Anything but the US $

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Even though over the past year gold has markedly under performed other assets, for example only increasing 4.45% compared to the S&P 500′s 20.97%, Central Bankers reportedly haven’t lost the faith. In fact in 2012 Central Banks have purchased gold at levels not seen since 1964. What’s going on?

Simple, the United States [...]

The Dow / Gold ratio

Since the onset of the credit crunch central banks globally have injected unprecedented amounts of liquidity into the global financial system. Buy doing so central banks are trying to stimulate the well known “wealth effect” which entices folks to increase their spending simply because they feel wealthier as their portfolio’s increase in value.

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How now for gold?

With the recent drop in US share prices and simultaneous run up in gold prices the yellow metal now is slightly ahead of equities, up some 10.60% YTD compared to the S&P 500 which is up 10.28%, so where to invest? Lets take a look at few factors that might influence metals in the [...]

The long term view

Here is one of the bigger themes that you have to be aware of when investing in the markets today: dollar debasement. In other words, the weakening US currency and its impact on investible assets. The chart above shows both the US dollar (red line) and gold (black line) over the past ten years. [...]

Precious metals are booming!

The European Central Bank did it, the Bank of England did it, The US Federal Reserve did it and yesterday the Bank of Japan just done it.

As the chart above shows, gold and silver responded accordingly, soaring 13.21% and 24.75% respectively since the global easing began in earnest in late July. The [...]

Waiting for Helicopter Ben

Europe on the edge of recession, both Australia and Hong Kong at risk as is The United States. Both gold and silver soared during August on hopes of September’s FOMC meeting. The chart above shows gold ($GOLD, black line) and silver ($SILVER, red line) daily during the month of August, 2012, up 4.59% and [...]

America vs. The World

Something interesting: while looking at equity market performance, curiously, America has sharply outperformed. The chart above shows the year to date performance of the S&P 500 ($SPX, black line) compared to the MSCI World Index ex-USA ($MSWORLD, red line). Year to date, the S&P 500 is up 12.40% while The World Index is up [...]

Still an opp in gold stocks?

On May 4th I posted about the divergence between the spot price of gold and the producers of gold, i.e., gold miners. I look at correlations a great deal (subject of my PhD thesis actually) and noticing a breakdown in the long run relationship I suggested there was an opportunity in gold stocks by [...]

A gain of almost 300%, sweet

On May 4th I wrote about the opportunities gold mining stocks presents. I suggested folks take advantage of the opportunity presented by a divergence between HUI (sometimes called the “gold bugs index”) and spot gold prices. So lets look at the record; the chart above shows the daily price of spot gold ($GOLD, black [...]

Oh what happened to fiscally conservative America?

On the chart above I’ve presented the US Federal Budget Surplus or Deficit over the last two decades as the red line with the left axis showing millions of dollars. Observations are taken on September 30th of each year. As recently as February, 2002 the United States actually ran a net budget surplus. And [...]