We began this Gold Commentary in January 1996.
Due to many requests, we began to archive them in May 2000.
December 12 - "What Happens After December 16?"
"But US FEDERAL government borrowing surged at a 39 percent pace in the third quarter of 2008 - SIX times its rate for the previous three months! That is totally unsustainable. Even to maintain that level of borrowing in coming "quarters" is all but impossible."
December 5 - "Gold - Or 'Government Guaranteed'?"
"Those who do NOT trust in the value of "government guarantees", both inside and especially outside the US, are flocking to physical Gold and have been doing so for the whole of this year. They are still the tiny minority, though, the vast majority of individuals still preferring to trust in the printing press which is the only way that any such "government guarantees" can ever ultimately be met"
November 28 - "Emerging As A Clear Winner"
"Yes, Gold is still well below the highs it set earlier this year. But global stock markets are well below the levels they reached when Gold was languishing well below $US 300 seven years ago. Yes, Gold has fallen since the start of the great commodity price collapse in July. But its fall is FAR less than any other commodity."
November 21 - "We're Running Out Of 'Safe Havens'"
"On November 21, the day that Gold suddenly woke up and soared $US 50 in intraday trading, the three-month yield on US Treasuries got as low as an interest rate can get. It closed on the day at 0.01 percent!"
November 14 - "Fixing The Financial System - With No Reference To MONEY"
"The point is that it is not Gold that needs help, it is what is now circulating as "money". All the ills which our financial potentates would have us think have been caused by irresponsible bank lending practices and lack of regulation have in fact been caused by the fact that the world today does not use a SOUND money."
November 7 - "New President - Old Problem"
"It is easy to produce paper claims to Gold. It is not easy, and it is costly, to produce the physical metal. That is why the "shear" between Gold "prices" on the paper exchanges and the amount being paid for physical Gold in coin or bar form is widening inexorably."
October 31 - "On The Manipulation Of Money And Credit"
"In our day and age, the techniques and the 'machinery' for manipulating money and credit have become hugely more complicated and 'sophisticated' than they were in the first half of the twentieth century. They have also become hugely more destructive."
October 24 - "A Case Of Global 'Debt Poisoning'"
"What is happening is something never before seen in anything like as virulent a tidal wave as the one rolling across the markets at present. What we are seeing is a tidal wave of "deleveraging" - a phenomenon which we analyse in detail in the Late October Issue (Number 615) of The Privateer"
October 17 - "Bretton Woods Or Bust?"
"'Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline. It's absolutely clear that the financial markets need discipline: macroeconomic discipline, monetary discipline, market discipline.'
ECB chief Jean Claude Trichet - speech to the Economic Club of New York on October 14."
October 10 - "A Week For The History Books"
"Even at this extreme point in the unravelling of the system, there is as yet little or no discussion of the root cause of the financial meltdown. This remains what it has always been - the absolute absence anywhere in the system of any semblance of SOUND money."
October 3 - "A Desperate Week - A Great Liquidation"
"The US financial and political establishment and the powers that be in both politics and banking had a huge shock handed to them on Monday (September 29) when the US House of Representatives actually voted down the $US 700 Billion rescue package for the US banking system."
September 26 - "Fiddling While The Paper Money System Smoulders"
"Mr Paulson doesn't particularly like the "Troubled Asset" part of this new moniker, preferring to refer to "illiquid assets". Ron Paul, pretty well the only sane politician left in Washington, shot this one down very effectively indeed, pointing out that the reason that these "assets" were "illiquid" was probably because they weren't worth anything."
September 19 - "The Biggest Bailout In History"
"On Thursday, September 11, 2008, the spot future Comex Gold price hit an intraday low of $US 740.30. Exactly one week later, on Thursday, September 18, 2008, that same (December) Comex spot future Gold price hit an intraday high of $US 921.90. In exactly five trading days, that is an increase of $US 181.60 or 24.53%!"
September 12 - "The Great US Bail Out - Six Months And Running (Out?)"
"Last weekend, the Fed formally "took over" (the polite word is "conservatorship") Fannie and Freddie and the result was an acceleration in the commodities bloodbath and a US Dollar which completed regaining all the losses it had sustained since the beginning of the global credit-crunch with the subprime crisis in August last year."
September 5 - "The Amazing Saga Of Fannie And Freddie"
"As you are no doubt aware, the big story in global fiancial circles on September 5 was the announcement that the US Treasury is going to put the two huge US GSEs ('Government Sponsored Enterprises') into what is conveniently called 'conservatorship' - possibly as early as this weekend"
August 29 - "(Northern) Summer's Over"
"Buying futures contracts on Gold and Silver is no problem. Getting hold of the actual metal supposedly behind these contracts is getting difficult and, in many cases, impossible. The moral of the story is very simple."
August 22 - "A New Perspective From The Captain"
"Last week, commodities had their biggest weekly fall on record. This week, they had their biggest weekly rise in more than three decades, despite the stampede back into the US Dollar and US stock markets on August 22."
August 15 - "Trade For Your Lives!"
"It's official, the week just ended was the worst week for paper Gold trading on US futures markets for 25 years - and that is in percentage, not nominal, terms. For the week, the spot future Gold closing price was down 8.4 percent. We haven't seen a "rout" like that since February 1983."
August 8 - "The Market Olympics Have Begun!"
"Unquestionably, the star performer role was reserved for that long maligned currency, the US Dollar. On August 8, the trade weighted index measure of the US Dollar - the $US index or USDX - soared 1.29 points or 1.73 percent."
August 1 - "If No One Else Will Spend - WE WILL!"
"If you wanted to see what it would really look like if and when Ben Bernanke started to rev up his (money) helicopters, it doesn't look as though you'll have to wait much longer. The US Treasury has seen its debt limit increased by $US 1,650 Billion since September 27, 2007. That's ten MONTHS ago."
July 25 - "Manna From Heaven?"
"The 'Housing Bill' - complete with the bailout provisions for Fannie and Freddie, several items that President Bush has been threatening to veto for years, and a $US 800 Billion increase in the Treasury's 'debt limit' - was passed in the US House of Representatives on Wednesday, July 23"
July 18 - "It's All The Regulators' Fault!"
"Not much is necessary for a genuinely properous nation. Private property must be sacrosanct. Then you need free exchange, for which you need sound money first and foremost. After that you need a set of inviolable and unchanging LAWS designed specifically to protect individuals against force and/or fraud perpetrated by anyone - INCLUDING THE GOVERNMENT."
July 11 - "Brother Can You Spare $US 5.2 TRILLION?"
"Freddie could be bought, in the words of one wag - 'for less than the price of a gallon of gas'. It hit an intraday low of $US 3.89 before rebounding to finish the day at $US 7.75. The two companies, the backbone of the US mortgage market, are in meltdown on the stock market."
July 4 - "Two Views Of 'Inflation'"
"Inflation, properly defined, has ALWAYS been - an increase in the total stock of money. And, of course, as a RESULT of any increase in the total stock of money all prices have a tendency to rise. There is no hard and fast correlation though."
June 27 - "The Fed Admits Defeat"
"The most ludicrous aspect of all is the Fed's oft stated determination to keep "inflationary expectations" from breaking out. This is utterly hilarious, nearly as hilarious as are the Fed's preferred measures of price inflation, the CPI and, in particular the "core" CPI."
June 20 - "WE NEED MORE POWER!!"
"Whenever a high government official starts calling for more or increased power to regulate/interfere with a "system", one's first safe assumption is that the "system" in question is in trouble and that the official asking for increased powers knows it."
June 13 - "Economic Goods And The Medium Of Exchange"
"There is only one way out of the crisis. Forego every attempt to prevent the impact of market prices on production. Give up the pursuit of policies which seek to establish interest rates, wage rates and commodity prices different from those the market indicates."
June 6 - "The Strain Keeps Ratcheting Up"
"The problem then - and now - is that there is no MARKET price for the paper that was dragging down Bear Stearns. There never has been. The paper is tailored for the individual "deal" and "priced" using a level of abstruse mathematics that would melt the average desktop computer down into a smoking heap of metal and silicon slag."
May 30 - "A Three Day Weekend"
"The paper markets for precious metals are 'manipulated'? Of course. With all the other paper markets being manipulated within an inch of their lives, we could hardly expect the financial powers that be to neglect the markets for the alternative MONEY."
May 23 - "Pulling The Rug Out From Under"
"But as shown by the unprecedented level of global political deal making - none of it involving the US - which has gone on throughout the month, the recycling of US deficits is standing on very shaky ground indeed as the northern hemisphere approaches its summer."
May 16 - "Have 'They' Gone Too Far With The US CPI?"
"It announced the US Consumer Price Index (CPI) for the previous month - of April. The official CPI figure for April was - are you sitting down? - 0.2 percent. This prompted USA Today to run an article headlined: 'Inflation may be worse than consumer price index shows'"
May 9 - "'Inflation' Is Rampant - Gold Is Not - Yet"
"It doesn't matter where you look in the western (especially the English-speaking) world. People everywhere are aghast at what seems to be a sudden massive increase in the cost of living. And by cost of living, we mean just that - the cost of putting food on the table, of getting from point "A" to point "B" and the cost of maintaining a roof over one's head."
May 2 - "The Game Is NOT Over!"
"In fact the spot future Gold contract fell almost $US 45.00 between May 29 and May 1 - with the Fed's announcement of their latest decision on US interest rates coming smack in the middle of that three day period. Most other metals fell too, as did oil."
April 25 - "Food Goes Up - Gold Goes Down"
"But the new "purchasing power", so necessary to prevent a systemic meltdown, has to go somewhere. And it has. It has gone into REAL goods. In this case, the most basic and fundamental of all REAL goods. It has, literally, gone into FOOD. ...It has not, of course, gone into Gold. Just the opposite."
April 18 - "Another New York Friday On The Gold Markets"
"Oh ho. Spot future price down $US 27.60. Silver? Down $US 0.48. Must have been another bloodbath day on the metals. Not so. Platinum up. Palladium up. Check oil. Up another $US 1.83 to another all time high - of $US 116.69. USDX? Up, but not a lot. A gain of 0.33 points to 72.25. Still less than a point above its all time low set in March."
April 11 - "When There's No More Law - We're Left With Rules - And RULERS"
"Unfortunately, the common goal of all "rule-making" bodies, from the committee in charge of the local bake sale to the "committee" in charge of the global financial system, is to perpetuate themselves. Since they are "rule-making" bodies, their function is to make rules, and more rules, and yet more rules."
April 4 - "Damn The Economy - Full Speed Ahead"
"In fact, their weapons are so formidable that they have been able to perpetuate a financial system built on a completely fiat currency having no direct or even indirect connection to the real economy on a global basis for nearly four decades. This is a considerable feat."
March 28 - "The Gold Carry Trade Reaches Warp Speed"
"As you would have noticed if you follow our daily update on Gold lease rates (available to Privateer and GTW subscribers), the shorter term (one and two-month) rates have actually gone into negative territory this week."
March 20 - "Gold - Back In The 'Box'"
"Within minutes of the Fed's announcement, Gold was down $US 25 or so in after hours trading, back below the $US 980 level. By the close of trading on March 19, Gold had lost $US 59. By the close of trading for the week on March 20, Gold had lost another $US 25.30."
March 14 - "The Unkindest Cut Of All?"
"What a difference a number, no matter how absurd, can make. On March 14, with the release of the February CPI, the futures "betting" on a March 18 rate cut of a full ONE PERCENT had gone from ZERO to well over SIXTY PERCENT. The rest of the "betting" was for a 0.75% cut."
March 7 - "A Potential Disaster - March 18, 2008"
"So, Wall Street and the US paper markets in general have only one slim thread of hope remaining. That is that the Fed will go on cutting their official rates and that one of these cuts will do what they have always done before, it will re-ignite borrowing and spending. The universal expectation is that the Fed will cut another 0.50 percent (many want 0.75 percent) at their meeting on March 18"
February 29 - "The Last Hurdle - $US 1000.00"
"When any financial asset or investment has a long term history of trading at a certain one or two or three digit price, as long as it remains in that range, most people tend to look back at its history rather than forward at its potential. The "switch" from one outlook to the other is the crossing of the threshhold."
February 22 - "But All Those 1970s Guys Got It Wrong - Right?"
"Actually, all those 1970s guys got it right, dead right. They predicted exactly what was going to happen in the 1970s - before it happened. Better still, they told anyone who would listen to them precisely WHY it was going to happen, and how to protect against it."
February 15 - "In ___ We Trust - All Others Pay Cash"
"But our era, the great credit financed financial cornucopia of the period since 1982, has been one in which that fine old credo was sadly neglected. The world became very trusting indeed. Almost anything could be, and was, held to be an entirely predictable, trustworthy and unfailing way to riches."
February 8 - "The Emperor's Old Clothes"
"Americans don't "measure" a recession as two consecutive quarters of "negative economic growth", they measure it by their cost of living, the ease with which they can find a well-paid job, and the state of their existing finances. On all three counts, the overwhelming majority know that the US is IN recession."
February 1 - "'Tooth Fairy' Economics"
"For the month of January, Gold rose 10.1 percent. For the year of 2008? Impossible to say. What we know is that in the US, the desperate measures to "reflate" a system with a huge hole where the paper markets used to be will continue and intensify. WE know it won't work."
January 25 - "'Tooth Fairy' Economics"
"The reason that the global fiat money system has lasted as long as it has is simply that the system IS global. There are no dissenters. There are no nations whose currency IS redeemable in Gold."
January 18 - "If You Don't Fix The Leak - It Won't Hold Water"
"Mr Bernanke of the Fed and Mr Paulson of the Treasury depend on public perception above all other things. They count on what they call inflationary EXPECTATIONS remaining under control. And they count on the currency they control, the US Dollar, to continue to be seen as a viable, if not a strong, form of MONEY."
January 11 - "Now It Begins - Gold Exceeds $US 850"
"After almost exactly 28 years, Gold in US Dollar terms has this week risen to new all time highs. ...By the end of this week on January 11 spot future Gold had risen further to close at $US 897.70, having also moved above the $US 900 level in intraday trading for the first time ever."
January 4 - "Gold - On The Verge In The New Year"
"In $US terms, there are two big numbers for Gold. The first is the well known spot close of $US 850.00 reached on January 21, 1980. The second is the not so well known spot FUTURE close of $US 873.20 reached on that same day, January 21, 1980. Over this past week, Gold has already closed above that January 1980 all time high on a spot basis."