The Gold Economy

April 30, 2010 – Greece’s debt troubles are well known.  Less recognized is the worrying truth that Greece is just the tip of the iceberg.

There have been plenty of warnings.  These include, for example, the recent downgrades of the debts of Spain and Portugal.  By highlighting the risks, the debt rating agencies have sent a signal with one certain outcome.  Heightened awareness over sovereign credit risk will grow, and rightly so. 

A report released just last month by the Bank for International Settlements, entitled “The future of public debt: prospects and implications”, made some startlingly frank and sobering

Hyperinflation Looms – The Dollar Arrives at Its ‘Havenstein Moment’

April 20, 2010 – There is an interesting article in Canada’s Globe & Mail about the lack of growth in the US money supply.  Ignoring for the moment that the quantity of dollars in circulation is significantly underreported, it observes:

“The money supply in the United States is doing something that almost never happens: it’s shrinking, after taking into account inflation.  Similar episodes in the past have usually been scary times for investors. Declines in the amount of money in circulation have coincided with recessions, and some

April 12, 2010 – On August 16, 1999, I recounted how legendary traders Jim Fisk and Jay Gould had profited handsomely from a massive short squeeze in gold 130 years earlier.  The opportunity they took advantage of arose because of the ongoing monetary turmoil of their day arising from the so-called “greenback”, the irredeemable fiat currency issued by the North to finance President Lincoln’s war with the South.  Here is what I wrote about the immediate prospects for gold back then:

“I believe that within two weeks, another gold squeeze will start from the depths of a typically

April 1, 2010 – The shorts in gold – and particularly the shorts in silver – felt some pain today.  Gold climbed $11.80 to close on the Comex at $1125.10, a 1.1% gain for the day.  Silver did nearly twice as well, up 2.1% for the day and ending at $17.876, the highest in ten weeks.  The gold/silver ratio fell to 62.9 from 63.6 the day before.

Now that the downward pressure put on gold and silver prices by the gold cartel for option expiry and quarter-end window dressing is behind us, it is no surprise that the precious metals