MK Note: Interesting how quickly things can change.
…“Rate hike expectations are essentially back at their mid-May level
before the publication of the Fed meeting minutes caused them to rise,” said
Commerzbank commodities analysts in a note. “At that time, [spot] gold was
trading at $1,280 per troy ounce. Against this backdrop, gold thus has
further upside potential.”
PG Note: Gold nearly did reach that $1280 target at the end the week,
trading as high as $1278.13.
It now stands at $19.265 trillion.
…All in all, that’s a lot of red. Just wanted to make sure you were all
awake. . . .It is getting to be summer-time (and the living is easy). . . . .
.
PG Note: There is indeed a lot of red (negative) numbers. Lots of debt.
Lots of interest owed, even with ridiculously low rates. It’s good to keep
the growing bond bubble in mind because if it where to pop, things could get
really ugly in a hurry.
MK Note: No sooner had the ink dried on the June issue of our newsletter
(of which this article was a part) than Mervyn King was quoted in the World
Gold Council’s Gold Investor magazine as advocating gold ownership at a time
of what he calls “radical uncertainty.” Some might think that we had an
inside track on the World Gold Council interview released this morning, but
we did not. Though we have a relationship with the World Gold Council that
goes back decades, it does not send us advance copies of its publications.
The similarities between King’s views and those of his old friend, Mr.
Greenspan, were striking thus the conclusion that logically the former BoE
governor might be headed in gold’s direction.
“And I am very struck by the fact that over many many
years, central banks, governments and individuals have always, despite the
protestations of economists, held some gold in their portfolio. Obviously,
there is no high running return, but when unexpected things happen,
particularly when governments rise and fall, then gold is a means of payment
that everyone is always prepared to accept. And I think that’s why even
central banks have always had a role in their portfolios for gold.” — Mervyn
King
Brian Milligan (BBC) Royal Mint to sell gold bars
for pensions The Royal Mint is to offer savers the chance to own
gold bars within their pension funds for the first time.
Investors will be able to buy 100g or 1kg bars – or even a fractional
amount of a larger 400oz bar – and have it stored at the Royal Mint.
PG Note: If owning gold within a retirement plan sounds like a good idea,
be aware that U.S. investors can hold physical gold in a self directed IRA.
Further information can be found here.
Luzi-Ann Javier (Bloomberg) ECB
‘Monetary Amphetamine’ Propels Gold to Best Start Since ’79 Gold
has rallied 19 percent this year, the best start since 1979, as low interest
rates boost the appeal of the metal, which offers returns only through price
gains. A sputtering dollar and economic-growth concerns have also spurred
demand for bullion as a store of value. Bets that rates in the U.S. will stay
lower for longer have given the yellow metal an added lift the past few days.
PG Note: From the accompanying video:
Bloomberg: Is [gold] turning into kind of a currency proxy for a lot of
people?
Joseph Cusick: Yes. That’s exactly right. I think it is.
“Turning into”? I would point out that gold has been money for thousands
of years, and while governments and central bankers have made every effort to
replace it with fiat, it has never really gone away. In fact, at this very
moment, reasserting itself in the global monetary system.
Szu Ping Chan (Telegraph) George
Soros opts for gold haven saying Brexit would spell end of EU George
Soros has piled more of his £30bn fund into gold amid growing concerns about
the global economy.
The billionaire investor also warned that if Britain voted to leave the EU
on June 23 it would mark the end of the European project.
PG Note: Soros is buying gold because he thinks inflation rates are likely
to remain dangerously low. Once again proving that the yellow metal is a
hedge for all the various ‘-ations.’ See Black
Swans, Yellow Gold: How gold performs during periods of deflation, chronic
disinflation, runaway stagflation and hyperinflation
Jan Harvey (Reuters) London
appetite for gold bars, coins rises on Brexit nerves At Sharps
Pixley, a gold showroom in London’s smart Mayfair district, demand for
bullion bars and coins is rising, with men and women of all ages buying up
the safe-haven metal in case of a British exit from the European Union.
PG Note: I have heard reports that margins on leveraged metals (and FX)
are going up dramatically in advance of the referendum, amid expectations of
heightened market volatility. Word has it that margins on metals will double
and margins on GBP and EUR currency pairs will triple. Those buying actual
physical gold in London and elsewhere are on the right path! Those holding
leveraged paper are likely to have to put up more margin, or exit their
positions.