05 January 2012
China will slowdown to 3.5% GDP growth, will devalue Yuan to boost exports: Rickards
NEW YORK (Commodity Online): China’s Premier Wen Jiabao has just warned that China’s economy is now facing challenges, including higher-than-desired inflation and an economic slowdown.
Our guest James Rickards, the author of Currency Wars: The Making Of The Next Global Crisis, says this slowdown will be significantly worse than most people think. He believes it will trigger a policy response from the United States that will likely Lead to a third round of “quantitative easing” by the Fed.
Rickards thinks China’s economy could slow to a 3.5% growth rate. This doesn’t sound bad, but it would be a disaster relative to the 10% growth rate of the last few decades, and it is much more of slowdown than most analysts are looking for.
In response, Rickards says, the Chinese government would likely devalue China’s currency relative to the dollar, to help stimulate exports. This would counter Washington’s ongoing attempts to do the same thing. Rickards believes that the U.S. would respond with another round of quantitative easing designed to produce inflation, likely through a technique called “nominal GDP targeting.”
Our guest James Rickards, the author of Currency Wars: The Making Of The Next Global Crisis, says this slowdown will be significantly worse than most people think. He believes it will trigger a policy response from the United States that will likely Lead to a third round of “quantitative easing” by the Fed.
Rickards thinks China’s economy could slow to a 3.5% growth rate. This doesn’t sound bad, but it would be a disaster relative to the 10% growth rate of the last few decades, and it is much more of slowdown than most analysts are looking for.
In response, Rickards says, the Chinese government would likely devalue China’s currency relative to the dollar, to help stimulate exports. This would counter Washington’s ongoing attempts to do the same thing. Rickards believes that the U.S. would respond with another round of quantitative easing designed to produce inflation, likely through a technique called “nominal GDP targeting.”
Gold and Silver: The best way to invest and the danger of buying on dips
By William Bancroft
As we enter the New Year only the firmest of Gold and Silver investors are holding with serene assurance, as the gold and silver prices have been trending down for a couple of months.
Gold has sold off by nearly 13% since it recovered to $1,800/ounce in early November. The mainstream media has been pronouncing the death of the gold bull market, and CNBC even suggested gold be re-rated as a risk asset.
Silver prices have also disappointed precious metal investors. Gold’s more volatile cousin has lost 20% in value from its own early November recovery to $35/ounce.
Such price drops do get us thinking, an investor can never fall idly in love with a position, but are they again part and parcel of silver investing this last 12 years?
Plenty of notable investors have made their voices heard beyond what we continue to urge are continuing bull markets for owners of gold and silver bullion. The silver price has undergone many corrections en route to gains of over 560% over the last ten years. The fundamentals driving the precious metals are stronger today than ever.
But what does this all mean for our two favourite ways to invest in gold and silver?
Averaging into gold and silver investment
Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.
Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.
All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.
As we enter the New Year only the firmest of Gold and Silver investors are holding with serene assurance, as the gold and silver prices have been trending down for a couple of months.
Gold has sold off by nearly 13% since it recovered to $1,800/ounce in early November. The mainstream media has been pronouncing the death of the gold bull market, and CNBC even suggested gold be re-rated as a risk asset.
Silver prices have also disappointed precious metal investors. Gold’s more volatile cousin has lost 20% in value from its own early November recovery to $35/ounce.
Such price drops do get us thinking, an investor can never fall idly in love with a position, but are they again part and parcel of silver investing this last 12 years?
Plenty of notable investors have made their voices heard beyond what we continue to urge are continuing bull markets for owners of gold and silver bullion. The silver price has undergone many corrections en route to gains of over 560% over the last ten years. The fundamentals driving the precious metals are stronger today than ever.
But what does this all mean for our two favourite ways to invest in gold and silver?
Averaging into gold and silver investment
Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.
Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.
All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.
Dow/Gold ratio suggest a mega bull rally in gold is coming
By Hubert Moolman
For Gold to rise to levels significantly higher than the recent high of $1,920, a new impetus is needed. Without additional energy from such an impetus, gold could just trade sideways for a very long time, or even fall further. See the chart below.
There is only so much value in the world economy, and it is split between all the different instruments (like gold, silver, stocks bonds, etc.) where value resides.
For gold (and silver) to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The printing of more money does benefit gold, but it does not necessarily benefit gold more than other assets-such as commodities, for example.
For Gold to rise to levels significantly higher than the recent high of $1,920, a new impetus is needed. Without additional energy from such an impetus, gold could just trade sideways for a very long time, or even fall further. See the chart below.
There is only so much value in the world economy, and it is split between all the different instruments (like gold, silver, stocks bonds, etc.) where value resides.
For gold (and silver) to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The printing of more money does benefit gold, but it does not necessarily benefit gold more than other assets-such as commodities, for example.
'Four reasons why still to invest in silver'
By Joseph C Ford
Silver is like Gold because it has lots of uses. It can be used as jewelry, dental fillings, for making coins and etc. Since Silver is very useful in such industry, the idea of investing silver is one of the best ideas for starting and building a business. Because of its uses, there are some people who choose investing silver. But aside from many uses of silver, there are major reasons why there are lots of investors who are attracted to invest silver. Here are the common reasons why they choose silver for business:
Inflation
No one wants to encounter inflation! Especially in business! Since most of us want to avoid inflation, investing silver (and all precious metals) is a wise choice to protect against inflation. Silver and other precious metal are fairly rare and highly valued for jewelry and industrial practices, it will always be valuable, regardless of the economic climate.
When your country's market is at the middle of difficulty, expect that your government's currency tends to become less valuable compared to other governments. It will result in a devaluation of the currency. Other alternative of the government, they may issue more money. So if there more money in the general population, it means that the price of everything goes up, also resulting in inflation. If the currency (cash) becomes less valuable to inflation, it means that you can trade in your silver for more cash (the price of silver and other precious metals inflates just like the price of everything).
However, there is a little more than understanding inflation to learning why investing in silver is appealing for some investors.
Market Size
Gold is extremely popular today. That means that the typical investor tends to wish to use gold to drive back inflation rather than silver. Most investors only decide to buy silver if they suspect that the silver market in particular is going to move up. Why might this happen? It is because the size of the market of sterling Silver is small. Actually, gold's availability to invest is twice compared to silver, and over the final 20 years Gold has been 20-100 times more costly than silver.
This results in volatility. This could trigger amazing profits or losses. There are several primary things that drive the price of silver:
Supply and Needs. A lot of appearing out of mines today is used for industrial purposes rather than being changed into bullion. If silver manufacturing drops off below industrial demand, this could guide spike silver prices. You have to consider investment demand. Since there is a relatively small supply of silvers, a few powerful investors can really drive the amount up if they are bullish on this market.
Silver is like Gold because it has lots of uses. It can be used as jewelry, dental fillings, for making coins and etc. Since Silver is very useful in such industry, the idea of investing silver is one of the best ideas for starting and building a business. Because of its uses, there are some people who choose investing silver. But aside from many uses of silver, there are major reasons why there are lots of investors who are attracted to invest silver. Here are the common reasons why they choose silver for business:
Inflation
No one wants to encounter inflation! Especially in business! Since most of us want to avoid inflation, investing silver (and all precious metals) is a wise choice to protect against inflation. Silver and other precious metal are fairly rare and highly valued for jewelry and industrial practices, it will always be valuable, regardless of the economic climate.
When your country's market is at the middle of difficulty, expect that your government's currency tends to become less valuable compared to other governments. It will result in a devaluation of the currency. Other alternative of the government, they may issue more money. So if there more money in the general population, it means that the price of everything goes up, also resulting in inflation. If the currency (cash) becomes less valuable to inflation, it means that you can trade in your silver for more cash (the price of silver and other precious metals inflates just like the price of everything).
However, there is a little more than understanding inflation to learning why investing in silver is appealing for some investors.
Market Size
Gold is extremely popular today. That means that the typical investor tends to wish to use gold to drive back inflation rather than silver. Most investors only decide to buy silver if they suspect that the silver market in particular is going to move up. Why might this happen? It is because the size of the market of sterling Silver is small. Actually, gold's availability to invest is twice compared to silver, and over the final 20 years Gold has been 20-100 times more costly than silver.
This results in volatility. This could trigger amazing profits or losses. There are several primary things that drive the price of silver:
Supply and Needs. A lot of appearing out of mines today is used for industrial purposes rather than being changed into bullion. If silver manufacturing drops off below industrial demand, this could guide spike silver prices. You have to consider investment demand. Since there is a relatively small supply of silvers, a few powerful investors can really drive the amount up if they are bullish on this market.
Opening 2012 Gold and Silver Eagle Sales Top Prior Year Levels
January 4, 2012 By
The United States Mint began accepting orders for 2012-dated American Gold and Silver Eagle bullion coins on January 3, 2012. The opening sales numbers exceed the levels seen for the prior year.
Bullion coins produced by the US Mint are distributed through a network of authorized purchasers who are able to buy the coins in bulk quantities based on the market price of the precious metals plus a mark up. The bullion coins are then distributed to secondary dealers and the broader public.
On the opening day of availability, January 3, 2012, authorized purchasers ordered 3,197,000 of the one ounce Silver Eagle bullion coins. Through January 4, 2012, orders for Silver Eagle bullion coins have now reached 3,372,000. These amounts include both the 2012 Silver Eagles as well as some 2011-dated coins. Before the close of last year, the US Mint had indicated that there was a remaining inventory of 2011-dated coins. As long as this inventory remained, authorized purchasers would be required to order one 2011-dated coin for every four 2012-dated coins ordered.
This year’s opening sales for Silver Eagles surpass the numbers seen in the two prior years. The stronger sales may be the result of the lack of an allocation program imposed by the Mint. For the start of sales in 2010 and 2011, the US Mint rationed available quantities of the coins amongst authorized purchasers. This year, the Mint indicated that supplies would not be rationed as sufficient quantities of the coins would be available.
The United States Mint began accepting orders for 2012-dated American Gold and Silver Eagle bullion coins on January 3, 2012. The opening sales numbers exceed the levels seen for the prior year.
Bullion coins produced by the US Mint are distributed through a network of authorized purchasers who are able to buy the coins in bulk quantities based on the market price of the precious metals plus a mark up. The bullion coins are then distributed to secondary dealers and the broader public.
On the opening day of availability, January 3, 2012, authorized purchasers ordered 3,197,000 of the one ounce Silver Eagle bullion coins. Through January 4, 2012, orders for Silver Eagle bullion coins have now reached 3,372,000. These amounts include both the 2012 Silver Eagles as well as some 2011-dated coins. Before the close of last year, the US Mint had indicated that there was a remaining inventory of 2011-dated coins. As long as this inventory remained, authorized purchasers would be required to order one 2011-dated coin for every four 2012-dated coins ordered.
This year’s opening sales for Silver Eagles surpass the numbers seen in the two prior years. The stronger sales may be the result of the lack of an allocation program imposed by the Mint. For the start of sales in 2010 and 2011, the US Mint rationed available quantities of the coins amongst authorized purchasers. This year, the Mint indicated that supplies would not be rationed as sufficient quantities of the coins would be available.
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