Showing posts with label decline. Show all posts
Showing posts with label decline. Show all posts

Friday, January 20, 2017

The Further Decline in International Reserves

Look at what happened when Nixon closed the window of gold redeemability in 1971, effectively ending the Bretton-Woods Agreement.  Central bank reserves surged exponentially, as central bankers printed endless currencies without the constraint of gold backing.  This only increased the magnitude of booms and busts of credit and liquidity.  This is why we have soaring price inflation, and reduced purchasing power--despite government CPI data suggesting otherwise.  With stagnant wages and sagging economies, coupled with rising cost of living expenses, the average citizen suffers from a reduced standard of living.  This is what causes social unrest.

http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=304

Wednesday, November 25, 2009

Supply side of gold

There has been much focus on the fundamentals of the rally in gold prices, mostly on increasing demand for nonmonetary (jewelry, art, industrial) and monetary (investment) reasons. Gold has a consistent record of having store of value over centuries, and has been a useful hedge against inflation, financial crises, and currency debasement.

But the supply side of the equation hasn't been addressed by the mainstream financial media. The bullish case on the supply side is equally compelling. Gold production peaked in 2001 and is in steady decline, despite much higher prices. Higher demand and lower supply can only have one long-term outcome.

http://www.brisbanetimes.com.au/business/miners-were-running-out-of-gold-20091125-jqqy.html