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Right to the breaking news that matters…
Remarkably 3 Sources Now Buying Entire World Gold Production – From a gold price perspective, we still see higher prices. What we are looking at is strong Chinese demand, and we firmly believe that demand will continue to stay strong. Indian demand has also been strong, despite the higher taxes and duties that have been put on gold.
We also expect Indian demand to remain quite robust. Central bank buying will continue to remain firm in our view as well. When you add up just those three components, astonishingly, it’s almost equivalent to the annualized gold production of the entire world….
We are not expecting increases in supply over the next one-to-two years, but we do expect continued strong demand out of the Far-East and from central banks. We also believe that there will be continued ongoing financial uncertainty, which will bolster investment demand for gold. When you add investment demand into that equation, this is going to drive gold prices much higher. So we are looking for a 30% increase in the gold price over the next 12 months.
U.S. Bullion Banks Remain Unusually Long Gold – It is rare to see the U.S. bullion banks on the long side of gold futures. As the comment in the chart reads: Since the bull market began in 2002, prior to June, 2013, the only other time that U.S.
Banks were net long gold futures was in June/July of 2008, with gold < (less than) $1,000 during the 2008 Panic. Gold subsequently rallied in the largest, most important bull market move of all time, peaking in September 2011, at $1923.
The Energy Factor to Push Gold to New Highs – One of the most misunderstood factors that will impact the price of gold is energy. Many analysts forecast the future value of gold relative to the amount of fiat money circulating in the system as well as total government treasury and bond debt. However, the world may not have the available energy supply in the future to satisfy these massive debts.
Gold and silver are monetary metals because they function as a store of “Economic Energy”, a term coined my Mike Maloney. Basically, the precious metals are batteries that store this trade-able energy value.
In the past when a country would print too much fiat money (not backed by gold), economic upheaval would occur as the public lost faith in the currency. To restore faith back in the system, the government(s) would revalue the price of gold relative the amount of fiat currency in circulation.
Ouch! Bank of America cuts 2,100 jobs in mortgage slump – Bank of America is planning to cut 2,100 jobs and close 16 mortgage offices because higher interest rates have reduced demand for home loans, Bloomberg News is reporting.
WTO warns of trade slowdown due to protectionism – The director-general of the World Trade Organization (WTO) has told CNBC it will downgrade global trade growth estimates for both 2013 and 2014, despite hopes that the world economy is recovering.
In an exclusive interview with CNBC, Brazilian Roberto Azevedo said world trade growth estimates for this year would be revised down to 2.5 percent next week from the previous estimate of 3.3 percent. Next year’s global trade growth estimate of 5 percent would also be downgraded to 4.5 percent for 2014.
Fed will get its inflation; here’s who will pay – What’s good for central banks isn’t always good for the individuals they are supposed to serve, a lesson likely to come into view even more clearly in the days ahead.
Higher inflation that’s to come will mean still-tough times for savers and retirees, whose money has generated little return since the Fed took over the post-crisis economy.
Why the US Fed won’t taper QE: James Rickards, author of Currency Wars: The Making of the Next Global Crisis – I don’t think the Fed actually will taper in September – in fact, I don’t think they’ll do it at all this year and the reason is I’m sort of taking the Fed at their word. They said we’d like to. Tapering is the jargon, it’s reducing asset purchases, but asset purchases are the way they print money. So what they are really saying is we are going to print less money.
But they said we are going to do that sometime this year if the economy grows in accordance with our forecast, etc. And so many people in the market have focused on the first part about tapering, but ignored the conditionality, the “if” clause about the economy conforming to their forecast.
So one thing you need to know about Fed forecasting – they have the worst forecasting record of any institution I can think of, any central bank or any private forecaster. Every year the Fed gives a one-year forward forecast. In ’09 they gave a forecast for 2010, in 2010 they gave one for 2011, etc. The last four years they’ve been wrong all four times by a lot