Keith Weiner's Blog

If there is a credible rumor that the Fed is planning to further extend its “Quantitative Easing”, how would you expect the monetary metals to react? Typically, the gold price would rise and the silver price would rise even more. The question is why.

Speculators in the futures markets may believe that the gold price “should” fall because the central banks say they are not going to competitively devalue their irredeemable paper currencies.

It’s curious, isn’t it? So-called “paper gold” (a futures contract) has a price that is not only very close to physical gold, but it remains locked to it. This is despite the fact that “paper gold” is reviled in the gold community.

Germany has announced that it plans to take home all 374 tonnes of its gold stored at the Banque de France, and 300 out of 1,500 tonnes held at the Federal Reserve Bank of New York...

What does Japan hope to get by doing this? According to Japanese Finance Minister Taro Aso, Japan “seeks to weaken its currency”. The Europeans are wary of Japan acting to weaken the yen, and by this move Japan may be throwing them a bone.

Part III is longer and more technical, as we consider the key features of the unadulterated gold standard. It could be briefly stated as a free market in money, credit, interest, discount, and banking.

In Part I, we looked at the period prior to and during the time of what we now call the Classical Gold Standard. It should be underscored that it worked pretty darned well. Under this standard, the United States produced more wealth at a faster pace than any other country before, or since.

Gold is already money. It is the commodity with the tightest bid-ask spread. It is the commodity with the highest ratio of inventories divided by annual mine production (stocks to flows).