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The Screaming Fundamentals For Owning Gold

We're at a moment of historic opportunity
Tuesday, December 8, 2015, 12:53 PM

Every year or two we update this report, which lays out the investment thesis for gold. Here is this year's version.

Silver is touched upon only as necessary; as a separate report of equal scope is required for that precious metal.

Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world's fiat (unbacked) currencies. If this experiment fails -- and we observe it's in the process of failing -- gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it. » Read more

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Buy Gold While You Still Can!

An important update on the supply of physical gold
Friday, September 25, 2015, 3:56 PM

This report centers on preponderance of fascinating data revealing the extent of the West's massive dis-hoarding of physical gold, for the first time, begins to allow us to start estimating the range of end-dates for the flow to the East.

Here’s the punchline: there’s an enormous and growing disconnect between the cash and physical markets for gold. This is exactly what we would expect to precede a major market-shaking event based on a physical gold shortage. » Read more

Insider

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China's Demand for Gold Has Trapped The West's Central Banks

Kill the banks or kill their currencies?
Wednesday, April 9, 2014, 6:12 PM

Every once in a while, an Off the Cuff interview is so important that we decide to make it available to the entire public. This is one of those occasions.

In this week's Off the Cuff podcast, Chris and Alasdair Macleod build on the insights laid out in Chris' recent mega-report last week on gold: The Screaming Fundamentals for Owning Gold. And specifically, they delve deeply into the poorly-understood topic of why Chinese demand has become such a game changer in recent years. » Read more

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The Screaming Fundamentals For Owning Gold

Updated 2014 edition
Friday, April 4, 2014, 9:44 AM

This report lays out the investment thesis for gold. Silver is mentioned only where necessary, as a separate report of equal scope will be forthcoming on that topic. Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well. Timing and logic for both entering and finally exiting gold as an investment are laid out in the full report.

The punch line is this: Gold (and silver) is not in bubble territory, and its largest gains remain yet to be realized; especially if current monetary, fiscal, and fundamental supply-and-demand trends remain in play.

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There Is Too Little Gold in the West

The history of gold's flight to the developing world
Friday, December 6, 2013, 1:53 AM

Western central banks have tried to shake off the constraints of gold for a long time, which has created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand. It is important to understand how little there is and the dangers this poses for financial stability. » Read more

Insider

Off the Cuff: Poking the Stick

We may just get the trouble we're asking for
Thursday, September 5, 2013, 12:05 PM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Syria
    • Hard to see an upside to intervention there
  • India
    • Showing us what a full-blown currency crisis looks like
  • Japan, Brazil, the PIIGS...
    • In danger of soon following India's lead
Insider

Off the Cuff: Trouble Brewing Everywhere

Signs of weakness are appearing on a number of fronts
Thursday, August 29, 2013, 8:00 PM

<p>In this week&#39;s&nbsp;<em>Off the Cuff&nbsp;</em>podcast, Chris and Adam discuss:</p>
<ul>
    <li>Currency Chaos
        <ul>
            <li>Weaker currency markets are suddenly imploding</li>
        </ul>
    </li>
    <li>From the Outside in
        <ul>
            <li>Economic distress is moving closer to the core</li>
        </ul>
    </li>
    <li>Is a Financial Collapse Nigh?
        <ul>
            <li>Does Chris still expect declines of 40% or more?</li>
        </ul>
    </li>
    <li>The Syria Curve Ball
        <ul>
            <li>How would an open conflict change the game?</li>
        </ul>
    </li>
</ul> » Read more

Insider

Blast Shields Up! Prepare for Incoming!

Get busy with defensive maneuvers – now
Tuesday, August 27, 2013, 4:05 PM

Executive Summary

  • Central bank policies to prop up the global economic system are failing
  • Developing countries and the PIIGS are the periphery where we can see the crumbling now accelerate
  • The emerging Syria crisis could hardly come at a worse time & could have an explosive effect
  • The steps every concerned individual should be taking now

If you have not yet read Part I: The Periphery is Failing, available free to all readers, please click here to read it first.

When Help Turns to Harm

The story, so far, goes like this:  A global credit crisis so worried the powers that be that they promised to do ‘whatever it takes,’ (Draghi) even if that means lying from time to time (Junker).  This has only resulted in larger and larger interventions in the form of more aggressive QE programs (U.S. Fed), doubling of the monetary base (Japan), and repeated ‘Final Bailout Ever’ goal lines that keep getting moved back (ECB re: Greece).

Each of these interventions, in combination with ultra-low and highly distortive interest rates, has only served to make markets more speculative, more risk-tolerant, and therefore more prone to some future accident.

Puzzlingly, and certainly off-script, has been the steady rise in long-term U.S. interest rates, which we’ve been tracking as the most interesting development in an otherwise boringly placid set of global equity markets.

That began in early June.  Now at August's end, we have a better picture to illuminate why that happened and where it’s probably headed next.

The initial data came to us via the Treasury International Capital (TIC) report that tracks the net buying and selling of financial securities in both directions across the U.S. border.  The June numbers were a real eye-opener, as they marked the first time in history that virtually every category of U.S. financial assets was net sold by foreigners.  It also showed the total amount of selling was even greater than the prior record set in October of 2008:

(Source)

Of course, this data is from June, and the TIC report, as good as it is, always comes out a month and a half after the fact.  So we can only guess at what has happened since.  (The July data will be released Sept 15).

The summary of the TIC data is this:  Countries across the globe are now selling more U.S. paper than they are buying, and that is very much a game-changer.  To understand why the game has changed, all we have to do is understand that the interventionist policies of the Fed, ECB, and Bank of Japan could never last forever and that eventually things would go into reverse.

This will prove to be quite surprising to many, but especially those who hold the belief that central banks actually have everything under control.  Certainly we cannot disagree with the idea that central banks have a tremendous amount of power and that they can distort things for far longer than we might think possible, but eventually they cannot prevent reality from being what it is.

It is our view that the tide has now turned.

From the Outside In

So if the story was one of Western central banks flooding the world with liquidity (including Japan as an honorary ‘Westerner’ in this story), and of that “money” rushing into various foreign markets, driving bond and equity prices up in those same markets, while the respective central banks fought the coincident strengthening of their local currencies by recycling that money back into U.S. paper assets (principally Treasury paper) well, that story eventually had to flip.

We’ve already seen... » Read more

Insider

Off the Cuff: The Global Cargo Cult

Praying for the return of unearned prosperity
Thursday, August 22, 2013, 2:27 PM

In this week's Off the Cuff podcast, Chris and Charles discuss: » Read more

Daily Digest

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Daily Digest 7/31 - India At Watershed, Detroit Has Bigger Problems Than Bankruptcy

Wednesday, July 31, 2013, 12:01 PM
  • Shipbuilders' losses seen widening
  • Bank of Cyprus deposits raid boosts finances
  • Greece sells state lotteries, clears way for OPAP sale
  • UK Losing Fight Against E-Crime Amid Budget Cuts, Parliamentary Committee Warn
  • Amid bankruptcy, Detroit has a bigger problem
  • Growing copper theft 'like an epidemic' sweeping US
  • India at a watershed as it confronts the spectre of stagflation
  • India central bank pat on rates, cuts growth view
  • African Barrick Writes Down Mines, Cuts Costs After Gold Tumbles
  • Court ruling allows Flint to start collecting on retiree cuts
  • Miami Springs counting on red-light camera revenue in face of deficit