Friday, 25-Mar-2016
Michael J. Kosares (USAGOLD) Over
$1 trillion added to the national debt since last November Since
November 1, 2015, when Congress lifted its moratorium on additions to the
national debt, the federal government has added $1.035 trillion in new red
ink. On March 17, it posted $37 billion in fresh borrowing putting the total
figure at $19,188,228,962,810.34, according to the Treasury Department.
PG Note: Most rational thinker would agree that our ever-growing national
debt burden is a problem. Hence it has been a consistent driver of a higher
gold price.
Ira Iosebashvili & Katherine Dunn (WSJ) Gold
Prices Rise After Brussels Attack Gold prices moved higher in
London on Tuesday, spurred by safe haven demand following a series of
explosions in Brussels.
…“It does prove that gold is acting as a safe haven,” said David Govett,
head of precious metals at Marex Spectron in London.
PG Note: This weeks tragedy in Brussels spurred safe-haven interest in gold,
although it was short-lived.
Cecilia Jamasmie (MINING.com) Germany
to bring half its gold back by 2020 After decades of storing the
majority of its gold reserves overseas, Germany has decided to speed up
efforts to bring its bullion back home, announcing Monday it plans to
repatriate at least half of the country’s gold by 2020.
PG Note: Knowing full well that there are for more claims on each ounce of
physical gold than can possibly be reconciled, Germany is doing the prudent
thing in repatriating their gold.
Stephanie Landsman (CNBC) JPMorgan
Chase’s forecaster says buy gold, not stocks One of Wall
Street’s most respected forecasters says the [stock] market’s rally is in
trouble, and that investors are likely to do better by betting on gold.
MK Note: JPM’s Marko Kalonovik is widely followed and respected in the
hedge fund industry and on Wall Street. He says the Fed’s dovish policy will
put pressure on the dollar and push gold higher.
Michael Pento (CNBC) Why
Goldman is wrong about gold Those who are still making short
calls on gold — expecting that it will fall further — fail to understand that
negative nominal rates coupled with rising inflation expectations are the
rocket fuel for gold — especially since central banks are trapped in this
vortex of persistently reducing the value of their currencies vis a vis their
trading partners. Even our Federal Reserve found it necessary to renege on
its plan to raise rates four times this year after the markets fell apart in
January. But from this folly, there is no end.
MK Note: Pento’s argument with some strong elaborations is very similar to
the one I made in the last issue of News & Views – “Gold in
the zero-bound”
Brian Price (CNBC) Technician:
Gold heading toward $1,450—here’s why Indicators are generally
positive on the daily, weekly and monthly charts. However, current readings
are slightly overbought on the weekly chart,” said [Zev]Spiro [Orips
Research], who believes that prices are overextended from the major moving
averages. “Therefore, a continued consolidation may occur before [we see] higher
prices.”
MK Note: This is another way of saying “Buy the dips.”
Simon Kennedy (Bloomberg) Helicopter
Money Takes Flight as Latest Drastic Monetary Idea After more
than 600 interest-rate cuts and $12 trillion of asset purchases failed to
move the inflation needle enough, central banks may need to head even deeper
into uncharted territory.
PG Note: That first sentence is probably the most striking thing I read
all week, even though I am well aware of that reality. As central bank
credibility is increasingly challenged, and they become ever-more desperate,
the case for storing some of one’s wealth in gold becomes ever-more
prescient.
James Steel (HSBC) HSBC:
Gold best alternative in negative interest rate environment A
third pillar of support for gold is the global phenomenon of negative interest
rates. As we highlighted in Gold rally: Gold glows in a negative rate world,
11 February 2016, gold is one of the few beneficiaries of negative interest
rates and deteriorating risk sentiment. With an increasing number of central
banks implementing a negative rates policy, and this reflecting continued
economic weakness, we expect gold to be supported by this backdrop. Negative
rates are a sign of distress, which may increase flight-to-quality demand for
gold. They lower the opportunity cost of owning gold and therefore encourage
purchases. If the negative rates are deep enough or persist long enough they
may encourage the hoarding of cash and gold. Gold may be a better alternative
to cash in some cases as gold does not carry the risk of central bank intervention
by a monetary authority wishing to limit its currency’s appreciation.
PG Note: This is a really important point, but in the same report, Steel
noted that gold also shines when Fed starts tightening.
