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The Australian Dollar: An Unlikely Trade War Casualty


Posted by Alex Kimani

on Wednesday, 08 August 2018 10:46

ausmoney

The Australian dollar has been the worst performer among the world’s major currencies this year, dropping like a rock against most other currencies apart from the Swedish krona. AUD has weakened about nine percent against the U.S. dollar, currently changing hands at 73.91 cents against the greenback from the January high of 81.15 cents.

Despite the deep slide, the current optimism that the Aussie has found a bottom may be a tad premature.... CLICK for complete article



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Lifestyle

Elon Musk's Tesla Go-Private Tweets: Are They Legal And Is The Deal Even Plausible?


Posted by Elizabeth Balboa

on Tuesday, 07 August 2018 17:04

elon

Tesla Inc shares were halted with news pending Tuesday at 2:08 p.m. after CEO Elon Musk tweeted he was considering taking the company private. The tweets came not long after a report that Saudi Arabia's sovereign wealth fund has built a $2 billion stake in Tesla.

Tesla representatives confirmed the unexpected tweets were, in fact, posted by Musk and were not the result of a hack. The company didn't confirm or deny any particular strategy, though.... CLICK for complete article



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Currency

How Will A Global Economic Crisis Impact Bitcoin?


Posted by Michael Kern

on Tuesday, 07 August 2018 12:00

bitconneeeeect

Bitcoin was created in the wake of the 2008 financial crisis that wreaked havoc on the world economy, but it hasn’t quite had the chance to prove itself since. The fact is, stock markets have been doing well. Really well. Especially in the U.S. But now, some analysts are beginning to sound the alarms.... CLICK for complete article



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Gold & Precious Metals

Gold Market Update


Posted by Clive Maund

on Tuesday, 07 August 2018 07:15

Gold has had a rather hard time of it during the past several months, as we can see on its latest 1-year below, but its drop has been proportionate to the rally in the dollar, and is therefore unremarkable. What this drop has achieved, which is a useful precursor to a recovery, is to finally flush out the Large Specs, who, after outstaying their welcome, have finally packed their bags and left. This we can see on the latest COT chart which is stacked right below gold’s 1-year chart for direct comparison. 

ty

Click on chart to popup a larger, clearer version. Points worth noting on these charts include the following: gold is now oversold on its MACD and relative to its moving averages and when you couple these facts with the now cleaned up COT and strongly bullish seasonal factors now in play that we will look at shortly, we can see that there is a strong case for gold turning up here, which implies that the dollar will soon drop, so we will look at that later too. The positive divergence of the Accum – Distrib line relative to the gold price over the past couple of weeks is worth noting too. Taking all of the above into account it is thus very interesting to observe gold’s latest 10-year chart on which we see that its price has dropped down to arrive at the support of a giant Bowl pattern, so, again, this is a very point for it to turn up. The pattern in gold since early – mid 2013 may also be described as a complex Head-and-Shoulders bottom which is not shown here as it would make the chart rather messy, and the Bowl pattern suffices to define what is going on, at least for now. 



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Currency

Wait Until You See the Price of Gold in Venezuela Right Now


Posted by Frank Holmes - US Global Investors

on Tuesday, 07 August 2018 07:04

glld

Last month in Venezuela’s capital city of Caracas, a cup of coffee would have set you back 2 million bolivars. That’s up from only 2,300 bolivars 12 months ago, meaning the price of a cup of joe has jumped nearly 87,000 percent, according to Bloomberg’s Café Con Leche Index. And you thought Starbucks was expensive.

But that was July. Prices in Venezuela are doubling roughly every 18 days. The International Monetary Fund (IMF) now projects inflation to hit an astronomical 1 million percent by the end of this year. This puts the beleaguered Latin American country on the same slippery path as Zimbabwe a decade ago and Germany in the 1920s, when a wheelbarrow full of marks was barely enough to get you a loaf of bread.

Venezuela’s socialist president Nicolas Maduro—who only this past weekend survived an assassination attempt involving several explosive-laden drones—announced recently that the country plans to rein in hyperinflation by lopping off five zeroes from its currency. If you recall, Zimbabwe similarly tried to combat soaring prices of its own by issuing a cartoonish $100 trillion banknote—which in 2009 was still not enough to buy a bus ticket in the capital of Harare.

Without structural governmental reforms, a new bolivar is just as unlikely to steady Venezuela’s skyrocketing inflation or remedy its crumbling economy.

Gold Could Save Your Life

So where does this put gold? At some point, hyperinflation gets so ludicrously out of control that discussing exchange rates becomes pointless. But as of July 30, an ounce of the yellow metal would have gone for 211 million bolivars—an increase of more than 3.1 million percent from just the beginning of the year.

COMM-gold-priced-venezuelan-bolivars-08032018
click to enlarge

My point in bringing this up is to reinforce the importance of gold’s Fear Trade, which says that demand for the yellow metal rises when inflation threatens to destroy a nation’s currency—as it’s doing right now in Venezuela.



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