The Antidote Something needs to be said. We are against the existence of irredeemable paper currency, central banking and central planning, cronyism, socialized losses and privatized gains, counterfeit credit, wealth transfers and bailouts, and welfare both corporate and personal. When we write to debunk the conspiracy theories that say manipulation is keeping gold from hitting ,000 (one speaker here at Freedom Fest claimed gold will go to ,000), we are not trying to defend the Fed. When we discuss the flaws in predicting that kind of price, and the error in expecting to profit from it, we are not expressing a pro irredeemable dollar view. We are saying there are good arguments against the regime of
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Bron Suchecki considers the following as important: dollar price, Featured, Gold, Gold and its price, gold basis, Gold co-basis, gold price, newsletter, Precious Metals, silver, silver basis, Silver co-basis, silver price
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The AntidoteSomething needs to be said. We are against the existence of irredeemable paper currency, central banking and central planning, cronyism, socialized losses and privatized gains, counterfeit credit, wealth transfers and bailouts, and welfare both corporate and personal. When we write to debunk the conspiracy theories that say manipulation is keeping gold from hitting $5,000 (one speaker here at Freedom Fest claimed gold will go to $65,000), we are not trying to defend the Fed. When we discuss the flaws in predicting that kind of price, and the error in expecting to profit from it, we are not expressing a pro irredeemable dollar view. We are saying there are good arguments against the regime of irredeemable paper currency — but this is not one of them. Irredeemable currency has two fatal flaws. One is the interest rate is unhinged. It can skyrocket as it did from the end of WWII through 1980, or collapse as it has been doing since then. Two is there is no extinguisher of debt. Debt grows — must necessarily grow — exponentially. As it has been doing for many decades. The antidote to this poisonous system is the gold standard. However, it must be said that no gold price will cause the metal to circulate in the economy. It did not circulate when it was “cheap” 20 years ago. It did not circulate when it was “expensive” 6 years ago. It does not circulate now. It will not circulate even if it hits any of the gold bug price targets (if anything, a rapid price rise will be a powerful force keeping it out of circulation, as most people would have large taxable capital gains). The one thing that can make gold circulate is interest. |
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Fundamental DevelopmentsFor two weeks, we have been talking about a potential capitulation. The gold price has risen about $40 since then, and that of silver 85 cents. Will the bounce continue? Have the fundamentals firmed up? We will show graphs of the true measure of the fundamentals. But first charts of their prices and the gold-silver ratio. |
Gold and Silver Prices(see more posts on gold price, silver price, ) |
Gold:Silver RatioNext, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio moved down this week.
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Gold:Silver Ratio(see more posts on gold silver ratio, ) |
Gold Basis and Co-basis and the Dollar PriceHere is the gold graph. |
Gold Basis and Co-basis and the Dollar Price(see more posts on dollar price, gold basis, Gold co-basis, ) |
Gold Fundamental PriceWe have switched to the October contract, as the August is nearing expiry and under selling pressure. The dollar fell this week (the mirror image of the rising price of gold). As the dollar fell, the co-basis fell — gold became less scarce. Our calculated gold fundamental price fell a few bucks. |
Gold Fundamental Price(see more posts on gold price, ) |
Silver Basis and Co-basis and the Dollar PriceNow let’s look at silver. As the dollar has dropped, the co-basis has come down (though silver remains in backwardation). Our calculated silver fundamental price fell 25 cents to $17.59. |
Silver Basis and Co-basis and the Dollar Price(see more posts on dollar price, silver basis, Silver co-basis, ) |
Bron Suchecki is a colleague of Keith Weiner, who normally writes the weekly precious metals supply-demand update. Bron is Vice President of Operations at Monetary Metals.
Tags: dollar price,Featured,Gold,gold basis,Gold co-basis,gold price,newsletter,Precious Metals,silver,silver basis,Silver co-basis,silver price