Author: Gold News Club

Seeking Alpha/Talley Leger – Invesco/9-6-2020

“In a physical sense, gold is a tangible and quantifiable substance, given its limited supply on planet Earth. Gold is so rare, in fact, that estimates suggest the entire global stock of gold would fit into two to three Olympic-sized swimming pools.¹ Just like any other asset, however, its value can be influenced by forces other than mining and production, including human emotions.

Consumption represents about 70% of US gross domestic product (GDP) and roughly 60% of Canadian GDP.² Therefore, surveying consumers’ moods about the economy and their plans to make purchases is time well spent, pun intended. The University of Michigan Index of Consumer Sentiment measures how American households feel about their finances and the nation’s output.

If consumer sentiment is a vote on the health of the economy, it stands to reason that bad feelings and weak economic activity should coincide with firm gold prices (i.e., an inverse relationship). Given the history, psychology, and nature of the human experience, bullion has remained a safe haven in challenging economic times.

Understandably, fiscal policy gridlock in Washington has led to heightened uncertainty and a growing need for precautionary funds to offset lapsed relief programs (i.e., more saving and less spending). According to the latest Surveys of Consumers, challenging economic times are expected to persist not only in the year ahead, but most consumers don’t see a return to uninterrupted growth over the next five years.”

USAGOLD note:  More of Invesco’s rationale for gold ownership at the link – a solid overview for newcomers to the market.

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Bloomberg/Niall Ferguson/9-6-2020

‘Yet no example known to Franklin’s generation could match the Weimar Republic as a warning from history. That is why, within a few years of its collapse in 1933, Americans had adopted Weimar as their very own nightmare scenario.”

USAGOLD note:  The upshot of Ferguson’s latest is that America is not headed the way of the 1920s German Weimar Republic. He concentrates, however, on the cultural and political aspects of the comparison and only makes a passing reference to the monetary – a matter of great interest to financial markets. That said, Ferguson’s comparisons are a very interesting and thought-provoking read. Perhaps he will tackle the monetary aspect in a future article. If he does, we would like to get a read on what he thinks might have sparked the transition from hyper monetary policy to hyper price inflation and how Federal Reserve policies today differ from those of the Reichsbank then.

The post Weimar America? The Trump show is no cabaret. first appeared on Today’s top gold news and opinion.