Shill Alarm

One well-known commentator this week opined about the US health care industry:

 

“…the system is designed the churn and burn… to push people through the clinics as quickly as possible.

The standard of care now is to prescribe some medication (usually antibiotics) and send people on their way without taking the time to conduct a comprehensive examination.”

 

From the annals of modern health care… [PT]

 

Nope. That is not the standard of care. And anyone who works in health care knows that the above is BS.

This same guy has touted the conspiracy theory which claims the gold price would be thousands of dollars higher, but for a long-term gold price-suppression racket. And anyone who works in banking knows that is BS. And anyone who doesn’t work in banking, but who works in health care, would suspect it.

Be careful who you buy your gold from. Also be careful who you buy your macroeconomic analysis from. Not everyone uses the same standard of care with the facts.

This segues into a pet peeve of ours. Who puts more tarnish on gold? The central bankers and the apologists for fiat currencies? Or the people who care little for truth, touting whatever speculation they hope to sell or get paid to pump? They treat gold as if it is nothing more than a speculation. And when the price doesn’t go up it is blamed on “manipulation”.

Folks, look all around you at regular people. If they have a distaste for gold, a vague dislike that they can’t quite articulate, then perhaps this sort of behavior is part of the reason why.

Civilization cannot exist without money. Gold is money. This is serious stuff. Money should be treated with respect, if not reverence. It is not some get-rich-quick scheme, and a conspiracy is not the only conceivable reason not to be rich already.

The price of gold rose four bucks, to $1,318.85. Actually, that is not quite precise. $1,318.85 is the last cleared price for spot gold at the end of the day on Friday. While the market is open, there are two prices. There is the bid and the offer (also called the ask). Late on Friday, gold was bid $1,318.85 and offered $1,319.75.

If you own gold, then $1,318.85 was the price (in dollars) you were paid, to permanently get rid of it. Interest, on the other hand, is the price (in gold) you are paid to part with it for a year, and then get it back again. Which is more important? And which is more popular? We hope this makes it clearer why we scorn the conspiracy theory.

 

Fundamental Developments

Here is the chart of the prices of gold and silver.

 

Gold and silver, priced in USD

 

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio (see here for an explanation of bid and offer prices for the ratio). It fell slightly this week.

 

Gold-silver ratio, bid and offer

 

Here is the gold graph showing gold basis, co-basis and the price of the dollar in terms of gold price.

 

Gold basis, co-basis and the USD priced in milligrams of gold

 

The June gold contract is approaching backwardation, with a co-basis of -0.1%, though farther-out contracts subsided slightly. This is selling pressure on the near contract, which goes First Notice Day in a few weeks.

The Monetary Metals Gold Fundamental Price fell $4 this week to $1,493. Now let’s look at silver.

 

Silver basis, co-basis and the USD priced in grams of silver

 

The July silver co-basis fell a bit, as did farther-out contracts. This corresponds to the fall in the price of the dollar, measured in gold (the inverse of the price of silver, conventionally viewed in dollar terms).

In other words, speculators bid up silver futures… so what’s new?

The Monetary Metals Silver Fundamental Price fell 9 cents to $17.60.

 

Charts by: Monetary Metals

 

Chart and image captions by PT

 

Dr. Keith Weiner is the president of the Gold Standard Institute USA, and CEO of Monetary Metals. Keith is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. Keith is a sought after speaker and regularly writes on economics. He is an Objectivist, and has his PhD from the New Austrian School of Economics. He lives with his wife near Phoenix, Arizona.

 

 

 

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One Response to “Scorn and Reverence – Precious Metals Supply and Demand”

  • Kreditanstalt:

    It’s *not* a “price suppression scheme”. It’s a PRICE SUPPRESSING MECHANISM.

    The one key point to remember is that much of the broad category of “paper gold” is no different from any other casino chip. (It might just as well be porkbellies). It is a vehicle to facilitate betting on price – a price set by that same betting.

    And in a casino in which the bettors don’t even have to actually possess that with which they are betting.

    Until each and every bet is required, by government decree, to be 100% backed by unencumbered, money-good physical metal (short) or cash (long) these games will go on.

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