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Millionaire Now! by Larry NusbaumThis blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth". |
GOLD & SILVER: WHAT NOW?
Posted on 10/06/2006 22:57 PM | Link | Post Comment
1. SILENT MONETARY EXPLOSION
Central banks worldwide have grown the money supply in reckless fashion in the last year. The pace ranges from a seemingly modest 8.5% in European Union, a modest 7.5% in Australia, and roughly 9% in the United States. Check this! Money supply growth is up to 18.4% in China, 19.1% in India, and a whopping 23.2% in South Africa. While not “Weimar-like” numbers, for the modern era, these are staggering numbers. The next phase will be marred by the futility of more rapid money supply growth to kickstart economies, in conjunction with flat economic growth outside Asia. The more rapid money growth will render US energy costs as painfully high again, since the USDollar’s crippled status will be recognized, acknowledged, debated, and confirmed. Without fanfare, Russia has increased its money supply by almost 45%, not so much inflationary as capitalization of energy deposits.
2. Banks may be behind plunge in gold price.
Central banks may have dumped far more gold on the markets over the last three weeks than officially reported, accounting for the sudden plunge in prices that has stunned investors.
Barclays Capital said Europe's banks had sold an extra 100 tonnes from reserves in a rush to meet a quota deadline on Sept 26, but had done so by selling through forward contracts that disguised the effect.
3. The gold market ignored the news today that North Korea plans to conduct its first nuclear test, and accompanied crude's drop of nearly 4%. James Turk, founder and chairman of GoldMoney.com, and Jon Nadler, analyst at Kitco.com, offered their collective four cents to RI regarding yesterday's gold sell off.
4. In a speech at the Economics Club in Washington, Federal Reserve (Fed) Chairman Ben Bernanke warned America to save more and spend less to preserve our standard of living for the long-term. The core of his message that we must improve fiscal discipline and the quality of our education is not new; his advice will also be applicable as long as we have politicians and schools. The speech is more striking for what was not mentioned - namely the Fed's role in this process.
5. Now that prices have violated the September support we can lower the important upside resistance level from $626 to $588. A close above there would be viewed as a catalyst for a renewed bull market move. In the interim, resistance should be encountered on 50% to 60% retracement rallies of the break from $607.
Central banks worldwide have grown the money supply in reckless fashion in the last year. The pace ranges from a seemingly modest 8.5% in European Union, a modest 7.5% in Australia, and roughly 9% in the United States. Check this! Money supply growth is up to 18.4% in China, 19.1% in India, and a whopping 23.2% in South Africa. While not “Weimar-like” numbers, for the modern era, these are staggering numbers. The next phase will be marred by the futility of more rapid money supply growth to kickstart economies, in conjunction with flat economic growth outside Asia. The more rapid money growth will render US energy costs as painfully high again, since the USDollar’s crippled status will be recognized, acknowledged, debated, and confirmed. Without fanfare, Russia has increased its money supply by almost 45%, not so much inflationary as capitalization of energy deposits.
2. Banks may be behind plunge in gold price.
Central banks may have dumped far more gold on the markets over the last three weeks than officially reported, accounting for the sudden plunge in prices that has stunned investors.
Barclays Capital said Europe's banks had sold an extra 100 tonnes from reserves in a rush to meet a quota deadline on Sept 26, but had done so by selling through forward contracts that disguised the effect.
3. The gold market ignored the news today that North Korea plans to conduct its first nuclear test, and accompanied crude's drop of nearly 4%. James Turk, founder and chairman of GoldMoney.com, and Jon Nadler, analyst at Kitco.com, offered their collective four cents to RI regarding yesterday's gold sell off.
4. In a speech at the Economics Club in Washington, Federal Reserve (Fed) Chairman Ben Bernanke warned America to save more and spend less to preserve our standard of living for the long-term. The core of his message that we must improve fiscal discipline and the quality of our education is not new; his advice will also be applicable as long as we have politicians and schools. The speech is more striking for what was not mentioned - namely the Fed's role in this process.
5. Now that prices have violated the September support we can lower the important upside resistance level from $626 to $588. A close above there would be viewed as a catalyst for a renewed bull market move. In the interim, resistance should be encountered on 50% to 60% retracement rallies of the break from $607.
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