Philipsburg, Montana, 1890: evidently, these gentlemen did not suffer from a silver shortage. Photo via mininghistoryassociation.org Surging Contango There are two views of the markets for the monetary metals. One, as we have discussed many times in this Report, holds that gold and silver will eventually go up so high that those who own the metals will be rich. This is the Schrodinger’s dollar view. Buy gold because...
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The buck. The Dollar Increases in Value The dollar moved up, though most people would say gold fell about $40, and silver 32 cents. In the mainstream view, the value of the dollar is 1/N (N is the quantity). So how could the dollar go up? Certainly, the quantity keeps on increasing. Our view is different. If you borrow dollars to buy an asset, and the asset doesn’t generate enough yield to pay the interest, you have to sell or default. It should go without saying that it is an...
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Illustration via irs.com A Wake-Up Call The price of gold moved down about twenty Federal Reserve Notes, and the price of silver dropped $0.57. The big news is that the gold-silver ratio moved up about 1.5. We hate to say “we told you so,” well, OK. Actually… sometimes there’s a certain je ne said quoi about gloating. *Achem* In all seriousness, the dollar is going up. We measure it in gold, or alternatively in silver. In gold, the dollar rose 0.4mg gold to 24.84. In silver, it was up...
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