August, 2015

Invitation: Event in NYC Sep 11

You are cordially invited to a discussion of the economy, markets, interest rates, commodities, speculation, investment, and of course the monetary metals and our unique approach to valuing them. Here is the agenda.   1pm to 2:30pm You cannot understand what’s happening in the markets with the conventional view. This view says that central banks […]

The Gold and Silver Fundamentals, 30 Aug, 2015

Last week, we called for a rising gold to silver ratio. On Wednesday, this ratio hit nearly 80 before backing down a bit by the end of the week. It did not happen with a rising price of gold, rather it was a function of a falling silver price. On Wednesday, the silver price was […]

Move Over Entrepreneurs, Make Way for Speculation!

Once upon a time, before banks and before even private lending, there was only one way to prepare for retirement. People had to hoard something durable. Every week, they would set aside part of their wages to buy salt (later, it was silver). Assuming it didn’t get wet, the salt accumulated until they couldn’t work […]

The Exquisite Market Setup, 23 Aug, 2015

There is an exquisite setup building once again. Tight fundamentals in the gold market apply upwards pressure on the price. For quite a while, we have been saying gold’s fundamental price was around a hundred bucks above the market price. Well, the market price moved up $46 this week. What happened to the fundamental price? […]

Please Join Us on Sep 11 in NY City

We don’t have a normal economy, or normal markets. We are six years into a so called recovery based on zero interest rates, and it’s obvious that the Fed’s interventions aren’t working. The Fed’s critics, however, are also wrong. The price of crude oil is now at a low not seen since the height of […]

Why Is Gold Becoming Scarcer, 16 Aug 2015

For quite a while, we have been talking about scarcity in gold. The cobasis for both October and December is positive. These contracts are backwardated. The cobasis for the February 2016 contract is not far from backwardation. The gold market is tight. Why? Let’s explore. Part of the matter is that the price has fallen. […]

Who the Heck Consumes Capital?!

I have been writing about consumption of capital, using the example of a farmer who sells off his farm to buy groceries. It’s a striking story, because people don’t normally act like this. Of course, there are self-destructive people in every society, but, not many. Most people know not to spend themselves into poverty. To […]

The Economy is in Liquidation Mode

If you’re an American over a certain age, you remember roller skating rinks (I have no idea if it caught on in other countries). This industry boomed in the 1970’s disco era. However, by the mid 1980’s, the fad was fading. Imagine running a rink company at the end of the craze. You know it […]

Monetary Metals Supply and Demand Report 9 August, 2015

Last week, we left off with this. “Something is happening with gold…” It began in Dec 2008. To understand it, it is necessary to understand two principles. The first is that gold is money and the dollar is credit, which currently has nontrivial value. A dollar is worth 28.4mg gold. To understand the second, let’s […]

Yield Purchasing Power: $100M Today Matches $100K in 1979

I wrote a story about poor Clarence who retired in 1979, and even poorer Larry who retired last year. I created these characters to challenge the notion of calculating a real interest rate by subtracting inflation. The idea is that the decline of a currency can be measured by the rate of price increases. This […]