Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Northern Vertex Files Preliminary Economic Assessment Report for the Moss Gold Mine in NW Arizona
By: Northern Vertex Mining Corp.

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dentís Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOINÖ. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest ďIn Four DecadesĒ Ė Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
Why? Because itís Always been that way?


 -- Published: Wednesday, 29 October 2014 | Print  | Disqus 

By It's a Mystery

There is a very tired mantra out there that gold and silver are the anti-dollar trade. This is reinforced as seen below by whatever machines are controlling the price. Yes, they are machines. These are algorithms devoid of emotion and clearly on auto-pilot as the same rinse and repeat of commercials versus funds shows every week.

What you see below is a one minute line chart of gold and the $/yen. The inverse correlation is perfect. I have chosen this chart because it illustrates how the two reacted in the perfect inverse to US financial reports, durable goods which was negative and consumer confidence which was allegedly positive.

  

What does US economic data have to do with the following picture? The answer is clearly nothing. However, there is still this absurd notion that permeates global financial markets that gold is an anti-dollar trade or an anti-fiat trade. Sure it is and I am having Santa Claus over for dinner tonight.

 

Here is some quick math. The US reportedly has 8000 tonnes of gold and at todayís prices that equates to a little over $300B. Forgetting future obligations, the Federal government has $16T in debt and the FEDís balance sheet (LOL) is $4T. But thatís not all folks, since the US$ is the reserve currency (whatever that means) global indebtedness is $150T give or take tens of trillions.

This belief that somehow, someway gold is going to balance someoneís books or the worldís books is the theatre of the absurd. Fiat backed by debt has gone exponential. Gold cannot fix the global balance sheet nor can it fix the US balance sheet. Even if adopted on a ratio basis the numbers are simply too big for gold.

Gold will de-couple from the dollar and become a stand-alone asset. It is not a currency and has no basis in reality trading in inverse lockstep fashion with the $/yen, as it is nowhere near large enough a market anymore. Yet, day in and day out we see the same tired trade.

Now, I have no idea what the price will be when this happens (de-coupling) and neither does anyone else. I do have an idea when this will occur. The process will start when one of the bigger sovereign debt markets starts to crack. Why? Because so far, insatiable demand from the East and a global mine supply versus demand deficit equating to a yearís mine supply has had ZERO positive effect on price. This is only made possible by the chart above. As long as the $/yen gold relationship holds, which is made possible by faith in CBs controlling interest rates, the world belongs to the algos. If faith is lost in one of the big sovereigns, gold breaks for good.


| Digg This Article
 -- Published: Wednesday, 29 October 2014 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.