The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label investment. Show all posts
Showing posts with label investment. Show all posts

Sunday, June 4, 2017

Despite gold and silver prices being below their 2016 highs, each has done better than the S&P; 500 in 2017

With all eyes being on both cryptocurrencies and equity markets here at the halfway point of 2017, gold and silver have themselves proven to also be a positive investment despite the fact that they have not even reached their 2016 highs.  And while the three primary equity markets have all reached historic all-time highs at some point this year, it is interesting to note that both gold and silver have actually done better than the returns one would have received from investing in the S&P 500.

Since the U.S. presidential election, the stock market has remained strong, but what has surprised some financial analysts has been that the precious metals complex has been ever stronger, says Blanchard President and CEO David Beahm. 
“What is notable through the end of May is that gold and silver continue to outpace the strength in the stock market, leaving both precious metals very well-positioned for strong new rally waves if stocks turn lower in a seasonal correction phase or a bear cycle move,” Beahm says. “Typically, gold and silver perform well during periods of stock market weakness, but the fact that metals are climbing alongside the strength in stocks is notable from a historical perspective. It reveals that there is a strong safe-haven bid for metals and a desire to diversify away from stocks in the current environment.” 
The Blanchard Index 
Here’s how the market performance stacks up through late May: 
  • Gold +9.45%
  • Silver +8.13%
  • S&P 500 +7.91% - Seeking Alpha
Yet perhaps the most important technical indicator to look at going forward between the two markets is the fact that the P/E ratios for the S&P 500 are at nearly double their historic averages while gold and silver are more than 40 and 65% respectively below their all-time highs.  And this means that the far better investment right now is in the precious metals, especially as sovereign debt levels and currencies begin to show immense signs of weakness, and underlying supplies for the metals are reaching critical levels.

Sunday, May 28, 2017

Mainstream business analysts finally get on board with Bitcoin as they start to advocate ownership of cryptocurrencies in clients portfolios

It is ironic that as mainstream business shows such as CNBC, Bloomberg, and Fox Business News vilified Bitcoin and all cryptocurrencies for years, they are all of a sudden now getting on board once the digital currencies showed themselves to be the best performing assets of 2017.

Yet this acknowledgement of Bitcoin, Ether, Ripple, and many other crypto's being a viable investment appears to be only the beginning as more and more investment managers are advocating to their clients that cryptocurrencies need to be a vital part of their investment portfolios.

Boris Schlossberg of BK Asset Management has joined the cadre of investment advisors who see bitcoin as a way for investors to hedge their bets against market uncertainty. Schlossberg, according to CNBC, sees bitcoin as an addition to an investment portfolio in the wake of political uncertainty. 
Schlossberg sees parallels between bitcoin and gold, and he noted that bitcoin is being called the “new gold,” due to its ability to retain value over time. 
He noted that bitcoin is holding steady following its 92% rally this year. Speaking Wednesday on “Trading Nation,” Schlossberg said the cryptocurrency is holding at steady highs, and that when there is a big move for any type of instrument, there is usually some continuation. 
Bitcoin is clearly signaling more demand, Schlossberg observed. He favors it as a hedge play moving forward. - Crypto Coins News
Additionally, a contributor to CNBC on May 28 analyzed Bitcoin the same way he would an investment and highlighted the risk - reward potential that it and other cryptocurrencies offer.
"I wish I’d invested in Bitcoin," is a response I usually hear when I tell people how much they could have made off the cryptocurrency if they had bought it at the start. Just to be clear, if you bought US$100 worth of Bitcoin in 2010 when it was worth 0.003 cents each, you’d be sitting on more than $88 million. 
It all sounds so easy. But for regular investors in Bitcoin - those not heavily involved in the cryptocurrency world - Bitcoin has a confusing reputation. It’s known to be highly volatile with wild price swings, but at the same time some, such as Bobby Lee, the co-founder and chief executive of Bitcoin exchange BTCC, have called it a safe-haven asset. 
"When the existing money system has problems, people turn to Bitcoin, sort of like people used to go to gold in the old days," Mr Lee told CNBC in a recent interview. - The National AE
While most in the crypto world believes Bitcoin is a currency, most of Wall Street and the rest of the mainstream financial world believes it to be a security.  And with more and more brokers and institutions starting to advocate its purchase and ownership of cryptos in personal and joint portfolios, the volatility will continue to be high, and everyone who owns a cryptocurrency must respect this and trade accordingly.

Sunday, May 21, 2017

Bitcoin suddenly becoming the investment of the elite as price soars to over $2300 in some Asian exchanges

When Satoshi wrote his White Paper back in 2008 regarding the creation of a money form that would be secure and outside the control of sovereign entities, the underlying premise was that it would not only change the way commerce was conducted, but also provide the common person a means to store their wealth in an asset that was absent of monetary devaluation.

And while it took about five to six years for Bitcoin to move away from the fringe of society, where it was half seen as a novelty and half seen as the savior from the world's fiat monetary system, its sudden emergence into the mainstream has been incredibly robust and unlike anything ever seen in monetary history.

But as we enter into the second quarter of 2017, what was originally intended for the masses to be used as a medium of exchange has suddenly turned into a speculative investment that is being lapped up by the very institutions that would see it financialized instead of used as a real currency.  And the massive rise in value over just the past five months is threatening to categorize the cryptocurrency as a bubble, and scare away many individuals who might seek an alternative to the dollar, euro, or yen as a way to secure their wealth.

Image result for bitcoin bubble
Bitcoin price established its new all-time high at $2,087 earlier today after surging past its previous all-time high set at $2,050, with demand toward Bitcoin rising from institutional investors in the US, Japan and South Korea. 
At the time of writing, Bitcoin is being traded in Japan and South Korea, the second and third largest Bitcoin exchange markets in the world, at around $2,350, at an 11 percent premium relative to the global average Bitcoin price and the price listed by US-based Bitcoin exchanges. 
Analysts including Charles Hayter, the CEO of CryptoCompare, explained that the Japanese and South Korean Bitcoin exchange markets played a key role as the driving factor of Bitcoin’s recent price surge. In an interview with CNBC, Hayter stated: 
"Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share.” - Coin Telegraph
From a purely fundamental point of view, investors and owners of Bitcoin need to realize that the market is treating the cryptocurrency like a security, and at a time when nearly all other assets such as bonds, stocks, and real estate are at all time highs.  And one of the reasons that Bitcoin is skyrocketing in price and value right now is because institutional players are moving money into what they believe is one of the very few potentially undervalued assets.  But like with any security or investment that receives too much buying in a short amount of time in relation to selling, at some point it will hit terminal velocity, and the fall in price will be just as fast as the velocity in which it rose.

Monday, May 15, 2017

Bitcoin has emerged as one of greatest investments of all time over seven year period if investors got in early

There is a reason why the equity markets are known as the 'risk trade', because no one truly knows if a particular stock or company will succeed or fail before these stocks become spoken of regularly in the mainstream.  In fact one of the key indicators of a stock's success is often whether it gets picked up by mutual fund managers as part of their clients investment or retirement portfolios.

Yet outside of bonds and real estate, virtually any investment can be labeled as a risk trade, especially in this era where fundamentals and technicals no longer play a significant role in their future price.

And unfortunately for the average Joe investor, they rarely receive the proper guidance or advice about potential life-changing investments from their broker unless that professional has a personal stake in a particularly risky investment scheme.  And because of this, the majority of individuals missed out on perhaps one of the best investments of all time when the price was sitting at approximately .09 back in 2010.

And what was that investment opportunity that has seen its price rise from just .09 to just under $1800 per?  The answer of course is Bitcoin.

On May 13, StockTwits, the world’s largest financial communications platform for the investing community, revealed one of its users’ growth chart comparing various currencies, bonds and assets. In it, a StockTwits user by the name of Charlie Bilello noted that a $10,000 investment in Bitcoin made in July 2010 would have earned investors a $200 mln return. 
To be exact, a Bitcoin investor who purchased $10,000 worth of Bitcoin in 2010 would have earned $201.56 mln. - Coin Telegraph
Assuming an individual had invested $10,000 back in 2010, they would have been able to purchase approximately 114,793 Bitcoins.  And with today's current price at around $1754, that would equate to an estimated value of $201,560,000, or 20,156x roi (return on investment).

Now compare this to what is considered to be the top all-time ROI of 1300x when John Grey invested $10,500 into the fledgling Ford Motor Company in 1903 and you can see this example pales in return to what someone who invested a similar amount in Bitcoin today would have earned.

In the end it is nice to dream about the what ifs when it comes to missing out on a diamond in the rough, but the fact of the matter is very few actually saw the potential of Bitcoin during the first few years of its existence.  But for those who did, and who did not sell a few years back when it had its first big jump to just over $1100 per bitcoin, it has become a lucrative and life changing investment with an even greater potential now of succeeding into the future.

Yet at $1745 per Bitcoin today, who has the stomach or the available cash to invest in it now that it is once again near its all-time high?  Thus it remains as it was back in 2010... a risk trade with great potential for massive gains, or massive losses.

Tuesday, May 9, 2017

At $1700 per coin and climbing, is Bitcoin this year's best performing currency, or best performing investment?

It took barely 48 hours for Bitcoin to jump from $1600 per coin to over $1700, but that is exactly what took place as of this morning on May 9.  But at the same time there was an interesting caveat that also took place that begs the question of whether Bitcoin should be considered the best performing currency to date in 2017, or instead the best performing security (investment).

If Bitcoin is supposed to be a currency that runs in competition to the dollar, yen, euro, etc..., then by all monetary logic it should be moving in opposition to each individual currency that it is priced in.  However when Bitcoin jumped to over $1700 earlier today, it did so when the dollar had strengthened by over 100 bps on the dollar index, meaning that it was moving in tandem, rather than in opposition to the dollar.

Those are the actions of a security rather than than a currency.

Bitcoin Chart:


Dollar Chart:


Another interesting thing to ponder is who exactly is buying Bitcoin right now?  We know from public reports that investors/entrepreneurs like the Winklevoss Twins own between $10 - 25 million worth of Bitcoin as they bid to put the crypto-currency into a financialized ETF, and Billionaire Michael Novogratz has stated that he has put 10% of more of his wealth into both Bitcoin and Ether coin.

So perhaps the question that has to be asked is not if Bitcoin is a currency versus an investment, but what is the market itself saying Bitcoin is based on its price movement, and how it is relating to all the world's currencies it is denominated against.

Wednesday, April 5, 2017

Bitcoin finally to function as a currency as Japanese retailers rush to allow the digital money as payment

In the opinion of the staff here at The Daily Economist, a large number of Bitcoin advocates over the past few years have sold out the original mission of the crypto-currency as being primarily a form of decentralized money that individuals and entities could use as a medium of exchange for goods and services and instead have welcomed its financialization by both Wall Street type markets, and third party conduits.  By this we mean that Bitcoin has been seen and purchased more as a speculative investment versus used as a form of money.

But with the Japanese government suddenly buying into the crypto-currency last week, and setting forth a regulatory framework to allow it to function as a medium of exchange within their nation's borders, Japanese retailers on April 5 are now rushing in to get on board to accept Bitcoin in their online and brick and mortar stores.

Image result for bitcoin is money
A few days after Japan recognized bitcoin as a legal method of payment, two of the country’s biggest retailers have sealed cooperation agreements with bitcoin exchanges to begin accepting the digital currency. 
The two leading retail groups, Bic Camera and Recruit Lifestyle, have announced trials of a bitcoin payment option, according to Japanese daily Nikkei. 
Bic Camera, a consumer chain selling electronics, has partnered with the Tokyo-based bitcoin exchange bitFlyer. The retailer will test the digital currency in two outlets. 
Consumers will be able to pay up to 100,000 yen ($900) using bitcoin, getting reward points at the same rate as for cash payments. 
Recruit Lifestyle, the retail branch of human resources conglomerate Recruit Holdings, is cooperating with another Tokyo bitcoin exchange operator Coincheck to include bitcoin payment option into its AirRegi application. 
The step will enable over 260,000 outlets across the country to start accepting bitcoin. Coincheck will process payments made by consumers using the app, converting bitcoins into yen and transferring the funds to the store. 
Japan is poised to become one of the leading cryptocurrency markets. Nearly 4,500 Japanese stores are currently accepting bitcoin while over 700,000 outlets actively use other modes of digital payments. - Russia Today

Tuesday, March 28, 2017

As future of Bitcoin continues to be up in the air, investors looking towards other crypto-currencies for less risk

While the future of Bitcoin is still up in the air due to the fight between two conflicting paths on how it should be managed and processed, speculators who have been at the core of recent price moves are now seeking alternative crypto-currencies that may provide less risk.

At the current time Bitcoin is not likely to implode if either of the two camps (Segwit and Bitcoin Unlimited) are successful in overtaking the other in their goals to improve upon the original and outdated blockchain setup, but the outcome will effect confidence in what is still a fringe and slowly maturing alternative form of money.  And as such many of the individuals and institutions who currently are in Bitcoin are appearing not to be afraid to take their profits and invest in other burgeoning crypto-currencies that at this time are less expensive.

Image result for crypto currencies
It's been a volatile period for bitcoin investors, as holders of the crypto currency prepare for a potential 'fork' in the blockchain. 
From Friday morning until Monday afternoon, bitcoin was trading under the $1,000 level, and even fell beneath $900 on Saturday. This is significant as, barring the weekend of March 18 and 19, bitcoin has traded above $1,000 since early February and hit a fresh all-time high of around $1,325 on March 10. 
Bitcoin faces a scaling issue, where the number of bitcoin transactions that can happen on the blockchain at any one time is limited. This is creating a backlog of transactions that are needed to be processed and slowing down the system. 
As a result, investors are hedging their bets or selling out of bitcoin, waiting to see whether or not the fork will happen, and if so, which blockchain will be favored by the market. 
Data from Bitfinex indicates around 49 million more coins have been sold than bought, or roughly 5 percent of total coins traded, in the last 30 days. Through March, the number of long bitcoin positions held by investors has decreased from 26,858 to above 23,142, while the number of short positions has increased from 9,820 to 14,731. 
Meanwhile, the market cap of blockchain assets other than bitcoin, such as ether, dash and monero, has more than doubled since March 10 from $3.5 billion to more than $7 billion, according to Chris Burniske, blockchain products lead analyst at ARK Invest. 
"At the same time, bitcoin's market cap has gone from $19 billion to $16 billion. Hence, bitcoin's market cap has lost $3 billion in value while the combined market cap of all other blockchain assets has added more than $3 billion," he told CNBC via email. 
"Given these market indicators, it would appear investors are diversifying their blockchain asset holdings, positioning themselves for a generally rising tide in this emerging asset class." - CNBC

Thursday, March 9, 2017

With the gold to silver ratio over 70:1, exchanging gold for silver is an inexpensive way to start accumulating your stack

Contrary to much of the mainstream rhetoric given by brokers and mutual fund managers on how to grow your investments, one of the best and most inexpensive ways to accumulate wealth is by using the divergence between two precious metals to expand your assets.

Thanks to the U.S. government changing gold and silver from money to a commodity in 1971, the historic ratio of 10:1 or 15:1 has become broken due to the financialization of precious metals.  And it is through this mechanism that individuals can use the skewed ratio to their own advantage.

On March 9 the gold to silver ratio is now above 70:1, with the price of gold being approximately $1202 and the price of silver being around $17.18.  This means of course that it doesn't matter if gold is undervalued in relation to the dollar or other fiat currencies, but rather that silver is extremely undervalued in relation to gold.

24 hour gold silver ratio chart

So how does using the gold to silver ratio to your advantage work?  When the ratio is above 50:1 as it is now and has been several times over the past two decades, it is time to exchange a portion (large or small... it is all dependent upon your appetite) of your gold for silver.  And likewise when the ratio then starts to fall down from a high to one that is below 50:1, the opposite is in effect where you exchange your silver stack for gold.

Example:  5 ounces of gold minus a premium cost (average) of $2.29 for each silver ounce allows for an exchange of approximately 309 ounces.

Now let's look at the historic chart for the gold to silver ratio since 1971 and see how many nexus points allow for a profitable exchange of one metal for the other.


Over the course of the past 35 years, there have been at least eight different cycles in which it would be profitable to exchange gold for silver or vice-versa when the ratio's reversed from one level to its opposite.  (These are approximate estimates based on the above chart)

1973 - 1977   - Silver for gold when ratio went from 43:1 to 23:1
1977 - 1979   - Gold for silver when ratio went from 23:1 to 18:1
1979 - 1982   - Silver for gold when ratio went from 18:1 to 56:1
1982 - 1984   - Gold for silver when ratio went from 56:1 to 37:1
1984 - 1991   - Gold for silver when ratio went from 18:1 to 98:1
1991 - 1998   - Silver for gold when ratio went from 98:1 to 42:1
1998 - 2004   - Gold for silver when ratio went from 42:1 to 79:1
2004 - 2008   - Silver for gold when ratio went from 79:1 to 50:1
2008 - 2008   - Gold for silver when ratio went from 50:1 to 80:1
2008 - 2011   - Silver for gold when ratio went from 80:1 to 38:1
2011 - 2016/17   - Gold for gold silver when ratio when from 38:1 to today's 70:1

One would need to look back at the historic prices of both gold and silver to determined exactly the premium costs for each exchange, as well as the amounts of metal one would accumulate through each cycle.  But over the course of the past 35 years that original 5 ounces of gold would very likely have grown to 20-30 ounces or more, and your silver stack would be close to 2000 at the time of your most recent exchange here in 2017.

Saturday, February 25, 2017

As Bitcoin and gold converge at $1250, which asset is the best to buy with your money?

On Friday Feb. 24 we saw the price of gold end the week over $1250, and bitcoin near its own all-time high of nearly $1230 begging the question of which asset of the two is the best to buy if you have the money.

Followers of either gold or bitcoin have strong arguments both for and against each asset, while there are also a number of investors who are in favor of owning both as a means of wealth protection.  However, if an individual only had $1250 to spend on one or the other, what parameters would separate the two to make one stand out more than the other.


Bitcoin has the potential for much bigger growth, and in this it acts as both a form of currency and type of investment.  But Bitcoin relies upon many factors such as widespread public acceptance to function in commerce, and the hope that governments do not criminalize the crypto-currency as being a threat to their monetary systems.

Additionally however, Bitcoin is completely portable and transferable, and can be taken across borders without anyone having knowledge of its existence.

But perhaps it's biggest failing is that it is not tangible in the physical sense, and has as much emotional value to an individual as their plastic debit card, or even as poker chips do while gambling in a casino.

Live New York Gold Chart [Kitco Inc.]

Gold on the other hand has a history stretching back to the beginning of mankind, and has been both money and a store of wealth of over 5000 years.  And while it is much more difficult to store in larger quantities than Bitcoin, and much more difficult to transfer across borders and customs than if someone simply carried a pen drive with them in their carry-on luggage, gold is easily the most recognizable form of money and could be used for commerce in just about every city, nation, or village on the planet.

As fiat currencies show their age and their accelerating decline in value, assets like gold and Bitcoin will both reign as strong alternatives for people to transfer their wealth into for the distant future.  And the question of which one to choose will become a real issue in the days ahead now that both have reached virtual equilibrium in both price and desirability.


Friday, February 24, 2017

World's largest gold backed ETF now certified as Sharia Law compliant

On Feb. 23, the U.S. run SPDR Gold Shares ETF was certified as Sharia Law compliant, making it the first gold based financial instrument to be open to the new Islamic statutes on gold ownership for the world's 1.6 billion Muslims.

Run by State Street Global Advisors, and reportedly backed by $30 billion in physical gold, the ETF could soon become a springboard for new investment from the Islamic community.

Image result for sharia law gold
U.S. asset management company State Street Global Advisors has announced that a huge exchange-traded fund for investment in gold has been certified as being compliant with Islamic financial law. 
The question of whether ETFs themselves comply with Islamic law has not been addressed. However, the certification by Amanie Advisors of Malaysia, a leading sharia advisory company specializing in Islamic financial institutions, is expected to stimulate investment in the gold ETF within the Muslim world.  
The fund, called SPDR Gold Shares, is one of the world's largest ETFs backed by gold bullion, having a net asset balance of more than $30 billion. Managed and marketed by State Street Global, it is listed on the New York Stock Exchange. - Asia.Nikkei

Friday, February 17, 2017

Silver could be the greatest potential investment of all time as paper sales of metal in Comex and LBMA are close to 3000 to 1

While China is currently in the process of trying to wrench price determination for gold from the Comex and LBMA, these futures markets still have absolute control over how the price of silver is determined in the spot markets.

And in a couple of recent podcast interviews, precious metal and bitcoin analyst Bix Weir announced that from his research he has discovered that the amount of derivatives being sold in relation to the amount of physical silver actually held in both the Comex and LBMA is close to 3000 to 1, with over 100 billion ounces being traded in 2016 for a registered inventory of only 30 million physical ounces.

Crush the Street: I'd like to start off with your latest publication named $10,000 ounce silver if Donald Trump drains the silver swamp.  $10,000 per ounce silver, not gold?  And silver is sitting at around $17 per ounce... that's a pretty high price and I'd love to get the details on this analysis. 
Bix Weir: It goes back to silver and the price suppression scheme that's been in place for close to 150 years... going back to the Opium Wars in the 19th century.  And then it got kicked into high gear when computers were invented in the 1960's.  I do alot of work on the computer rigging side of the world and that's what Roota (in Road to Roota) stands for (Root A) and was a term created by Alan Greenspan in the 1960's when he helped create the computerized banking system. 
What we see in the silver price today is not a silver market anywhere in the world that trades freely.  What we have in the Comex and LBMA is a market that trades electronically futures and options contracts (derivatives).  The Comex and LBMA are supposed to be a physical market, but it's not, and you can tell by the volumes.  Every year they 'supposedly' transfer over 100 billion ounces of silver, and there hasn't even been 100 billion of ounces of silver dug up in the history of the world. - Crush The Street
The key for this of course is when the manipulation ends, or is forced to end, it will suddenly cause a volatility spike unseen outside of a hyper-inflationary event as price discovery reverts back to a supply and demand model versus a rigged manipulated one.  And this has already begun with the Deutsche Bank testimony in which they, and several other bullion banks, admitted to have been rigging the price of silver for decades.

An end to the manipulation will see silver rise in a two-fold fashion.  First, the banks will need to cover their short positions that are currently active in helping to suppress the price in the derivative paper markets.  And second, once the price climbs in relation to the buying OR insolvency of these banks in defaulting on their derivative positions, the reality of how small supplies really are in the silver market will cause another massive spike due to its absolutely vital requirement to support the global technology sphere.

The gold to silver ratio is hovering around 68:1 right now, and nearly all analysts see silver as more depressed in price than its yellow metal sister gold.  And just as the discovery of oil made petroleum the most important global commodity for use in agriculture, industry, and energy, silver is well on its way to taking over this mantle as the world rushes forward in needing the metal for electronics, alternative energies, and all future technology to come in the 21st century.

Sunday, January 29, 2017

Signal or deception? Lady Rothschild tweets that gold is set to go higher

There are interesting dichotomies when it comes to investing, and often it can depend on which source one follows.  For example, entrepreneur and wealth coach Robert Kyosaki advocates that if you want to be rich, do what the rich do.  Yet on the other side of the token if you are a client of top investment bank Goldman Sachs you often receive tips and information that will make you lose money since the bank itself regularly bets against the advice they give to their customers.


So with this in mind it was rather interesting this evening when we noticed that Lady De Rothschild had tweeted out two days ago that gold is poised for a rebound and why it should go higher.
And yes, this is the same Lady De Rothschild that is part of the global banking dynasty, and close friends with Hillary Clinton.

In addition to the tweet, Lady Rothschild also cited an article by CNBC which forecasted that gold should have a pull back here at the end of January due to what is known as Quad Witching (options expiration, Fed FOMC meeting, Jobs Report, and China being off due to the week long Chinese New Year).
With the Lunar New Year holidays starting in China on Friday and markets closed next week, demand for gold will see a decline, the report said. Gold prices have drifted down a bit ahead of the Chinese festival. The precious metal is trading nearly 8 percent higher over a 12-month period but is down more than 6 percent since the U.S. elections. 
"We think gold's performance, as the typical Q1 seasonal demand fades, should provide a good gauge of investor sentiment towards gold at this point." - CNBC
One thing that is always certain regarding given advice no matter from which quarter of the market it comes from... the elite are always ahead of the game when it comes to buying investments and quite often will only drop hints on what they believe assets will do only after they already have bought their desired stake in the stock, bond, or commodity they believe (or wish) will go higher.

Tuesday, January 24, 2017

Most in the gold community are not prepared for Islam entering the market, and for those who are it will be big

Many people have heard about the idea of 'Peak Oil', especially since it has been propagated by the mainstream media for over three decades.  But how many have heard about the concept of 'Peak Gold', especially when demand for the metal is about go up several fold?

At the beginning of January a new policy and protocol began in Islamic finance that could shape the future of investing, savings, and even money for the rest of the century.  And this is because 1.6 billion people, or nearly 30% of the world's population, are now able to purchase and own gold and gold products outside of jewelry for the first time in perhaps centuries.

Sharia Law is the ultimate guideline for Islamic living, similar to how the Misvot (the Law) was for the Israelites under the Mosaic Covenant.  And Sharia Finance is the portion of this guideline that dictates money and investment for Muslims around the world.

And with the door now becoming wide open for followers of Sharia Law to enter into the gold markets, most financial industries, particularly in the West, are ill prepared for this.

Image result for sharia gold
Years of underinvestment by gold mining companies have created a looming vacuum in supply as the new Sharia Standard kicks in, says the head of one of the largest producers, Africa-focused Randgold Resources. 
"A complete lack of investment in exploration means we are headed towards a supply cliff," said Mark Bristow, the chief executive of the UK-based mining firm, in reaction to the announcement of a Sharia standard for the precious metal. Randgold is the largest gold producer listed in London with a market value of about US$7.7 billion. 
During the gold "supercycle" that began in 2005 and lasted until about 2011 the price rose more than three times from an average of US$513 per ounce to $1,664. Mining companies responded with a frenzy of investment, mergers and acquisitions. When the price run finally gave out many struggled to adapt and began cutting costs that included axing exploring for new gold. 
"Any new addition to demand will drive up price, as we saw with the Chinese led supercycle back in 2005," Mr Bristow said. If the prediction of UK-based gold trader GoldCore that another 500 to 1,000 tonnes of the precious metal will be needed is accurate, the pressure will be on producers. 
Today it takes at least five years to go from mapping a gold deposit to turning into a mine. Investors willing to risk the billions of dollars it can cost need to be found, and they must be prepared to wait years before seeing a return. Moreover, most new mines are being built or planned in remote locations. 
To feed the continuing need for cash, mining companies frequently issue shares. This dilutes the stock and causes wild fluctuations in share prices. This turns them into a speculatively traded stock rather than a long-term investment, something that Sharia investment forbids. 
Developing countries are where most of the new investment in mining capacity will go should a renewed interest in new mining ventures result from increased gold demand from Sharia investors. - The National.AE
In addition to potential boons in mining stocks, companies like Karatbars and Goldmoney have a leg up on many gold selling institutions through their ability to bypass paper markets and provide products and services directly to consumers and investors.  And this will will be key in marketing to the Islamic world since their processes do not involve the use of interest based gold instruments, or derivatives.

Tuesday, January 3, 2017

Silver price could recover faster than gold in 2017 as metal producers prepare to enter class action lawsuit against the banks

In the wake of the Deutsche Bank revelations that the bullion banks had been colluding to rig the gold and silver markets for at least the past decade, a group of metal producers, particularly those in the silver industry, are preparing to join a massive class action lawsuit against these banks for earnings and profits lost due to the manipulation of the metal's price.

Keith Neumeyer, who is the CEO of the world's largest silver producer, spoke in an interview on Jan. 3 where he stated that he is currently talking with the heads of several mining companies that may ban together at some point in the future to jump in on an ongoing class action lawsuit that is expected to incur damages well into the tens of billions of dollars. 
Now that the cat is out of the bag and Deutsche Bank has agreed to turn over documents implicating other banks in related schemes, major mining companies are preparing lawsuits of their own. Straight-shooting First Majestic Silver CEO Keith Neumeyer, who in 2015 was the first mining company head to issue a public statement on the manipulation of precious metals prices by a small concentration of players, has said that the company’s legal team is closely monitoring the situation
Citing loss of revenue, jobs and shareholder value Neumeyer said in an interview with SGT Report that his company will likely be preparing legal action against the bullion banks involved in the rigging of prices. - SHTF Plan
In addition to this, and on a separate note of interest, many precious metal analysts have been citing the greater potential for silver to rise in value much faster than gold in the future, especially as governments begin to crack down on gold ownership in the wake of collapsing currencies and monetary policies.  And with the expectation of silver being the catalyst for new technologies expected to arrive over the next five to ten years, once silver completely breaks away from its manipulation, the rebound back to a historic 15:1 or 10:1 ratio to gold will make it potentially one of the best investments of all time.

Thursday, October 20, 2016

How much gold and silver should an individual or family have to protect their wealth?

For those who invest, save, or stack gold and silver, the question always arises on what kind, and how much should individuals or families have to protect themselves from a financial disaster, or to protect their wealth.  The answer of course is arbitrary since no two people live under the same circumstances, but there are some general rules to help in diversifying yourself from the cycles of economic chaos.

If there is anything the last 100 years have taught us is that either by greed, corruption, natural cycles or simple chance, economies and currencies will have periods of extreme decline.  And sadly for most people, no matter how many times the financial system fails, few prepare themselves for that one time the turmoil will come to effect them, or even their entire community.

In just the past 20 years we have seen two economies go into hyperinflation, and several others experience currency crises and deep depressions.  And while the United States and most of Europe has not fully collapsed into any of these scenarios, history shows that at some point all empires fall, and all monetary systems fail.

But will it be in our lifetimes?

If the financial crisis of 2008 proved anything it is that systems can seize up and collapse in a matter of days.  Yet unlike the phantom specters of events such as Y2K or even the more recent Brexit vote, people often don't have months or years to prepare for change and must learn to make monetary preparation a lifestyle choice.

So the question still remains... how much gold and silver should individuals or families accumulate to be solvent in nearly any crisis or financial cycle change that could take place?  We know in Venezuela right now that on the streets an ounce of silver will buy enough food for a family to last 3-4 months, and a gold ounce coin will buy a house.  But more than this, when the inevitable global financial collapse comes what will you need to be able to both survive, and set the foundations to thrive in what new system emerges.

The first thing one must do is change their mindset.  When determining the amount of precious metals to own the solution is not determined in price or value, but in the number of ounces.  This is important because their values change daily, and are different in relation to the hundreds of different currencies operational around the world.

Second you must do a real evaluation of your wealth, incomes, debts, and needs.  And from there it becomes much easier to figure out what goals to set in accumulating a stack.

Thirdly you must recognize what each form of precious metals does for your portfolio and how to allocate it.  The best rule of thumb is to see the metals and metal stocks in this light.

1.  Gold - Wealth protection
2.  Silver - Barter and also Investment
3.  Mining Stocks - Speculation

Each of these are also in the correct order of risk, with gold being the least risky and mining stocks being the most volatile.

Here is a good example of how much of each metal you would need if there were no longer cash or income from employment, and the economy had moved into an inflationary spiral.

Chart courtesy of Jeff Clark

But as with all financial crises, there are no cut and dry parameters or limits to be fully covered.  As I noted today in Venezuela, only three ounces of silver would cover your food needs for one year.

In times past brokers who actually believed in precious metal ownership suggested having 5-10% of your wealth held in both gold and silver, while another 5% might be dedicated towards speculation (mining stocks).  But this adheres to the premise of value vs. ounces, and since your would be holding the metals physically in hand, ounces are the most important determinant.

As I am not a Certified Financial Planner, I can only give suggestions and thoughts based on my experiences and prognostication of future events.  And with this in mind for myself as a single unmarried individual, my minimum stacks would be like this.

10 ounces (or equal grams) of gold bullion
500 ounces of silver
$500 - $5000 in speculative mining stocks

In the end this article is not meant to determine exactly for you how much gold and silver you would need to protect your wealth and hedge against financial crises or uncertainties.  But it is a beginning from where you can assess your own situations and set some short, medium, and long-term goals because the time for buying any type of insurance is always before the disaster strikes, not while it is happening when that insurance will be far beyond your ability to afford it.



Tuesday, October 11, 2016

Sharia law standards for Muslim gold ownership expected to be completed by end of the year

One of the biggest and perhaps most under reported events in the gold spectrum is very close to completion as on Oct. 11, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) announced the primary draft that would allow for gold ownership by Muslims under the stricture of Sharia Law.

Worldwide there are around 1.6 billion Muslims, many of which follow Sharia Law in their cultural and financial lifestyles.  And for centuries gold ownership was limited to both jewelry and currency, as any investment in the precious metal carried the potential of earning interest above the value of the metal, especially in areas such as futures and other paper gold markets.

But now the AAOIFI has laid out new guidelines that will become the standard under Sharia Law, and are expected to become fully functional by the end of 2016.  And with this new opportunity opening up for a significant portion of the Islamic world, expectations are that both the gold price and demand could skyrocket as nearly 25% of the world's population would have access to gold ownership and investment for the first time.

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) plans to finalize several new standards by the end of the year, as the standard-setting body works through a revamp of its guidance for the $2 trillion industry.
Bahrain-based AAOIFI has published a draft sharia standard for gold-based products with a one month consultation period ending Nov. 9, the industry body said in a statement. The project was started last year by the World Gold Council, a London-based market development body. 
AAOIFI issues guidelines that are followed wholly or in part by Islamic financial institutions globally, a sector that has grown fast but remains fragmented across its core centers in the Middle East and Southeast Asia. - Reuters

Saturday, September 10, 2016

Wall Street fund manager who hated gold suddenly telling clients to buy the metal due to inflation expectations

With both the Fed and the government continuously putting out false data reports to support the political establishment, it is sometimes difficult to find out the true state of the economy and the myriad of indicators that drive the markets.  For example, last Friday the August jobs reports came in much lower than expected, and manufacturing declined to its lowest levels in six months, but an analyst from Goldman Sachs went on CNBC and stated their bank had raised the odds of a rate hike from 40% to 55%.

So quite often the best way to gauge the true condition of markets and the economy is to watch what the rich are doing, especially if they engage in a trend that is counter to what they have done previously for months or years at a time.  ie... when several hedge funds and billionaire investors went long into gold starting back in February as a counter to negative interest rates in the bond markets.

And on Sept. 9, a former Chief Investment Strategist for Merrill Lynch, and long-time hater of gold as an investment did a 180 and is now advocating his clients to purchase gold primarily out of expectations that higher inflation is right around the corner.

Rising inflation expectations have attracted an unlikely investor to gold. 
Richard Bernstein, who has spent more than 35 years on Wall Street, is buying gold for his clients' portfolios for the first time. 
"My firm and I are not gold bugs," said Bernstein, a former chief investment strategist for Merrill Lynch who started his eponymous firm in 2009, at the Morningstar ETF conference on Thursday. "Most of the people who tell you stories about gold are people trying to sell you gold funds and gold ETFs, and those stories are not based on reality at all." 
But when Bernstein quizzed conference attendees on the right time to buy real assets, like metals, he revealed the reasoning behind a gold buy for a guy who thinks it's 'wampum.' 
The answer: "You buy real assets when inflation expectations are starting to go up," he said. 
"For a long time, gold was really not a diversifier," Bernstein said. When gold prices hit new highs earlier this decade, gold had a positive correlation to stocks, meaning when stocks rose, so did gold prices. 
Gold has become slightly negatively correlated to the stock market, Bernstein said, and so gold adds extra ballast in a portfolio to hedge against volatility. "It's a change in the way we look at the world," Bernstein said. - CNBC

Monday, August 29, 2016

Markets about to enter the best month of the year for gold

Minus this year's huge climb for gold during the first six months of 2016, precious metals almost always run in cycles dependent upon which part of the year it is.  June and July have historically been bad months for gold and silver, primarily because investors 'leave in May and go away' until around Labor Day when market volume once again picks up.

This trend has once again fallen in line as gold has found heavy resistance over the past three months, and has been unable to push through the $1360 level which is the springboard to the next move higher.  But historically that is about to change as we are about to enter into the best month of the year for gold.

Gold bullion has had its biggest gains in September over the past 20 years. Seasonally gold is entering the sweet spot with the Autumn being gold’s best season and with September being gold’s best month in the last 20 years. 
Given the backdrop of one of the most uncertain macroeconomic, systemic, geopolitical and monetary outlooks both the U.S. and the world have ever seen, we are likely to see gold do well in its traditionally seasonal strong period. Possibly, the most vitriolic, hateful and divisive election in U.S. history is set to be witnessed and this will likely lead to considerable volatility in markets and should see the dollar come under pressure. The election date is Tuesday, November 8, 2016. 
The spring and summer months frequently see seasonal weakness, since gold became a traded market in 1971. Gold bullion often sees periods of weakness in the summer doldrum months of May, June and July. 
August tends to be a better month for gold but not this year with gold down nearly 2% in dollar terms, 3% in euro terms and 1.8% in sterling terms. 
Gold’s traditional period of strength is from August through to January and February with weakness and a correction frequently seen in October. Thus, August is generally a good time to buy after the seasonal spring and summer dip. - Goldcore

Friday, August 26, 2016

First hedge fund managers, and now stock brokers advising clients to buy physical gold

When several billionaires and hedge fund managers like George Soros, Stanley Drunkenmiller, and even Lord Rothschild began purchasing gold in their portfolios, and advocating it for their clients, the lid was fully removed as confirmation of the new precious metal bull market.

But it appears that the next phase is now taking shape for the mainstream's buying into the gold bull rally as stock investment broker Charles Schwab this week suggested to their clients that the time is right to buy physical gold as a key component in their investment portfolios.


A Guide to Investing in Gold 
Learn about why gold is considered to be so valuable as well as various vehicles that allow you to hold an interest in gold. 
By: Schwab Trading Services 
Investors and traders have long held a great fascination with gold. Some of this fascination is no doubt related to the mystique that surrounds the yellow metal. Some of it is also due to the intrinsic value involved in holding a piece of essentially indestructible metal. In any event, due to its unique qualities, gold has long offered investors a one-of-a-kind investment opportunity. 
In this guide we will discuss the reasons why this has been, why it remains so, and why gold will remain a unique investment opportunity far into the future. But even more importantly we will also detail a variety of investment vehicles available that can allow you to hold an interest in gold and to participate in bullish and/or bearish price movements in the world’s most renowned precious metal. 
The decisions regarding if, when, and how to allocate investment capital to gold are personal ones. The purpose of this guide is not to tell you when or even whether to make such a commitment, nor to tell you which investment vehicle to choose. The goal of this guide is simply to provide you with an understanding of: 
1. Reasons why an investment in gold may be right for you. 
2. Primary factors that can affect the price of gold. 
3. Commonly used investment vehicles for trading gold and their relative advantages and disadvantages. - Charles Schwab letter to clients

Wednesday, August 17, 2016

Rothschild dumps stocks and buys gold during 2nd quarter of 2016

George Soros, Stanley Drunkenmiller, and Carl Icahn weren't the only billionaire fund managers to have sold off their stocks and increased their gold holdings since the beginning of the year.  In fact, the grand-daddy of all financiers, Lord Rothschild, published in his semi-annual report that he had cut stocks from 55% in his fund's portfolio down to just 45%.  And in their place he upped his stake in gold to 8%.
The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale. 
To date, at least in stock market terms, the policy has been successful with markets near their highs, while volatility on the whole has remained low. Nearly all classes of investment have been boosted by the rising monetary tide. Meanwhile, growth remains anaemic, with weak demand and deflation in many parts of the developed world.
Many of the risks which I underlined in my 2015 statement remain; indeed the geo-political situation has deteriorated with the UK having voted to leave the European Union, the presidential election in the US  in November is likely to be unusually fraught, while the situation in China remains opaque and the slowing down of economic growth will surely lead to problems. Conflict in the Middle East continues and is unlikely to be resolved for many years. We have already felt the consequences of this in France, Germany and the USA in terrorist attacks. 
In times like these, preservation of capital in real terms continues to be as important an objective as any in the management of your Company’s assets. In respect of your Company’s asset allocation, on quoted equities we have reduced our exposure from 55% to 44%. Our Sterling exposure was significantly reduced over the period to 34%, and currently stands at approximately 25%. We increased gold and precious metals to 8% by the end of June. We also increased our allocation to absolute return and credit, which delivered positive returns over the period, benefiting from a number of special situations. Within this category our new association with Eisler Capital had an encouraging start. We expect this part of the portfolio to be an increasingly important contributor to overall returns. 
On currencies, we reduced our exposure to Sterling in anticipation of Brexit and the generally unsettled UK political environment. Our significant US Dollar position has now been somewhat reduced as, following the Dollar’s rise, we saw interesting opportunities in other currencies as well as gold, the latter reflecting our concerns about monetary policy and ever declining real yields - Zerohedge