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Reno Chris

Gold Bounces Upward On The Fed Keeping Interest Rates Near Zero.

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Thursday, the Federal Reserve left interest rate targets unchanged, keeping its near zero rate setting. The lack of action gave a big boost to precious metals, with gold touching a high of $1,140 an ounce early on Friday and silver also moving sharply upward. Still there is little doubt that the US Federal bank will eventually raise interest rates higher, possibly later in 2015 or early in 2016,  Fed Chair Janet Yellen left open the possibility of a rate hike in October. Experts are divided on the direction of precious metals - what do you think?

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I think we've made the bottom on gold spot.  It's taken quite some time.

 

Personally, the spot price is the gauge of when to sell into the market strength.  It's still the time to add to holdings.

 

Acquire when affordable and sell when there's some profit.   That's the simple example.

 

Miners who must sell gold that's freshly harvested in order to eat have a more complex decision.   Selling is often while at the mercy of the market.   Same old story of farmers and miners,  you can be semi-wealthy for a decade and then be in the poor-house for a spell.  Farmers can't hold their crops for a favorable price, but some miners can.

 

 

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I'm of the notion that any gold I acquire gets sold at market lows, taxes paid and then the remaining cash turned back into gold and silver coin.

Why pay taxes at the market high when you get nailed for less at the low.

The gold and silver coin?

Goes into the generational wealth fund.

 

The trick to acquiring generational wealth is minimal debt and saving discretionary monies in a medium who's value is difficult for others to manipulate.

Although many complain about the manipulation of gold and silver, the harsh reality is that it is only possible while fiat money is the currency of the day. No fiat currency has ever lasted long.

Some famous guy said something like, "Once the tide goes out, you see who is swimming naked."

Then all assets will show their real value.

What'cha think the paper gold bought with paper money will be worth?

 

Read some history.

Gold was the currency of kings.

Silver for gentlemen.

Barter for the commoners.

Debt for the slaves.

What was shall be again.

 

Income generating property is another good place to store wealth.

This can take the shape of a small family farm capable of growing the majority of your food.

Food is production. Production generates wealth.

Small mining ventures producing what is in demand is another.

Woodlots produce firewood.

 

The problem with rental property is the renter.

If the renter can't pay, all you get is wear and tear, i.e. wealth depreciation.

 

Same goes for companies.

If the consumers are broke, no product gets sold.

 

So celebrate the fact that Yellen and company can still play their silly reindeer games.

Every day it goes on is another day you can put towards acquiring generational wealth.

Why generational?

It wasn't that long ago that our offspring took care of us in our older age.

Why should they care if you are costing $5K a month in an assisted care facility?

 

Oh. Don't look for interest rates to ever normalize.

That would spell the end of this latest experiment in fiat money.

Inflation would become so obvious that the government would be forced to use force against its citizenry.

That influx of illegal immigrants in Europe is all about their gravy train was cut off.

Nobody immigrates for political or religious purposes. It is always about the money.

When the entitlements end, so does any loyalty.

If your boss isn't paying, do you stick around?

 

Read, Ludwig von Mises, "The Theory of Money and Credit".

Some would say prescient, I would just say the obvious outcome of politics playing in the market.

Not too difficult of a read, but lacks a glossary.

Many of the terms are arcane to the everyday person such as fiduciary money versus credit money.

 

But once again, be of good cheer. Have a beer and celebrate that Yellen and company kicked the can again.

As long as the band plays on, we still have time to do what needs to be done.

Für ich, I gotta quit this sniping nonsense and find a productive claim.

At least my family has moved back and is taking over the mini-farm.

Oh and they are learning the business of shaking a pan.

C'mon Yellen. Just 8-9 more months.

 

No doubt some of you have read about negative interest in some countries in Europe.

That is good incentive to put your cash in something more valuable.

Then there is the elimination of cash idea floating around.

Another good reason to put whatever monies into durables.

All of this is for controlling the interest rates.

Interest CAN"T rise to any meaningful level or else the financial world goes out with a bang.

Of course it will happen anyway.

Only fools would believe this current iteration of fiat money managers are wiser than the last car full of clowns.

 

Yellen and company know where this clown car is going.

They are just trying to take the scenic route.

The actual price of gold and silver is only relevant to those who depend on it for their revenue stream aka miners in debt.

Everything else is just gambling.

I have no pity for those who experience gambling losses.

The house always gets its cut.

And the wizards of the Eccles building spend beaucoup millions backing the house.

As long as Yellen and company can keep the game going, the only choice we have is to take our money off the table.

The thing about pecking yourself on the head with a sharp rock is that it feels so good when you quit.

Maybe a little Ayn Rand, "Atlas Shrugged".

 

Even Alan Greenspan admitted that, "In the extremis, gold is money".

 

Kinda reminds me of that "Who's on first" routine by Abbot and Costello.

 

Wow, that was certainly a long-winded ramble!

 

eric

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