elite. And of course the gigantic banks and corporations that the elite control are constantly gobbling up everything of value that they can find: natural resources, profitable small businesses, real estate, politicians, etc. Money, power, ownership and control are becoming very, very tightly concentrated at the top of the food chain, and that is a very dangerous thing for humanity."

No honest person can dispute Faber’s claim - "the majority loses, and the minority wins". What is still debatable is the timing of the looming break down of the fiat financial structure. The prospects for the inevitable, seems prudent, "When the asset bubble bursts, financial assets will be particularly vulnerable." How long can 190 trillion dollars of debt be serviced, when it is impossible to grow the world economy out of a mathematical impossibility?

The overriding issue in not about the current convertibility of gold into whatever paper species is still solvent. The conclusive finality is that a newly issued medium of exchange will be imposed under a terminable collapse of the world economy. All signs point that gold will be part of a desperate attempt by central banks to launch a world currency. The ultimate risk that outlaws gold, as once was the case in the U.S., for private ownership, is the gravest danger.

The Roubini model excludes the financial doom that Faber believes to be unavoidable. As long as it lasts, careerist economists will enjoy the payoffs from the paper-banking establishment. Yet in the end, the authentic "Doctor Doom" will prevail.

James Hall – June 5, 2013

Source : http://www.batr.org/negotium/060513.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2013 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2019 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