“With money coming out of bonds and looking for new inflation-proof homes, commodities are likely to attract investors…”
And money is coming out of bonds.
Click on the thumbnail below or click the link to read A Lot of Chaos; A Few Certainties.
Gold put in a stellar performance in recent weeks. It was bolstered by Russia’s invasion of Ukraine, but it’s also clear that gold was rising well before that.
Click here for the full article: https://goldresourceinvestor.s…
Real Rates, Safe Have Buying, Commodities Set To Soar, Gold’s Technical Setup, Russia Isn’t That Big (but the camel might not be able to carry another straw).
Click here to read the full article: https://theresourcemaven.subst…
This month I thought it would be fun to talk about a little-known yet significant event in silver’s relatively recent history. By recent, I mean the last 90 years.
Remember, silver’s been used as money in some form for over 5,000 years. So, anything in the last century is like…yesterday.
You may already know about U.S. President Roosevelt’s Executive Order 6102. As a refresher, I’ll bring you up to speed.
In 1933 the U.S. money supply was limited by the “gold standard” – while the economy was mired in a severe depression. The Federal Reserve Act of 1913 required the U.S. dollar (Federal Reserve Notes) be 40% backed by gold. But by the late 1920s, the U.S. Federal Reserve was already bumping up against its credit limit. Most economists and financial historians now believe this limit exacerbated the October 1929 stock market crash – and the ruinous Great Depression that followed. At the time, the gold price was fixed at $20.67 per ounce. So, on April 5, 1933, President Franklin D. Roosevelt signed Executive Order 6102 into law.
The order outlawed the ‘hoarding’ of gold coins, gold bullion, and gold certificates within the continental United States. The rationale was
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The Ukraine situation has evolved. Whether sanctions will limit Putin’s ambitions to annexing the Donbas, leaving the rest of Ukraine alone, is yet to be seen. Certainly his hour-long rambling monologue on his take on Ukraine-Russia history makes clear he thinks he – I mean Russia – should control all of Ukraine. And tonight he officially moved into Ukraine, moving the three-quarters of Russia’s army that he had posted on the Ukraine border – in the largest mobilization of troops in Europe since WWII, I might add – supposedly to “enforce the independence” of Donetsk and Luhansk provinces. Enforce by bombing, it would seem.
(Separatist groups in those two regions of eastern Ukraine, which have large Russian populations, proclaimed independence from Ukraine in 2014. Russia is the only government in the world to recognize that claim, as there have not been referendums showing majority support.)
No one knows whether Putin has his sights set beyond Donbas. We also don’t know when (now or if Putin moves past the Donbas?) NATO allies might decide to fight. We will probably know more in the morning.
Whatever form it takes, this war will last some time. And while it does, the most
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Can you offer your suggestion for a lower-risk uranium play?
– Reader MC
Uranium has historically been a volatile space, with long periods of depressed prices punctuated by dramatic price spikes. If I thought the future would play out as the past has done, my answer would be: there’s no such thing as a low-risk uranium stock!
However, I think this market could play out differently in that I think the main fuel is a realization across the space that prices have to go higher and stay there to incentivize the building of the new mines needed to keep the lights on (feed the supply gap).
That doesn’t mean the spot price won’t shoot up, but I think the drop back will leave the price strong.
With that foundation, I think uranium stocks will provide some of the crazy volatility they have in past bull markets but I also think that investors won’t need to watch closely and exit as soon as things appear to turn down. That kind of attention and trading was needed in past markets or else one’s gains would evaporate. This time, I think close attention and trading might give one the chance to capitalize
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Inflation has become the issue of our time. It’s affecting everyone in many ways. Whether we’re talking about food, energy, housing, transportation, clothing, electronics, or cars…prices are way up.
Ever since the Fed started calling inflation “transitory”, I’ve been calling them out on it. While the rise in the inflation rate may stabilize or even fall back, I wouldn’t bet on that happening. Even if it did, I would not expect that to last. The other point is that even if we had real zero inflation at this point, we’re still faced with prices at a new and much higher level. And wages are not keeping up. So this is a problem.
And in my view, odds are good that it’s only going to become an even bigger issue. That’s because Money Velocity has crashed, but it’s unlikely to stay this low for too much longer.
Money Velocity is a simple but very important concept. It’s the rate at which money changes hands in the economy. It indicates the level of demand for money.
A lower money velocity generates deflation, with falling prices. A higher money velocity is naturally the opposite, creating upward pressure on prices, leading to inflation.
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One year ago there were some dramatic and exciting events in the silver markets.
It was a silver squeeze, which many of you may remember well. Let’s revisit what happened and then we’ll examine what’s happened since.
In the first week of January 2021, silver peaked at around $27.50, then quickly sold off to about $24.50 on US dollar strength. For the next three weeks, it hovered around the $25 – $26 level. Then, on January 28th, silver spiked to $26.50, then rose further. Here’s what I wrote about these events in the 2021 February issue:
It was a call-to-action by the now infamous WallStreetBets (WSB) Reddit community, which had essentially told its followers to buy GameStop shares and call options, and other shares in order to squeeze out the big short positions held by hedge funds.
Then In the last couple of days of January, a WSB Reddit subpost essentially told its readers/followers/members to buy the SLV silver ETF to effect a squeeze on paper silver shorts.
Reddit’s Wall Street Bets (WSB) has a new subreddit titled: ‘The biggest short squeeze in the world $SLV Silver $25 to 1000$.’ Here’s the post:
By all accounts, followers bought SLV,
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Another week, another frenzy of forecasts on what the Fed will do.
Powell’s comments from last week’s meeting were taken as hawkish, setting gold back (it seems the market is refusing once again to acknowledge that gold gains alongside rates once a hiking cycle beings), hurting stocks, and lifting the dollar. Then four Fed governors emphasized in speeches that they do not expect to be aggressive or surprising as they tighten. Everything reversed.
I believe the Fed will avoid surprises at almost all costs. They’ve spent the last decade establishing trust with the markets that they will telegraph their intentions clearly. On that basis, I tend to believe what they say.
But they have to tighten because inflation at 7% steals half your wealth in 10 years. And loss in spending power because wages fall behind inflation can derail an economy based 70% on consumer spending pretty easily.
I have been characterizing the Fed’s task as threading the needle: they must tighten enough to tame inflation without suffocating growth or upending the markets.
That’s not an easy task. In fact, when I considered that task last fall I thought it almost impossible, which led me to think that a
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