GoldSeek Radio Nugget: Gerald Celente expects Silver to ascend above $50 an ounce
- Global Trends Forecaster, Mr.
SilverSeek
Fri, 06/25/2021 – 09:28
Month: June 2021
Gold, silver post price advances ahead of key U.S. inflation data Kitco NEWS
Bloomberg/John Authers interviews Jeremy Grantham/6-22-2021
“This current event is particularly dangerous because bonds, stocks and real estate are all inflated together. Even commodities have surged. That perfecta and a half has never happened before, anywhere. The closest was Japan in 1989 with two hyper-inflated asset categories: record land and real estate, worse than the South Sea bubble, together with record P/E’s in stocks recorded at the time as 65x. The consequences for the economy were dire, and neither land nor stocks have yet returned to their 1989 peaks!”
USAGOLD note: An important interview conducted by an interviewer who has an acute sense of the financial markets, and an interviewee with a reputation for accurately calling Wall Street crashes. Grantham concludes that “asset allocation is particularly difficult today, with all major asset classes overpriced.” lAuthers suggests that cash “isn’t just there as a lead weight in a portfolio. It obviously gives you no kind of decent return at present, but it does have value in its optionality.” Returning once more to the possibility of rapid currency debasment (Please see below.), it might be useful to hold both kinds of cash – green and gold.
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Alice’s adventures in equilibrium
Hussman Funds/John Hussman/June 2021
“Coherent thinking is interested in how things are related; where they come from, where they go, and the mechanisms by which they affect each other. Incoherent thinking is a world of magic, loose theory, and superstition; where things pop into existence, vanish without a trace, and are somehow related without any need to carefully describe cause and effect. Much of what passes for economic and financial analysis is incoherent. I’ve chosen that word carefully. The problem is not that the beliefs of investors are ‘less true’ than they think. It’s that many of the most commonly repeated phrases don’t mean anything close to what investors think they mean.”
USAGOLD note: More deep analysis from John Hussman, who believes zero interest rates have introduced self-reinforcing bubbles. “Overvaluation doesn’t create wealth,” he concludes. “It simply enables a wealth transfer from others, and only then if a holder actually sells at the elevated price.” Even that transfer of wealth, we will add, would be threatened by an on-going debasement of the currency. That is why diversification with gold and silver is so important.
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Gold-Mining Companies Fail To Persuade Court That Washington Attorney General’s Clean Water Act Jurisdiction Is Limited JD Supra
- Gold set for weekly gain as inflation data calms Fed taper fears CNBC
- Gold futures end higher to tally first weekly climb in 4 weeks MarketWatch
- PRECIOUS-Gold en route to weekly gain, digs in for U.S. inflation data Reuters
- Gold price still has a path to $2000, silver to $31 – CIBC Kitco NEWS
- PRECIOUS-Gold gains on dollar dip, while focus turns to inflation Nasdaq
- View Full Coverage on Google News
Gold price is looking for a breakout next week, watch the $1800 level – Kitco’s gold price survey Kitco NEWS
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
As unsustainable government spending and debt raised alarms in Washington this week, precious metals markets showed some signs of firming up.
After last week’s price drubbing, gold and silver were at risk of breaching major support levels. And while they aren’t out of danger just yet, the metals markets appear to be attracting buyers at these levels.
Gold prices currently come in at $1,788 an ounce, up 1.0% since last Friday’s close. Silver, meanwhile, shows a weekly gain of 1.1% to trade at $26.17 an ounce.
The platinum group metals are significantly outperforming, with platinum prices up 5.4% for the week to trade at $1,114. And palladium is now putting in a weekly advance of 5.9% to command $2,653 per ounce as of this Friday morning recording.
Palladium has seen a surge in demand in recent years from the automotive industry, which uses the metal in pollution-scrubbing catalytic converters. Platinum could soon see a surge in demand from hydrogen fuel cell technology which serves as a viable alternative to gasoline and battery-powered vehicles.
In the rush to roll out electric vehicles, problems have emerged such as a lack of grid capacity for battery charging. California officials recently asked EV owners to refrain from charging during peak hours as the state copes with a heat wave.
A full-size car’s batteries can take hours to charge depending on the source and will deliver degraded performance during extreme temperatures. Batteries also generate a large amount of toxic waste during their production and eventual disposal.
Hydrogen, by contrast, is a zero-emission fuel that can be pumped into vehicles as quickly as a fill up at a gasoline station. Hydrogen-powered cars have longer ranges and lighter weight loads than battery-heavy cars.
The main problem, of course, is the current lack of hydrogen fuel stations.
This necessary infrastructure is sorely lacking in most places. The automotive industry along with politicians and “green” activists have bet everything on promoting a transition to electric vehicles – even though they’re powered by an outmoded, overburdened, and in many ways inferior technology.
The World Platinum Investment Council forecasts increasing adoption of fuel cells in the years ahead. It notes that Korean automaker Hyundai is developing hydrogen systems for cars and trucks as well as investing in refueling stations. Importantly, these technologies currently use platinum as a catalyst to release hydrogen electrons.
According to the World Platinum Investment Council, platinum demand will rise by 5% in 2021, generating an annual supply deficit. The tiny platinum mining industry will be unable to raise production to pre-pandemic levels this year and will struggle to keep pace with any future demand growth.
Although the outlook for demand is highly dependent on dynamics within the automotive industry, the potential exists for platinum to outperform other metals. Bulls are eyeing a return to a historical premium over gold and possibly a run past the current palladium price.
Platinum and other metals that are inherently scarce all stand to move higher over time in dollar terms as the supply of U.S. currency inflates. Inflation is the last resort and only way out for a government with an otherwise unpayable debt load.
In testimony before Congress this week, Federal Reserve Chairman Jerome Powell admitted the U.S. is on an unsustainable fiscal path in response to questioning by Iowa Republican Mariannette Miller-Meeks.
Rep Miller-Meeks: The financial report of the United States government, published annually by the Treasury Department says unambiguously, the current fiscal path is unsustainable. On our current path, debt is projected to exceed six times GDP by the end of the century and annual government spending will exceed 50% of GDP. Do you agree with the conclusions of this report? And if so, isn’t this an additional, and one of our greatest avoidable crises that our country currently faces?
Jerome Powell: I think unsustainable just means that the debt is growing faster than the economy. That’s been the case for a long time. I have no question that the U.S. government will be able to pay its bills for the foreseeable future. There’s no case in which that would not be the case. We have the strongest and largest and most flexible economy in the world. It’s also true though, that we’re on an unsustainable path.
Left unsaid by Powell is why the government can be counted on to pay all its bills, to sustain itself financially, while simultaneously running up unsustainable deficits.
The answer is that the Fed stands ready to buy the Treasury Department’s debt in unlimited quantities. The central bank has the power to create new currency in perpetuity – effectively giving it the ability to sustain the unsustainable.
But there is a cost to averting a debt default in this manner. It will be paid by everyone who earns and holds U.S. dollars as inflation erodes their purchasing power.
Investors who want to build a portfolio that can sustain them through the inflationary times ahead need to think outside the box of conventional asset allocation. Stocks, bonds, and cash savings are all at risk of losing real value when measured against rising costs of living.
The risks in financial assets are especially acute now with the stock market trading near record highs and dollar-denominated income instruments sporting historically low yields.
That makes diversifying into alternative asset classes including physical precious metals crucial for surviving an onslaught of inflation.
Diversifying within the precious metals space is important as well. Gold-only bugs will miss out on silver’s potential to outperform, which it has during past precious metals bull markets. Beyond gold and silver, platinum and palladium can show more of a positive correlation to economic growth and help balance out a hard assets portfolio.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.
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Fun on Friday: Lost or Stolen?
“Officer, I need to report my wife. She lost her gold necklaces.” That’s basically what happened in Strongsville, Ohio, recently. According to the police blotter, a man showed up at the police station to report the theft of two Cartier necklaces valued at $5,000. The problem is, there was apparently no evidence that the necklaces […]
The post Blog first appeared on SchiffGold.
Yesterday, President Joe Biden announced Republicans and Democrats have come up with a $1.2 trillion infrastructure deal. But where is Uncle Sam going to come up with the money? And what does this tell you about the likely trajectory of Federal Reserve monetary policy? Host Mike Maharrey talks about it in this episode of the […]
The post Blog first appeared on SchiffGold.