#PeterSchiff #China #Switzerland #centralbanks #gold #economics #monetary #policy
Saturday, January 17, 2015
Economics Theory: Will China Pull a "Switzerland" on the U.S. Dollar?
Peter Schiff Poses and attempts to answer the question, Will China Pull a "Switzerland" on the U.S. Dollar?
#PeterSchiff #China #Switzerland #centralbanks #gold #economics #monetary #policy
#PeterSchiff #China #Switzerland #centralbanks #gold #economics #monetary #policy
Swiss Central Bank Defends Franc Move Despite Turbulence
Switzerland’s central bank on Saturday stood by its shock decision to let the franc soar, insisting the subsequent turbulence rocking global markets and the Swiss economy since the move would eventually subside.
“This was not an easy decision... (but) we are convinced it is the right one,” Swiss central bank chief Thomas Jordan said in an interview published in Swiss dailies Le Temps and NZZ on Saturday.
The Swiss National Bank (SNB), he said, had determined that by continuing to artificially hold down the franc, “it risked losing control of its monetary policy in the long term.” Jordan’s comments came after the bank stunned markets Thursday with its decision to abandon the minimum rate of 1.20 francs against the euro that it had been defending for more than three years.
This Swiss currency has since gained around 20 per cent against other currencies and is currently trading at around parity with the euro.
The soaring franc caused panic on global markets, bankrupted foreign exchange traders as far away as New Zealand and was seen as a significant threat to Switzerland’s export-dependent economy.
The Swiss stock exchange’s main SMI index has plunged more than 14pc since Thursday’s announcement.
Swiss banking giant UBS said the SNB’s decision would deliver a severe blow to economic growth, slashing its forecast to just 0.5pc expansion this year from its previous estimate of 1.8pc.
The yield on Swiss 10-year bonds on Friday meanwhile entered negative territory for the first time, slipping to -0.031pc, meaning lenders will now have to pay to lend money to the country.
THREATENING ENTIRE SWISS SYSTEM: “The strong franc is threatening the entire Swiss system,” the Tribune de Geneve (TdG) daily lamented on Saturday, adding: “The future looks dark.”
Jordan said Switzerland’s central bankers, who unanimously agreed to scrap their long-drawn efforts to hold down the value of the franc, “were aware that this decision could have a major impact on markets.”
“The markets should gradually stabilise,” he said, admitting though that “it could take time.”
The SNB had been defending the exchange rate floor since September 2011 in an effort to protect the country’s vital export and tourism industries, even buying massive quantities of foreign currencies to do so.
The rate was introduced as the eurozone crisis sent investors scurrying to the safe haven currency. More recently, the Russian rouble crisis put renewed pressure on the franc.
Jordan insisted the efforts to rein in the franc were no longer justified, insisting the Swiss economy was in a much better place than it had been when the cap was introduced.
“We gave the Swiss economy time to adapt to the new situation. A period of three years is not negligible,” he said, stressing that “the currency cap from the beginning was supposed to be an exceptional and temporary measure.”
“It was always meant to be abandoned.”
SNB NOT ALL-POWERFUL: Now that the cap was gone, Jordan acknowledged that “following this decision, the economic situation in Switzerland is more difficult.”
But, he pointed out, “SNB cannot fulfil all wishes with its monetary policy. It is not all-powerful.”
His comments were unlikely to win over Swiss businesses bracing to see exports plunge and shoppers at home flood across to neighbouring eurozone countries for cheaper goods.
“Making products in Switzerland and selling them abroad is currently the worst possible scenario,” Syz analyst Jerome Schupp told TDG.
The Swiss National Bank (SNB), he said, had determined that by continuing to artificially hold down the franc, “it risked losing control of its monetary policy in the long term.” Jordan’s comments came after the bank stunned markets Thursday with its decision to abandon the minimum rate of 1.20 francs against the euro that it had been defending for more than three years.
This Swiss currency has since gained around 20 per cent against other currencies and is currently trading at around parity with the euro.
The soaring franc caused panic on global markets, bankrupted foreign exchange traders as far away as New Zealand and was seen as a significant threat to Switzerland’s export-dependent economy.
The Swiss stock exchange’s main SMI index has plunged more than 14pc since Thursday’s announcement.
Swiss banking giant UBS said the SNB’s decision would deliver a severe blow to economic growth, slashing its forecast to just 0.5pc expansion this year from its previous estimate of 1.8pc.
The yield on Swiss 10-year bonds on Friday meanwhile entered negative territory for the first time, slipping to -0.031pc, meaning lenders will now have to pay to lend money to the country.
THREATENING ENTIRE SWISS SYSTEM: “The strong franc is threatening the entire Swiss system,” the Tribune de Geneve (TdG) daily lamented on Saturday, adding: “The future looks dark.”
Jordan said Switzerland’s central bankers, who unanimously agreed to scrap their long-drawn efforts to hold down the value of the franc, “were aware that this decision could have a major impact on markets.”
“The markets should gradually stabilise,” he said, admitting though that “it could take time.”
The SNB had been defending the exchange rate floor since September 2011 in an effort to protect the country’s vital export and tourism industries, even buying massive quantities of foreign currencies to do so.
The rate was introduced as the eurozone crisis sent investors scurrying to the safe haven currency. More recently, the Russian rouble crisis put renewed pressure on the franc.
Jordan insisted the efforts to rein in the franc were no longer justified, insisting the Swiss economy was in a much better place than it had been when the cap was introduced.
“We gave the Swiss economy time to adapt to the new situation. A period of three years is not negligible,” he said, stressing that “the currency cap from the beginning was supposed to be an exceptional and temporary measure.”
“It was always meant to be abandoned.”
SNB NOT ALL-POWERFUL: Now that the cap was gone, Jordan acknowledged that “following this decision, the economic situation in Switzerland is more difficult.”
But, he pointed out, “SNB cannot fulfil all wishes with its monetary policy. It is not all-powerful.”
His comments were unlikely to win over Swiss businesses bracing to see exports plunge and shoppers at home flood across to neighbouring eurozone countries for cheaper goods.
“Making products in Switzerland and selling them abroad is currently the worst possible scenario,” Syz analyst Jerome Schupp told TDG.
Thursday, January 15, 2015
Silver Investment News: Short Term Silver bottom?
Has Silver hit a Short Term bottom?
Gold and silver mining stocks will likely bottom before the price of the underlying metal. Are mining shares telling us that a bottom is near?
#silver #silverbullion #silvermining #bullion #miningstocks #commodities
Thursday, December 11, 2014
Are We About To See A Historic Melt-Up In Gold & Silver?
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| Are We About To See A Historic Melt-Up In Gold & Silver? |
Rick Rule, who is business partners with billionaire Eric Sprott, also discussed exactly how this historic advance will unfold and why the up-moves will be so incredibly violent
Eric King: “Rick, are we finally seeing the more than 3-year bear market in gold and silver coming to an end?”
Rule: “You and I both believe in higher precious metals prices, Eric, so it’s tempting to say yes. Bear markets end with capitulation selloffs. I think we were on the verge of a capitulation selloff six weeks ago but we didn’t get one. The questions is, do we have to see a capitulation selloff this time? The answer is, of course not
“I said to my Chinese friends that ‘The U.S. dollar is in one way shape or form a lie.’ And they said, ‘Yes, but it’s the most liquid lie on the planet, and from that point of view we are attracted to it.’
When the confidence in the U.S. dollar begins to wane, and I say when, not if, then precious metals will shine. We may be seeing a preview of that today. But if you had bought precious metals in rubles, Eric, or yen, or the Brazilian real, you would be very happy today.
Eric King: “Rick, are we finally seeing the more than 3-year bear market in gold and silver coming to an end?”
Rule: “You and I both believe in higher precious metals prices, Eric, so it’s tempting to say yes. Bear markets end with capitulation selloffs. I think we were on the verge of a capitulation selloff six weeks ago but we didn’t get one. The questions is, do we have to see a capitulation selloff this time? The answer is, of course not
“I said to my Chinese friends that ‘The U.S. dollar is in one way shape or form a lie.’ And they said, ‘Yes, but it’s the most liquid lie on the planet, and from that point of view we are attracted to it.’
When the confidence in the U.S. dollar begins to wane, and I say when, not if, then precious metals will shine. We may be seeing a preview of that today. But if you had bought precious metals in rubles, Eric, or yen, or the Brazilian real, you would be very happy today.
For many people who bought them in dollars this has created frustration because of the strength of the dollar vs other fiat currencies. Gold doesn’t have to win the war against the dollar, it just needs to lose it less badly for KWN readers not to be just happy, but ecstatic.”
Eric King: “In this secular bull market, if we are seeing an end to the cyclical bear market in gold, silver, and the shares, how do you see the advance unfolding off the lows? Will it give people time to get in?”
Rule: “I definitely believe it will. I believe that without a capitulation selloff, the bottom that we see will resemble the market that we saw from July 2013 - February 2014. That is a gradual saucer-shaped recovery, with higher highs and higher lows but plenty of volatility to scare people and also delay investment in the sector. And it may be that we are back into that phase after having been scared to death recently.
Certainly without the capitulation selloff what you will see is a long consolidation period that’s extremely choppy and volatile. And that has been, in my experience in the last three cycles, eventually greeted with a melt-up.
Eric King: “In this secular bull market, if we are seeing an end to the cyclical bear market in gold, silver, and the shares, how do you see the advance unfolding off the lows? Will it give people time to get in?”
Rule: “I definitely believe it will. I believe that without a capitulation selloff, the bottom that we see will resemble the market that we saw from July 2013 - February 2014. That is a gradual saucer-shaped recovery, with higher highs and higher lows but plenty of volatility to scare people and also delay investment in the sector. And it may be that we are back into that phase after having been scared to death recently.
Certainly without the capitulation selloff what you will see is a long consolidation period that’s extremely choppy and volatile. And that has been, in my experience in the last three cycles, eventually greeted with a melt-up.
That’s the only way I can describe it if you remember 2002, Eric. This is where, finally, all of the sellers get used up and the metal gaps higher and the shares gap higher. I’m not saying that past has to be prologue but that’s what has happened the last few times we have been in a similar position.”
Eric King: “You are talking about some pretty violent upward moves.”
Rule: “Yes. It’s funny that we have been, in effect, punished in this market since 2012 and subjected to several violent down-moves, so we forget that the thing which attracted us to this sector originally was the fact that in recovery this market exhibits very violent up-moves.
Remember, people’s expectations of the future are set by their experience in the immediate past. And everybody’s experience in the immediate past going back to the tail end of 2011 has been negative. What that means is that our expectations are all negative.
Eric King: “You are talking about some pretty violent upward moves.”
Rule: “Yes. It’s funny that we have been, in effect, punished in this market since 2012 and subjected to several violent down-moves, so we forget that the thing which attracted us to this sector originally was the fact that in recovery this market exhibits very violent up-moves.
Remember, people’s expectations of the future are set by their experience in the immediate past. And everybody’s experience in the immediate past going back to the tail end of 2011 has been negative. What that means is that our expectations are all negative.
What moves a market is a market that exceeds expectations, and expectations for the mining industry are pathetically low, which means we will exceed those expectations.
And when we exceed those expectations the market will move significantly higher and perhaps very violently to the upside. If you remember back to the 1993 melt-up, or the 2002 melt-up, or going back even further to the melt-up of the late 1970s, which was the most violent melt-up I’ve ever experienced in my life, these are truly spectacular events. If past is prologue, and it normally is, this will happen again.”
And when we exceed those expectations the market will move significantly higher and perhaps very violently to the upside. If you remember back to the 1993 melt-up, or the 2002 melt-up, or going back even further to the melt-up of the late 1970s, which was the most violent melt-up I’ve ever experienced in my life, these are truly spectacular events. If past is prologue, and it normally is, this will happen again.”
Wednesday, December 10, 2014
US Mint Silver Coin Sales Climb to Annual Record as Silver Price Rebounds
Purchases of American Eagle silver coins reached 43.051 million ounces in 2014, data on the mint’s website shows. That tops last year’s 42.7 million ounces, the previous all-time high, according to an e-mailed statement yesterday. There are still enough supplies to keep selling 2014-dated coins through the week starting Dec. 15, the mint estimates.
A surge in demand prompted the mint to suspend sales in November for more than a week because of a lack of inventory. When the coins were again made available for purchase, it was on allocated basis. Buying has increased with prices heading for a second straight annual loss, the longest slump since 1992.
“This has been a very strong year for us,” said Michael Kramer, the president of New York-based MTB Inc., a dealer authorized to purchase coins directly from the mint and sell to consumers. “It was especially busy on days prices took a big tumble.”
Silver futures for March delivery jumped 5.3 percent to $17.134 an ounce on the Comex yesterday, the biggest gain since Dec. 1.
Prices declined 12 percent this year through yesterday, after dropping 36 percent in 2013. On Dec. 1, the metal reached $14.155, the lowest since 2009.
Swiss Franc No Longer a Safe Haven and a Possible Bottom for Gold
Peter Schiff responds to the results of the "Save Our Swiss Gold" initiative this past weekend. He explains why he thinks it is bullish for gold and might have even marked gold's bottom.
0:17 – “Save Our Swiss Franc” would have been a more accurate description of the Swiss gold initiative.
0:59 – Switzerland used to have more than 40% of its reserves in gold and was very prosperous.
1:47 – The Swiss gold initiative was a threat to the powers-that-be, because it limited the ability of the Swiss National Bank (SNB) to create inflation
2:35 – If the initiative had passed, Switzerland would have been an example of a strong economy in a sea of European inflation.
3:34 – How is it crazy to have only 20% of your assets in gold, but sensible to have 100% of your assets in fiat currencies?
4:30 – The Swiss originally didn’t want to adopt the euro, but now they’ve embraced a de facto euro standard.
5:30 – Gold and silver dropped dramatically after the vote, which was surprising since no one had really expected the initiative to pass.
6:23 – Gold and silver recovered their losses quickly once the United States started trading.
7:10 – Peter believes the “no” vote is more bullish for the long-term price of gold.
7:43 – If the Swiss had adopted the referendum, it would have slowed down Swiss money printing and Swiss inflation.
8:28 – When the world realizes the United States is going to return to quantitative easing, the Swiss franc will no longer be a safe-haven option. This would mean greater demand for gold.
9:36 – If the SNB won’t be buying gold on behalf of its people, the Swiss will buy gold individually to protect their purchasing power.
10:49 – Looking at historical actions of central banks, there’s a chance that gold’s low price on Sunday could end up being gold’s bottom.
0:17 – “Save Our Swiss Franc” would have been a more accurate description of the Swiss gold initiative.
0:59 – Switzerland used to have more than 40% of its reserves in gold and was very prosperous.
1:47 – The Swiss gold initiative was a threat to the powers-that-be, because it limited the ability of the Swiss National Bank (SNB) to create inflation
2:35 – If the initiative had passed, Switzerland would have been an example of a strong economy in a sea of European inflation.
3:34 – How is it crazy to have only 20% of your assets in gold, but sensible to have 100% of your assets in fiat currencies?
4:30 – The Swiss originally didn’t want to adopt the euro, but now they’ve embraced a de facto euro standard.
5:30 – Gold and silver dropped dramatically after the vote, which was surprising since no one had really expected the initiative to pass.
6:23 – Gold and silver recovered their losses quickly once the United States started trading.
7:10 – Peter believes the “no” vote is more bullish for the long-term price of gold.
7:43 – If the Swiss had adopted the referendum, it would have slowed down Swiss money printing and Swiss inflation.
8:28 – When the world realizes the United States is going to return to quantitative easing, the Swiss franc will no longer be a safe-haven option. This would mean greater demand for gold.
9:36 – If the SNB won’t be buying gold on behalf of its people, the Swiss will buy gold individually to protect their purchasing power.
10:49 – Looking at historical actions of central banks, there’s a chance that gold’s low price on Sunday could end up being gold’s bottom.
Wednesday, August 6, 2014
Investor Sues the Silver Bullion Banks for Benchmark Manipulation
An investor has filed suit against the three firms that set the price of silver, accusing them of manipulation. The lawsuit, filed in the US District Court in the Southern District of New York, is noteworthy because similar accusations have been levied in the gold market and the process by which commodities prices are set has increasingly come under scrutiny.
The lawsuit was filed by J. Scott Nicholson, a Washington State resident, who is seeking class-action status for the suit. Bank of Nova Scotia "vigorously" denied the charges, according to an article from Bloomberg Businessweek, and the other two rate setters, Deutsche Bank and HSBC, declined comment. The three banks conduct the fix, or price-setting, once a day by conference call, according to an article from Reuters.
It is unclear if Nicholson has evidence to back his charges, but the complaint states that the defendants "have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the release of silver fixing results, allowing them to reap large, illegitimate profits."
Deutsche Bank said in January that it would withdraw from participating in setting the gold and silver benchmarks in London as it plans to cut 200 jobs in commodities trading. London Silver Market Fixing Ltd. said in May that it would stop administering the benchmark after Deutsche withdraws its participation in August.
The suit comes on the heels of similar suits in the gold market and a lengthy silver market investigation. The five banks accused in the gold fixing case deny the accusations. The five-year silver market investigation, conducted by the Commodities Futures Trading Commission, ended last September when it found no evidence of wrongdoing.
For more:
- read the Bloomberg Businessweek article
- read the Reuters article
- read the BBC article
For more:
- read the Bloomberg Businessweek article
- read the Reuters article
- read the BBC article
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