Tag Archives: Basic Reports

The response to the virus has added a new mechanism of capital consumption to the many we have documented over the years. Businesses are shut down, yet they continue to incur expenses. There is a popular misconception out there that this is merely a paper loss. One can almost picture a neutron bomb that somehow wipes out only paper, leaving all the physical assets and plant unscathed. It’s a pleasant fantasy. And it’s quite a popular one—not only amongst all the...

The price of gold has been up steadily for the last 30 days (with a few zigs and zags), now re-attaining the high it achieved prior to the big drop in March. Gold ended the week at $1,662. Alas, it’s not quite the same story in silver, whose price drop was bigger. Now its price blip is smaller. Silver ended the week at $15.19. One does not need to look to the gold-silver ratio, which is currently off the charts, to see that the world has gone mad. Silver, it has long...

So, the stock market has dropped. Every government in the world has responded to the coronavirus with drastic, if not unprecedented, violations of the rights of the people. Not to mention, extremely aggressive monetary policy. And, they are about to unleash massive fiscal stimulus as well (for example, the United States government is about to dole out over $2 trillion worth of loot). The question on everyone’s mind is what will be the consequences? The standard...

“The Medievals were smarter than most people think,” says Dr. Michael Mus. “I mean, sure, they tortured people for believing that the sun was the center of our solar system, and they burned witches at the stake. But they knew a thing or two about gold.” Picture of Dr. Michael Mus Dr. Mus is working to perfect a method of turning lead and other base metals into gold. He says he is so close, that he will only need one more grant from the King government. Then he says,...

The price of gold dropped $31, and that of silver fell even more by proportion, $2.14. The gold-silver ratio hit a hit of over 126 before closing the week around 119. This exceeds the high in the ratio last hit in the George H.W. Bush recession. Last week, we were warming up to silver, if not recommending it. We said: “While we would not recommend betting on silver with leverage at this moment, we certainly would not be short silver right now. If you don’t own any,...

We got hate mail after publishing Silver Backwardation Returns. It seems that someone thought backwardation means silver is a backward idea, or a bad bet. “You are a *&%#! idiot,” cursed he. “Silver is the most underpriced asset on the planet,” he offered as his sole supporting evidence. He doesn’t know that backwardation means scarcity, not that a commodity’s price is too high. Since we wrote that on March 2 (our Reports are always based on the prior Friday’s...

Most people assume that the central bank prints money when it buys bonds. They further assume that this increase in the quantity of money causes an increase in the general price level. And, this leads them to assume that the value of the money is 1 / P (P is the general price level). Therefore, when the central bank prints money to buy bonds, it is diluting the value of the money held by everyone—in proportion to the amount printed divided by the total amount in...

The big news this week was the drop in the prices of the metals (though we believe that it is the dollar which is going up), $57 and $1.81 respectively. Of course, when the price drops the injured goldbugs come out. We have written the authoritative debunking of the gold and silver price suppression conspiracy here. We provide both the scientific theory and the data. So we won’t say anything more about it today. On 17 Feb, we wrote about the widening bid-ask spread...

The price of gold rose $14 and the price of silver fell $0.07. The gold-silver ratio rose further with this price action. Welcome to our new Gold and Silver Market Report, or “Market Report” for short. We are separating this from the economics essay, which was attached for many years. As they used to say in many toy commercials of yore, “batteries sold separately”—or in this case essays. The new Market Report is going to depart from the familiar old format of four...

We apologize for not posting articles during January. We have been busy, and going forward will publish a separate Market Report every Monday morning plus macroeconomics essays later in the week, as time permits. This is our annual analysis of the gold and silver markets. We look at the market players, dynamics, fallacies, drivers, and finally give our predictions for the prices of the metals over the coming year. Introduction Predicting the likely path of the...