Submitted by Mark O’Byrne – GoldCore
- Demand for physical gold this month at “a historically high level” – HSBC
- Q3 U.S. Mint gold sales set to dwarf those of previous two quarters
- Supply of physical silver “continues to be tight” and premiums rising
- China and India demand remains very strong
- Seasonal Asian buyers to add to demand in coming weeks
- Dovish Fed bullish for gold
Demand for physical gold and silver in August and September has been exceptionally strong as investors seek a safe-haven from market turmoil, as the global economy slows down and as it becomes clear that the Federal Reserve and central banks generally are slowly losing credibility and ultra loose monetary policies are set to continue for the foreseeable future.
BULLION COIN & BAR PREMIUMS & AVAILABILITY – September 18, 2015
Note: Given continuing and deepening delays for certain popular bullion coins and bars and rising premiums we believe it is important to keep our clients and subscribers aware of the most up to date premiums and availability. The prices quoted are indicative and can change at any time. We continue to be one of the most competitive bullion dealers internationally. The premiums quoted are for smaller orders and there are volume discounts and lower premiums on larger orders.. Continue reading
Gallus Gallus Domesticus and the Ghost of 1937
Just before writing this comment, we happened to come across a truly funny tweet by the WSJ’s Greg Ip, which you can see below, including our reply:
Jon Hilsenrath seems to seriously believe the markets weren’t “prepared” enough for a ridiculous rate hike of 25 bps at most, from the current level of – zero!
Of course we would like to thank Ms. Yellen and the merry pranksters for helping to set up a better shorting opportunity, but all kidding aside, we actually believe that Hilsenrath is in a way correct. They are dead scared of being seen as setting off a market crash, and they know of course that more than six years of humongous money printing have achieved little besides blowing another bubble. In fact, the real economy, though not yet in recession, looks decidedly lame. Continue reading
September 18 – Reuters: “The world’s leading central banks are facing the risk that their massive efforts to revive economic growth could be dragged down again, with some officials arguing for bold new ideas to counter the threat of slow growth for years to come. A day after the U.S. Federal Reserve kept interest rates at zero, citing risks in the global economy, the Bank of England’s chief economist said central banks had to accept that interest rates might get stuck at rock bottom. In Japan, where interest rates have been at zero for more than 20 years, policymakers are already tossing around ideas for overhauling the Bank of Japan’s huge monetary stimulus program as they worry that it will be unsustainable in the future, according to sources familiar with its thinking. Separately a top European Central Bank official said the ECB’s bond-buying program might need to be rethought if low inflation becomes entrenched.”
Most just scoff at the notion that there has been a historic global Bubble, let alone that this Bubble has over recent months begun to burst. Talk of an EM and global crisis is viewed as wackoism. Except that the Federal Reserve clearly sees something pernicious in the world that requires shelving, after seven years, even the cutest little baby step move in the direction of policy normalization.
The Fed and global central banks responded to the 2008 crisis with unprecedented measures. When the reflationary effects of these measures began to wane, the unfolding 2012 global crisis spurred desperate concerted do “whatever it takes” monetary stimulus. This phase has now largely run its course. And there is at this point little clarity as to what global central bankers might try next.
Clearly, great pressure will remain to hold rates tight at zero. I fully expect policymakers at some point to see no alternative than to implement additional QE. But under what circumstances? Will it be orchestrated independently or through concerted action? What about timing? How much and how quickly? Might global central banks actually consider adopting negative rates? Well, there’s enough here to really have the markets fretting the uncertainty, especially with global central bankers not having thought things through.
There is today extraordinary confusion and misunderstanding throughout the markets. Policymakers are confounded. Years of zero rates, Trillions of new “money” and egregious market intervention/manipulation have left global markets more vulnerable than ever. Now What? I’m the first to admit that global Credit, market and economic analyses are these days extraordinarily complex – and remain so now on a daily basis. We must test our analytical framework and thesis constantly. Continue reading
With the announcement by the Fed today of no interest rate increase, the hopes and fears of a September crash recede into the background noise from which they came. What we can expect is the same slow grind of deflation and modest volatility leading into the fall and winter months. Though nothing the Fed said today would indicate that a rate increase is off the table for 2015, and could still take place in December.
The international demand on the Fed not to raise rates was coming from all sectors and regions, including the Bank for International Settlements, IMF, World Bank, China, and various other central banks and institutions. With a level of domestic justification for a rate increase, quantified by previous Fed statements on inflation and employment levels over the last few years (all of which have been reached), it can be assumed that the lack of international justification and support influenced today’s decision.
With the restructuring of the international monetary system high on the agenda of the global institutions, it is probable that the decision by the Fed today is signaling that the US is in fact willing to negotiate and facilitate the development of reforms. Continue reading
When something deviates so far from expectations, the last thing you would do is dismiss it as unimportant. Yet, that is exactly what has happened in 2015 among the cabal of economists that claim to be able to control monetary levers of economic interjection. It’s not just that the FOMC will not act as it was so sure it would, the real comparison is how far the committee members themselves expected they would have by now. That more relevant scale for comparison shows you just how serious the economic deviation has been this year.
Below are the infamous “dots” published from March 2014 when Janet Yellen was confidently claiming “six months” – meaning that she expected to end ZIRP six months after the end of QE. The rise in the Establishment Survey that summer propelled several mainstream economists (and clearly some of the FOMC were already thinking this) to begin forecasting a rate hike as early as March if not January 2015. Their interpretation of the economy was so robust that their sense of danger was seriously overheating not falling toward recession. From that we can infer, quite reasonably, they have little appreciation for the actual economy.