Gold & Silver Real Money
- Are Central banks in denial?
(2010 - DATE) The Precious Metals industry is huge and has been throughout history. Here's the metaphor; The average ordinary tomato in the supermarket is sprayed with 12 pesticides. Plenty of scientific evidence that living a healthier life is important. This requires a reset to the basics of what our nature has on offer.
Our monetary system is no different. Have we lost touch with nature some 100 odd years ago spraying nature's hard mined money with pesticides in the form of easily inflatable fiat currencies.
Today, some big names in the Precious Metals space deliver constant attack on an ever deteriorating world financial platform with massive debt. Names like Spott, Maloney, Bonner, Sinclair, Prins, Greyerz, Smith, Austin-Fitts and many others have voiced extreme criticism towards 21st Century unprecedented monetary policy behavior in all corners of the world. This does not hit Mainstreet as their voices are mostly heard in alternative media like Zerohedge, KWN, USAWatchdog and various other prominent blogs.
We share those concerns, not only because it has been proven via backward deep asset allocation analysis that holding a small percentage of Gold, Silver, Platinum and Palladium as insurance is a very wise wealth hedge, and also because the fundamentals of monetary policy appear to being violated without any historic evidence of potential success. In fact, historic evidence to the contrary is plentiful. A time bomb waiting to be ignited, and also by nature's forces.
Are Central Banks in denial? Not really. Traditionally, most of them hold gold at a minimum ratio as that same asset allocation research seems to suggest. Some Central Banks have abandoned the security of gold, like Canada and the UK, whilst others like Greece must have provided the same as collateral. Central Banks however, and/or their shareholders, are still the biggest players in this space, but what we do not know is what hidden derivatives positions, swaps and so on, may be at stake and may wipe out a country's minimum level of monetary insurance.
In any case, precious metals markets price behavior has been cause for massive frustration with investors this past decade. Investors are not prepared to accept that helicopter money is the answer to all our financial worries.
Suffice to say that we must deal with day-to-day realities and that these markets can go up as well as down. The risk analysis we do can be done by anyone using a stand alone or combination of the most commonly used technical tools calculating momentum of price. We tend to favor, RSI, Stochastic and MACD, whilst not necessarily in this order and we sometimes watch others to confirm the profile for each week.