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 Michael J. Kosares (USAGOLD) Gold a bargain in real terms For
those you who like to break things down to the fundamentals, this chart
should serve as an eye-opener. Why? Because it tells us gold’s value in real
terms when adjusted to depreciation in the purchasing power of the dollar.
Secondly, it tells us where gold stands today with respect to past peaks in
the price – once again in real terms – thus providing an indicator whether or
not it is a good buy at current prices.
MK Note: I will remind our readers that we at USAGOLD
come at gold from the defensive side of the football – as a means to
long-term asset preservation. None of this is posted to lure you into a sense
that runaway profits are just around the corner. In the end, we view gold
simply as portfolio insurance and an alternative savings vehicle rather than
an investment for speculative capital gain.
Andrew Mayeda (Bloomberg) IMF greenlights yuan for international reserves currency basket IMF staff have recommended the yuan be included in the fund’s
Special Drawing Rights reserve-currency basket, alongside the U.S. dollar,
euro, pound and yen, IMF Managing Director Christine Lagarde said Friday. The
staff nod makes approval by the fund’s board this month all but certain, as
major IMF shareholders including the U.S. have said they will support
inclusion if the yuan meets IMF criteria. It would be the first change in the
SDR’s currency composition since 2001, when the euro replaced the German
deutsche mark and French franc.
MK Note: The China/IMF linkage translates to a long-term
positive for gold. Back in the late 1990s, the European Union advertised its
gold reserves as part of the push to build confidence in the new euro currency,
even though it was not directly backed by the metal.
Leika Kihara and Tetsushi Kajimoto (Reuters) Japan relapses into recession in July-September, a blow to
‘Abenomics’ Japan slipped into its
fourth technical recession in five years between July and September –
spotlighting how the government’s “Abenomics” policies have struggled to drag
the economy out of chronic stagnation.
Official data on Monday showed the world’s third-largest
economy shrank an annual 0.8 percent in July-September after a 0.7 percent
contraction in the prior quarter, putting it firmly into recession – two
consecutive quarters of declines.
PG Note: Abenomics has been an epic fail. Our Treasury
Secretary thinks Japan should now focus on fiscal stimulus, which means more
debt for a country already deeply in the red. Wonder what he thinks his own
country should do . . .
John Ficenic (Telegraph) Gold remains the best insurance for a crisis [Fifteenth century Scholar-historian]Al-Maqrizi observed the
effect of a liquidity crisis on the Mamluk dynasty in the early 15th century
that caused money circulation to dry up. The solution was mass enforced
currency devaluation through replacing the gold-and-silver-based Dinar, with
copper coinage, or Fulus, and for a period the Mamluk economy recovered
rapidly as trade once again flowed freely. However, inflation soon crept in
and prices ran out of control as the currency was repeatedly debased. All the
while gold hoarding was taking place behind the scenes.
MK Note: Some things never change. . . . . .”As central
banks race to devalue currency,” says Ficenec, “private individuals are
hoarding record amounts of gold.”
(Xinhua) Gold coins, hoofs found in 2,000-yr-old Chinese tomb Chinese archaeologists on Tuesday discovered 75 gold coins and
hoof-shaped ingots in an aristocrat’s tomb that dates back to the Western Han
Dynasty (206 BC – 24 AD). The gold objects — 25 gold hoofs and 50 very large
gold coins — are the largest single batch of gold items ever found in a Han
Dynasty tomb. They were unearthed from the tomb of the first ‘Haihunhou’
(Marquis of Haihun) in east China’s Jiangxi Province. The coins weigh about
250 grams each, while the hoofs’ weights vary from 40 to 250 grams, said Yang
Jun, who leads the excavation team.
MK Note: These gold artifacts were found along with a
portrait of Confucius, perhaps the oldest known. Wisdom and gold make easy
company. Confucius once said something that has current applicability: “In a
country well governed, poverty is something to be ashamed of. In a country
badly governed, wealth is something to be ashamed of.” Or at the very least,
well-hedged . . . . . . . .
(Dubai-Mubasher) Gold prices rose on Wednesday as Paulson & Co. expected the
precious metal to stage a strong comeback next year.
John Paulson, the hedge fund’s president, said prices will rise
strongly in 2016, noting that gold will be a safe haven for investors
especially after the occurrence of several economic challenges.
PG Note: There do indeed appear to be a number of “economic
challenges” congregating on the horizon. Some may in fact be self-inflicted
if the Fed decides to proceed with a rate hike in December.
(Bloomberg) Chinese savers turn to gold as the rest of the world exits
holdings “Stung by a $5 trillion
stock-market collapse, an overbuilt property market and a devaluation of the
yuan, Chinese investors are adding to bullion holdings that have already made
them the world’s largest consumers of the metal. A third straight annual
decline in prices has failed to deter purchases, partly because there are few
attractive alternatives for preserving assets.
MK Note: The writer of this article fails to understand
the prevailing mindset of Chinese investors. They see a decline in prices as
an incentive not a deterrent. The headline to this article is misleading as
well. The World Gold Council recently reported record U.S. physical demand
led by sales of American Eagle gold bullion coins. Demand, and this is well
documented, is also very strong in India, the Middle East and Europe, so it
is difficult to justify the contention that “the rest of the world” is
exiting its holdings. That is simply not the case.
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