Entries by Keith Weiner

Theory of Interest and Prices in Practice

Medieval thinkers were tempted to believe that if you throw a rock it flies straight until it runs out of force, and then it falls straight down. Economists are tempted to think of prices as a linear function of the “money supply”, and interest rates to be based on “inflation expectations”, which is to say […]

Monetary Metals Supply and Demand Report: 20 Oct, 2013

On Thursday, the prices of gold and silver took off 50 dollars and 54 cents, respectively, on a statement by Dallas Fed President Dick Fisher. He declared that, “fiscal shenanigans have swamped QE taper prospects”. That was enough to light the fuse. As always, the question is: speculators or hoarders? Read on. We are interested […]

Monetary Metals Supply and Demand Report: 13, Oct, 2013

The prices of the monetary metals slid this week, especially on Friday. Gold ended the week 38 bucks lower than last Friday (-2.9%), and silver ended 42 cents lower (-1.9%). We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting […]

Monetary Metals Supply and Demand Report: 29 Sep, 2013

The “No Taper” announcement has been long forgotten, another flash in the pan like most Fed announcements and non-announcements before it. Leveraged speculators jump in, based on the Quantity Theory of Money. If the announcement seems to imply more money “printing” (it’s really borrowing), then prices “should” go up. And the speculators aggressively meet their […]

Monetary Metals Supply and Demand Report: 22 Sep, 2013

Heading into Wednesday, the prices of the metals were sagging. Then, the announcement from the Federal Reserve took everyone by surprise. They said they would not “taper” their purchases of bonds. And BAM! All prices rose sharply: stocks, currencies, and our favorite metals. In a minute, the gold price went up $25. Clearly, traders are […]