18 September 2015

Gold Daily and Silver Weekly Charts - Curiouser and Curiouser

“Anything that has more upside than downside from random events (or certain shocks) is antifragile;  the reverse is fragile.” 

Nassim TalebAntifragile

Gold and silver continued to rally today, even as the Dollar took back quite a bit of its recent loss after the Fed did what everyone expected them to do, which is nothing.  Keep in mind that the Dollar DX index is antiquated, and potentially misleading since it is so heavily weighted to the old order currencies.

Currencies are under closer examination now, because we are in a period of change that some have called 'the currency wars.'  Sometimes analysts will narrow that definition down to just the competitive devaluations that governments engage in to help to boost exports and curb imports to their faltering domestic economies.

But it is much more than that.  They are missing the bigger picture because it is the kind of change that occurs over long periods of time.  One day they will look up and see it, and surprise.  Who could have seen it coming?

Gold is the king of currencies, the crème de la crème of monetary vehicles.  If you have an ancient gold coin now, even if it is not of collectible merit, its value is still sustained as bullion after all these years, no matter what country or ruler may have happened to have issued it.  And the same is true for silver.

That is because physical precious metals have no counterparty risk.  No paper currency may make that claim, since they exist on either the strength of a promise, or the force of a threat.  And as the promises erode, the application of force often increases.

It is the international force of wills that is causing the currency wars.  Some wish to uphold the existing regime, the dollar as the reserve currency, whether it makes sense or not.  That is because money is power.  There is little that is noble in this effort.  It is the greed of the merchants and the will to power that they serve.  And the rest of the world has grown weary of it.

Others would aspire to grow the power of the Anglo-American empire at any cost, most of it to be paid by other people.  It is an old story, one of the oldest.  Pride and the will to power, and from them spring jealousy and greed.  Enough is never enough for some.

There was overnight commentary about gold, and some recent controversy about the supplies of gold in London and New York. You might take the time to read Deriding the Theory of Gold Tightness at the Comex.

What goes around comes around.  And what is coming around the corner may be enlightening.

Have a pleasant weekend.

Related:  How Many Gold Bars Are Left In the London Vaults