After markets closed on Friday, it was announced that Cyprus worked out a deal with the European Central Bank, European Commission, and the International Monetary Fund (“the Troika”). Here is a typical article reporting on the story. Cyrpus has been in desperate need of a bailout, and was in discussions as early as June last […]
A group called “Being Liberal” posted the following graph to Facebook purporting showing how deficit as a proportion of GDP has fallen from 10% to 4%. The caption implies two things: 1) most Americans are simply ignorant if they think that there is a borrowing or debt problem 2) the deficit is falling (the caption […]
When writing about economics (as opposed to trading), one does not expect to be proven right within days of publishing something. Things can take years to play out. On Monday, February 25, we published What Drives the Price of Gold and Silver? In that article, I wrote: If there is a credible rumor that the […]
Gold is in Backwardation!
With all the discussion on the Internet, some of it confusing, we thought a picture would be worth a thousand words. Backwardation is when there is a profit to decarry the metal. This is the simultaneous sale of metal in the spot market and purchase of metal in the futures market. Selling is on the […]
As this set of infographics show, more than half of the silver mined throughout history is still in human inventories. Be sure to keep reading and scroll to the bottom.
Far too many people believe that gold serves no useful purpose. I am therefore publishing this response to The 10 Minute Gold Standard: It’s Much Easier than You Think by Nathan Lewis. Mr. Lewis, a professed advocate of the gold standard, argues that even if we have a “gold standard”, we don’t need actual gold. […]
John P. Cochran writes on Zero Hedge about Murray Rothbard’s propsal that the government default on its debt: Rothbard’s recommendation: “I propose, then, a seemingly drastic but actually far less destructive way of paying off the public debt at a single blow: outright debt repudiation.” Repudiation is not only a sound economic solution to our […]
Three links from Seeking Alpha’s Wall Street Breakfast: Must-Know News today really underscore the intractable debt and interest rate problems in irredeemable currency. Corporate pension deficits soar. The WSJ shines a light on the significant funding gap in corporate pension plans, with the deficit among Russell 3000 companies rising to $441B in 2012 from […]
