Two Words That Will Send Gold Prices Soaring Higher: Debt Monetization

Central banks have one main role in society: control the amount of money floating in the system. However, according to Adam Button, chief currency strategist at ForexLive.com, they are abdicating that role. 

Last weekend Adrian Orr, Governor of the Reserve Bank of New Zealand made only small ripples in financial markets when he said that he was open-minded about monetizing his nations debt last week. 

Button said that he was haunted by those comments during the weekend as this could be the start to global currency debasement.

- Source, Kitco News

Alasdair Macleod: Destruction of Fiat Currencies, Coming Soon

Alasdair Macleod, Head of Research at GoldMoney.com, returns to Liberty and Finance / Reluctant Preppers to lay out the emerging facts which he says are confirming his predictions for this year, including: the end of the credit expansion cycle, deepening global recession, a banking crisis, monetary supply inflation with loss of buying power, the destruction of the currency, and the need for families to protect themselves with sound money before it’s no longer available.

- Source, Reluctant Preppers

Rick Ackerman: We Have a Deflationary Abyss to Cross

Financial writer and professional trader Rick Ackerman says he likes gold because even in deflation, debt default and destruction, “Gold will hold its value.

Gold is catching on now because of uncertainty and not inflation—yet.” In closing, Ackerman says, “I still believe we are going to have a deflationary abyss to cross before we get to the hyperinflation of the mind where people realize the government’s obligation either to default on Treasury debt or not is the crux of the hyperinflation argument. 

Yes, at that point, I have to acknowledge the Fed can print money without limit, and they may have to.”

- Source, USA Watchdog

Martin Armstrong: President Has Power to Reopen Country, Federal Reserve is Failing

Legendary financial and geopolitical cycle analyst Martin Armstrong says the President has the power to reopen the entire country. 

Armstrong explains, “He doesn’t want to use it, but he actually has the power to open up the entire country. I wrote a piece on this, and it’s called the Commerce Clause (in the U.S. Constitution) which governs. They (the governors) have no legal authority to shut down the economy—period. 

They cannot do that. The Commerce Clause prohibits interference with interstate commerce—period. Increasing the money supply, which is what the Fed is doing right now, is not going to save the day because the amount of money lost on a leverage basis is 20 to 30 times that. 

It’s like throwing a bucket of water into the wind, it’s going to come right back in their face. They can’t stimulate enough. It’s impossible to overcome this.

The only way to overcome this is to open up the economy. We have to get the productive capacity back up, which is what wealth is and you are destroying that. 70% of employment is with small business.”

- Source, USA Watchdog

Gold Miners Soar Higher as Oil Crashes Below Rock Bottom

For the first time ever, on Monday, April 20th, the benchmark price for US oil crashed below $0 a barrel, a reality that almost no one even thought was a possibility up until a few short days ago.

However, the carnage in the oil markets didn't stop there, as a further 30% cut in consumer demand caused prices to continue cascading lower, hitting negative $40 per barrel at one point in the trading session, later settling at negative $37.63 per barrel.

This of course is the lowest price that oil has ever traded at, in all of its history on the markets, symbolizing just how dire of an economic situation we now find ourselves in. A true black swan event.

Large sectors of the economy are all but virtually shut down, meaning that demand for oil has fallen off a cliff, leading to a huge surplus of oil reserves, that continue to pile up in warehouses, as consumers simply have no need for the tremendous amount of oil being produced on a daily basis.

(Chart source, oilprice.com)

Fortunately, in recent days these lows were not maintained and the price of WTI Crude, along with other key benchmarks have staged a rally, however, they still remain at historically low levels, of which are not profitable for many producers.

The Canadian oil markets, which already trade at a disadvantage due to a number of significant factors against it, are especially hard hit by this crash lower in prices and are unlikely to see a recovery anytime soon, even if normality returns in the short to medium term.

Sadly, if this crisis continues on in its current state, or god forbid, things deteriorate even further, then you can rest assured that this will not be the last time that we witness negative oil prices, which would devastate the oil industry even more than it already has been, especially if as some health experts are stating, that this crisis is very likely to have a second wave come the fall of 2020.

Gold Miners Benefit

It is not all doom and gloom however for the entirety of the commodities sector, as gold producers are uniquely positioned to benefit in these dire times, especially if they are capable of continuing production throughout this crisis.

Miners such as Barrick Gold Corp and Newmont Goldcorp are two of the largest gold bullion miners in the world and as can be seen from the chart below are weathering this crisis much better than most.

(Chart sources, globeandmail.com)

It is a fact that the price of oil is one of the largest cost inputs for precious metal miners and miners in general, with the price of oil having a direct impact on the total cost that it takes to get commodities out of the ground.

This means that miners are now able to get materials out of the ground at a much lower price than they would of previous been able to do so, just a few short months ago when the price of oil was higher.

For most miners, this point is moot as demand for many commodities is suffering alongside oil, however, gold bullion is not one of these commodities. In fact the demand for physical gold bullion is through the roof.

The reasoning for this is of course the vital role that gold bullion has played for over 10,000 years in the our financial history, acting as a safe haven asset in times of need, strife and economic crisis. Of which our current time period most definitely qualifies as.

(Chart source, goldprice.org)

This is why you are seeing the paper chart prices for both gold and silver bullion remain at healthy levels, even while everything else seemingly turns to mud.

However, when looking at the physical precious metals markets, you see a much different picture being painted, as premiums continue to remain at elevated levels, disconnecting themselves from the largely fraudulent and easily manipulated paper price.

These premiums are due to the incredible demand that physical metals are currently and have been experiencing since this crisis kicked off in earnest and of which I believe is a trend that is only going gain traction the longer COVID-19 remains a threat to society.

Because of this, gold bullion miners, most notably the titans of the industry such as Barrick and Newmont, who have the capital to continue operations throughout this crisis are going to uniquely benefit and thus continue to increase in price as they reap the dual benefit of increased demand and lower mining costs.

Opportunity still exist, even in these dire times.

Stay safe and keep stacking.

- Source, Nathan McDonald via the Sprott Money Blog

Golden Rule Radio: Oil Goes Negative, First Time In History

“I’d gladly pay you Tuesday to take this barrel of oil today”. Oil contracts drop to zero, then to negative -$44.00. Fragility in all debt ridden assets open to such catastrophic events. Thanks for listening to this week's McAlvany Commentary.

- Source, Golden Rule Radio

Governments Are Broke And Can Only Print, Gold & Silver Will Do Much More Than Just Maintain Purchasing Power

Gold is the best money for this unfolding global hyperinflationary depression, but soon, physical gold will only be available at much higher prices. Egon von Greyerz sits down with Silver Doctors today to explain that and a whole lot more. 

Egon says the current situation in the world is the catalyst, but not the cause, which kicks off the global hyperinflationary depression, and the current situation in the world is the worst catalyst, Egon says. 

How does Egon see the hyperinflation playing out? How does Egon see the disconnect between the paper markets and the real markets, especially in gold and in oil? What are we to make of the crude oil futures markets going bonkers with prices even trading negative? 

Does Egon see gold as something that can appreciate with capital gains, or are gold & silver strictly held for wealth preservation and insurance purposes? 

Is real estate good for wealth preservation, and is real estate even a good investment at all? 

For the answers to those questions and a whole lot more, tune-in to the interview in its entirety.

- Source, Silver Doctors

Perth Mint: Gold Supply Decimated, What Will a Recovery Look Like?

With logistics shut down across the world, transporting physical gold has been exceedingly difficult, resulting in the widest spreads between gold futures prices and those of physical gold bars since the last recession, this according to Kevin Rich, consultant to the Perth Mint. 

Rich says we are currently in the opening phases of normalizing. 

“There already is more commercial freight being allowed, I think commercial flights are now allowed to carry freight,” he said.

- Source, Kitco News

Losing Faith In Fiat: COVID Crisis Has Dragged Forward The Moment When "The Money Is No Good"

Money manager and economist Michael Pento says the Federal Reserve has only massive money printing left to try to save the economy from the current and ongoing debt implosion. There is going to be lots of fresh cash needed.

Pento runs down a list of just few of the things the Fed will need to spend money on and says,

“We all should know more than 22 million people have lost their jobs in the last four weeks alone. That’s 22 million people, and the unemployment rate, according to me, is heading up to 15% to 17%. That, my friends, is a depression. We also have the Philly Fed (Manufacturing Index rating) come out with a -56.6. That’s a minus 56.6. That’s the worst ever. Empire State Manufacturing -78.2, which is the worst rating ever. Retail sales plunged in March 8.7%. That is also the worst reading ever. That’s the worst plunge ever, and that’s just March. In my opinion, it will be something worse in April because all of the month will be completely shut down. That’s 90% to 95% of the economy.”

Now you know why the Fed freaked out and started printing money at the highest pace ever. Pento predicts the Fed, who took $4.5 trillion onto its balance sheet as a result of the “Great Recession,” will explode “The Federal Reserve’s balance sheet to $10 trillion by end of the year.”

Pento says forget the so-called “V shaped recovery” because “you cannot simply turn back on the economy like a light switch. There’s no electricity.” On top of that, Pento points out that,

“Millions of people who have been thrown out of work have taken on even more debt . . . . So, the economy is not bouncing back.”

So, it is clear the Fed is going to print trillions of dollars in fresh cash to pay for bailouts, unemployment checks and debt payments to avoid massive defaults in the U.S. economy. Pento asks, “What kind of faith will people have in the purchasing power of their fiat currencies?"

"...If the Fed can print trillions of dollars with no consequences... why bother working? Everybody can just stay home and cash a check...This is a recipe for hyper-inflation. It’s been tried many, many times in history, and it has never worked...

The gap between the real economy, asset prices and debt and the underlying economy has never been greater...

You have a massive increase of insolvent debt...Then you are going to ad inflation to that mix? Think about the carnage that is to come. That is the real crash... We will partially recover from this virus. . . . We are now sending money, helicopter money, directly to consumers, and that will cause inflation.”

Pento predicts a “tsunami of inflation” is coming in the not-too-distant future. Pento says,

“People are losing faith in fiat currencies. The price of gold in other currencies is already at all-time record highs. Even in dollar terms it’s $1,700 per ounce and on its way to record highs. What is the government going to do when you have insolvency and inflationary implosion of the bond market? The real crash is coming...

A government cannot issue more debt to bail out an insolvent condition—fact.

A government cannot print more money to placate a market that is afraid of inflation—fact.

That’s what they are going to be faced with: Yields spiking because of inflation and insolvency concerns, and then there is nothing a government can do. It’s not going to be just the United States, it’s going to be the case globally... That’s when the money is no good, and the bonds are no good.”

- Source, Zero Hedge

Fauci: No Recovery Possible If Virus Isn't Under Control

President Trump's top doctor on the White House coronavirus task force has pushed back against protesters demonstrating against stay-at-home orders, warning that the US economy won't recover until COVID-19 is "under control."

"This is something that is hurting from the standpoint of economics," Fauci acknowledged during an appearance on ABC's "Good Morning America," in comments which sharply contrast with those by President Trump, who has encouraged the protests, Bloomberg reports.

"Unless we get the virus under control, the real recovery economically is not going to happen," Fauci added. "So what you do if you jump the gun and go into a situation where you have a big spike, you’re going to set yourself back."

“Clearly this is something that this is hurting …. but unless we get the virus under control, the real recovery, economically, is not going to happen.”

Fauci added that while it can be "painful" to follow federal guidelines regarding a phased re-opening, it will "backfire" if done too soon.

Protests have erupted in Michigan, Minnesota, Texas and other states demanding that governors lift strict social distancing policies that have battered the U.S. economy. Some demonstrators have called for Fauci’s firing.

Trump has encouraged the protests, tweeting that protesters should “liberate” Michigan, Minnesota and Virginia. The president said Sunday he watched footage of the crowded protests, called them “orderly” and said people “were all six feet apart.” -Bloomberg

According to Trump, people on both sides - including state governors, have gone "too far."

"Some of the things that happened are maybe not so appropriate," he said.

- Source, Zero Hedge

JP Morgan is on the Verge of Collapse, Shares Plunge as They Warn of a Massive Recession

Josh Sigurdson reports on the clear and present dangers at JP Morgan as the bank sees earnings dive 69% while the bank warns of a massive recession. 

While they see a mortgage crisis at the same time as a global recession it's important to point out we've been in a recession since 2008. It never ended. It was simply papered over. 

What we are seeing today is a global depression, the likes of which we've never seen in history and it will be historic. One can take that to the bank. Jamie Dimon recently recovered from surgery as JP Morgan watched shares dive fast. 

Their cash to deposit ratio was never good but surely they will have some problems if people do what they should have done long ago. Done a run on the bank. 

We cover this and the comments by BlackRock on the Federal Reserve basically running the stock market today as we enter the era of complete central planning.

- Source, World Alternative Media

Paul Craig Roberts: We Need a Debt Jubilee or the System Will Collapse

Former Assistant Treasury Secretary in the Reagan Administration Dr. Paul Craig Roberts says, “We need a debt jubilee. Debt jubilees were widely used in the ancient world.

Either the system goes into collapse or you write the debts down and you start over. Again, either you paper it over again or you don’t succeed and everything blows up.” 

What about the rising gold price during this new round of bailouts? Roberts says, “In the previous bailout, it did not affect the dollar. The question is this bailout, on top of the previous bailout, is it going to affect the dollar? 

Are people going to say, good heavens, do we really want to hold dollars when they are creating so many? People are saying we don’t know how this is going to play out, but they can’t print gold, so let’s get into gold.

I don’t know how people are going to see this, but the enormous money creation, no doubt, worries some. If they are successful in reflating the stock prices, then the problems with the dollar is over--for now.

 Again, bailing out debt with more debt is kicking the can down the road. How long can you kick it? We don’t know until we will find out you can’t kick it any further.”

- Source, USA Watchdog

Economy on Life Support: The Federal Reserve is Now the Market

Rapidly increasing taxes? Massive, runaway inflation? Or an outright economic collapse, the likes of which the world has never seen before? 

Choose your poison, because something is going to have to give, sooner or later...

The Federal Reserve, along with many other governments around the world, have essentially circumvented the free markets, choosing in the short term to keep the system and the entirety of their populations from entering into an outright collapse by simply printing staggering sums of fiat money, out of thin air.

Whether or not this is the right course of action, is not up to me to decide, however, to think that there will not be long term consequences to what government officials are currently engaging in, would be foolish to say the least.

Bailout after bailout program has been initiated, with many countries choosing to send their citizens large sums of money in the mail, or digitally, to help mitigate some of the economic damage caused by the COVID-19 shutdown.

Unfortunately, as common sense would dictate, this cannot and thus will not go on forever, as one cannot create true wealth by simply printing ever increasing amounts of money, without any production, or productivity to go along with it.

However, in the short term, government officials are proving just how far they can push the limits of an ever increasing supply of fiat money, without entering into an outright collapse.

(Chart source, usdebtclock.org)

This has caused national debts around the world to explode, with the most notable of these being the United States government, who has issued trillions of dollars since the outbreak of COVID-19 began just a short few months ago.

This blatant intervention in the markets has inverted reality, largely destroying the free markets in the process, as we have just recently seen with the latest jobless claim figures, which in any rational world, would of sent markets spiraling lower.

Yet, this is not rational times that we live in. Quite the opposite.

Over five million Americans filed jobless claims last week alone, bringing the total to over 22 million in just one month!

These are truly staggering numbers, that are going to have cascading and dire effects on the economy not only in the short term, but the long as well. The true economic fallout caused by the COVID-19 outbreak is going to be felt for years to come.

As one economist recently stated;

“The labor market is showing us what I think we all know, that the economy is falling off a cliff at an unprecedented rate,”

At the same time as this, the United States is reporting their largest ever one day increase in coronavirus related deaths, rising by at least 2,371 and bringing the total to 30,800, according to a recent tally done by Reuters.

(Chart source, worldometers.info)

Meanwhile, futures rebounded on this devastating news, doing exactly the opposite of what any rational minded person would believe they should do, indicating once again just how much of a bizzaro world we now live in.

This is because, as I stated earlier, Wall Street knows that the Federal Reserve "will do whatever it takes" to keep the markets afloat, they will print as much money as need be, no matter the economic cost down the road.

Even if that means completely eroding the value of the dollar in the long term.

The Federal Reserve is now the market and that is truly terrifying, as this has the potential to end in complete and utter disaster, as people lose complete faith in the system as a whole, forcing the Fed to take an ever increasing role in supporting the markets.

What people also need to remember is that we are just in the early days of this crisis, as many health experts are now indicating that the coronavirus is going to be a threat for many more months, if not into next year as a possible "second wave" brings the system to its knees once again.

Dr. Robert Redfield, Director of the CDC made the following statements;

“I think we have to assume this is like other respiratory viruses, and there will be a seasonality to it.”

“The CDC is science-based, data-driven, so until we see it, we don’t know for certain [there will be a resurgence], But it is critical that we plan that this virus is likely to follow a seasonality pattern similar to flu, and we’re going to have another battle with it upfront and aggressively next winter.”

If these statements come true, this means that the bailouts are far from over and thus the fiat money printing is going to have to continue, unless governments around the world suddenly change their tunes and open up their economies again, hoping for herd immunity to occur, while also hoping that they are not sacrificing a significant percentage of their populations in the process.

This means that the markets are going to become increasingly more and more of an illusion, the longer that Central Banks are forced to intervene and support the system as a whole. How long can this last? No one truly knows, as nothing the likes of this, on such a grand scale, has ever been attempted before.

However, one thing is for certain, tangible, real assets, such as physical gold and silver bullion are going to continue to increase in price and be in extreme demand the longer that this crisis continues.

I believe that $2000 USD per oz of gold is only going to be a pit stop, with future gains in the coming years to make that price look cheap in comparison. 

Additionally, I believe silver bullion is going to follow a similar pattern, however, with even greater potential gains in store, as the gold to silver ratio eventual stabilizes and comes back down to a more historic average.

Until then, stay the course, stay safe and keep stacking.

- Source, Nathan McDonald via Sprott Money Blog

Why Russia’s Central Bank Really Stopped Buying Gold

There are a lot of theories as to why central banks, and Russia in particular, are cutting down the gold purchases, but in the case of Russia the reason is simply that they need cash, this according to Jeff Christian, managing partner of CPM Group. 

“The Russian government is strapped for cash. It’s facing the pandemic that everybody else is facing, but it was slow to move on it so it’s got serious problems there. It still has sanctions, it doesn’t have a lot of foreign exchange coming in, it’s losing money on every barrel of oil that it sold in Russia,” Christian told Kitco News. It doesn’t have the money to buy gold.

- Source, Kitco News

1 oz 2016 Rwanda African Meerkat Silver Coin

Golden Rule Radio: Gold Prices Nearing All Time Highs

This week we cover gold and silver supply amid the current equities market crisis. As jobless claims soar what are the real economic impacts for precious metals investors during this volatile period? 

With more massive government stimulus on the way, we'll explore the real consequences of these injections and how the U.S. Dollar index will react. We cover the prices of gold, silver, platinum, & palladium.

- Source, Golden Rule Radio

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