Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Precious Metals and Financial Blasphemy, Part 2

Commodities / Gold and Silver 2016 Aug 24, 2016 - 01:53 AM GMT

By: Dr_Jeff_Lewis

Commodities

Fiat money does not have any intrinsic value. What value it has depends on public confidence in the currency's issuer. Legal tender is any currency declared legal by a government. Many governments issue a fiat currency and then make it legal tender by setting it as the standard for repaying debt. – “Investopedia”

Hedging against a currency collapse is one of the primary reasons to hold precious metals is physical form. 


In part 2 of our “religious financialization’ series continues with the objections that emerge out of the real blasphemy – that fiat is the ultimate ruler of value. 

“There is no meaningful correlation between Asian demand for precious metals and the current price of gold / its short term trajectory: in 2013 the price tanked and the Chinese loaded up on the stuff, during 2014 the price has risen and Chinese demand has slackened slightly…” 

I would tend to agree, but only because price discovery is still centered on U.S. futures markets. 

The Chinese are plausibly, and probably involved too. 

Besides, Asian demand has shifted within Asia itself – from Hong Kong to Shanghai. 

Also, the BRICS have been accumulating (net buyers of) gold for going on a decade. Central banks are still net buyers despite the allure of printing press. 

“The same is true of geopolitical drivers: since 2014 we have seen Ebola, ISIS, Ukraine, Gaza, the collapse of Bulgarian and Portuguese banks and the worst US GDP print in living memory, domestic social unrest, and yet the gold price is still $100 below where it was at the recent peak…” 

Yes. And the stock markets are at all time highs. 

How did they ever accomplish this? 

From the manipulation of interest rates, enabling precious metals price suppression and/or the direct buying of equities. 

This spawns and perpetuates the ‘religion of financialization’ as the fiduciary clergyman of others people’s money (by technically oriented trading mantra) are continually sacrificed at the altar by the central banking priests. 

All the while pillaging the socio-cultural landscape in the aftermath. 

“From a chart perspective gold – and particularly silver – is range bound and currently going nowhere, with a bias towards the downside. There may indeed be consequences from massive expansion of the Money Supply, there may be economic hardship and unemployment, and there may ultimately be a collapse of confidence in the USD. But there is no indication of any of these things occurring any time soon, and even less of them having a benign influence on the price of gold”. 

This is the same old boring rationalization disguised as an indiscriminate attack against anyone who advocates allocating some amount of wealth toward a hard money asset. 

From a tea leave perspective where the leaves are placed before you ahead of time. 

Anyone who dares to suggest that prices are managed immediately falls into a category of price prediction fringe conspiracy commentary.   

The old adage that when you point one finger at someone else, you are in essence pointing four more back at yourself works here. 

Isn’t it ironic? 

A trader who specializes in reading charts, and at the same time backs presumptions tethered to ’fundamentals’.

Professionals who have figured out a way to make fiat by gaming the broken system walk around feeling threatened by any and all. 

And once again, ‘there is no sign of imminent threat of a dollar crisis’. 

That’s the best one can muster for a takedown of a worn out meme. 

The state of all monetary systems has never before existed in a moment such as this. 

Money velocity is the last variable in the currency equation. Deficits like a cancer, incomprehensible toxic debt loads, and an ever-diminishing ability to stoke new economic under those conditions are the landscape.  

Velocity can only be measured in retrospect, and therefore it doesn’t exist, until it does, and by then it’s too late. The best proxy for it’s potential is the mountain of financial derivatives. 

This time around is different because media consolidation and information technology make it much easier to herd sheep and confine perception. 

The methods of propaganda have grown in lock step with the methods that create the illusions these guide read in the tape. 

When the black swan arrives, and the system buckles, you get a different type of collapse. 

The ensuing financial panic will lead to currency non reflate-able currency crisis. 

And the rush to safety will ignite the long-awaited move that will have us speaking in terms ounces, rather than dollars.

1. To receive early notification for new articles, click here. 

2. Or to view all of our products and services, click here. 

3. Or...support the cause, and buy me a cold one! 

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2015 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 2005-2022 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