Wall Street Journal Editorial calls for a Return to a Gold Standard

posted by Trader Dan at Trader Dan's Market Views - 8 hours ago

The Wall Street Journal is in exceptionally fine form in Tuesday's edition. The headline from the commentary says it all: Monetary Reform: The Key to Spending Restraint This is no small development. Alth...

 

 

 

Guest Post: Gold As a Hedge: A Back-of-the-Envelope Calculation

How much gold would an individual investor need as a hedge against the total depreciation of fiat currencies? Here is a back-of-the-envelope calculation...There are about 5.3 billion ounces of gold "above ground," roughly 160,000 tons. At the current price of $1,500 an ounce, all the available gold is worth about $8 trillion. About half is in jewelry, 10% in industrial uses and 40% as central bank reserves and investment. If gold took the place of fiat currencies as "money," the available gold would have rise to about $140 trillion in value. In today's dollars, that's about 18 times its current price. So $1,500 X 18 = $27,000 an ounce...To hedge $250,000 in paper financial wealth (recall that productive real estate, windmills, factories, etc. would still retain their productive utility value after currency depreciation), you would need 10 ounces of gold, or $15,000 worth at today's prices.

 

Will Silver Reach 100 USD?

posted by Admin at Jim Rogers Blog - 3 hours ago

If it does there is a bubble and we will have to sell. That would be a parabolic move and all parabolic moves end badly. I hope it doesn’t happen because I own silver and want to buy more. I hope they cont...

Silver Undergoes 10% Correction As Dollar Poundage Resumes; Dollar-Backed Swiss Franc Now Flight To Safety

Submitted by Tyler Durden on 04/26/2011 04:25 -0400

And so the proverbial correction in silver may have well been completed in the span of 24 hours. As the attached chart shows from its Sunday night peaks to its Monday night bottom silver has dropped over 10%, what some call a mini bear market (which takes it to those depressionary lows seen on Thursday of last week). Is the climb now set tp resume, although not so much due to anything else (and there is plenty else) but because the USD pounding is back in full brokeback style. The EURUSD is about to break above the Sunday night heights in the mid 1.46s and while weak hands are vacating gold and silver, everyone is scrambling to load up in CHF. We wonder how long until those same people realize that Hildebrand is just as mortal as any other central banker with a balance sheet behind him, and as recently as 12 months ago underwent a failed campaign to halt the surge of the CHF in the process contaminating his assets with some seriously ugly currency assets (if one may call $220 billion of dollars on the left side of your balance sheet assets and thus implicitly "supporting" the SNB liability - the Swiss Franc) whose eventual unwind will not be too kind on the Swiss currency. 

Gold And Silver Correction Possible But Store Of Value Demand - Especially From Asia To Support

Submitted by Tyler Durden on 04/26/2011 08:42 -0400

Silver and gold are lower today after the record nominal highs seen yesterday (gold marginally and silver significantly). Gold reached $1,518.30 per troy ounce, a nominal record, while silver climbed to $49.79 per ounce, its highest nominal level since the short term parabolic spike in 1980. A period of correction and consolidation has been expected for some time and it may ensue as gold and particularly silver are overbought in the short term. However, absolutely nothing has changed with regard the primary fundamentals driving the gold and silver markets. 

Pimco's Observations As The US "Reaches The Keynesian Endpoint" - The QE2 Ponzi Scheme Is "Nothing But A Profit Illusion"

Submitted by Tyler Durden on 04/26/2011 09:33 -0400

Once again, it is the world's biggest bond manager which either is really tempting fate by telling the truth in an increasingly more aggressive manner day after day, or is engaging in the most acute case of reverse psychology ever seen, coming out with the most critical opinion of the Fed's actions on the verge of the Fed's historic first press conference. And this one is truly a stunner, far more real than anything even Bill Gross has said in the past: "Just as Charles Ponzi needed donuts to turn back a suspicious crowd of investors, the Fed needs “donuts” in order to fill the bellies of the literally millions of investors worldwide who worry about the alarmingly large U.S. budget deficit and the impact that the U.S. debt dilemma could have on their Treasury holdings...Their collective buying has created what we believe to be a profit illusion with many investors mistakenly believing they can continuously reap profits from perpetually falling bond yields and rising bond prices, just as they have had opportunity to do over the past 30 years, amid the great secular bull market for Treasuries and the bond market more generally...For many reasons, this “duration tailwind” for Treasuries can’t last, particularly because the United States has reached the Keynesian Endpoint, where the last balance sheet has been tapped." Must read.

20 Questions For Ben Bernanke

Is Dow/Gold Ratio Signaling a Stock Market Crash?

A Debt Default is Not the Real Problem for the US

an interview with Bob Chapman of The International Forecaster wherein he lays out "details on where gold and silver is going and explains the shorts by the big banks, market crashes and dollar defaults, and warns to buy plenty of freeze dried foods, battle rifles, thousands of rounds of ammo, and plenty of spare magazines."