April, 2013

How Not to Trade the Dollar

I hope this essay provides some food for thought. It is not my intention to insult or belittle anyone, but using humor and cold logic, to help people understand an abstract topic with many counterintuitive principles. The ultimate goal is to protect what you have and make some more (in that order). Gold is money. […]

Monetary Metals Supply and Demand Report: April 28, 2013

There were no more Dark Cabal “smashdowns” this week. Gold rose $56, which is to say the dollar fell about 0.9mg this week. The gold bugs may be feeling somewhat vindicated, but what is the basis saying? First, here is the graph showing the prices of the metals in dollar terms. There was some up […]

The Gold Futures Open Interest Caper: Part 2

Regular readers will know that most traders with a short position in the futures market are not “naked”. It is an easy trap to fall into, to assume that everyone else in the market is the same as the small trader: betting on the likely direction of price. But, this is not the case. The […]

The Gold Futures Open Interest Caper

In the recent Gold Basis Report, we published a graph showing the open interest in gold and silver futures (i.e. the number of contracts held at any given time). At the time of the crash and in subsequent days, the open interest number decreased only modestly in both metals. A number of people asked me […]

Guest Post: Pater Tenebrarum – US Stock Market – Giddy Bulls Abound

Barron’s Big Money Poll Bullish Consensus Reaches a Record High This week’s Barron’s magazine contains the latest Barron’s ‘big money’ poll. Evidently they interviewed a herd – there was once again near unanimity on a number of markets. The bullish consensus on US stocks clocked in at a new all time high for the Barron’s […]

Theory of Interest and Prices in Paper Currency Part I (Linearity)

Under gold in a free market, the theory of the formation of the rate of interest is straightforward.[1] The rate varies in the narrow range between the floor at the marginal time preference, and the ceiling at the marginal productivity. There is no positive feedback loop that causes it to skyrocket (as it did up […]

Guest Post: The Big Picture by Alex Manzara

The big picture over the past few months is that markets are experiencing one large adjustment after another, perhaps analogous to the shifting of tectonic plates that create rolling earthquakes and various aftershocks.  The first large move was the fall in the yen (rise in dollar/yen), and the change in sentiment towards Apple (AAPL) which […]

Monetary Metals Supply and Demand Report: April 21, 2013

The Last Contango Basis Report The “coordinated smashdown of gold and silver” was on everyone’s mind this week, but is it true? Did the price of paper gold (futures) divorce from the price of physical gold? One thing is for sure, the dollar gained from 21g to over 22g of gold on Friday. A 5% […]

What is Pushing Down the Gold Price: Part II

This is a continuation of “What is Pushing Down the Gold Price: Part I” One factor is the lack of rapidly rising consumer prices. If consumer prices aren’t rising, then this eliminates the need to buy gold as a hedge. Gold speculators are like everyone else. They get frustrated waiting for a rapid price gain […]