Negative Rates, Money Printing and Gold

“As well as being modified by its specific supply and demand conditions, Gold’s time preference is essentially for its moneyness, represented by its use as a medium of exchange and store of value. The moneyness aspect links it to its exchange value for all commodities, and it is this aspect of gold’s qualities that should warn us that a backwardation in gold, emanating from negative dollar interest rates, will herald a general backwardation in commodities as well.” – Alasdair Macleod, Negative Rates and Gold

The “perfect storm” is forming that will push gold to record highs in U.S. dollars. In 2008 a near-perfect storm hit the global financial system that drove the price of gold to record level in just about every currency including dollars. The only missing ingredient back then was negative interest rates. The same financial excesses that caused the previous financial crisis have reformed only now they are much larger in scale. Most of the western hemisphere has already implemented negative interest rates. Now Trump has opened that Pandora’s Box in the U.S.

Chris Marcus of Arcadia Economics invited me onto this podcast to discuss the implications of Trump’s proposal and how it will affect the precious metals sector:

7 thoughts on “Negative Rates, Money Printing and Gold

  1. Negative rates equals legal robbery.
    They forcing people to spend , invest in risky business or loose money in the bank , only gold and silver can protect people and don’t forget about platinum too.

    1. Any asset class can be manipulated, and thus largely controlled.
      As long as we continue to allow others to define “value” of certain narrow assets, we remain under their influence, under their domination & control.

      Vanguard, BlackRock and State Street, the “Big Three”, are the largest institutional shareholding firms in the world.
      They often hold the largest percentages of shares of the largest “competing” corps, inml most every single industry.

      What’s more, they also exist as among the largest shareholders/investors of each other, and/or of the other largest money-management/investment firms.

      Like one huge cartel.

      Whereas some mere 10% of investors hold close to 90% of all stocks, the same type of concentration exists within these firms.
      They are firms largely owned by the super wealthy elite, whom know how to manipulate/game the system for their benefit.

      GLD is the SPDR Gold Trust, which is a State Street fund.

      IAU is the ishares fund, which is a BlackRock fund.

      These are the two largest gold ETF’s.

      These institutional firms are not merely passive investors.
      Holding such large volumes/percentages of shares, they are market movers, able to dictate corporate policy.

      In the corporate world, they have led the call for corporate stock buybacks, decreasing outstanding shares, thereby driving stock prices to their bubble levels.

      Some of their held corporate assers, like Blackstone, have engaged in similar moves in the housing market, buying up large swaths/quantities of mortages, reducing inventory, driving home prices to historic bubble levels.

      Buy low, sell high…or, buy a lot & drive prices higher, creating bubbles, driving a buying frenzy among others (exploiting the seeming human instinct of “fear of loss”, i.e. fear of losing out), then selling, causing prices to eventually crash from those bubble levels.

      This is the schema of the contemporary “Everything Bubbles”.

      The price/value of metals can thus be manipulated in a similar fashion as everything else deemed of value.

      It’s foolish to believe metals are immune to such manipulations.

      We are seeing current levels of unprecedented asset/wealth consolidation/concentrations, unseen for hundreds of years (since perhaps 15th-17th century Europe).

      Beware the neo-feudal Lords.
      They largely own & control the asset classes, they control the media & pop-culture narratives, thus beliefs & attitudes.

    2. I agree with Mark, I’ve already invested in gold and silver. Mostly gold though for the past few years. I know it can be a little pricey but it’s worth it. I use Bullion Exchanges to buy precious metals and it’s an online dealer that ships to you. If anyone is looking for investment for precious metals, then I recommend checking out Bullion Exchanges. https://bullionexchanges.com/

  2. I just wonder how young people can get in future loan without savings ?,
    They going to be forced to save and keep money in the bank .
    People going to use banks more often to get loans because they are discouraged to save.
    You slave again.
    It’s something fishy and not right about this Market ??!!

  3. The criminals have been at it by sinking gold and silver for 7 straight days.

    Fresh off the news that the Hong Kong Stock Exchange (i.e., now Chinese interests) made a new $37 billion fiat US dollar valued bid for the London Stock Exchange.

    This coming October 14, 2019, the CME Group COMEX gold derivative exchange is going to be introducing a respective fiat US dollar and fiat yuan renminbi-denominated Shanghai Gold Futures contracts aimed at its most western gold derivative trading clients.

    Both of these two new Chinese gold futures contracts will get based on the SGE Shanghai Gold Benchmark p.m. price.
    A few thought-provoking questions come to mind.

    If we are in a real trade war with China, why would we allow them further access to our most critical commodity and precious metal price discovery markets?

    Why is the CME Group still actively incentivizing foreign central banks and foreign financial institutions to openly trade in our critical price discovery markets?

    https://go.cmegroup.com/webmail/502091/433375535/77dadb9292ea3b51ca1619fec41dcb6e81864430f534a522fb11b2a6056deddd

    Is the BIS getting very close to announcing a Global Trade SDR between countries with Gold as an important component repriced upward with Yuan, Euro USDollar, Yen as other components. BIS made Gold a Tier One asset 5 months ago….is there a connection between all these events?

  4. Government Interest rate for 10 year bond for example represent :

    1 – Inflation.
    2 – Time value (future is more risky than the present).
    3 – Counterpart risk.

    Negative interest means :

    1 – No inflation.
    2 – The future is less risky than the present.
    3 – There is no counterpart risk.

    Which is not true.
    So in this insane environment only sound assets mean something which is Gold and Silver.

  5. The DOJ U.S. criminal investigation into J.P. Morgan’s metals trading practices continues with more developments. Getting closer to the De(i)mon and the Loathe Mistress…..can they feel the heat as their employees do the perp walk and sing like canaries. Will the DOJ go for the jugular….I have e-mailed them and implored them to enforce the laws to the maximum in this criminal investigation and render full complete justice (not some worthless settlement in the end). I am asking everyone to e-mail the DOJ to send them the same message as they are supposed to work for us and represent us as U.S. citizens and taxpayers.

    https://www.justice.gov/criminal/contact-criminal-division

    Correspondences by e-mail may be sent to: Criminal.Division@usdoj.gov

    https://www.reuters.com/article/us-jpmorgan-spoofing-exclusive/exclusive-two-jpmorgan-metals-executives-put-on-leave-amid-us-probe-source-idUSKCN1VX2IG

    https://sdbullion.com/blog/jp-morgan-precious-metals-trading-head-placed-on-leave/

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