Following the Panic of 1907, John Pierpont Morgan was called to testify before Congress in 1912 on the subject of Wall Street manipulations and what was then called the “money trust” or banking monopoly of J. P. Morgan & Co.
In the course of his testimony, Morgan made one of the most profound and lasting remarks in the history of finance. In reply to questions from the congressional committee staff attorney, Samuel Untermyer, the following dialogue ensued as recorded in the Congressional Record:
Gold, which is traditionally seen as a safe haven, is usually subject to the whims of supply and demand. Its value changes quickly, pushing the bullion price to extremely high levels at times.
The yellow metal also makes a habit of performing poorly when the stock market is doing well. But gold is the ultimate store of value, according to precious metals expert Ronan Manly of Singapore’s BullionStar.
“What this means is that gold retains its purchasing power over long periods. Gold’s purchasing power is not eroded by inflation as it is an inflation hedge,” the analyst told RT. “In contrast, fiat currencies such as the US dollar are not stores of value. Fiat currency purchasing power is consistently eroded by inflation, and over time fiat currencies, such as the US dollar, lose nearly all of their purchasing power relative to gold.”
Thanks to the Fed and Central bank intervention, sales of Gold and Silver Eagle sales declined sharply over the past year. Yes, it’s true… precious metals investors have lost interest in gold and silver as the stocks, real estate, and crypto markets reached new highs in 2017. So, who wants to continue purchasing gold and silver when many cryptocurrencies were experiencing 10% increases in a day.
H/t reader squodgy:
“Another sign that the herd is being herded…….
Paper money and electronic money have a questionable and thus insecure lifespan.”
The U.S. gold exports to Hong Kong surged in February consuming nearly all of the domestic gold mine supply. According to the USGS recent Gold Mineral Industry Survey, February gold exports to Hong Kong more than doubled compared to the prior month. This was an interesting increase in gold demand from Hong Kong as the market price increased slightly month over month.
Not only did gold exports to Hong Kong jump, but total U.S. gold exports also increased 40% from 36.1 metric tons (mt) in January to 50.4 mt in February.
Last Thursday, the Dow Jones fell 724 points. It followed up with a 424 point decline on Friday. Meanwhile, the Nasdaq fell 2.43% Friday.
Most analysts blamed the plunge on fear of an all-out trade war between the US and China. But the Federal Reserve rate hike on Wednesday also likely played a part in the stock market decline. The markets don’t like the prospect of having their easy-money punch bowl taken away.
So, could we be on the verge of a gold breakout as stocks break down?
In his latest podcast, Peter Schiff said he believes we are already in a bear market. Technically, analysts don’t start talking bears until the stock market declines 20%. But as Peter pointed out, you have to drop 10% before you get to 20.
So, if this is a bear market, if we ultimately go down by more than 20%, then this is the bear market right now. It’s only a correction if it doesn’t turn into a bear market. But if it becomes a bear market, it’s been a bear market the entire time, and I think we are in a bear market now.”
The mainstream analysts continue to assure us that everything is fine. The fundamentals haven’t change. Peter said in a sense, they’re right.
Will physical gold and silver prices ever break free of manipulation and price suppression?
Renowned gold expert Andrew Maguire with Tom Coughlin, who is CEO of Kinesis that will be rolling out a gold backed currency in the fall, both say yes. So, what is it about? Coughlin explains, “It’s actually classified as a monetary system, and it’s called Kinesis. The reason we call it Kinesis is that it actually stimulates the flow of money. We see this as reintroducing the gold and silver standard through this monetary system.”
Maguire says there will be actual precious metal backing it up. Maguire says,