After The Carnage, Here Is A Big Picture Look At The Gold Market

After the recent carnage in the gold and silver markets, sometimes it’s a good idea to take a step back and look at the big picture.

The Godfather of Newsletter Writers
August 20 (King World News) –
Nobody was better at looking at the big picture than the Godfather of newsletter writers, Richard Russell.  Here are just a few of his words of wisdom regarding the big picture on gold:  
One central bank giveth and another central bank taketh away. The Bank of Japan, smarting from years of deflation, decided to unveil some “shock and awe.” The Bank of Japan stunned the markets by saying that it would boost asset purchases. Barron’s brilliant editor, Randall Forsythe, put it this way:

This is truly a dazzling example of 21st century government finance. The government runs a deficit covered by IOUs, or bond borrowings. The Central Bank buys those bonds to fund the budget shortfall and also purchases bonds sold by the pension plan, all reserves it creates out of thin air. The pension fund uses the newly printed yen it receives from the BOJ for its bonds to buy claims against the future earnings of private industry — that is, common stocks.

In other words, the central bank monetizes the debt with money created out of thin air


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The old adage tells us, “There’s no free lunch.” This is also true when applied to real money, which is gold. Gold cannot be created by computer entry. It takes capital, long years of searching and mining expenses to recover gold from the ground. Thus gold, or real money, costs men’s labor, risk and capital. Yet fiat money, created from the computer, is, in effect, “free lunch” money.

At one time the dollar was freely convertible to gold. But over the years the US went off the gold standard, meaning that the dollar was no longer convertible to gold. Whereas the pre-1930 dollar implied that the holders of dollars actually owned a certain portion of gold, with the advent of fiat money, the dollar began saying, “I owe you nothing.” Thus, as I see it, fiat money is immoral in that no risk or capital was exerted to produce the fiat money. Fiat money is, in truth, “free lunch” money. No man hours or risk are represented by fiat money.

In coming years, we’ll see a panic to own physical gold. The most derided object in the world will become its most beloved and treasured item. I have elected to go the “peace of mind route.” That is why I maintain a large position in gold.”

***KWN has now released the powerful audio interview where Gerald Celente gives a sneak peak look at the just-published Trends Journal and also discusses the recent smash in the gold and silver markets and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.

ALSO JUST RELEASED: SPECIAL REPORT: Actionable Data On What To Expect Next After Gold & Silver Carnage CLICK HERE TO READ

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