Commodity Trade Mantra

Posts Tagged ‘Government Bonds’

Most Asset Classes at All-Time Highs. Gold Yet 50% Below - Get It Now

The US dollar is at a multi-decade high, and both US stocks and bonds are at all-time highs. It’s generally not the greatest investment strategy in the world to buy assets at their all-time highs. Unlike stocks and bonds, gold is NOWHERE NEAR its all-time high, at least in US dollar terms. In fact gold can still appreciate nearly 50% before it breaks its previous price record. So?

Why Own Bonds or Fiat With Negative Yield When You Can Buy Gold?

Either way (hike or no hike), there is no place for the gold bull to hide. It took gold approximately 7 months to advance $250 and overcome major resistance at $1,300/oz from a bottom of $1,050. A reasonable target could be $1,550/oz ($1,300 + $250) by March 2017 – 7 months from now. Silver could follow a similar pattern with a near-term target of $26/oz.

The Inflation Horse Defies Central Bankers' Whippings - Why?

Every 3 days for the past 9 years, one of the world’s central bankers dresses up as a jockey. They mount the horse & flog it with the whip marked ‘lower interest rates’. The inflation horse is supposed to respond to these whippings by suddenly springing to life & galloping towards the furlong marked ‘2–3% inflation’. No one seems to have told these jockeys they’re flogging a dead horse.

Gold Investment Necessitated by Failed Monetary Policies

Many analysts are interpreting weak Japanese Government Bond demand as a signal that investors are starting to lose confidence in the effectiveness of unconventional monetary policies, following increasingly desperate bids by the world’s central banks to reflate the global economy. In this environment, we believe investors are using gold to hedge portfolio risk as they add more stocks.

Gold is Worried More About a Broken Financial System, Than Just a Brexit

Speculative money is there for a good time — not a long time — so the gold price is at risk from a pullback as some of the Brexit fear unwinds. But if it continues to hold up in the event of a ‘remain’ vote, that will be very positive for gold’s longer term prospects. It will tell you that gold is worried more about a broken financial system. That’s what gold is really worried about.

Russia's Dollar De-Dollarization May Have Begun

Russia has plans to raise $1 billion in government debt next year with bonds denominated in Chinese renminbi. Not the US dollar! Uh-Oh. the de-dollarization is taking off. So what if Russia denominates their bonds (that used to be issued in dollars) in renminbi & vice versa with Chinese issued bonds? This eliminates the need to hold large sums of dollar reserves.

Gold, Interest Rates, Price of Oil & Bonds - Here’s All You Need to Know

All the same “macro” issues that drove gold prices up during the 2000s decade are still with us; expansionist monetary policies, out-of-control government spending across the world, growing government debt levels, counter-party risks, looming currency crises & more. Second, we’re in the midst of a major reset across the global gold mining industry.

$76 Trillion Global Bond Bubble About To Explode - Even Experts Are Scared

The global bond bubble has ballooned to over $76 trillion & interest rates have never been lower in modern history. There is literally nowhere for the bond market to go except for the other direction, and when this bull market turns into a bear it will create chaos and financial devastation all over the planet.

What Do Negative Bond Yields Mean for the Gold Price?

Bonds are no longer trading like bonds. They now trade like commodities. Given that investors often buy gold and other precious metals as a hedge against risk — for instance, when the economy is doing poorly — it will be interesting to see whether this new way bonds are being traded has any impact on interest in such metals.

Marc Faber on Gold, Oil, Currency, Stocks & Economy

What is overvalued and undervalued is a subjective judgment, and I tend to agree that gold shares are down 80% & they are cheap, compared to the physical price of gold & to Facebook or Google & these Netflix type of stocks. There is value in gold mining shares, and I think they could easily rebound from this level by 30 to 40%.

Forget Ebola - Here's Why US Banks Are Now Extremely Vulnerable

Under the BIS Basel capital adequacy rules, government debt rated at least AA continues to carry a zero risk weighting. So banks need not set aside capital against it. With a combined position of nearly $2 trillion in US govt debt, against which they hold no capital buffer, US banks are now EXTREMELY vulnerable to a bond market sell-off.

Europe: Stagnation, Default, Or Devaluation

When a country accumulates too much debt and begins to find the roll-overs a growing challenge, it really has just two options: the first is a total or partial default; the second is a large currency devaluation. The second choice begs the question ‘Who prints the currency in which the debt is labeled?’

Obama Fires the First Shot on Your Retirement Account

US retirement accounts hold well over $5 trillion in assets – You can almost hear Uncle Sam salivate. The MyRA looks like the first baby step toward acclimating people to the idea that retirement savings are too important to entrust 100% to the market. Government bonds, you see, are much safer.

We Will Be Told Hyperinflation is Necessary, Proper, Patriotic, and Ethical

The most likely trigger to hyperinflation is an increase in prices following a loss of confidence in the dollar overseas and its repatriation to our shores. Committed to a low interest rate policy, authorities will dismiss the only legitimate option to printing more money — allowing interest rates to rise.

China Bails Out Money Markets Following Repo Rate Blow Out

China said it injected over 300 billion yuan ($49.2 billion) into the nation’s money markets over a three-day period as interbank interest rates surged to their highest levels since June – Perhaps the PBOC hinting at tapering at a time when the Fed is actually doing so is not the smart choice…

Euro Tumbles After ECB - European Central Bank Hints At QE

The European experiment will require every weapon in the ECB’s arsenal, and sooner or later the ECB, too, will succumb to the same monetary lunacy (QE) that has gripped the rest of the developed world in the ongoing “All In” bet to reflate or bust.

Gold Is Not A Safe Haven? Tell That To People In Indonesia

Rupiah, the currency of Indonesia has weakened nearly 15% against the dollar since the start of June and 20% against gold since June 28th; And by nearly 600% against gold since 2000 – Can someone tell the people of Indonesia that Gold Is Not A Safe Haven?

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