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It is easy to get caught up in data releases. The media is keen to read a lot into them, hoping it will offer some sense of what is really going on, so often the news is about numbers just announced or expectations for what one economic measure will show from one month to the next. However, as we outline below, many of the numbers that are released on a frequent and regular basis (CPI and employment, for example) can be misleading. Whether it’s down to the inputs or how the figures are presented to us, they rarely give enough insight into the breadth and depth of what is really going on. They are snapshots in a small time frame, with very selective inputs. This is why we like gold. Gold is a constant. It is tangible, finite and exists without the say so of central banks and government policies. So when you next hear the new CPI number of payroll data, rather than take it as a given that they are telling you what the economy looks like right now, why not look at gold and the gold price across a number of currencies and see what that tells you about the state of play now and in the long-term. Because, ultimately that’s what matters. Click Below to Watch Now Equity markets plunged on Tuesday. The systematic correlation of equity markets meant that not only did U.S. equity markets decline sharply but it also meant many international equity markets were also sharply lower. The main U.S. indices all plunged: the DOW (-3.9%), S&P500 (-4.3%), and NASDAQ (-5.2%). International indices, although not as steep of a decline, were also down, the FTSE (-2.3%), and DAX (-2.7%) for example. The catalyst for the decline was the U.S. CPI report for August showed that inflation continues to be a major issue for the U.S. economy. This changed the probability of a larger Fed funds interest rate increase at the Fed’s meeting next week, and it also increases the probability of ‘larger’ increases at future meetings. CPI is one of the main indicators for inflation in the U.S Before the CPI data release on Tuesday the market was somewhat split between whether the Fed would increase interest rates by a further 50 basis points or by 75 basis points, after the CPI data the conversation has changed to whether the Fed will increase by 75 basis points or 100 basis points. Furthermore, the stopping point of the current tightening cycle seems higher than before – some are calling for the Fed funds rate to reach more than 4.5% before the Fed pauses. Economic weakness is already showing in the US economy (negative GDP, for the first two quarters for example) and the fear is that the higher the Fed raises rates the deeper the resulting recession will be. The recession has been the ending result of all but two of the Fed’s nine tightening cycles since 1971. The systematic failure extends to the very data that markets are reacting to – and which the central banks are basing their rate increases on. The Consumer Price Index is one of the main indicators for inflation in the U.S. This data is released each month by the U.S. Bureau of Labour Statistics and represents the increase in prices of a weighted basket of goods and services compared to a prior period, usually the previous month or previous year. Two main components of CPI There are two main components of CPI that are often touted by the press – Total CPI (also called Headline CPI) and Core CPI, which takes out the energy and food components. The data released for August showed that Total CPI increased by 8.3% from August 2021 (which was a slightly smaller increase than the 8.5% in July). However, Core CPI increased by 6.3% compared to August 2021 (which was a larger increase than the 5.9% in July). US Consumer Price Inflation Chart The idea behind Core CPI is that by taking out the energy and food components, which are generally more volatile (they can increase or decrease quickly depending on economic and political conditions), that the underlying components better determine the longer-term trend of the price pressures in the economy. This means that Core CPI is measuring the price differences of goods and services such as shelter, medical care, clothing, and vehicles (both new cars and used). The largest of these components is shelter which is approximately one-third of Core CPI, which is measured – not by the rise in housing costs or mortgage payments but by what the Bureau of Labour Statistics calls “owner’s equivalent rent of residence”. The problem with this measure is that it lags house price increases 12 to 18 months. This means that the 2020 and 2021 house price increases are just now getting picked up in CPI data. The bottom line on CPI data is that not only is it a lagging indicator. This means that it is data from the past but that the actual components are very antiquated and don’t capture the true rising prices in the economy. There is no doubt that inflation is an issue in today’s economies, and the official CPI data undoubtedly has under measured rising prices for many years now. However, our point here is that now the Federal Reserve and other central banks are basing their interest rate decisions on antiquated data sets and will most likely overshoot in their quest to bring inflation down, which will in turn cause a significant slowdown in the economy, which leads to high unemployment. Don’t let low unemployment rates fool you, the unemployment rate does not generally start to rise until a recession is underway and unemployment does not peak until mid-recession. All this is an example of the discussion in our recent podcast on What Problem Does Gold Solve? Gold provides an avenue to protect our portfolio from financial systematic risk. The rapid rise in interest rates into an economy that is addicted and relies on cheap money is not going to end well. The systematic risks are only starting to rear their ugly heads and it is likely to get ugly before central banks are forced to retreat into lower rates again – probably by the middle of next year. We end with two charts: The first chart below shows the relative performance in 2022 year-to-date of gold and various equity market indices. The second chart shows the gold price in various currencies. For those holding gold in currencies besides the U.S. dollars the returns have been even better this year-to-date. Gold Price and Various Equity Market Indices Chart Gold price In various currencies If you’re new to gold and silver investment or perhaps looking for a refresher about holding gold in your portfolio, then have a listen to Stephen Flood’s interview on the Capital Club podcast. Stephen discusses the problem that gold solves as well as suggested allocations and what counterparty risk really is. Listen here. You might have noticed that in the last few months we’ve sent some brilliant interviews and commentary your way, all from the GoldCore Team. If you’ve enjoyed it or would like to watch our latest interview with Jim Rogers then head to our YouTube channel and hit ‘subscribe’.

Realising that you need to protect your portfolio from financial systemic risks is a tricky thing. Because, not only have you identified that all is not well in the economy but you now need to make a decision about how best to protect your investments. In all likelihood, this is why you own or are thinking about owning gold bullion. Click Here to Listen to Podcast Have you ever asked yourself? What problem does gold solve in today’s environment? Should I own gold ETFs or gold bullion? What is and how can you reduce counterparty risk? GoldCore founder and CEO Stephen Flood answers these questions and more in his chat on The Capital Club podcast. Podcast host Brian Adams does a great job asking Stephen the key questions about the need to hold gold, what kind of gold we should hold and what allocation to gold we should have. Whether you enjoy your podcasts in the car, in the bath or when you’re walking the dog this is a great listen for anyone who is interested in gold ownership and the state of the financial system. If you’d like to hear more great content about gold, silver and the financial system then why not sign up to our YouTube channel, where we release market-leading commentary and interviews every week.

One of the reasons people choose to invest in gold bullion or to buy silver coins is because they are simple and they are finite; basically the opposite of fiat currency. The complexity of fiat-driven markets and infinite possibilities to create money works to the advantage of central banks. And they particularly like to take advantage when asked by the general public a very obvious question… Central banks are on the defensive over printing too much money during the pandemic. One of the latest examples is a post from the Bank of Canada on Twitter (August 25) stating #YouAskedUs if we printed cash to finance the federal gov’t. We Didn’t. The Twitter feed went on with an explanation that the Bank of Canada bought bonds from banks in the open market. This was to help unblock frozen markets at the start of the pandemic. This lowered the cost of borrowing to help Canadians get through the pandemic. Then the BoC Twitter thread states We bought the bonds with settlement balances – a kind of central bank reserve – not with bank notes. And finally, the Bank of Canada states Settlement balances don’t permanently add to the money supply. Unlike cash, we can remove those reserves from the system. And you can see that we’ve been doing just that (with the chart below as their evidence.) Let’s take a step back and look at the BoC’s Balance sheet. Starting with assets. Bank of Canada Assets The reason that the Bank of Canada started purchasing assets in 2020 was to provide liquidity to markets in the wake of covid-induced government lockdowns. The bank provides liquidity to markets by purchasing assets from its primary dealers and from the public. Although the main asset it purchased was Government of Canada Bonds it also purchased mortgage bonds and other assets. For very short liquidity it purchases assets Under Resale Agreements. This is an agreement between the Bank of Canada and the Primary Dealer that the Primary Dealer repurchases the assets back on a specified date. All of these purchases are added as assets to the BoC’s Balance sheet. The Bank of Canada expanded its assets from just over CAD$100 billion in assets in mid-March 2020 to CAD$550 billion by July of 2020. The Bank held these assets until March 2021 when it started selling them back into the market. However, the assets on the BoC’s balance sheet currently still stand at almost $400 billion. Bank of Canada Assets Chart When the BoC purchases securities these become an asset on its balance sheet. However, this means that there must be an offsetting liability. In other words, the BoC has to pay for this asset somehow. Also, the most efficient way for the BoC to do this is to ‘credit’ the primary dealer’s account electronically. This then becomes part of the settlement balances on the liability side of the BoC’s balance sheet (settlement balances are referred to as excess reserves by other central banks). This is how the money supply is created from the Central Banks’ monetary base. Bank notes in circulation are also liabilities on the BoC’s balance sheet. (Note that both the Settlement balances and the Bank notes in circulation shown in the BoC’s Twitter post above are both liabilities of the Bank of Canada.) This ‘electronic payment’ now becomes an asset on the primary dealer’s balance sheet that they either use to purchase other assets or use to make loans. This then expands the money supply. The central bank, in this case, the BoC, creates what is known as the monetary base – or high-powered money. However, it is the banks that then use this base to create and expand the money supply. They do this through taking in deposits and then making loans against those deposits. Canada, like the UK, does not have an ‘official required reserves’ requirement of 10% like the U.S. Federal Reserve does, however, Canadian banks still need to have enough reserves to ensure smooth settlement at the end of each day. In general, this is around 10% of their M1 liabilities. Using the 10% reserve requirement as an example. This means that when a bank receives a deposit that it only has to hold 10% of that deposit. It can lend out or purchase other assets with the other 90%. An example of this is if Consumer A makes a deposit of $100, then the bank can lend $90 of that to Consumer B. Once Consumer B deposits that loan with their bank then Consumer B’s bank now can lend out $81 dollars and so on. Jim Rogers and Patrick Karim on Metals, Markets and Money This is how the money supply is created and expanded by banks from the Central Banks’ monetary base. If consumers A through F all use their new bank loans to buy homes, then we have liquidity fueled debt driven housing boom. Canada’s M1 money supply, which includes all banknotes and coins in circulation plus chequable deposits held in commercial banks. This has been increased by more than 50% (CAD$500 billion) since 2020. Canada M1 Money Supply Chart Bad News for Central Banks? Bottom line is that there is CAD$500 billion more money in the Canadian economy than there was pre-covid. The money supply also surged in other countries. The UK has 630 billion more pounds. The U.S. has added more than 3 trillion in dollars to its money supply for example. So it seems clear that the Bank of Canada, one of the central banks, is deflecting valid criticism rather than openly and clearly answering reasonable questions put to it by the public. Instead of saying ‘yes we added more currency to buy bonds’ they actually said ‘we did not print money’ in the hope that no one notices the semantics difference. The staff at the BoC is trying to be too clever by half. Canada is a mediocre economy with an uninspired central bank. So, if their staff is bold enough to be super cute with words instead of forthright today… just imagine what baseless claptrap they will attempt to pedal when things really get rough. We note that physical gold does not need to tweet. Physical silver does not need to take questions from the public! Over time the price of metals rises precisely because the metals are entirely outside the shenanigans of the central banking system!

Where do you turn to, right now? Inflation is at record levels, bond and equities are causing all sorts of headlines, food prices are skyrocketing, war continues to brew in Europe and we’re about to head into an energy crisis just as winter starts. Quite simply, the Floor is Lava. Click Here to Watch It Now This is our theme for today. We don’t claim to be able to solve these problems, but we do intend for The M3 Report to bring you the best commentary, analysis and expert minds to help you navigate this increasingly tricky period. We have Jim Rogers joining us to talk about the biggest bear market of his lifetime, as well as US Foreign Policy. We are also delighted to welcome Patrick Karim of NorthStarBadCharts.com to Chart Watch, listen out for when he expects to see gold break-out. And, finally, have you ever wondered what the best piece of investment advice from Jim Rogers is? Or asked him what the biggest lie is that people believe? Stick around for our quickfire round at the end of the show. Let us know your thoughts on the show, as ever we welcome feedback whether on Youtube, by email or on Twitter. Snail mail is also an option! Watch episode four of The M3 Report now. Make sure you don’t miss a single episode… Subscribe to GoldCoreTV

It would be easy for those who have decided to buy gold and silver bullion to lose heart over the precious metals, had they seen how prices reacted to Chairman Powell’s comments, last week. However, to do this would be very short-sighted. Whilst Powell may well have signaled that the Fed will stay on this path of tightening this does not mean that they have resolved the issue. Rather, it likely means that the Fed is reacting a little too hard, a little too late and this will almost certainly pave the way for gold and silver investors. Central Banks come under scrutiny The Federal Reserve of Kansas City hosted its annual policy symposium for central bankers on Thursday and Friday of last week. This was the 45th year of the annual event that is held in Jackson Hole Wyoming. During turbulent markets, a central banker’s every word is scrutinized to extract information from presentations on future policy moves. The highlight of this year’s conference titled Reassessing Constraints on the Economy and Policy was Fed Chair Jerome Powell’s Friday morning presentation. Powell’s short presentation focused on the Fed’s continued campaign to bring inflation down close to its 2% target. Click on the Link to Watch Now Gold and silver prices both declined sharply as interest rate expectations rose (along with the US dollar and real rates). US equity markets also declined with the S&P 500 Index plunging 3.4% on Friday. Key statements from Powell’s presentation included: Powell’s statement regarding what the September 20-21 meeting might bring in the way of additional hikes reiterated what he said at the July Fed Meeting The lower inflation reading Powell referred to was that both the Consumer Price Inflation Index (CPI) and the Personal Consumption Expenditure Index (PCE) came in slightly lower in July than June, the CPI at 8.5% compared to 9.1% in June and the PCE at 6.3% compared to 6.8% in June. It is too early to know if the lower numbers are merely a pause in inflation or a turning point into inflation declines. Either way, the Fed remains well behind the inflation curve with the fed funds rate only in the 2.25% to 2.50% range. However, the Fed and other central banks also must consider slowing economic growth, wobbly housing markets, lower equity markets, and rising debt servicing costs for both households and governments. Especially in Europe, the rising costs of natural gas and low storage supply are already stretching household budgets to breaking point even before winter sets in. Fed Fund Rate and Inflation Indicators Fed Fund Rate and Inflation Indicators Central Banks have Lost their Sense of Reality Central banks have printed so much money and kept interest rates low for so long that the unwinding of the damage is going to take time. As Powell stated there will be pain as households and governments sober up from the long party of low rates. The main problem now is that central banks have lost their sense of reality. Also, central banks are likely to now push rates too high, resulting in a deeper recession than otherwise. According to the CME Group’s FedWatch Tool, the probability of another 75-basis point hike by the Fed at the September meeting has increased back up to almost 70 percent. The probability that the fed funds rate will end the year in the 3.75% to 4.00% range is up to 60% (this is 1.5% higher than the current rate). Markets are currently placing the highest probability on the fed funds rate remaining in this range or being lower by July 2023. However, these probabilities do change quickly as new data points are released. Before the September meeting, there is an employment report scheduled for Friday. Also, CPI data for August to name a couple of the data releases still to come. The bottom line is gold and silver investors still require patience. However, the day of reckoning will come, and prices will break out of their sideways channel. Circling back to the Jackson Hole Symposium we leave the reader with the last quote from economist Edward Kane from the 1983 symposium. This quote seems very relevant to the current monetary policy environment: If you enjoyed this little piece of insight into the kinds of discussions we have in the GoldCore office, then why not subscribe to our YouTube Channel. There you will find a host of interviews and discussions from the great minds, commentators and experts in the financial and precious metals markets. You can see our latest interview with Jim Rickards and Marc Faber, here.

It is becoming increasingly clear that UN Nations are realising that it is very difficult to isolate a country that is already a global power. And not just a global power in terms of the military but also in terms of the world’s dependence on its energy exports. However, Russia’s energy exports are not the only thing the West benefits from. One little known fact about Russia is that its highest non-energy export is gold, exporting around $15 billion of gold bullion last year. Also, when the West really starts annoying Russia, how does Russia respond? It decides it will find a new way to manage its precious assets, and ensure that it’s to a level respected by its major trading partners, well away from the influence of the US dollar. One more step in a New World Order? Russia announced a proposal to create a new international standard for trading in precious metals. The Moscow World Standard (MWS) with the goal of the MWS becoming an alternative to the LBMA. This proposal is the latest in Russia’s desire to create independence from NATO countries and their associated institutions and currencies. Moreover, the sanctions against Russia over its invasion of Ukraine continue to mount. In March the LBMA suspended the accreditation of Russian precious metals refiners. Additionally, at the G7 meeting at the end of June the G7 countries imposed a ban against any Russia-produced gold entering the UK, Canada, US, or Japan. Gold is Russia’s largest non-energy export estimated to have added around the US $15 billion to the Russian economy in 2021. With LBMA at the heart of global precious metal trading being located in the UK, this shut Russia out of formal international markets for gold and silver. The additional sanctions also included an asset freeze of the Russian state-owned Sberbank. Dinner Party with Marc Faber, David Morgan and Jim Rickards Among other sanctions, Russia’s banks were cut off from the SWIFT processing system in March 2022. See our March 3 post titled SWIFT Ban: A Game Changer for Russia? The mounting sanctions have expedited Russia’s (and other countries such as China, Saudi Arabia) desire to de-dollarize and create systems that do not rely on G7 countries’ institutions. Russia and China have both been very vocal about their desire to elevate the U.S. dollar as the reserve currency. Moreover, the main problem with this plan is that there is not a solid alternative. However, proposals of a multi-currency system along with actions such as Russia demanding payment in rubles are chipping away at the US dollar’s role. (For more on Russia’s de-dollarization plan, which includes increased gold reserves see our post from December 9, 2021, titled Russia: A Prominent Player in the Global Gold Market.) The latest proposal is another of these wedges that will chip away at the institutions in place. According to press reports, the proposed Moscow World Standard would be a specialized international brokerage headquartered in Moscow. However, the price-fixing committee would include central banks from the Eurasian Economic Union (EEU) which includes Russia, Kazakhstan, Belarus, Kyrgyzstan, and Armenia. Membership would then be available to large gold players including China, India, Venezuela, and South American Countries such as Peru. A new gold standard? Under the MWS system proposal, the price of precious metals is fixed, either at the national level. In each key member countries’ currency or at an aggregate level. This is with a new currency such as the BRICS currency proposed at the BRICS conference also held at the end of June. A New Currency proposal to rival the U.S. Dollar The leaders of the five major emerging economies, Brazil, Russia, India, China, and South Africa proposed creating an international reserve currency to rival the U.S. dollar and the IMF’s SDR (Special Drawing Rights). Moreover, Putin is quoted as saying that Additionally, other countries that are currently considering joining the BRICS group are Turkey, Egypt, and Saudi Arabia. Putin is quoted as saying that He went on to give the example that Indian retail chain stores would be housed in Russia, and Chinese cars and hardware would be imported regularly. The increased contracts between BRIC countries show that Janet Yellen’s ‘friend-shoring’ concept works both ways. This means the US is looking to source supplies from countries friendly to the US, wanting only “countries they can count on”. Also, see the April 20, 2022 post titled The Friend-Shoring’ of Gold – A New World Order? Apparently what is good for Yellen is also good for Putin since he has his own circle of friends. Moreover, don’t let the reserve currency deceive you on the gold price. Also, one final comment on currencies and gold. The US dollar has surged this year for reasons related to its reserve currency status. (See David Russell’s interview on August 4 with Brent Johnson – The Dollar Milkshake Theory Explained). Since the U.S. dollar is the reserve currency, gold is generally quoted in US dollars. Additionally, in U.S. dollar terms gold is down slightly year-to-date. However, looking at gold in terms of other currencies paints a different picture. The chart below shows gold’s performance in year-to-date in terms of other major currencies, which are all positive.

Today’s guest is as much a historian and anthropologist as he is an expert on market events. Jon Forrest Little joins Dave Russell on GoldCore TV today and brings some fascinating insights into what we are currently seeing when it comes to political decisions, financial events and human reactions From what we can learn from the Romans through to why we need to consider gold’s utility rather than its price, this is an interview bringing a new perspective as to why we are where we are. Click on the Link to Watch Now Even if you are not familiar with Jon’s work and commentary then we highly recommend you watch this interview, as new perspectives such as his really help us to understand how we can best protect our wealth and savings in times such as these. And please, don’t forget to let us know what you think, in either the comments or on Twitter. If you enjoyed our chat with Jon 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 is paving a new path in the alternative market and economic commentary space.

We’re the first to admit that investing in gold can be pretty boring. Don’t get us wrong, when you first decide to buy gold then the newness of it is exciting, as you choose which gold bullion dealer to use then it is interesting and when you actually see the gold bars or coins appear in your account then it’s really exciting. But then what? There aren’t any major price moves, it’s not like you see any huge crashes or major leaps to keep you on your toes, not like with crypto. But, as you’ll read below, boring really is the best way to be. Well, when it comes to investments that is. Gold V/S Crypto The gold price is hovering around US$1,800 per ounce, where it has averaged since the beginning of 2021. Your feelings about the gold price likely are similar to ours: gold has been boring compared to stocks and crypto. Since the beginning of last year the gold price, with the exception of a rise of around 14% when Russia invaded Ukraine (note that the safe-haven demand due to the invasion which resulted in this rise was in contrast to the decline in cryptocurrencies and equity markets), has oscillated around 5% of the average just over US$1800. Gold Price Chart In contrast Cryptos oscillate 50% above and below Bitcoin’s average of 42,700 since the beginning of 2021. Most coins have had large runups and then sharp declines over the last year and a half. Some cryptos have moved 100% down. Bitcoin remains close to 50% below its average since the beginning of 2021. Bitcoin Chart Equity markets have had swings in the middle; more swing than physical metals but less swing than Bitcoin, oscillating around 20% from their respective averages since 2021 began. The above shows the store of value of gold and gold’s low volatility. Both qualities help to stabilize an investment portfolio in times of turmoil. Therefore, no matter how “boring” gold has been in recent months – the alternatives have had worse performances. Adding to the store of value is the fact that counterparty risk is avoided by holding physical metals. This factor has gained importance versus paper contracts and versus investing in cryptocurrencies of late. Versus paper contracts: This is a follow-up to our July 14 post titled Gold traders on trial: Only buy physical where we discussed the trial of former JP Morgan traders for manipulating trades. Last week the traders were convicted on charges of fraud, spoofing, and market manipulation of markets for more than a decade. The oversized position of JP Morgan in the futures market gave the traders the power to move prices and manipulate the worldwide price. The criminal case against the former JP Morgan traders is only one example of many scams and manipulation of markets. And this example shows manipulation in regulated markets, while the scams in cryptocurrency markets are even more blatant and expensive. Versus investing in cryptos The second point is growing cryptocurrency scams. One of these scams is called a digital ‘rug pull’. According to cryptowallet.com: A rug pull is a term used in the crypto community to refer to cryptocurrency projects that turned out to be exit scams. A rug pull is said to have occurred if the developers of a crypto project abscond with investors’ money. There are several types of digital rug pull in the crypto space, which include a form of Ponzi scheme where the project manager convinces investors to buy specific crypto and then flees with the funds. There are also cases where the head of a crypto exchange claims the exchange has been hacked and then takes off with the assets in the exchange wallets. The prevalence of ‘rug pulls’ is growing and there have been digital ‘rug pulls’ every month so far in 2022. Chainalysis reports the total loss to scam victims was over $7.7 billion worldwide in 2021. The chart below from chainalysis.com shows the estimated total value of scams from 2017-2021. With the increasing prevalence of ‘rug pulls’ 2022 will likely be worse than 2021 when measured by dollars stolen. Total Yearly Cryptocurrency value received by scammers, 2017-2021 Chart It is important to recall that emotions and exciting movements can cause trouble for investors. Therefore boring is beautiful … investors hold onto boring investments far longer than the next new creation, which could turn out to be a scam or decline significantly after a ‘bubble’ run-up in price. The store of value of gold has been demonstrated repeatedly. Long-term investments give better results because they are easier to buy and hold…which makes boring investments into better investments. All of this reinforces our belief in physical metals and that is why Goldcore stays true to the physical metals. Next week we will be interviewing Jim Rogers on GoldCore TV. Recently Jim issued some stark warnings about cryptos and security. For Jim, right now is a great time to own precious metals, and he recommends we all buy silver. Make sure you are subscribed to GoldCore TV so you don’t miss it! If you can’t wait for Jim’s interview then why not head to GoldCore TV now for a new offering, a dinner party with Jim Rickards, Marc Faber and David Morgan. If you’ve ever wondered what Marc Faber’s biggest investment regret is, or maybe what books Jim Rickards would recommend then now is your chance. Dinner Party with Marc Faber, David Morgan and Jim Rickards

Imagine you could throw a dinner party with some of the great minds of the gold and silver world. Who would you invite? What would you ask them? GoldCore newcomer Jan Skoyles did just this. Going through the GoldCore TV archives, Jan found some unused footage with some of the greats of the gold and silver market and put them together to have her own little dinner party. If you’ve ever wondered what books Jim Rickards would recommend, or what Marc Faber’s biggest investment mistake was, or even what David Morgan’s first job was then now is your chance. Join Jan Skoyles’ dinner party as she asks Jim Rickards, Marc Faber, and David Morgan some of those questions you’ve always wanted to hear the answers to. Click on the Link to Watch Now

When people ask why they should invest in gold or buy silver coins, we often explain that they should do so because they are a form of insurance. Many of us are taking steps right now to protect ourselves from the impact of inflation on our day-to-day spending, others are trying to manage the increase in interest rates and maybe you are preparing your home so your energy bills won’t be impossible to manage. These are all ways of insuring ourselves against major changes that we all face. But how are you insuring your savings and portfolio against the impact of inflation, war in Europe (or elsewhere) and other unforeseen events? This is where gold bars or silver bullion comes in. As today’s blog outlines, the energy crisis appears to just be in its infancy, and gas prices might not be the only thing that is beginning to cause problems, giving us even more reason to insure our portfolios. Europe was dealt another blow in the energy crisis at hand this week as oil supply from Russia was cut off for three European countries over a payment issue that resulted from sanctions. The problem occurred when the Russian pipeline operator paid the transit fee on July 22 to the Ukrainian operator. However, they received the money back because it was not authorized under sanction rules which prohibit European bank involvement with any transactions from Russia. Only with explicit authorization from European regulators to conduct settlements could Russia’s money be sent. The authorization did not come. Moreover, the payment dispute has resulted in the southern section of the Druzhba pipeline being turned off. The three countries, Hungary, Slovakia, and the Czech Republic are all very reliant on oil from Russia to fuel their economies (estimated at about 250,000 barrels a day in 2022). Also, if the dispute over payment doesn’t resolve in the coming weeks a dire situation will ensue. Moreover, oil flow through the northern end of the Druzhba pipeline through Poland and Germany was not halted. Druzhba Dependents Europe is also heavily reliant on supplies from Russia for diesel, natural gas, and coal. Supply problems which started in December 2021 (see our January 20 post European Energy Crisis: 4 Things You MUST Know!) have only escalated as the Russia/Ukraine war continues. The flow of natural gas in the Nord Stream 1 pipeline has been reduced to around 20% of normal capacity. This is making it very difficult for Europe to increase its reserves for winter. Major Energy Crisis: The Worst Nightmare Germany is the bloc’s largest consumer of Russian natural gas, followed by Italy which gets approximately 40% of its supply from Russia. Additionally, concern has grown that Russia could cut its supply of natural gas completely. Although countries are running “save energy” campaigns and looking into alternative sources of energy this crisis is far from over. European Gas Prices Chart Additionally, Europe is not the only region affected. Fatih Birol, IEA Executive Director, warned in mid-July that Also, Birol went on to say that Also, this faster adoption of government policies are already evident inside ‘The Inflation Reduction Act’ passed by the U.S. Moreover, the Senate which injects upwards of U.S.$360 billion into the U.S. clean energy economy. Will Silver Prices Go Up to $300? Watch Peter Krauth Only on GoldCore TV Part of the money is earmarked for the power sector and electric vehicles with another section awarding tax credits, grants, and loans totaling US$260 billion to companies in the clean energy sectors. These clean energy incentives include mature sectors such as solar, wind, and nuclear along with innovative technologies such as hydrogen and carbon capture and storage. The Chinese Dominance With the shift away from Russian energy comes also a shift away from China’s manufacturing advantages. Chinese companies currently control around 80% of the global supply chains for solar power. Its current pacing is set to reach 95% by 2025 according to the IEA. China also currently dominates much of the lithium-ion battery sector. It also is a key producer of wind turbines. Also seeking to quickly build capacity in clean hydrogen technology (Bloomberg.com). Although, this major shift is going to take time, money, and security of resources. New resources and new supply chains must be found and built which means more government spending. This will lead to central banks buying that debt. The short of it is that the economic environment is shifting again as governments continue to scramble to speed up spending for new initiatives. Gold and silver will benefit from higher prices because more printing and borrowing push the metals higher. If you’re enjoying our market commentary, why not tune into our podcast or our YouTube Channel? Check out our interview with Steve St. Angelo for more on how energy dynamics are evolving and how this will increase the need to own gold and silver. Or, see the latest The M3 Report with silver guru David Morgan and technical analysis from Gareth Soloway, as well as insights from our own team. Europe Energy Dependence Crisis Watch Steve St. Angelo Only on GoldCore TV

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

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.

“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.

“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

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!

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

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

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

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

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!

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

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

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.

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