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2024 Gold Outlook Report |
The rate of interest on the 10-year Treasury has been ticking up. Some prognosticators are calling for rising rates, trouble at the Treasury (when they roll lower-interest bonds at a higher rate), and the Beginning of The End. Here is a graph to put it in perspective.
Investor attitudes have become quite bullish again. Few want corporations to improve their balance sheets. And near-record numbers of them want corporations to spend money on capital projects. Congratulations Dr. Bernanke. You have reflated the credit bubble. Bets that when it bursts this time, the ensuing crisis will be even worse than the one in […]
The title of the following video clip is Would Returning to Gold Standard End Currency Wars? Obviously, countries which use gold as money would have to accept the fact that gold cannot be devalued. This would be a huge improvement over today. Michael Woolfolk from Bank of New York Mellon takes the anti-gold position, and Komal […]
Why wouldn’t oil or wheat or land or bonds work as money? To understand why, think of simpler example: manufacturers money-off coupons. To anyone buying the product, the coupon is worth its face value. So why don’t coupons circulate as a kind of currency. Let’s say you were planning on buying Charmin bath tissue today. […]
Companies with cash beat those without it. The need for cash rises with economic uncertainty. Sure, cash has a low yield, but so what–there aren’t many better opportunities anyways. Our competitors get it and the central bank gets it. If you don’t get it, try to raise the cash to buy the company? Oh, you […]
This article is a follow-up to Part II. I expound upon a point I touched on, and also address some questions raised by readers. First, let’s look at an update of the open interest numbers as of Feb 6. Gold’s open interest actually declined further. Next, here is an update of the bases. The gold […]
This is pretty technical, but in essence X owns junk bonds, so he swaps them for Treasury bonds with a promise to un-swap later. Then X has good collateral to post to buy another asset. Y owns Treasury bonds, so he swaps them for junk bonds. Then he has yield (the 10-year Treasury pays less […]
It’s become popular to theorize that China is smarter than the US, that China’s economy is doing better, that China will rise to surpass the US, etc. This theory is false, in our opinion. China has massive government controls and intrusions into the market throughout the economy. This article (http://www.zerohedge.com/news/2013-01-23/what-really-goes-china) enumerates some of China’s problems: […]
In Part I of this article, we looked at arbitrage between the physical metal market and the futures market. We saw that there are arbitrageurs who straddle the spread between these markets, who don’t care about price but about the difference between two prices. They seek to profit, not from a change to the gold price, […]
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