Gyroscopic Investing

economicsjunkie wrote: http://mishtalk.com/2016/03/04/demand-o ... old-trust/

"One of the biggest factors behind gold’s rise has been negative rates. The Bank of Japan last month joined a growing number of central banks, including the Swiss National Bank and the European Central Bank, when it introduced negative interest rates in an effort to spur consumer spending. Sweden’s central bank said on Thursday it was moving interest rates further into negative territory, and warned it could cut again. Canadian officials are also weighing cutting borrowing costs below zero."

Kbg wrote: I don't agree. I think Mish is correct, people are moving to gold to avoid paying interest on their savings. However, if it looks like the US is going to raise rates then gold will reverse. There is nothing more complex here than a basic carry trade.

Libertarian666 wrote: I'm sorry, but I fail to see the connection between "moving to gold to avoid paying interest on savings" and deflation.

Libertarian666 wrote:All people have to do to avoid paying interest on savings is store their savings somewhere other than bank accounts, in whatever form they prefer, including paper "dollars";

Libertarian666 wrote:they certainly don't need to buy gold for that purpose.

Libertarian666 wrote: What gold is responding to is inflationary central bank behavior.

Kbg wrote: I don't agree. I think Mish is correct, people are moving to gold to avoid paying interest on their savings. However, if it looks like the US is going to raise rates then gold will reverse. There is nothing more complex here than a basic carry trade.

economicsjunkie wrote:

Kbg wrote: I don't agree. I think Mish is correct, people are moving to gold to avoid paying interest on their savings. However, if it looks like the US is going to raise rates then gold will reverse. There is nothing more complex here than a basic carry trade.

I would qualify that to say that if it looks like the US will raise rates on a sustained basis, there will be some downward pressure on gold (I don't think we know what the net effect will be since there may be other pressures working the other direction, like for example if we suddenly see massive inflation which, granted, is unlikely).

sophie wrote: I've seen this ascribed to the uncertainty of negative interest rates, which are now being talked about as inevitable for many countries that aren't in the negative zone yet (e.g. Japan).  That makes sense.  I'd expect even more gold-buying if banks start imposing negative interest rates on savings accounts.

sophie wrote: I've seen this ascribed to the uncertainty of negative interest rates, which are now being talked about as inevitable for many countries that aren't in the negative zone yet (e.g. Japan).  That makes sense.  I'd expect even more gold-buying if banks start imposing negative interest rates on savings accounts.

Libertarian666 wrote: The next step after that is banning individuals from owning gold.

economicsjunkie wrote: ... aaand more: http://www.againstcronycapitalism.org/2 ... est-rates/

murphy_p_t wrote: https://www.youtube.com/watch?v=70xBQ2lL_pE
from 33;40

dualstow wrote:

murphy_p_t wrote: https://www.youtube.com/watch?v=70xBQ2lL_pE
from 33;40

I always see his name thrown around here, so I finally watched. Interesting.

They sure don't like him at bogleheads, do they? https://www.bogleheads.org/forum/viewtopic.php?t=162432

dualstow wrote: That's certainly true. They don't like gold. Still, the criticism seems to be that Rickards makes predictions all the time, and that they don't come true. Have they ever come true?

dualstow wrote: That's certainly true. They don't like gold. Still, the criticism seems to be that Rickards makes predictions all the time, and that they don't come true. Have they ever come true?