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  1. This week’s guest is so bullish on silver that he’s even written a best-selling book ‘The Great Silver Bull’ where he takes an in-depth look at why silver will outperform gold once again and even go as high as $300 an ounce. Author and investments editor Peter Krauth joins Dave Russell on GoldCore TV to discuss the silver price, silver’s future and how industrial demand will continue to grow, outstripping supply. Silver’s a big theme for us at the moment, look out for our interview with the silver guru David Morgan, released just a few days ago! If you enjoyed our chat with Peter Krauth then be sure to subscribe to GoldCore TV and watch our recently launched show The M3 Report. Featuring bonus material from guests such as Jim Rickards and Marc Faber, as well as commentary from our own team and chart analysis from Gareth Soloway. This show really is at the forefront of alternative market and economic commentary. Click on the Link to Watch Now
  2. Anyone who pays attention to global gold demand knows that China has been at the forefront of gold imports and central bank purchases for many years. To own gold bullion is something that is not only important to the Chinese government but also to Chinese citizens who have sought to buy gold bars and coins as both a means of investment and also as a way of celebrating many occasions. Sadly the expected increase in demand for gold from China is not because of a celebration, instead, it is due to the increasingly-heightened tensions between itself and the United States, both vying to be top dog in an increasingly polarized world. Nancy Pelosi’s visit this week has the world trying to work out if Taiwan is the next crisis we’ll be contending with. Here’s what we think this means for gold. Nancy Pelosi’s visit to Taiwan increases tensions between China and the US will push China to further its quest to ‘de-dollarize’. Also, push for alternative payment methods besides the US dollar. And it is no coincidence that the gold price has risen US$100 over the last 10 days as tensions leading up to Ms. Pelosi’s visit have increased. Ms. Pelosi is an accomplished career politician who currently serves America as its Speaker of the House of Representatives (head of one of the three branches of the US government). She has held that role since January 2019 (and previously between 2007-2011). Ms. Pelosi’s role as Speaker of the House puts Ms. Pelosi second in line to inherit the US Presidency behind Vice President Kamala Harris. She is the senior-most official to visit Taiwan in more than a quarter century. The last was Newt Gingrich (then-Speaker) in 1997. Senior US officials have not visited Taiwan since China joined the World Trade Organization in an effort to build a stable US-China relationship. The problem is that for reasons of history, China believes that it owns Taiwan. It should be in control of Taiwan and wants America to leave Taiwan alone so that China is unfettered. Suffice it to say that although Nancy does not actually speak for the country on matters of policy her actions matter because of the important office she holds. Tuesday this week she decided to visit Taiwan in person. The Dollar Milkshake Theory Explained Watch Brent Johnson Only on GoldCore TV The presence of Pelosi in Taiwan means that America cares about Taiwan. Also, by Pelosi meeting with the leaders, she validates and recognizes those Taiwan leaders as authority, and this infuriates China. China constantly threatens Taiwan with reunification by force. And to flex this force China ran military exercises aimed at Taiwan as Ms. Pelosi landed in Taiwan. Chinese officials have threatened countermeasures and sanctions if Ms. Pelosi included Taiwan in her Asia tour, which also includes Singapore, Japan, and South Korea. Taiwan is just one of many friction points in the complicated relationship between the U.S. and China. See our January 5 post Four Geopolitical Issues that could Drive the Gold and Silver Prices Higher in 2022 For the last five decades, the United States of America has been acknowledged as the leader in both military size and economic size. Less heralded but maybe as important is that since 1945 the U.S. has by far held the most physical gold out of any government in the world. The U.S. holds 8,133 tonnes in official reserves, the next largest is Germany with 3,355 tonnes. Why China is Increasing its Gold Reserves? Gold matters to nations, the same as individuals, because it has zero counterparty risk. China believes that its future is to eclipse America in economic size. Although they are cagey about releasing details China has been increasing its official gold holdings. China has increased its ‘official’ gold reserves to 63 million ounces (1948 tonnes), now the sixth largest behind the US, Germany, Italy, France, and Russia. However, reporting of official reserves has been very intermittent since China joined the Word Trade Organization in December 2001. With the next increase not reported for eight years until 2009, and then later leading up to the Renminbi inclusion within IMF’s Special Drawing Rights (SDR) basket of currencies. (The SDR is a made-up currency used to supplement assets at the IMF.) There is little doubt from most gold market observers that China’s unofficial reserves are much higher than reported. China Official Gold Reserves Chart Nonetheless, China has a long way to go to increase its gold reserves to the size of the US reserves. China can only catch America by mining its own gold, and/or buying gold elsewhere and moving it to Chinese vaults. There is an old adage that whoever owns the gold makes the rules. Ever since this is largely true China wants to own more gold. The government of China is not the only Chinese entity wishing to own physical gold. Millions of Chinese families, like millions of Indian families, use gold as their savings accounts because of limited access to and non-trust of bank accounts. The chart below shows China alone accounts for about 20% of global consumer demand. This is likely to increase after the recent problems investors have faced withdrawing money from Chinese banks! Gold Consumer Demand Chart China is the largest producer of gold. The production in 2021 is estimated at 332 tonnes, and Russia is the second largest at 330.9 tonnes of production in 2021 (data from the World Gold Council). There is reason to believe that, like official holdings, China reports this estimate much lower than actual production. The Chinese government has reasons to under report results to gain an edge over the Western countries, especially the U.S. China’s official import data shows a sharp increase in gold imports in June 2022. We will not be surprised to see this number climb further in the coming months. China Gold Imports Chart Complicated Relationship between The US and China The relationship between China and the U.S. is indeed complicated as the U.S. consumer has relied on China for cheap goods for the last twenty years. While China relies on the U.S. as the main place to export its goods, which helps build its economy. Indeed, China does still hold close to one trillion in US Treasury securities, which were purchased with the U.S. dollars that flowed into China as exports of China’s goods flowed to the U.S. China’s Official Holdings of US Treasuries chart This relationship has been severely strained for the last six years and Ms. Pelosi’s visit to Taiwan is a major crack that could expand, as it goes against the grain of the relationship. China and Russia are ever more on high alert and the move to a de-dollarized world is becoming more imminent. Both countries realize that the country that controls the most gold has the advantage. These moves take time, but the process is in motion. The rally in gold since July 21 could indeed be all levels of China’s participation in increasing gold holdings and this is only the beginning! With central banks trying to work out what to do next in an era of ever-rising inflation, and geopolitical tensions on the rise the numbers are adding up to create the perfect environment for higher gold and silver prices. To hear more about the move away from the US Dollar as the global reserve currency why not check out our new show The M3 Report? Jim Rickards, Marc Faber and David Morgan each spoke to us about the changing dynamics of the global currency system as both China and the US compete for control.
  3. “It's the dollar strength, which brings the system down.” This week GoldCore’s Dave Russell welcomes Brent Johnson of Santiago Capital onto GoldCore TV. Click on the Link to Watch Now Brent Johnson is the CEO and founder of Santiago Capital and the man behind the Dollar Milkshake Theory. Dave’s conversation with Brent is well-worth watching as they cover US dollar strength, if there’s any merit to global reserve currency theories, and what we can expect from gold and silver. And do not miss Brent’s two-minute explanation of what The Dollar Milkshake Theory really is. If you enjoyed this interview be sure to subscribe to GoldCore TV and watch our recently launched show The M3 Report. Featuring bonus material from previous guests, as well as commentary from our own team and chart analysis from Gareth Soloway.
  4. “Silver is something that’s needed. It’s essential, it’s imperative, you cannot run a society without silver,” This week we welcome the Silver Guru David Morgan to talk about silver as an investment and its vital role in daily life. We discuss the silver price, why it remains below $20/oz and what opportunities David sees for investors in the coming months. Click on the Link to Watch Now Following on from the excerpts released on last week’s The M3 Report we bring you the full interview where we hear David’s thoughts on not just silver but what the Fed will do next, how inflation is impacting us all and where we go from here. If you enjoyed this interview be sure to subscribe to GoldCore TV and watch our recently launched show The M3 Report. Featuring bonus material from previous guests, as well as commentary from our own team and chart analysis from Gareth Soloway. Click Here to Watch The M3 Report
  5. If you have decided to buy gold bullion or to buy silver coins in the last few months then you may have been delighted with how last night’s Fed press conference went. If you’re still wondering if or how to invest in gold then it might be worth paying attention to what central banks are doing in the coming weeks. After all, how do central banks make their decisions when it comes to monetary policy? In years before it might have been quite straightforward to answer that question – they look at inflation rates, they look at market indicators, they look at data from statistical agencies and then they decide what to do with interest rates. But, yesterday US Fed Chair Jerome Powell seemed intent on adding some cloak and dagger to the situation and in doing so he just made it look like the Fed are really sure what they think or where to go now. Of course, there’s nothing gold and silver prices love more than an incompetent central banker but especially one that basically admits that they aren’t sure they’ve got any of this right in the first place. David Morgan and Gareth Soloway on Metals, Markets and Money The Federal Reserve raised the fed funds rate by the expected .75% at their two-day meeting that ended on July 27, the statement was much as expected. The opening of the statement acknowledges that economic indicators for spending and production have softened. But still, the unemployment rate remains very low while inflation remains very high. However, the message in the press conference message was very muddled. The longer Chair Powell spoke during the press conference the more gold and silver rallied on his ambiguous message. Chair Powell said that they won’t provide guidance for more than one meeting at a time. They have no idea what the rates will be next year. He added that even in the best of times the projection of rates is uncertain, but projections today are even more unreliable since these are extraordinary times. When asked by reporters to clarify on the outlook Chair Powell kept referring to the Summary of Economic Projections that was released with the June Federal Reserve statement which points to the Fed Funds rate at 3.4% by year-end. But then he repeated that economic activity has come in weaker than anticipated; which should mean June projections are too stale now. So no one really knows what he is trying to say. June is now a long time ago. The economy is weakening since June. Does he want us to just trust that those June projections will be accurate … despite him stating earlier those projections are worthless? Or does he not have any more clever ideas about the way forward so his only talking point is to default to old ideas? In regard to the weaker economic activity, Powell stated that he does not think the US is in a recession … and still thinks that he can achieve a path of rate increases that do not lead to recession. A Conference full of Flaws Asking about the negative GDP data in Q1 and that data and models (including the Atlanta Fed’s GDP model) are suggesting Q2 could also be negative, Chair Powell said that GDP data can’t be trusted! If the data from other U.S. government statistical agencies can’t be trusted, then what is the Fed basing its forecasts and policy decisions on? Maybe he decided to follow President Biden’s declaration. Which is there is no recession happening now and there won’t be one in the U.S. If GDP data calculated and released by the U.S. Bureau of Economic Analysis (BEA) can’t be trusted, then how can the Fed’s preferred measure of inflation? The PCE Index (Personal Consumption Expenditures), which is calculated by the same agency be trusted? This press conference had so many flaws of logic that maybe, just maybe, the mainstream media will begin to doubt the Fed and its central banking friends are infallible! Chair Powell stated several times that the Fed focuses on bringing inflation down to 2% measured by the PCE index. The Fed has little control over the supply side of the equation. Also, the shortages are caused by supply problems from China, the Russia/Ukraine war, etc. The Fed aims to achieve lower inflation by stifling demand through tighter monetary policy. Did he really mean to say that Russia’s war affected supply chains therefore interest rates must go up to shrink the economy? Even if he did not mean it, that is what he said. Did Russia just become the de facto controller of the US economy? (side-note: Check out episode two of The M3 Report for more on this) Long Term Gold Price Prediction- Kevin Wadsworth It seems that the Fed has lost its ability to focus on more than one specific indicator at a time. Remember last year when inflation was rising quickly, they stuck to the stance that inflation was “transitory”, and they didn’t need to react? Yet now they are raising rates at a quick clip to try and combat that inflation. Even though other indicators are already showing an economic slowdown. Furthermore, inflation data is a lagging indicator. The latest PCE index numbers are for May and the latest CPI data is from June. The decline in commodity prices and the already indicated slowdown in economic activity (which leads to less spending) will filter through the economy and compound the Fed’s tightening. The Fed to Tackle Inflation with Rate Increase? Last summer the message from the Fed was that inflation was transitory, and they did not react to any of the indicators that showed otherwise. Now the Fed is frantically trying to catch up on that error. This summer the message from the Fed is that the U.S. is not in a recession. Also, its focus is solely on bringing inflation down to its 2% goal. (We remind readers a 2% goal was set on a fluke. See Did Central Banks Arrive at their Target Inflation Rate by Mere Fluke? The one glimpse of forward guidance that Chair Powell did provide was: Now that we’re at neutral, as the process goes on, at some point, it will be appropriate to slow down. And we haven’t made a decision when that point is, but intuitively that makes sense. We’ve been front-end loading these very large rate increases. Now we’re getting closer to where we need to be. Chair Powell was very ambiguous on the question of whether the risk of raising rates too much was the bigger risk for the economy at the current time. Our view is that the giant risk is that the Fed will do too much tightening. This means next summer the Fed will cut rates because the economy is too weak. The rally in gold and silver prices during the press conference, along with the declining longer-term bond yields tell us that those markets agree!
  6. Is silver the perfect investment? Is it the biggest tech play? Why is the price below $20? Can we survive without silver? All this and more in today’s The M3 Report! If you’re not already subscribed to GoldCoreTV then click here right now to make sure you’re all set to watch the third episode of our flagship show. Click Here to Watch It Now Featuring David Morgan (the Silver Guru) as well as technical analysis from Gareth Soloway and our do-not-miss feature Fire Hire and Admire! Our theme this week is silver (in case you hadn’t guessed). Our team looks at what makes it a very exciting tech opportunity right now and we chat through price, markets and opportunities with our guest David Morgan. Let us know your thoughts on the show, as ever we welcome feedback whether on Youtube, by email or on Twitter. Pigeon post also an option! Watch episode three of The M3 Report now. Make sure you don’t miss a single episode… Subscribe to GoldCoreTV
  7. When you choose to invest in gold it can be confusing to know the best way to add it to your portfolio. Should you buy gold bullion? Should you buy a gold ETF? Or maybe gold mining shares? It’s a minefield! Here at GoldCore, we see it very simply: if you want to get all of the benefits of holding gold then you should own physical gold. Because if you can’t hold it then you don’t own it. Never before has this philosophy been more pertinent than in the last few quarters. As more and more has come to light about how the paper gold market is managed. We summarise some recent changes below and highlight some significant imbalances. The End of the Beginning: Paper Gold V/S Physical Gold Has the ‘end of the beginning’ arrived for paper gold’s dominance over physical gold? An overdue accounting change sheds a small beam of light on the holders of the Paper precious metal market. This shows once again that the paper market is not the same as the Physical metals market! Even regulators are starting to realize that the counterparty risk involved in the paper gold market is not similar to holding physical gold. This was very apparent in the latest filing of bank activities in the US. A short background is important here: Each U.S. commercial bank and savings association (with assets of more than US$5 billion). These are required to file a report with the Office of the Comptroller of the Currency (OCC) each quarter. This report shows its trading and derivatives (financial contracts that value is based on the underlying security used to manage risk, speculation or leverage a position, examples are futures, option, and swap contracts) activities. The OCC states its requirement of banks to report this data is to make many markets. This includes the paper gold market, more transparency, addressing infrastructure, clearing, and margining issues in the over-the-counter (OTC) derivatives market. The first item we note in the report is that – in the first quarter of 2022 the report showed that there are more than 1,291 banks that reported in Q1. However, the four largest commercial banks represent 89% of the total banking industry notional amounts and 69% of the industry net current credit exposure. Yes – that is correct, the four banks do 89% of all trading and derivative activity by banks in the U.S. And almost 70% of the total market exposure is those same 4 banks! The second item of note, and most important to gold and silver investors is the change in the way that gold and silver contracts have to be reported. This change in reporting is in line with the change that was laid out in the Basel III accord of separating the way physical gold (they call it allocated gold) compared to Paper gold (they call it unallocated) is held on a bank’s balance sheet. For a refresher see our post from last July How will Basel III Impact the Gold Market? The bottom line of the change is that the counterparty risk of the paper market is now being considered. Said another way – How much money is really on the line if it all goes south? Precious Metals Contracts as an Exchange Rate Derivative In other words, as we have stated many times, if you or Goldcore don’t hold the physical gold then you don’t own it and there is too much counterparty risk! Previous to January 1, 2022 banks could state their precious metals contracts as an exchange rate derivative. However, starting January 1, 2022 banks are now required to calculate their precious metal contacts using the “Standardized Approach for Counterparty Credit Risk”. Below is the chart from the very back of the OCC report showing the resulting difference in exposure reported. The amount went from US$79 billion in Q4-2021 to US$492 billion in Q1-2022! This change also moved contracts hiding in other places to the precious metal contracts bucket. Moreover, the chart below shows the seven U.S. banks’ with the largest derivative contract holdings. And guess which bank controls the most precious metal contracts …. None other than JPMorgan Chase, second is Citibank. The change in accounting moved JP Morgan’s precious metal contracts from US$28 billion in Q4 of last year to US$330 billion in Q1-2022 and Citibank’s precious metal contracts from US$6 billion to US$89 billion. These two banks control 90% of the U.S. bank precious metals derivative market! Moreover, it’s no coincidence that it is JP Morgan Chase traders on trial for manipulation of the gold market. See Gold Traders on Trial: Only Buy Physical. Long Term Gold Price Prediction- Kevin Wadsworth Changes in Basel III prompted this change. This is to keep European banks and US banks from arbitraging across the Atlantic. Also, the case is strengthened by the sanctions against Russia that increases counterparty risk. However, it only offers a glimpse into the behind-the-scenes positions of large banks. This is only a glimpse – the main act and true extent of both the manipulation and control by a small few is yet to be fully revealed. And we leave the final thought as a question: Is it any coincidence that the largest U.S. bank derivative holders are also primary dealers of the Federal Reserve? Whilst we’ve got your attention do you fancy dragging out this coffee break some more and watching some top chat about gold, silver and markets? Our new show The M3 Report is now on its second episode and well worth checking out, if you haven’t already. Featuring Marc Faber and a new feature, Trading Places where we asked six experts what they would do if they were in Jerome Powell’s shoes. (No one said they liked the look of his shoes!). Gareth Soloway and Marc Faber on Metals, Markets and Money
  8. What do the weather and the markets have in common? Quite a bit says this week’s guest! Kevin Wadsworth is a meteorologist-turned-chart analyst who has a lot of interesting insight and predictions into market movements and the price of gold. Kevin joins GoldCore TV host Dave Russell to discuss how he applies his 35 years of experience and methodology to financial markets. He takes us through the range of outcomes he sees for the economy, the US Dollar and precious metals. And once you’ve enjoyed this interview be sure to check out our new flagship show The M3 Report. Our latest interview features Marc Faber as well as a Trading Places where we asked six experts what they would do if they were in Jerome Powell’s shoes. Click Here to Watch It Now
  9. Tune into GoldCore TV where we have just released the full, frank and direct interview with Dr. Marc Faber of the Gloom, Boom, Doom Report in a no-holds barred interview. Following on from the excerpts shown on last week’s The M3 Report we have today released the full interview with the highly-respected veteran of the investment space. Dr. Faber chats inflation, the downfall of central bankers and the war against Putin. Also, find out what the best advice he ever received was. If you enjoyed this interview be sure to subscribe to GoldCore TV and watch our recently launched show The M3 Report. Featuring bonus material from guests such as Jim Rickards and Marc Faber, as well as commentary from our own team and chart analysis from Gareth Soloway. Look out for our new feature Trading Places where we ask six industry experts what they would do if they were in Jerome Powell’s shoes. Click Below to Watch the Video Make sure you don’t miss a single episode… Subscribe to our YouTube channel
  10. Followers of the gold and silver price will have long been aware of the cases brought against large banks for manipulating the precious metals markets. This week has brought the issue to the fore as three former JP Morgan employees stand trial for “racketeering conspiracy as well as conspiring to commit price manipulation, wire fraud, commodities fraud and spoofing from 2008 to 2016”. JP Morgan Chase & Co. has long been known to have an oversized influence on the gold paper market. Accounting for upwards of 65% of the derivative contracts in precious metals put through U.S. banks. This is three times that of the next largest Citigroup. Inc. This week the criminal trial for three of JP Morgan Chase & Co.’s most influential precious metal traders started in Chicago. Gold Market Manipulation with Spoofing Trades One of three on trial is Michael Nowak, former managing director for JP Morgan Chase & Co., who ran their precious metals business for more than 10 years. Bloomberg also described him as once the most powerful person in the gold market. Mr. Nowak made hundreds of millions of dollars in profit trading precious metals at JP Morgan. He was also a board member of the body that runs the London gold market. He now faces a slew of charges on manipulation of the gold market with spoofing trades. As we have always reminded readers, the banks – central or otherwise, never have your own best interest at heart. We detail some of the alleged crimes below but remember our refrain about gold…if you or Goldcore don’t hold it then you don’t own it. Spoofing is planting large fake orders to buy or sell futures contracts and then cancelling the order before the deal’s execution. The intent is to create false sentiment in the market. Then the trader can manipulate the actions of other market participants and change the price of a security, thereby making a profit. The infographic below from the Wall Street Journal shows an example of how a trader can profit from a spoofing scam using the oil futures market as an example. Spoofing in futures works the same for oil or gold. This is ironic since everyone is coming to recognise that ‘paper gold’ is not the same as physical gold, which is obviously also true for oil. How Spoofing Works However, lofty expectations and profit at any cost, plus their use of It is estimated that traders working for Norwak placed more than 50,000 spoofing trades over a decade. Edmonds has also pleaded guilty for the manipulation of silver contracts. Gareth Soloway and Marc Faber on Metals, Markets and Money We note that spoofing as a business practise requires leverage and the willingness to cheat. Goldcore refutes both these items. Spoofing became more prominent through the 2000s as algorithms improved, causing the rise in high frequency trading, which allowed for very quick execution of trades. Regulation around high frequency trading lagged the industry and not until The Dodd-Frank Act in 2010 really defined and made it illegal. But it has taken even longer for the government to investigate and crack down on violators. The Dodd-Frank Act was new U.S. legislation after the 2008 financial market meltdown. One of the most well-known cases of spoofing is the ‘flash crash’ in 2010. This was when almost $1 trillion erasing in market value from U.S. stock markets. In a matter of about 10 minutes, the DJIA (Dow Jones Industrial Average) plummeted almost 1000 points, then recovered almost 600 points over the next 30 minutes. A London-based trader determined in 2015 the primary cause of the flash crash was spoofing. He entered a very large order for e-mini S&P 500 stock index futures contracts with the intent to cancel the order prior to execution. His large order stampeded certain high-frequency algorithms into aggressive selling executed that triggered the massive market declines. In 2020 after years of investigation, the US government ordered JP Morgan to pay US$920 million to settle spoofing claims in the precious metals futures market. If you don’t hold it then you don’t own it JP Morgan is not alone in its manipulation of the precious metals market. ‘In 2021, two Bank of America Corp. precious-metals traders were convicted in Chicago. A year earlier, a jury found two from Deutsche Bank AG guilty, while others reached plea agreements and cooperated with authorities.’ (Bloomberg). JP Morgan is the largest bank in the space and the trading desk worked as a group to manipulate the market. Hence U.S. prosecutors have also added charges under the Racketeer Influenced and Corrupt Organizations Act. They are usually reserved for gangs and the mafia! Also, manipulation in the gold paper market is an ongoing battle. Also, not knowing the intent of the counterparty is always a factor. We are unaware of spoofing in the physical metals market nor can we envision how global banks could attempt such actions. This is why we always recommend to those who wish to hold gold and silver as part of a balanced portfolio, to buy physical gold. As we said earlier, if you or GoldCore don’t hold it then you don’t own it. On Sunday we released the second episode of our hit new show The M3 Report. The M3 Report brings the viewer the best of GoldCore commentary analysis, fantastic guests, Chart Watch, and bonus clips from industry experts. Presented by our very own Dave Russell the show takes an irreverent look at financial markets and the double speak of policy makers, to help you better understand what’s really going on with your money. In this latest offering Dave and the team take on inflation, they ask is the futility of inflation simply the futility of central bankers? Dave discusses this (and more) in the exclusive interview with Dr. Marc Faber, whilst Gareth Soloway brings us some brilliant chart analysis in Chart Watch. Gareth Soloway and Marc Faber on Metals, Markets and Money And don’t miss Trading Places! What would you do if you were Head of the Fed? We asked six of our favourite guests. We’re not ruining anything by saying that no one wants to be Head of the Fed! If you haven’t already then make sure you’re subscribed to GoldCoreTV, so you’ll be the first to see new releases!
  11. Inflation! Trading Places! Marc Faber! Chart Watch! That’s right, it’s episode two of The M3 Report. It is finally here, what a great way to set you up for the week ahead. Subscribe here if you’re not already receiving alerts. Click Here to Watch It Now Our maiden episode was a huge success, and we have really enjoyed hearing everyone’s feedback. We are delighted to see how many new people are discovering the show each day. We really enjoyed making it and that’s why we’ve cracked on and brought you another episode! Just like in episode one we’ve got great commentary from the GoldCore team and brilliant chart analysis from Gareth Soloway in Chart Watch. Be sure to listen to Dr Marc Faber’s thoughts on inflation and government in as yet unseen clips from our recent chat with him. And (our favourite bit this week) stay tuned for Trading Places, when we asked six of the best industry experts out there what they would do if they were in Fed Chair Jerome Powell’s shoes. Let us know your thoughts on the show, as ever we welcome feedback whether on Youtube, by email or on Twitter. Snail mail is nice too! Watch episode two of The M3 Report now. Make sure you don’t miss a single episode… Subscribe to GoldCoreTV
  12. Yesterday the Fed released the minutes from the FOMC’s July meeting. There were few surprises, but two things really stood out; members are anxious about inflation and they’re anxious about a recession. As you will read below, this is good news for the gold price and anyone who has already decided to invest in gold. This might sound odd as generally an increase in interest rates is believed to be bad news for those who own gold bars or coins, but actually, history shows that when central bankers and governments get nervous about the economy then we are set to see a positive environment for gold and silver prices. Jim Rickards and Gareth Soloway on Metals, Markets and Money The economic cycle never stands still. In fact, the global economy is such a tricky thing to comprehend we almost pity the central bankers who believe any effective control over the economy is possible! Needless to say, they are once again wrong. Central banks have been lifting interest rates to combat inflation. But those same interest rates have caused a recession. Or may it be fairer to say that recession had already begun before interest rates rose, but the bankers could not see the recession starting? Either way the world is rolling over now from rising inflation fears into recession fears. Signs of recession setting in are popping in many data sources. When will this recession end? The U.S. is most likely in recession, which is two consecutive quarters of negative GDP growth. 2022’s first-quarter U.S. GDP growth came in at -1.6% and the Atlanta Fed’s GDPNow model currently estimates that second-quarter growth will be a negative 2.1%. And since one definition of a recession is 6 months of negative growth…we are already in one and it began back in January – surprise! The next big question is – when will this recession end? Followed by asking how deep will it get? Further questions will be about when central bankers decide to reverse course and lower the interest rates they just rose. Remember the central bank playbook is quite a short document. They raise rates to fight inflation and lower rates to fight the recession. They continually ‘provide liquidity’ when not playing with interest rates. Source: Atlanta Federal Reserve It’s not just the U.S. feeling the squeeze. Bloomberg reports that U.K. real household income is forecast to decline a record 2% this year. UK Households Face Record Income Squeeze chart And growth is expected to decline for 2022 in Japan as real household disposable income declines and the misery index climbs. The misery index is measured by the sum of the unemployment rate with the annual change in consumer price inflation. Japan Misery Index, Real Household Disposable Income Chart The equity markets, with steep declines this year to date are reflecting that recession has already begun. And bond yields are also signaling recession with 2024 interest rates lower than today’s rates. And even oil has declined to under US$100 this week because markets expect that consumers will fly less and drive less. What does gold do during a recession? Recessions are not generally good for gold. But recession fighting by governments and central bankers is very positive for gold! Politicians always print money as a response to the recession and this time will be no different. The continual growth of government printed money has accumulated for decades. This accumulation is why gold prices move ever higher over time. Gold Price Chart And even though gold and silver generally decline at the beginning of a recession a study put out by Bloomberg shows that since 1971, when then President Nixon ended the gold standard, that gold outperformed the S&P 500 for the two-year period surrounding recessions by 50% on average. That two-year period is measured one year before the recession and one year after the recession. The largest relative gain was the 1973-75 recession where gold outperformed the S&P 500 by almost 190%. The relative gain during the 1980 recession was the second largest at almost 115%. The 1981-82 recession period and the 1990 recession period where the only two out of seven recessions that S&P 500 outperformed gold. Looking at 2022’s current experience year-to-date gold; has held its value – while the S&P 500 has declined more than 20%. Gold and S&P 500 performance year-to-date chart This weekend we’re releasing the second episode of our hit new show The M3 Report. Presented by GoldCore’s Dave Russell, The M3 Report brings the viewer the best from GoldCore’s commentary and analysis, top guests, Chart Watch, and bonus clips from industry experts. In Episode 2 Dave and the team take a cogent look at inflation and the dysfunctional relationship between it and the actions of central bankers. We also have clips from our latest interview with Dr. Marc Faber, and Gareth Soloway brings us some brilliant chart analysis in Chart Watch. And, have you ever wondered what you would do if you were Head of the Fed? We asked six of our favourite guests. Be sure to stay tuned to hear their answers! If you haven’t already then make sure you’re subscribed to GoldCoreTV, so you’ll never miss an episode! Click Here to Subscribe and Be Notified When it’s Live
  13. When “whatever it takes” means confiscation of wealth One of the reasons people decide to buy gold bullion or add silver coins to their portfolio is because they cannot be devalued. No one can suddenly decide to print more gold or silver! Sadly, this is exactly what happens with currencies around the world. And the last two decades have been prime examples of this. As governments rush to patch up past mistakes, missed warnings and election cycles they resort to creating more money which ultimately leads to higher prices but less value slewing around the system. The self reinforcing trends of high inflation have become visible to all. Central banks and governments continue to do “whatever it takes” but now it is “whatever it takes” to deflect blame for the rising prices and falling asset prices. Central Banks Struggling to Contain the Surging Inflation Eroding wealth is hitting many people on several fronts – surging inflation on goods and services, tanking equity markets, and falling housing prices to name a few. Yet, governments and central banks claim no responsibility for the economic climate they have created blaming instead Putin for higher food and energy prices, speculators for eroding equity and housing markets, not to mention China for supply chain issues and lower economic activity due to the ongoing zero covid policy lockdowns. Surging inflation is more than a decade in the making. In our post on March 4, 2021, Central Banks Will Still Do “Whatever It Takes”! we discussed the then ECB President Mario Draghi’s “whatever it takes” of 2012 to save the Euro – that morphed into the 2021 promise from Rishi Sunak, UK finance minister’s promise of “whatever it takes” to support the British people and businesses through Covid lockdowns. Governments poured more than $15 trillion of additional support through increased spending and lower taxes in less than two years. Also, central banks printed money on a grand scale to sucked up all the additional debt issued from governments. Now central banks have conditioned everyone into the perception that they can save and solve problems with the “whatever it takes” promise over the last decade. Central banks have now pledged “whatever it takes” to get inflation under control. Chair Powell leads the bandwagon jumpers from old ‘transitory inflation’ onto new ‘yes we were wrong last year, but not wrong again this year’. Central banks have good reason to keep this bandwagon going in circles and not make much progress. Click Here to Watch The M3 Report John Maynard Keynes famously said, Remember governments have trillions in debt to deal with and the fastest way to reduce that debt is to inflate their way out of it. The other options are to raise taxes or to severely limit spending how many governments have the political will for either of those and if they do, then they are voted out with promises from the new government to reverse the measures put in place. The decade long excess is at a tipping point! Download Your Free Guide Click Here to Download Your Copy Now The annual economic report released this week by the Bank of International Settlements (BIS) warns that if inflation becomes entrenched in the global economy, then it could become the new normal and very hard to reverse. In other words higher prices lead to higher prices. The BIS doesn’t think that central banks, including the Fed, are doing enough to bring inflation under control. The Fed has raised the fed funds rate rates three times this year for a total increase of 1.5% – but the Fed is still “well behind the inflation curve”. The fed fund rate is in a range of 1.50%-1.75%, while the latest U.S. CPI reading for May came in at a year-over-year increase of 8.6%. Fed Fund Rate and Consumer Price Inflation Chart Inflation is Hitting its Tipping Point Warns BIS From the BIS Report: In addition to cyclical and structural factors, the level of inflation itself can influence wage- and price-setting. Hence the likelihood and intensity of wage-price spirals. In general, a high-inflation regime, if it persists, induces behavioural changes which raise the probability that it will become entrenched, not least by amplifying the impact of relative price increases. The report explains: The level of inflation is bound to influence the importance of inflation expectations. Once the general price level becomes a focus of attention, workers and firms will initially try to make up for the erosion of purchasing power or profit margins that they have already incurred. This, in and of itself, could trigger wage-price spirals if background conditions are sufficiently favourable. And, once inflation becomes sufficiently high and is expected to persist, they will also try to anticipate future changes in the general price level, as these will erode purchasing power and profit margins before contracts can be renegotiated. The report goes on to warn that once embedded inflation is very difficult and costly to bring under control and it advises central banks to avoid transitions from low- to high-inflation regimes in the first place – to nip inflation in the bud. Are we past that point? The BIS answer: We may be reaching a tipping point, beyond which an inflationary psychology spreads and becomes entrenched. This would mean a major paradigm shift. How on earth does inflationary psychology spread and become ‘entrenched’? This is something we explored recently on our new show The M3 Report. Along with our guests Jim Rickards and Gareth Soloway, host Dave Russell explored the idea of perception and asked for how long were politicians going to string us along telling us that all is FINE? I t seems too regular an occurrence these days to be told that inflation is either temporary or the result of covid, or Putin or someone sneezing. All whilst we listen from our cars that cost more than ever to refill, or from the kitchen whilst we cook meals that we can barely afford to cook. But, as Dave and Jim discussed, are perceptions starting to change? Are we now getting wise to the rhetoric? Here is what you need to know: for commodities like oil – high prices eventually cure high prices. But once inflation sets in for everyone – high prices mean more higher prices because cash cannot be trusted. Physical metals will benefit from inflation becoming embedded. Bottom line: in a high inflationary environment when the cake becomes smaller, the fight over it becomes bigger! And what does that paradigm shift look like? Sadly we still haven’t managed to get a hold of that crystal ball so we can’t be too specific. But, we do know that the world has been through paradigm shifts before. Whether through wars, financial crises or even pandemics (yes, covid isn’t the first). Every single time people are forced to find their own way to secure their savings and investments. They find their way to gold and silver, because when governments do ‘whatever it takes’ we should also do ‘whatever it takes’ to reduce the impact of the secret and unobserved theft that is inflation. Be sure not to miss the brilliant M3 Report! With over 10,000 views in its first week the show has been grabbing everyone’s attention.
  14. Jim Rickards! Chart analysis! The Wizard of Oz! What on earth are we talking about? Our brand new show, The M3 Report! Click Here to Watch It Now Today we are launching The M3 Report. Tune in for all things Metals, Markets and Money. With all the best bits of previous GoldCore TV offerings we now bring you something very exciting indeed. We’ve loved doing the podcasts and the guest interviews but there is so much going on in the markets, economy and on the street that we figured the best way to keep you informed was to mix things up a bit. With excerpts and bonus content from our yet-to-be-released interview with Jim Rickards we bring our own commentary and take on things going on. We also feature exclusive analysis from chart king Gareth Soloway. This week our theme is Perspective and how vital different perspectives are in order to gain any kind of sense of what is going on in the global economy today. We couldn’t think of anyone better to discuss this with than Jim Rickards himself. And stay tuned to the end to see Hire! Fire! Admire! when we asked Jim who in the public eye he really rates and who he absolutely does not. Make sure you don’t miss a single episode… Subscribe to our YouTube channel
  15. It’s been an interesting week so far in the world of gold prices and central banks making use of their gold reserves. For those asking if they should buy gold, two events this week provide further arguments on the benefits of holding the precious metal. There is little doubt that central banks, notably the U.S. Federal Reserve, are going to have a mess to clean up after the catastrophe they have created in markets. Just about everything is jittery – equities, bonds, housing …etc. Even gold and silver prices have been on a roller coaster ride from one day to the next. After last week’s Fed meeting on Wednesday equity markets rallied but then declined. On Thursday and Friday, fear took hold – namely fear of recession/stagflation. See our post on June 16 Is the Game Over for the Fed?. Click Here to Subscribe and Be Notified When it’s Live The chart below shows a comparison of gold, silver, select equity indices, and bitcoin. During this time of market turmoil gold and silver have done their job of holding their value! Take note of the sharp decline in Bitcoin once touted by many as the ‘new gold’ … in this instance Bitcoin is the largest decliner, but in US dollar terms gold has not declined at all! 2022 Asset Price Comparsion Chart Two other topics of interest made news this week: Firstly $100,000,000 of Russian gold was moved into Switzerland and, secondly the newly released report from the Bank of International Settlements (BIS) on the future of the monetary system. Russian gold shining again? The Swiss Federal Customs Administration reported that it imported over 3 tons of gold from Russia in May. This is the first time that Switzerland has imported gold from Russia since the war broke out in February. This could be a sign that the perception about Russia is changing as most refiners would not accept Russia’s gold after sanctions were implemented in late February. Back then LBMA (London Bullion Market Association) removed Russia’s fabricators from its accredited list. This put a de facto ban on newly mined Russian gold. However, previously mined gold was not prohibited from being further processed by other refiners. But some refiners were hesitant to do so. Russia has a big impact on the gold market, it is the second-largest gold-producing country (following China) and its central bank holds the 5th largest gold reserves. Russia’s central bank holds 2299 tonnes of gold. For more see our post from December 9 Russia: A Prominent Player in the Global Gold Market The physical move of gold from Russia to Switzerland does not mean that the Russian Central Bank is selling its gold. How Long Will Inflation Last 2022 Watch Dr. Charles Nenner Only on GoldCore TV More likely is that this gold is loan guarantee collateral. Obviously, no one but the Russian central bank knows for certain what is happening to this physical gold. But it does once again give us a chance to remind everyone that counterparty risk is so important. Russia may have willingly moved some of its refined gold to Switzerland because without doing so that physical gold cannot become the collateral for borrowing money or maybe even the basis of the gold sale. No one would be willing to lend Russia money against that gold if the physical gold remained in Russia because: if you don’t hold it then you don’t own it. Here is a hypothetical example to illustrate the workings of a loan for which this recently shipped gold serves as collateral. Assume that Russia wants to borrow $100,000,000 from India to pay for computer chips made in Singapore. India might be willing to lend money to Russia despite the Ukraine war. However, India definitely knows Russia cannot be trusted to repay just because Russia previously agreed to pay. Said another way, Russia is not considered a reliable counterparty, especially regarding assets contained within its own Russian borders. Furthermore, after a loan default, no Russian judge would dare rule India had a valid claim unless President Putin said so publicly. Hence India cannot rely upon the Russian legal system to protect India’s interests as a lender to Russia. And India knows that its own Indian army is not strong enough to force its way into Russia. Then collect $100,000,000 of assets, and then leave Russia if the collection is needed following a loan default. So, a peaceful collateral arrangement is necessary where the physical gold is moved to where India can seize it if the loan goes bad. Such holding and owning agreements are needed before any loan is made. Without India being comfortable that the loan principal will be repaid by either cash from Russia or by India seizing the tonnes of gold, no loan would ever be advanced. So what is the solution? The solution was that gold collateral for such a loan needed to rest with a counterparty acceptable to India. India knows that Switzerland will hand over Russia’s gold once it is clear that Russia cannot (or will not) repay India any other way. From the Indian lender perspective, Switzerland is an acceptable counterparty for physical gold whilst Russia is clearly not. This means the gold guarantee of a $200,000,000 loan must be held in Switzerland instead of Russia. On the other hand, Russia views Switzerland as a better counterparty than India for holding its gold because Switzerland has zero incentive to seize gold which does not belong to it – especially from Russia. Notably, the Russians would never choose America as a counterparty for this gold loan. Since, America is already busy seizing whatever Russian assets it can find. Switzerland’s Russian Gold Imports Chart The Future Monetary system The second topic this week is a special chapter from the Bank for International Settlements (BIS) annual Economic Report titled “The BIS presents a vision for the future monetary system”. BIS is an international organisation that states its mission is to support central banks’ pursuit of monetary and financial stability through international cooperation and to act as the bank for central banks. The key points of their chapter are that the limitations of ‘crypto’ and blockchain currencies make it unsuitable for central banks to adopt Bitcoin as the base of its monetary system: Structural flaws make the crypto universe unsuitable as the basis for a monetary system. It lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralisation narrative, crypto often relies on unregulated intermediaries that pose financial risks. The report goes on to explain that central banks have centralized the monetary system within a country and the far-reaching innovations, such as those in the crypto universe, entail a radical departure…. Innovations such as programmability and composability on permissionless blockchains enable these services. Such systems are “always on”, allowing for global transactions 24/7, based on open-source code and knowing no borders. … As dramatic as the recent price collapses have been, focusing on the price action alone diverts attention away from the deeper structural flaws in crypto. This renders them unsuitable as the basis for a monetary system that serves society. Gold To New All-time-high When Fed QT Fails Watch Don Durrett Only on GoldCore TV This report from BIS reinforces our long-held belief that cryptocurrencies are not going to be part of the ‘official’ central banking system for a long time to come. Yes – the monetary system will evolve and digitize even further…. but not with private cryptocurrencies since central bankers will never endorse a system not clearly controlled by themselves. Central banks won’t be replacing their gold holdings with crypto no matter how low or high the bitcoin price gets. This weekend we are launching The M3 Report, our new show about Money, Metals and Markets. With highlights from our yet-to-be-released interview with Jim Rickards, Chart Watch with Gareth Solloway, and commentary from our own team, this is something not to be missed. In Episode One we’re chatting about the power of perception so look out for the Wizard of Oz, thoughts on gas prices, and what Jim Rickards really feels about Janet Yellen!
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