Price inflation approaching

There is some evidence in the UK of a pick-up in consumer spending. There are two likely factors behind this, the first perhaps being seasonal, aided by the fine weather. The second is less obvious, but combines with the first to encourage purchases of big ticket items; and this is cheap consumer finance coupled with growing expectations of higher interest rates in the future.

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The nonsense behind state intervention

Both Keynesians and monetarists believe that increased government spending is sometimes necessary. The intervention is in the form of unfunded government spending, artificially low interest rates, or a drive to make the currency “competitive”. These methods have been tried unsuccessfully time and again, and they must be denounced if we are to understand our true economic condition.

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The geopolitics of gold

Western central banks have got themselves horribly wrong-footed as a result of not adjusting their anti-gold policies to allow for the realities of Asian gold demand. Though their dealings are shrouded in secrecy, there is compelling evidence that much – if not most – of Western central bank gold has been quietly sold over the last three decades.

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The role of GLD and SLV

Those invested in SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) must be prepared to accept a lower standard of custodial regulation. They must also be aware that GLD and SLV are only suitable for investors who look to benefit from a rising gold or silver price until they decide to take their profits. They are definitely not for those seeking a safe haven or hedge from a financial crisis.

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The case against deflation

Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.

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Goodbye to austerity

There is a new campaign to end austerity. First, the IMF lets it be known it has second thoughts about it; then we are told the threshold of 90% government debt to GDP which must not be crossed, set by Professors Reinhart & Rogoff, is based on an excel spread-sheet error. Lastly, Bill Gross of PIMCO, the largest bond fund in the world, tells us austerity is not working.

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Physical gold vs paper gold: waiting for the dam to break

In this article I will argue that the recent fall in the gold price has generated substantial demand for bullion that will likely bring forward a financial and systemic disaster for both central and bullion banks. To understand why, we must examine their role and motivations in precious metals markets and assess current ownership of physical gold.

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Gold price suppression: the game goes on

The fall in precious metals has shaken investor confidence, yet demand for the physical metals remains strong. This has led many to comment that paper gold and silver and not bullion are driving prices. The sell off is a combination of long paper positions capitulating, new short positions being opened by trend-chasers, and bullion banks squaring their books.

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Money supply accelerating

The monthly figures for the US dollar components of True Money Supply (TMS), for February are now in. In 2008 the trajectory of TMS went from exponential to hyperbolic, and its incredible rise is the clearest way to illustrate the accelerating debasement of the dollar.

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