Gold-Eagle

The United States has crossed a fiscal milestone that would have seemed unimaginable to earlier generations: $40 trillion in gross federal debt. One response is to look backward. In a recent guest essay in The New York Times, Paul Vigna invoked the Sumerian term amargi (also rendered amagi) and the associated practice of rulers canceling private debts. He urged America to consider the same remedy for its modern debt.

In a recent conversation with Jesse Day of Commodity Culture, Matthew Piepenburg, Partner at VON GREYERZ, explains why the many themes which the VON GREYERZ enterprise has been tracking (and warning) for years are now moving from the incremental to exponential phase.

After gold and silver prices hit new all-time record highs in January it's been a volatile year ever since. Although we've seen a recovery over the past month, and now the biggest warning alarm yet is ringing in the global debt and precious metals markets. And in this week's show, we talk about how, at least right now, the market is starting to implode in the government's face. VIDEO Arcadia Economics ********

In Friday's Gold Trading Alert, I wrote: "The breakdown below the rising support line and then below $4,500 will likely be the final two nails in gold's temporary coffin." Friday's close hammered in the first, and yesterday I noted that the day's close would decide the second. It decided. Gold closed Monday at $4,481.50, below $4,500, and it trades near $4,426 as I write this, down again.

How long will the gold bull market last? Forever. That’s the view of Ned Davis Research Chief Alternative Strategist John LaForge. Granted, he didn’t say “forever,” but that’s the implication of his comments on Kitco News. “I think prices peak when we learn how to deal with the debt situation.

Though Herbert Hoover was a pioneer among presidents in getting the government to “do something” about a depression, he was no maverick. He had the support of distinguished court economists who promoted the idea that stable prices were the key to lasting prosperity. Common sense tells us that if we walk into a store and find prices consistently lower than they had been, we are better off, other things equal, because our money buys more.

Another “traditional” US jobs report week is underway, with gold soft on “Tombstone Tuesday”, and moving towards a key buy zone for all precious metal enthusiasts. After surging almost 20% in a month and breaking out of the corrective channel marked by dotted lines on this daily chart, gold is staging a classic pullback towards the breakout point. The $4300-$4200 zone is targeted. As gold corrects, oil surges… and the target is the highs in the $110-$119 area.

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Matthew Piepenburg, Partner at VON GREYERZ, joins his friends from “down under,” Brian and Darryl Panes of As Good as Australia, to discuss core gold themes, including why now is a highly credible buy-moment for precious metals. Piepenburg begins by making the critical distinction between gold investing (for the long term) and gold trading (for the short term).

It is generally held that bank credit is a major driver of economic growth. Hence, it would appear that, through an increase in the supply of credit, banks could strengthen the process of wealth generation. Without previous private savings, however, banks cannot simply extend credit. On the other hand, banks can expand credit out of “thin air” via inflation. This type of credit damages the wealth-generating process. Take a farmer, Joe, who produced 2kg of potatoes.