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 Weekly Wrap-Up: Gold and Silver Gain Nearly 1% and 2% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 16 2018
By: Ira Epstein

Silver Slumps, US Military Weak, and PTJ Says We Are headed For Scary Moments
By: David Morgan

Slowly We Turn... Gold vs.
By: Gary Tanashian

COT Gold, Silver and US Dollar Index Report - November 16, 2018
By: GoldSeek.com

GE, Nvidia, Nordstrom, Bitcoin All Tank, And The Fed Notices
By: John Rubino

Years of Recklessly Low Interest Rates Causes Inflation to Soar
By: Nathan McDonald

Gold Miners’ Q3’18 Fundamentals
By: Adam Hamilton, CPA

GoldSeek Radio Nugget: Bill Murphy and Chris Waltzek
By: radio.GoldSeek.com

Is Gold Under or Overpriced?
By: Arkadiusz Sieron

 
Search

GoldSeek Web

 
It's Ugly If You Look Under The Hood


 -- Published: Thursday, 30 April 2015 | Print  | Disqus 

By Bill Holter

My plan for today was to write a very basic piece hitched to the one written yesterday "the money has to go somewhere".  The plan was to point out that gold (and silver) will be the final destination for monies dislodged from crashing markets all over the world.  Along came the Q1 figures for U.S. GDP, a disaster on many levels.  So switching gears, let's look at the first quarter, how quickly the economy has deteriorated and what it means in the future and in relation to the past.  I do plan to tie this together at the end because no matter how you look at it, gold is a magnet for what will be shaken loose.

 

Q1 GDP came in at .2% growth, this was a whopping $6 billion worth of growth for the quarter This number was an obvious disappointment as estimates were around 1%+.  Of course the apologists were immediately out in full force to remind us of how terrible the winter was and "weather" was to blame.  I would ask, isn't that what "seasonal adjustments" are for?  Steve Liesman of CNBC even posed the question why seasonal adjustments are "not working".  The obvious answer is because you can only stretch, massage and outright lie about economic numbers so far before you cannot any longer ...because even the blind will see it.

   

Breaking the quarter down and looking under the hood, were it not for the biggest inventory build of any quarter in history, the quarter would have shown a negative 2.6% growth rate What exactly does this mean?  It means the consumer or final user has shut off their purchases.  It means "stuff" was produced but wasn't sold.  The inventory build number was over $120 billion, can this happen again in the 2nd quarter?  And what if the end buyer keeps their pocketbook shut again?  Something must give, either the inventory gets sold or the producers must cut back production drastically.

   

It is worth mentioning that QE 3, the "final QE" ended in the fourth quarter.  Is this an example of the economy convulsing because the juice was taken away?  And let's not forget, today (yesterday) was a Fed meeting and announcement, can they possibly even hint about raising rates and actually withdrawing some of the previous "juice"?  Another "blame" is being pinned on the strong dollar, can the Fed really raise rates and put a further bid under the dollar?

   

What does this mean for the future of the economy and more importantly the financial markets?  The markets are at record high valuations, the news of an economy going in reverse can only augur for lower earnings.  The strong dollar can only augur for a Fed who doesn't want a stronger dollar.  The leverage in the financial system is so thin already, can the risk be taken that something will snap?  I don't believe so, I also believe it will not be long before QE 4 gets floated seriously and then implemented. 

   

As I wrote yesterday, "the money has to go somewhere".  It looks to me like some sort of come to Jesus moment is close in both the economy and the markets.  If you have been awake, you understand the economic and financial systems, are dichotomized yet so intertwined, a spark anywhere means a fire everywhere!  Literally hundreds of $trillions will be shaken, some of it "shaken loose" and will look for a safe place to hide.

 

All the gold ever mined in history is worth some $6 trillion, what do you suppose will happen when $10's of trillions seek the safe harbor of gold?  No matter how you look at it, the Fed is in a box of their own making, any action or inaction has the possibility of shaking the tree and dislodging capital, forcing it to look for safety.  The result will be your "no offer" moment in time.  As capital floods toward the only monetary asset that cannot default, owners will pull their wares off the shelf and withdraw their offers.  This only makes sense because the movements will be so large and so fast, no one will even know what various assets are worth or where they will settle until after the dust clears. 

I leave you with this thought, if you need to build a fire or light a cigarette, how much would you pay for a BIC lighter?  The same could be asked about "money", if one needs to put capital somewhere that cannot ever default (which is gold only), what is one ounce of gold worth?  It is crystal clear to me, when this question gets asked, it may take some time for the physical market to clear and give an answer!  The true value of gold will shine as a vortex of defaults occurs.   

Regards,

Bill Holter

BILL HOLTER, Associate Writer, Miles Franklin Precious Metal Specialists

Address: 801 Twelve Oaks Center Drive, Suite #834, Wayzata, MN 55391;

Telephone: 800.822.8080, 952.929.7006; Fax: 952.476.7971

E-mail: bholter@milesfranklin.com; Website: www.milesfranklin.com

Prior to joining Miles Franklin in 2012, Bill Holter Worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. Later, he left Wall Street to avoid potential liabilities related to management of paper assets. In 2006 he retired and moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-2012.


| Digg This Article
 -- Published: Thursday, 30 April 2015 | 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 - 2018



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.