gold news

 ultimately for anybody that has patience i believe that we are really headed for these astronomical prices and gains in true purchasing power on august 22nd and 23rd of 2011 gold put in prices that were above 1900 and i believe that the nine years that has elapsed since is nothing but a launch pad that they have that gold and silver have built for not just a launch pad to the moon but a launch pad for some truly astronomical prices now if you investigate all of this i'm sure you will come to the same

conclusion but there's some great articles i'd like to direct you towards so what are the factors that are going to cause gold and silver to go to these astronomical prices what who who are the buyers that are going to cause gold and silver to go to these astronomical prices and what potential crises could be the trigger events that take us there so i'm going to start with the gold silver main page and one thing that's interesting is we have ratios that are below 70 again the gold silver ratio so

silver's price measured in gold is less than 170th of an ounce now i'm kicking myself in the butt for not buying uh gold i was waiting for a pullback that never happened and they just took off like rockets and uh but i was going to buy gold and i priced gold and silver two different ways i priced them in in dollars but i also priced them against each other and it's much easier for me to buy gold actually at 2 000 when it's at a below the ratio of 70 than it was to buy at 1800 when the ratio was up at like uh it was

over a hundred it was 122 at one point when it was 122 i didn't have excess cash set aside uh to be able to purchase however the factors that are going to cause the potential crisis i highly recommend reading this article by aleister mccloud gold at 2 000 plus so why the fuss this shows that the big financial crisis that the world is going to have we don't know what is going to be the trigger i i talked about uh real estate in china recently in real estate in the united states there are so many

potential pins for the the currency bubble that we currently have the debt bubble uh the almost everything bubble but this article by aleister mccloud goes through a bunch of the triggers that are in the gold sector in precious metals the liquidity on the commodities exchange the london bullion exchange the lbma is and these are huge and it exposes the banks to the banks which are not in that good of financial condition right now exposes them to 38 billion dollars of potential losses there they are

short there's not enough gold there to cover everything and and if the price continues going up they have to cover it sometime and accept these losses and that means bailouts is what would happen so i highly recommend taking a look at this article it's it's a long article but aleister is a great analyst and he's put together a real good trail of breadcrumbs for you to follow um the factors that are driving this i mean who's buying it millennials flood into precious metals now millennials are people that

this is the small investor that we're talking about here and they tend to jump around all of the small investors that get invested in whatever the fed is recently so they will jump in and out and the jumping in and out is usually what causes losses you know there could be a pullback coming at any time i have no idea because gold is way overbought so is silver way overbought they should do a pullback they need to do to work off some of the steam by revisiting their 200-day moving averages and things

like that but uh ultimately for anybody that has patience i believe that we are really headed for these astronomical prices and gains in true purchasing power so um this is about the millennials coming in and the people using the robin hood app and buying gold etfs and so on but this next article is about the people that are in this for the long term and what they're talking about here on bloomberg is that it's it's got a new wider fan base of pension funds insurance companies and private wealth specialists

now these are organizations that are going to use every pullback to add to their positions they're going to dollar cost average in they're not going to put a billion dollars into gold tomorrow and cause a huge price price spike but they know that the rest of the economy is on shaky ground and that gold and silver are probably destined for the types of prices that i think that they're destined for and then there are some other threats some other pins besides a default on the commodities exchanges

because of all of the the short positions that the commercial bullion banks have that alistair mcleod wrote about i highly recommend his article read that there's also the biggest threat to the stock market is a wave of corporate bankruptcies now this is because of all the debt that the banks have taken on this is a 10 trillion dollar corporate debt bomb is waiting to explode the u.s economy and they're talking about impacting the uh corporate debt and the economy this next article central bankers are caught in a

leverage trap and this one i also highly recommend we'll put the links below this video but they've spent years warning of the perils of excess corporate debt uh the catch-22 uh to stave off a debt crisis monetary policy makers create conditions that allow companies to borrow even more increasing the potential severity of the next crisis and this is true no central banker wants to encourage excess borrowing equally no central banker wants i'm going to change that to will stand by while companies default increasing

unemployment and throttling economic growth the chosen solution to a debt crisis is more debt there is no escaping it you cannot cut back unless you create tremendous amounts of economic growth to offset it and i'm sorry that that's just not in the cards the economic growth there is nothing else central banks can do and so they really are trapped and one of the things that is happening is um these this is creating zombie companies that i've talked about many times in the past but the debt leverage ratio the ratio

of their um earnings their earn net debt to ebitda is uh earnings before uh interest taxes uh depreciation and amortization and so this is the earnings before they pay taxes on it and pay interest so the ratio of that they've got 2.4 times at the end of the second quarter the highest level on record and the bank's analysts predict that it will peak at 3.2 times now the economy would have to get screaming good for this to work out otherwise like it says at the end of the article such a slowdown in activity

lowers investor demand for risky assets thereby raising the spreads and depressing the valuations as business losses accumulate the delinquencies and defaults rise banks are willing are less willing or able to lend this dynamic feeds on itself potentially amplifying the downside risk into more serious financial stress or a downturn now in the previous article at the end it says it would be devastating for the cash flow of highly indebted firms it's possible that dozens or even hundreds of companies

would look to renegotiate pause or maybe even default on interest payments default on interest payments this means massive bailouts not just for the big banks but for a whole a huge percentage of the s p 500 companies and the figure isn't 10 trillion it is now 12 trillion and 12 trillion of uh corporate debt defaulting wipes out the average investor it wipes out all of these pension funds it would be a cascading effect through the economy that would require a default and so you know the federal reserve may be

creating 12 trillion bucks sometime soon so if you got anything from this please go to goldsilver.com download my book check out our charts and the news stories i want to thank you for watching we'll see you next time