Mark Pey

February 14, 2020

We at SendGold believe that one of our jobs is to help our customers stay informed about the precious metals markets so they can make better investment decisions. We do that by trying to separate gold market fact from fiction.

Part of this includes separating gold “conspiracy theories” from “conspiracy facts”.

Gold in The Ocean

One conspiracy theory for example says that there is a practically unlimited supply of gold that could be mined from seawater.

But it’s fairly simple to fact check this: according to New Scientist the amount of gold that exists in 100 million tons of seawater is 1 gram:  MIT Scientists: Gold in Seawater.

Gold In The Markets

Another prominent conspiracy theory that has circulated for years about gold is that its price is manipulated by the big banks (the so-called “bullion banks”).

Today we can report that this has now moved from the realm of “conspiracy theory” to that of “conspiracy fact”.

And no, it’s not the careful analysis by the team at SendGold that says so, it is the U.S. Department of Justice (DOJ).

Justice Is Served

Last Fall the DOJ handed down an indictment to J.P. Morgan bank. In it they stated that J.P. Morgan’s precious metals trading operation, one of the largest in the business, was (to quote) “a criminal enterprise” that “had manipulated the precious metals markets for at least a decade”.

U.S. DOJ Indictments

Most interestingly the DOJ used The RICO Act, which is normally only used for big drug cartels and the Mafia, in the indictment.

What This Could Mean

It’s widely thought that banks want to suppress the price of gold since it represents competition for all of their paper-based offerings: currencies, bank accounts, shares, and bonds.

Curbing price manipulation will mean that gold prices will better reflect actual market conditions. Supply (which is low) and demand (which is high) would be allowed to seek a more realistic equilibrium.

And the DOJ enforcement action against J.P. Morgan has reportedly sent the Compliance Departments of the other bullion banks (HSBC and others) to their own gold trading operations to make sure they are complying with the law.

Why Now?

We can speculate, but the DOJ reflects the will of the U.S. Government. President Trump wants the dollar lower (a higher gold price would help achieve this), and a few weeks ago nominated well-known “gold standard” advocate Judy Shelton to the U.S. Federal Reserve Board.

And the Fed itself has been vigorously seeking higher inflation. A higher gold price would also help achieve this.

Is Gold a Bond?

One respected observer, commenting on gold in light of these enforcement actions, said that “gold is a high-yield bond of infinite duration and limited issuance”.

We agree, and are working to make SendGold the fastest, easiest, and most liquid way to own it.

Our 2020 Gold Outlook

Download our new App now and BUY 100% title to GOLD in minutes.

  •  


Mark Pey

February 14, 2020

We at SendGold believe that one of our jobs is to help our customers stay informed about the precious metals markets so they can make better investment decisions. We do that by trying to separate gold market fact from fiction.

Part of this includes separating gold “conspiracy theories” from “conspiracy facts”.

Gold in The Ocean

One conspiracy theory for example says that there is a practically unlimited supply of gold that could be mined from seawater.

But it’s fairly simple to fact check this: according to New Scientist the amount of gold that exists in 100 million tons of seawater is 1 gram:  MIT Scientists: Gold in Seawater.

Gold In The Markets

Another prominent conspiracy theory that has circulated for years about gold is that its price is manipulated by the big banks (the so-called “bullion banks”).

Today we can report that this has now moved from the realm of “conspiracy theory” to that of “conspiracy fact”.

And no, it’s not the careful analysis by the team at SendGold that says so, it is the U.S. Department of Justice (DOJ).

Justice Is Served

Last Fall the DOJ handed down an indictment to J.P. Morgan bank. In it they stated that J.P. Morgan’s precious metals trading operation, one of the largest in the business, was (to quote) “a criminal enterprise” that “had manipulated the precious metals markets for at least a decade”.

U.S. DOJ Indictments

Most interestingly the DOJ used The RICO Act, which is normally only used for big drug cartels and the Mafia, in the indictment.

What This Could Mean

It’s widely thought that banks want to suppress the price of gold since it represents competition for all of their paper-based offerings: currencies, bank accounts, shares, and bonds.

Curbing price manipulation will mean that gold prices will better reflect actual market conditions. Supply (which is low) and demand (which is high) would be allowed to seek a more realistic equilibrium.

And the DOJ enforcement action against J.P. Morgan has reportedly sent the Compliance Departments of the other bullion banks (HSBC and others) to their own gold trading operations to make sure they are complying with the law.

Why Now?

We can speculate, but the DOJ reflects the will of the U.S. Government. President Trump wants the dollar lower (a higher gold price would help achieve this), and a few weeks ago nominated well-known “gold standard” advocate Judy Shelton to the U.S. Federal Reserve Board.

And the Fed itself has been vigorously seeking higher inflation. A higher gold price would also help achieve this.

Is Gold a Bond?

One respected observer, commenting on gold in light of these enforcement actions, said that “gold is a high-yield bond of infinite duration and limited issuance”.

We agree, and are working to make SendGold the fastest, easiest, and most liquid way to own it.

Our 2020 Gold Outlook

Download our new App now and BUY 100% title to GOLD in minutes.

  •  


Mark Pey

January 17, 2020

With a new year and a new decade upon us we think it’s time to discuss our outlook for gold.

Gold is simultaneously a commodity, a currency, an investment, and a hedge against political uncertainty, so a look at each of these influences may provide some insight into how its price might react in the coming year.

Commodity

On the commodity side gold is used in jewellery and industrial applications and according to the World Gold Council global jewellery demand has been steady, so we would currently count this as a “neutral” influence. Commodity demand tends to reflect overall economic conditions and growth rates.

Currency

On the currency side gold competes with bank currencies, and it’s no secret that central banks have struggled over the last decade to maintain the integrity of their national currencies. The single biggest indicator of these struggles of course is the price of money, expressed as interest rates, and around the globe interest rates are effectively at (or even below) zero.

When something is priced at zero it is sending you a signal about its value, and while of course you can still exchange currencies for (fewer and fewer) goods and services, we do wonder how a debt-based currency system will  operate going forward if lenders are to receive nothing in exchange for extending credit.

The short-term answer seems to be that entities without underwriting expertise (central banks) must be willing to put risk on their books regardless of the borrower’s ability to repay, but there are limits to that approach.

The U.S. Federal Reserve Bank is well aware of these limits and flirted briefly in 2018 with reducing this form of life support for the financial system by shrinking their balance sheet. They reversed that policy in short order when billions were lost in the share market as a result.

The U.S. required $1.9 trillion in new debt issued in 2019 in order to keep the lights on, and more than 70% of that was issued with a term of 6 months or less. In “normal” times the USG would fund itself primarily in the 10- and 30-year bond markets, so this very short duration borrowing (bleeding into the overnight markets, where the Fed has stepped in with more than $3 trillion in support in the last 3 months) is an ominous sign.

So if the U.S. Dollar is gold’s competition (which it is) then the competition is looking fundamentally weak indeed.

Signing up to the currency wars recently with a “quantitative easing” (QE) program of their own has been the Reserve Bank of Australia, who do not seem troubled by the analysis of the IMF and the World Bank, and the opinions of the CEOs of the four largest banks in Europe, who have said that QE and negative interest rates “destroy the banking system”.

In a currency war you seek to lower the value of your currency in order to make your exports cheaper. Stated differently, the strategy is to try to make your country richer by making its citizens poorer.

In response to the RBA’s actions, gold hit all-time highs in Australian dollars in 2019 and we see no fundamental reason why that trend would change in 2020. The RBA has explained publicly that its policy is to reduce the value of the currency, but that does not mean you need to play along.

Investment

Gold competes in the investment markets with bonds and shares (and other investments). Bonds pay little or no interest today and rates are at 500-year lows, so it would seem that the $38 trillion bond market is risking a gold substitution trade.

Some of us have been around long enough to remember a rising interest rate environment, when bonds were called “certificates of confiscation”. If bonds pay you no interest, and you risk an erosion of your principal if rates drift upwards, and the currencies that bonds are denominated in confiscate your buying power over time, will more savers and capital preservation investors move from bonds to gold? We think they will.

The 9-year bull market in shares, driven almost entirely by share buybacks that reduce the number of shares outstanding (causing the price per share to rise), is now officially the longest equity bull market in history. We think one nagging fact should temper the bulls’ enthusiasm: corporate earnings are at exactly the same levels they were at in 2014 but share prices are now 70% higher.

Investment markets are funny, however; if we were talking about cars or TVs, people would go on a buyer’s strike after a 70% price hike. Those of us who favour a metal that is 25% denser than lead tend to be believers in gravity, but it’s not clear that 2020 (an election year) will be the year when gravity re-asserts itself in the share market. We may have to wait a little longer.

Geopolitics

On the geopolitical side gold’s role as a safe haven has come to the fore as tensions have mounted in the Middle East and elsewhere. These tensions peak and plateau, but even the plateau levels seem elevated these days so we believe geopolitics will continue to be supportive of even higher gold prices going forward.

Price Action

On the price action front we’re seeing a replay of 2017-2018 when the bullion banks worked feverishly to defend the $1200 (USD) price level. They failed. The recent price action sees them trying to defend the $1500 price level, and despite throwing more than 100,000 short Comex futures contracts at gold since last May to try to stem the metal’s rise, they do not seem to be having any more success defending $1500 than they did defending $1200.

Outlook

It’s worth recalling that savers and investors who choose gold as an alternative to bonds or shares will be competing for an exceedingly rare metal whose miners already venture up to 10,000 feet underground seeking minute amounts of it to sell. Despite these heroic and expensive efforts by miners the global supply of gold increases by a mere 1.6% per year.

So given the parlous state of money markets outlined above and the immovable fact of gold’s scarcity, we think there is a non-zero chance of a very asymmetric outcome for those lucky and smart enough to own gold: that they wake up one day to find an offerless market where gold gaps dramatically higher.

One analyst we respect (Jim Rickards, a contact and colleague of ours here at SendGold) has an upside price target of more than USD $5,000 per ounce or possibly even more.

Strategy

Our strategy in 2020 for the world’s premier precious metal, with its finite supply dictated by the laws of physics and not the whims of politicians or central bankers or corporate treasurers, can be summarised in one word: “accumulate”.

We’ll be rolling out exciting changes in SendGold in the coming months that we think will make SendGold your preferred option as you continue to accumulate history’s most reliable investment asset and one of the best hedges against political and market uncertainty.

Keeping our Clients Informed About Gold

Download our new App now and BUY 100% title to GOLD in minutes.

  •  


Mark Pey

February 14, 2020

We at SendGold believe that one of our jobs is to help our customers stay informed about the precious metals markets so they can make better investment decisions. We do that by trying to separate gold market fact from fiction.

Part of this includes separating gold “conspiracy theories” from “conspiracy facts”.

Gold in The Ocean

One conspiracy theory for example says that there is a practically unlimited supply of gold that could be mined from seawater.

But it’s fairly simple to fact check this: according to New Scientist the amount of gold that exists in 100 million tons of seawater is 1 gram:  MIT Scientists: Gold in Seawater.

Gold In The Markets

Another prominent conspiracy theory that has circulated for years about gold is that its price is manipulated by the big banks (the so-called “bullion banks”).

Today we can report that this has now moved from the realm of “conspiracy theory” to that of “conspiracy fact”.

And no, it’s not the careful analysis by the team at SendGold that says so, it is the U.S. Department of Justice (DOJ).

Justice Is Served

Last Fall the DOJ handed down an indictment to J.P. Morgan bank. In it they stated that J.P. Morgan’s precious metals trading operation, one of the largest in the business, was (to quote) “a criminal enterprise” that “had manipulated the precious metals markets for at least a decade”.

U.S. DOJ Indictments

Most interestingly the DOJ used The RICO Act, which is normally only used for big drug cartels and the Mafia, in the indictment.

What This Could Mean

It’s widely thought that banks want to suppress the price of gold since it represents competition for all of their paper-based offerings: currencies, bank accounts, shares, and bonds.

Curbing price manipulation will mean that gold prices will better reflect actual market conditions. Supply (which is low) and demand (which is high) would be allowed to seek a more realistic equilibrium.

And the DOJ enforcement action against J.P. Morgan has reportedly sent the Compliance Departments of the other bullion banks (HSBC and others) to their own gold trading operations to make sure they are complying with the law.

Why Now?

We can speculate, but the DOJ reflects the will of the U.S. Government. President Trump wants the dollar lower (a higher gold price would help achieve this), and a few weeks ago nominated well-known “gold standard” advocate Judy Shelton to the U.S. Federal Reserve Board.

And the Fed itself has been vigorously seeking higher inflation. A higher gold price would also help achieve this.

Is Gold a Bond?

One respected observer, commenting on gold in light of these enforcement actions, said that “gold is a high-yield bond of infinite duration and limited issuance”.

We agree, and are working to make SendGold the fastest, easiest, and most liquid way to own it.

Our 2020 Gold Outlook

Download our new App now and BUY 100% title to GOLD in minutes.

  •  


Mark Pey

January 17, 2020

With a new year and a new decade upon us we think it’s time to discuss our outlook for gold.

Gold is simultaneously a commodity, a currency, an investment, and a hedge against political uncertainty, so a look at each of these influences may provide some insight into how its price might react in the coming year.

Commodity

On the commodity side gold is used in jewellery and industrial applications and according to the World Gold Council global jewellery demand has been steady, so we would currently count this as a “neutral” influence. Commodity demand tends to reflect overall economic conditions and growth rates.

Currency

On the currency side gold competes with bank currencies, and it’s no secret that central banks have struggled over the last decade to maintain the integrity of their national currencies. The single biggest indicator of these struggles of course is the price of money, expressed as interest rates, and around the globe interest rates are effectively at (or even below) zero.

When something is priced at zero it is sending you a signal about its value, and while of course you can still exchange currencies for (fewer and fewer) goods and services, we do wonder how a debt-based currency system will  operate going forward if lenders are to receive nothing in exchange for extending credit.

The short-term answer seems to be that entities without underwriting expertise (central banks) must be willing to put risk on their books regardless of the borrower’s ability to repay, but there are limits to that approach.

The U.S. Federal Reserve Bank is well aware of these limits and flirted briefly in 2018 with reducing this form of life support for the financial system by shrinking their balance sheet. They reversed that policy in short order when billions were lost in the share market as a result.

The U.S. required $1.9 trillion in new debt issued in 2019 in order to keep the lights on, and more than 70% of that was issued with a term of 6 months or less. In “normal” times the USG would fund itself primarily in the 10- and 30-year bond markets, so this very short duration borrowing (bleeding into the overnight markets, where the Fed has stepped in with more than $3 trillion in support in the last 3 months) is an ominous sign.

So if the U.S. Dollar is gold’s competition (which it is) then the competition is looking fundamentally weak indeed.

Signing up to the currency wars recently with a “quantitative easing” (QE) program of their own has been the Reserve Bank of Australia, who do not seem troubled by the analysis of the IMF and the World Bank, and the opinions of the CEOs of the four largest banks in Europe, who have said that QE and negative interest rates “destroy the banking system”.

In a currency war you seek to lower the value of your currency in order to make your exports cheaper. Stated differently, the strategy is to try to make your country richer by making its citizens poorer.

In response to the RBA’s actions, gold hit all-time highs in Australian dollars in 2019 and we see no fundamental reason why that trend would change in 2020. The RBA has explained publicly that its policy is to reduce the value of the currency, but that does not mean you need to play along.

Investment

Gold competes in the investment markets with bonds and shares (and other investments). Bonds pay little or no interest today and rates are at 500-year lows, so it would seem that the $38 trillion bond market is risking a gold substitution trade.

Some of us have been around long enough to remember a rising interest rate environment, when bonds were called “certificates of confiscation”. If bonds pay you no interest, and you risk an erosion of your principal if rates drift upwards, and the currencies that bonds are denominated in confiscate your buying power over time, will more savers and capital preservation investors move from bonds to gold? We think they will.

The 9-year bull market in shares, driven almost entirely by share buybacks that reduce the number of shares outstanding (causing the price per share to rise), is now officially the longest equity bull market in history. We think one nagging fact should temper the bulls’ enthusiasm: corporate earnings are at exactly the same levels they were at in 2014 but share prices are now 70% higher.

Investment markets are funny, however; if we were talking about cars or TVs, people would go on a buyer’s strike after a 70% price hike. Those of us who favour a metal that is 25% denser than lead tend to be believers in gravity, but it’s not clear that 2020 (an election year) will be the year when gravity re-asserts itself in the share market. We may have to wait a little longer.

Geopolitics

On the geopolitical side gold’s role as a safe haven has come to the fore as tensions have mounted in the Middle East and elsewhere. These tensions peak and plateau, but even the plateau levels seem elevated these days so we believe geopolitics will continue to be supportive of even higher gold prices going forward.

Price Action

On the price action front we’re seeing a replay of 2017-2018 when the bullion banks worked feverishly to defend the $1200 (USD) price level. They failed. The recent price action sees them trying to defend the $1500 price level, and despite throwing more than 100,000 short Comex futures contracts at gold since last May to try to stem the metal’s rise, they do not seem to be having any more success defending $1500 than they did defending $1200.

Outlook

It’s worth recalling that savers and investors who choose gold as an alternative to bonds or shares will be competing for an exceedingly rare metal whose miners already venture up to 10,000 feet underground seeking minute amounts of it to sell. Despite these heroic and expensive efforts by miners the global supply of gold increases by a mere 1.6% per year.

So given the parlous state of money markets outlined above and the immovable fact of gold’s scarcity, we think there is a non-zero chance of a very asymmetric outcome for those lucky and smart enough to own gold: that they wake up one day to find an offerless market where gold gaps dramatically higher.

One analyst we respect (Jim Rickards, a contact and colleague of ours here at SendGold) has an upside price target of more than USD $5,000 per ounce or possibly even more.

Strategy

Our strategy in 2020 for the world’s premier precious metal, with its finite supply dictated by the laws of physics and not the whims of politicians or central bankers or corporate treasurers, can be summarised in one word: “accumulate”.

We’ll be rolling out exciting changes in SendGold in the coming months that we think will make SendGold your preferred option as you continue to accumulate history’s most reliable investment asset and one of the best hedges against political and market uncertainty.

Keeping our Clients Informed About Gold

Download our new App now and BUY 100% title to GOLD in minutes.

  •  


Jodi Stanton

May 10, 2019

If it isn’t a recession, inflation hike or currency crisis, an economic downturn is one of the many financial woes countries are experiencing nowadays. These, naturally, are a cause of concern for governments, banks, everyday citizens, and, perhaps, more importantly, for investors. Given that the value of many traditional assets take a hit when the economy misses a step, investors are usually deeply affected in these instances. Those who’ve put their money to invest in gold, however, may be better off when the charts don’t look promising. In fact, gold value is projected by many analysts to increase beyond its current value of $1300 per ounce, despite a recent drop in IMF’s global growth forecast to 2.3%. Continue reading our post for 3 signs indicating that a greater economic downturn may be upon us. Fortunately, they’re also 3 reasons why you should consider investing in gold. International trade has taken a hit With US President Donald Trump promising to double tariffs on $200bn of Chinese goods and introduce new tariffs in the near future, two of the world’s largest economies continue to disrupt whatever semblance of stability the global economy possesses. Even the German economy, the biggest in Europe, grew only by 1.5% last year, its weakest rate of growth in 5 years. This was largely due to some of its exporters being unable to conduct business, as usual, owing to international trade disputes. This reflects a global trend where countries are moving away from multilateralism; a prerequisite for global economic stability. Over the years, there has been a stark drop in international trade, with 2019 proving to be a somewhat disappointing year so far. The pinch is felt more in export-reliant countries, which now face rising inflation, a higher cost of living, and startling currency depreciation. Possessing assets like gold can prove useful in these scenarios, given that throughout history gold has tended to hold firm in the face of economic downturn. High levels of debt Debt, even when it’s not your own, can take a hit on your wallet and affect how you spend your money. High levels of national debt, in particular, force governments to increase taxation, which doesn’t just affect your quality of life, but also how you repay your own loans or secure them in the first place. This truth is reflected in the debt crisis gripping Europe right now, with countries like Greece and Italy struggling to keep up with debt payments. Having asset investments in place, however, can insulate you from some of these effects. With an asset like gold that has survived every recession and economic crisis in history, it may be easier for you to avoid taking a big hit when the economy is down. Economic growth is slowing down drastically Apart from Germany, whose growth rates were enough of a concern, the Chinese economy, which has always given the US a run for its money, recorded its lowest growth rate in 28 years, last year. Given its position in the global economy, disruptions to China’s domestic economy can have effects far beyond Chinese borders. Recently, The Economist published the findings of its quarterly data review of the 73 countries who account for 95% of global output. These findings showed that economic slowdown started in the second half of 2018, recording the steepest values in around 2 and a half years. Cumulatively, the data shows that even in well-developed countries, including those in Europe, economic growth has been slowing down considerably. In light of this concerning trend, everyday citizens may be interested in protecting themselves against the effects of a slowing global economy. Investors and financial experts have constantly expounded on the value of gold when financial indicators aren’t looking too good. Insulate yourself against the effects of an economic downturn - invest in gold An economic downturn doesn’t have to disrupt your way of life or bear heavily on your hard-earned savings. While a global recession may seem far off, signs of an eventual crisis are on the horizon. By investing in assets that are stable in value, remain secure, even in the throes a financial crisis. Among the safest investments, gold has always been a top choice for those with an eye on the future. At SendGold, we make this process as affordable as it has ever been. Start your investments for as low as $10 today - we believe in zero minimums. https://www.sendgold.com/sendgold-leading-with-global-standards-for-digital-gold/ Follow SendGold on Facebook