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 09:10:13 Glenn Olnick's Thought for the Day

After a turbulent summer I am returning to my blog, and sadly the change of season brings little change to the economic chaos in the US.  It’s hard to believe that the US has got itself into such a mess; and that is probably understating the reality.

There are a number of issues that Obama is currently facing that should spell real trouble for the US and the $dollar including the federal shut-down, the debt ceiling and Syria.  What you would normally expect in a chaotic situation such as this is a flight to gold as a safe-haven, but for some reason, gold isn’t behaving as it should, and the $dollar isn’t weakening.

 Add to the US mix uncertainty over Bernake’s replacement, an election catching us up rapidly and the weight of Obamacare, it makes me believe that there is something else going on when it comes to gold.  We have already seen the manipulation of the LIBOR rate, and a current European investigation into exchange rate manipulation.  What’s to say that the same isn't happening to gold?  If that’s the case, then in the short-term, market forces are no longer relevant; we’re fighting an invisible enemy. 

 But no-one can doubt that gold supply is shriveling up; mining companies are making huge cuts, marginal ore bodies are being mined, and there’s no money in the pot for exploration.  There has to come a point when supply and demand dictate terms, and for me, that’s not too far in the future.  In the end, you can’t beat fundamentals, and that’s where the market is heading.  My belief has always been to hold steady in such an unpredictable situation; true market forces will win out resulting in a correction upwards in the gold price.  

 

01:08:2013 Glenn Olnick’s Thought for the Day

For those of you that haven’t already seen the film ‘The Inside Job’, I highly recommend it.  The 2008 crash seems a long time ago now, but from time-to-time we need reminding about how it all came about and why there are lessons to be learned  Narrated by Matt Damon, the film clearly shows that ‘the foxes are, and were, in charge of the chicken coup’. 


In my view, the people that the government think can hopefully solve the problem are the same people who caused the problem; they have a VESTED interest in the status quo and are making far too much money to want to solve the problem. 

It’s too easy to look at the current issues that we’re facing and forget how we got here. But we should remember, and it’s important that we somehow capture the lessons for future generations.  However, I fear that won’t happen. For example, youth unemployment is at critical proportions across the US and Europe while nothing practical is being done to help reverse the situation. As we know from history, unemployment at these levels can result in drastic action such as revolution.  And it begs the question; why not if you have no hope or have nothing to lose?  But to consider this in our day seems unthinkable. 

Then you look at Detroit; the saying used to go –‘as Detroit goes so goes the USA’.  You had to be under a rock to not know about the financial trouble there, so why did people keep buying their bonds? Detroit in my view is a warning shot across our bow in relation to what could happen in the wider US and Western Europe.   Everyone knows about the US debt but they keep buying the US bonds… its utter madness.

So, is Detroit too big to fail?  If there is a bail out then how many more cities will have to be bailed out?  Forget countries; we could be talking thousands of cities in the near future.

Only today, I read an article in the Sprott Global newsletter that tackled exactly this situation in relation to Detroit and the US.  I share their conclusion that the longer the delay in sorting this problem out, ‘the more pain and suffering citizens will face when the benefits and safety nets they have come to expect from the government suddenly disappear.’ http://sprottglobal.com/markets-at-a-glance/maag-article/?id=8078

So, back to precious metals and particularly gold. There are some very interesting indicators that I believe point to the fact that there’s real fear in the world about the availability of gold.  

'Backwardation' is when the future price, say 3 months in the future, is lower than the spot price. An example spot price for gold is $1,333 and the 90 day futures is say $1,320. So the owner of gold sells his gold on the spot market for $1333 and buys a future contract for $1320.  He puts the $1,333 in an interest-bearing account for 90 days. On the 90th day he pays $1,320 for the gold and pockets $13 plus the 90 day interest on $1,333. Simple risk less profitable transaction. So why is it not being done? If people did it, the backwardation would disappear. However, it seems as though people are afraid that they won’t get the gold back in 90 days.  There appears to be a huge fear that there is a shortage of gold ready for delivery in the futures market, which is why people are avoiding this transaction. This does not bode well for confidence in the overall market and goes back to my original point; what is it can we learn from experience, records, advice and films such as ‘The Inside Job’ before we face another catastrophe?  This all backs my fundamental belief in gold ownership, and while the price bumps around the $1,300 mark, I am confident that we will see a rise as people start to figure that we are far from real solutions on both a local and global level.

 

04:04:2013 Glenn Olnick’s Thought for the Day

 The most shocking ‘gold’ news of this week was the revelation that ABN AMRO, the largest Dutch bank in the Eurozone, had issued a letter to their gold contract customers stating failure of delivery of gold, and that they will pay account holders in a paper currency equivalent to the current spot price. 

Have they run out because of shorting or did they simply not have enough?  In my view, this is just the start and backs up my on-going concern that keeping your gold in a bank is the worst thing one could do.  There are a number of debates online, many of them in blog or forum format, about the ABN AMRO situation, but that appears to be it.  There is very little ‘official’ news from the quality newspapers, magazines and business bulletins, the debate and the issue therefore seems to be suppressed.  Could this be a house of cards scenario; ABN AMRO is the first with many other banks to follow?  We will wait and see, but in the meantime, Kenneth Schortgen Jr comments intelligently on the situation as follows (or see his article at http://www.examiner.com/article/largest-dutch-bank-defaults-on-physical-gold-deliveries-to-customers?cid=rss)  And finally, my advice is to get your gold out of the banks and into a safer haven.  

“Last week, a rubicon was crossed in the precious metals market as one of the largest banks in Europe defaulted on their gold contracts, and informed their customers there was no physical gold available for delivery.

ABN AMRO, the largest Dutch bank in the Eurozone, issued a letter to their gold contract customers of failure of delivery, and instead will pay account holders in a paper currency equivalent to the current spot value of the metal.

ABN AMRO, the biggest Dutch bank, has sent a letter to its clients stating that they will no longer be able to take physical deliveries of the gold they have bought through ABN. Instead they are offered money at the current market rate for gold. Basically, instead of owning a risk free, physical asset (a gold bar or a gold coin), the bank’s clients now own a monetary claim on ABN AMRO, being exposed to the bank's credit risk. - Voice of Russia Over the past two months, there has been a concerted effort by the major Western banks to bring down the price of gold and silver, even as countries like Russia, Iran, and China continue to accumulate the physical metal in large quantities. Like the folly of betting against the stock markets when the Fed is pumping up equities with $85 billion per month, going against the J.P. Morgan silver short machine in the futures market has been a losing proposition for silver bulls.

Interestingly for Europe however, since the Eurozone crisis spread from Greece to Spain, Italy, and Cyprus, the fastest growing currency being purchased by retail investors is Bitcoin. Bitcoin is a digital currency that is out of the control of sovereign central banks, and to this point, has not been manipulated by inflationary monetary policy.

In investing circles there is an adage which says, if you don't hold it, you don't own it. Whether it is land, metals, or other hard assets, if it is held in a bank, in a paper instrument, or in a paper currency, the documented owner has management control, but not physical control. And as the world saw last month in Cyprus, the government, or even a major bank like ABN AMRO, can change the terms of a contract at any time, and return to investors asset values set by the bank, and not the customer's intention.”

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

 

18:03:2013 Glenn Olnick’s Thought for the Day

So, today we see gold up slightly above $1,600 on the news that Cyprus, in a rare move, is trying to raise around 5.8 billion euros ($7.5 billion) from a one-time bank charge on local deposits. Quite rightly sentiment across the euro zone has been shaken in what will be an unprecedented action.  As a result, we are seeing investors drawn to gold as a safe haven - which is exactly what gold is in my view.

But to me, what’s most shocking is that Cyprus closed its banks for 4 days.  When one of the 17 countries in the Euro orders bank closures, then the world really needs to sit up and take notice.  This has serious implications for us all.  This is a major move by Cyprus, and investors such as the Russians could easily  flee the Cyprus banking system triggering potential  bankruptcy in the country.    Then the whole bailout would have been a failure as their banking system would grind to a halt.

This is exactly why gold is such a good investment option.  It doesn’t devalue, and if it’s not stored in a bank, then the bank and the government can’t touch it.  This bizarre action by Cyprus is a lesson to us all about the power and the failings of the bank system, and how our money is not our own.  Simply put, this is a tax you never saw coming and are helpless to resist.   My advice would be this; if you own gold and it’s stored in a bank, then move it now.

We will all watch what happens in Cyprus with trepidation because if it works, well, what’s to stop other countries such as Italy, Spain, Ireland etc doing the same.  If this happens, where will the investors move their money to?  On the positive side it could trigger further buying of gold.  But what is clear is that we could be lurching towards another major financial catastrophe in Europe and potentially globally.  We will wait and see what happens next.

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

 

19:02:2013: Glenn Olnick’s Thought for the Day

I want to share some interesting views from Alan Greenspan on the economy and in response to Obama’s proposed short term cuts.  You can see the CNBC interview at this link – I have summarized a few of this thoughts below: 
Greenspan: Odds of Sequestration Occurring Are Very High http://cnb.cx/2Fukhaj

Greenspan thinks the problem is so severe at this stage, that, unless we come to grips with the deficit it in a large way, we’re running into serious trouble.  He believes there are a wholly unsustainable series of events out there, and therefore it’s not easy to bring the deficit down.  He believes the US has already picked the low hanging fruit, and to bring the deficit down will require some very unpopular actions.  As Greenspan rightly observes, the baby boom generation is only just retiring, and this shift from the highly productive baby boomers to retirement will result in a double whammy effect. Like me, he is a big fan of the Simpson Bowles approach, and like me, Greenspan doesn’t believe that we have fully understood what a big deal this trying to cut the deficit is going to be.

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

 

06:02:2013: Glenn Olnick’s Thought for the Day

The situation with the US and ratings agencies has reached boiling point.  In my view, this is the world gone mad.  If a business behaved like the US government, they would have lost their ratings years ago.  However, it appears that it’s a culture of “do as I say; not what I do”.  This only serves to make investors nervous about the market and the wider governance issues. This is something that our economy cannot afford at the moment when capital is desperately required to give businesses and stocks a much needed boost. Rather than hearing this from me, an article in the Washington Times this week summarized the situation perfectly.  See the following excerpt and for the full article, click here  http://communities.washingtontimes.com/neighborhood/politics-blue-collar/2013/feb/5/here-comes-another-us-credit-downgrade/

“The obvious and logical reason that a debt downgrade is unavoidable is that the US debt cannot ever be paid back, and more than likely will never stop increasing.

Any credible credit rating agency on earth would have the US debt rated as junk.

Another sure sign that another downgrade is coming is the preemptive damage control being undertaken by the US Department of Justice. They have brought suit against Standard and Poor's, claiming that the rating agency “lied about its objectivity.”

Attorney General Eric Holder stated that “S&P's actions caused billions in losses", in relation to the financial crisis of 2008.

This is the same Eric holder that recently announced that bringing suit against the banks that made billions in the crash of 2008 (betting against their own products no less) were essentially above the law, as bringing suit against them would cause instability in our economy.

"Too big to fail" has become "too big to jail."

President Obama all but ensured the downgrade today by asking congress to kick the sequester (automatic spending cuts) can down the road a few months. The goal in this delay is only to buy time to come up with a way to avoid it altogether.

This leaves Standard and Poor's in a catch-22; if they do not downgrade the US credit rating, they will lose global credibility, as any economist besides Paul Krugman will tell you flat out that our path is not sustainable, if not terminal.

If they downgrade the US again as they did in 2011, S&P will face the wrath of the DOJ. Of course Mr. Holder says that the suit has nothing to do with the downgrade, but he also recently said that executing American citizens without charges or a trial is constitutional.

Egan-Jones credit ratings agency had recently downgraded the US debt three times, which of course resulted in an “unrelated” suit, which was recently concluded. The agency was banned from rating US debt for 18 months. That seems an odd verdict on a suit unrelated to their downgrading of the US debt.

Should S&P toe the line and not downgrade the debt, they will likely be found innocent of all charges.

To do that however would be submitting to a moral code which be devastating to the credibility of their business.

Obama has claimed his spot on the bully-pulpit (as usual) by bringing this suit before announcing his “kick-the-can” plan for any cuts to spending. While this action is only shocking to those that were surprised by the recent economy contraction, most conservatives saw it coming from a mile away.

These cuts are only reductions in increases, not actual reductions in spending for those keeping score at home.

Should S&P decide to maintain their credibility and downgrade the US, expect to hear the Obama administration rant and rave about the destructive and vindictive actions of S&P for downgrading the US in retribution for the suit.

 

01:02:2013 Glenn Olnick’s Thought for the Day

And so we start February.  If you watched the performance of gold this week, you will have seen some major surges and falls.  Whether that’s on the back of US data, or for other reasons, we can only speculate.  One thing is clear to me and that’s that gold is still see a valuable asset class, and the swings this week still see gold at $1,669 as I write this. 

f you are fortunate enough to read Leonard Melman’s report today, he has his own theories about why gold has performed as it has this week.  Here’s an extract from his article, and a link to the full piece: http://www.themelmanreport.com/minutes/minute907.html

"About mid-morning on Wednesday, the gold market suddenly surged higher, rising by twenty dollars from $1,664 to $1,684 and then stabilized.  Quite suddenly, at about the same time Thursday morning, goldplunged by twenty dollars, falling from $1,678 to $1,658.  Now, this morning, beginning at almost the same hour of the trading day as Wednesday and Thursday's moves, gold soared by twenty dollars from $1,662 to $1,682 and, not only that, but it then proceed to fall back almost exactly twenty dollars before regaining about one-half that amount.
 
When I see such moves, one suspicion enters my mind and that is reflected in the word `manipulation`, defined in my six-inch-thick Webster's Dictionary as, `...to manage or control artfully or by shrewd use of influence, especially in an unfair or fraudulent way...`
 
Obviously, if such manipulation is in fact taking place, it is bound to be shrouded in secrecy and obfuscation and, therefore, I cannot offer concrete proof to back up my suspicions - but this type of action is sufficient in itself to at least point to the possibility of behind-the-scenes direction of the gold market.” (end).
 
 (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).






29:01:2013 Glenn Olnick’s Thought for the Day
Today, Marc Faber, or ‘Dr Doom” as he is sometimes known, talked in earnest about his prediction regarding the economy.  He predicts a correction in the market, and why he owns gold in potentially unstable market conditions.  The full interview can be seen at CNBC at the following link. http://video.cnbc.com/gallery/?video=3000144537&__source=yahoo%7Cheadline%7Cquote%7Cvideo%7C&par=yahoo

Back to Marc.  If you’re a gold bug like me, then you will probably know him.  If not, then it’s probably the time to acquaint yourself with his thinking, predictions and philosophies.   He is the creator of The Gloom Boom & Doom Report which you can find here at http://new.gloomboomdoom.com/public/pSTD.cfm?pageSPS_ID=1000.

In summary, and in the report’s own words, the content is as follows: it’s an in depth economic and financial publication, which highlights unusual investment opportunities around the world. The guiding philosophy is that, as Horace already observed, "many shall be restored that are now fallen and many shall fall that are now in honor." The Gloom Boom & Doom report aims, based on economic, social and historical trends, to warn investors when investment themes have become widely accepted and are, therefore, highly priced and risky, while it continuously searches for opportunities in unloved and depressed markets. Subscribers to the GBD report are usually institutional investors, corporations or high net worth individuals, who are in a position to invest internationally and in all asset classes including bonds, equities, commodities and real estate, and have the necessary account facilities in place to do so.

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


18:01:2013 Glenn Olnick's Thought for the Day
David Skarica, a newsletter writer and editor of Gold Stock Adviser and The International Contrarian, has recently stated that gold junior investors might feel as if they live in the movie "Groundhog Day," but he believes that the undervaluation cycle will eventually be broken. So, is spring just around the corner for the junior gold miners?  In my view, 2013 will be a more positive year for gold equities at the junior end of the market.  The combination of supply, demand and macro-economic factors (as I frequently talk about in my blog) all point towards an upward trend in both the gold price and the valuation of equities.  Those nervous of investing in junior gold companies would do well to take note of the Five P's David Skarica subscribes to; apparently paraphrased originally from Doug Casey.  You can see David’s recommendations in the full interview at http://www.theaureport.com/pub/na/14930?utm_source=delivra&utm_medium=email&utm_campaign=Gold%20final%20streetwise-reports%2001/16/2013%2014:58:33
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


07:01:2013 Glenn Olnick’s Thought for the Day
I very much like what Ian Williams, head of a fund in London that we know well called Charteris  Treasury, has to say regarding silver. 
Ian predicts that silver will increase by 400% in the next three years.  His outlook was picked up widely this week by Bloomberg, The Daily Telegraph and others. Here’s the extract that featured in the Daily Telegraph - originally from Bloomberg (by Emma Wall):
Silver will increase in value five times over the next three years. according to mixed asset fund manager Ian Williams. "Silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015," he predicted. "This forecast  is based entirely using technical  & cyclical  analysis  and is in keeping with the mathematical  form displayed  so far in the bull run that has taken Silver from $8 an ounce  in 2008 to its current  price of$32 an ounce having  hit $50 an ounce in 2011." Mr Williams said that the silver  price was more volatile than gold. but that he expected  silver to continue to dramatically outperform  gold. The Charteris manager said that macro fundamentals  were supportive  for the silver price, such as the re-election  of President  Obama, who supports Ben Bernanke's  policy of quantitative  easing. Darius McDermott  of Chelsea Financial Services agreed  that QE means good news for precious metals. "Strong demand for precious metals will remain as long  as we have QE, which do well with each round of money printing.  QE is bound to lead to inflation  at some point and at that time, real assets will do best." he said. "Investing in a fund that holds a range of precious  metals gives  you positive diversification and less reliance on just gold."
Copyright  of Telegraph  Media Group  Limited 2012
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).



31:12:2012 Glenn Olnick’s Thought for the Day
As we head towards 2013, it’s a time for us investors to reflect on the major developments in 2012, and their effect on our own portfolios.  From my blogs, and for those who know me, one of my key areas for investment is gold and silver; whether that be in bullion or equities.  For me, the 2012 white elephant in the room was the continued printing of money.  We stopped talking about it.  But it continues, and it will in 2013. 
What was clear from the events of 2012 was that gold truly became the No 1 acceptable currency substitute.  Reading through my previous posts, you will see how this played out; whether it was China buying oil with gold, the US’ on-going debt problem, or key influential economists and large scale investors supporting gold, it was clear that the precious metal had lost none of its influence over the past twelve months.
And in the same way that sovereign risk and printing of money will continue into 2013, so will the value of gold as an alternative currency.  If we need evidence, we only have to look at the recent Japanese elections.  Shinzo Abe’s conservative party won with a landslide victory and in a short space of time, Abe announced that they would print more money.  Obviously this is a move designed to make Japan’s exports look cheaper as the currency subsequently devalues.  But it’s not just Japan, and this move by the Japanese government is by no means an isolated move by global leaders.  All countries want, and need, to make their exports appear cheaper.  As a result, there is a global race as currencies race to zero.  What does that leave investors with?  Not much choice; apart from, in my view, the safe haven of gold and silver.  And this is borne out by the first Japanese pension fund to buy into gold.  As detailed in the Financial Times article link http://www.ft.com/intl/cms/s/0/1be7a2a2-9f3f-11e1-a255-00144feabdc0.html#axzz2Gdak3AjI, Okayma Metal and Machinery is stating that it will keep 1.5% of its assets in bullion via ETFs.  According to the Chief Investment Officer, Yoshisuke Kiguchi he stated that they were diversifying into gold to ‘escape sovereign risk’.
But what worries me more is the US debt problem.  As I write, the US Congress is wrestling with a solution to the fiscal cliff.  But tax rises and spending cuts are a drop in the ocean when it comes to the reality of the situation.  And no-one seems to be facing up to the underlying issue;  how will $607bn of cuts and tax rises make any difference to the huge US debt of $ 14,271,000,000,000?
One way to look at this is to match the US federal budget onto a household budget as follows:

Lesson # 1:
* U.S. Tax revenue: $ 2,170,000,000,000
* Fed budget: $ 3,820,000,000,000
* New debt: $ 1,650,000,000,000
National debt: $ 14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $ 21,700
* Money the family spent: $ 38,200
* New debt on the credit card: $ 16,500
* Outstanding balance on the credit card: $ 142,710
* Total budget cuts so far: $ 38.50

Got It ? OK now,

Lesson # 2:
Here's another way to look at the Debt Ceiling. Let's say, You come home from work and find there has been a sewer backup in your neighborhood and your home has sewage all the way up to your ceilings. What do you think you should do? Raise the ceilings, or remove the waste?

Whilst this might sound like a childish way to explain what’s going on, it sometimes takes a reality check in simple terms to outline the severity of the situation.

What is important is that the tax increases and huge spending cuts will have a huge impact on US households and businesses, and could push the US into recession resulting in a global impact on growth.  As I’ve said before; we need a clear, realistic plan such as the Simpson-Bowles plan.  But that won’t happen with Obama in power. 

And adding to the US woes is the fact that the dollar will continue to lose its role as the reserve currency.  Indicators continue to point towards this; Brazil selling iron ore in Brazilian real, and talk that China is building up its gold reserves to promote globalisation of the yuan. 

What does this mean for gold (and silver) in 2013?    In my view, it’s the only safe haven.  It’s predicted that China will accumulate 6,000 tons of gold in the next 3-5 years.  Hopefully there will be enough to go round!

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


17:12:12 Glenn Olnick’s Thought for the Day
For those of you who know me, you will also know that I admire and respect James Turk, his approach to precious metals, and his views on global and US fiscal policies.  An email containing a recent video of James talking about his views landed in my inbox this week.  So I’m more than happy to share this video with you so that you too can hear his views, and especially why everyone should have a precious metals portfolio.  Incidentally, the video, conducted by Gold Money, was sent to me by The Gold and Silver Newsletter.  If you’re a natural resource investor, tt’s worth signing up to as it gathers interesting blogs and articles from some key spokespeople from the precious metals sector.
Here’s a quick summary of what you can expect to see on the video:
James outlines the stark fiscal facts about government debt problems across the developed world, and why central banks' determination to devalue the currencies they issue is causing a bull market in precious metals. He demonstrates why gold remains undervalued, despite the great gains seen in its price over the last 11 years, and a means of assessing whether or not the yellow metal is fairly valued or not.

James argues that we are living in "fiat currency bubble", similar though many magnitudes greater than the recent housing bubbles seen in America, Ireland, Spain and other countries, or the "Tech bubble" in NASDAQ stocks in the late 1990s. The USA is racing towards hyperinflation, courtesy of the Federal Reserve's monetisation of US government deficits."

Find the link to the full video here:http://jamesturkblog.blogspot.co.uk/



(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

05:12:2012 Glenn Olnick’s Thought for the Day
A couple of very interesting interviews this week in The Gold Report.  As a goldbug myself, the first is an interesting discussion with Paul Van Eeden of Cranberry Capital; a goldbug but with a difference.  He interprets the value of gold as $900 as expectations of monetary inflation are keeping gold prices high.  I’m not sure I totally agree with all of his sentiments, but I like his view re the market and how we’re at the bottom of the market now.  The interview is an interesting read.  Here’s a brief extract:
“Many goldbugs like gold as a hedge against Federal Reserve policies and high inflation. Paul van Eeden, president of Cranberry Capital, says he does not fear high inflation due to Fed policies. Van Eeden is a different kind of goldbug and in this interview with The Gold Report, he explains how his proprietary monetary measure, "The Actual Money Supply," is the reason why.”
http://www.theaureport.com/pub/na/14790?utm_source=delivra&utm_medium=email&utm_campaign=Gold%20final%20streetwise-reports%2011/28/2012%2014:45:00
The second interview is with US Global Investors and relates to miners who are focusing on growing margins by lowering capital expenses.  Here’s an extract, and for the full article, read it at http://www.theaureport.com/pub/na/14797?utm_source=delivra&utm_medium=email&utm_campaign=The%20Gold%20Report%2011-30-12

“Smart companies are beginning to ignore analysts' insistence that production growth is always good, and starting to focus instead on growing margins by lowering capital expenses. This is good news to U.S. Global Investors Inc.'s Brian Hicks, co-manager of the Global Resources Fund, and Ralph Aldis, senior mining analyst and portfolio manager of the Gold and Precious Metals Fund and World Precious Minerals Fund. Learn what kinds of companies attract the interest of these active managers in this Gold Report interview.”
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


27:11:2012 Glenn’s Thought for the Day
I tend to get emailed many of the precious metals newsletters on a daily basis.  One that caught my eye this week was the Gold Report and its interview with fund managers Brian Ostroff and Adrian Day.  At a recent interview with the Gold Report at the Hard Assets Show, the two discussed their thoughts regarding the gold price and selection of junior gold exploration companies. Here’s an extract from Brian Ostroff’s interview that I liked, and for the whole interview, click through to   http://www.theaureport.com/pub/na/14779?utm_source=delivra&utm_medium=email&utm_campaign=Gold%20final%20streetwise-reports%2011/26/2012%2014:37:12.
“….The backdrop is actually very bullish for gold. Gold prices should continue to appreciate if only due to scarcity. I don't know how the euro ultimately ends, if it ends, if you have a Northern euro and a Southern euro, but people don't like uncertainty and the Euro is a very uncertain currency. That is bullish for gold. Maybe the answer is gold-linked debt. Let the investor choose between Spanish paper bonds at 5.50% or a bond at 0.50% backed by gold and interest paid in gold.  Europe's problems are not a huge drag on the U.S. economy because those countries are not big trading partners, but it is negative for China because it is reliant upon European consumers to buy products”.

23:11:2012 Glenn’s Thought for the Day
Extremely interesting interview by two European fund managers in Citywire this week.  Their view is that a major overhaul in the gold mining industry is underway, and that the industry is headed for a more austere era of smaller scale, more commercially viable projects with quality taking priority over quantity.  Read on for the full interview: 

Speaking to Citywire Global, Euro Stars A-rated manager Markus Bachmann of Craton Capital and Precious Capital’s Citywire A-rated manager Florian Siegfried stated a change is coming to operating practices in the sector.
Bachmann, who runs the Craton Capital Precious Metal Fund, said the wider financial crisis had started to impact mining firms, which were being forced to scale back larger projects and focus on profitability.
‘What was very feasible five or six years ago when these projects were planned may not happen, they are not as profitable now as the economy is much worse,’ said Bachmann.  ‘I think when you look at bigger picture, there is a lot of re-rating of stocks on the cards across the market because of the lot of the issue the industry is going to be confronted with.’
Rather than sinking costs into developing their own production or boosting capital expenditure, Bachmann said capex is likely to fall to negative levels and instead predicts a rise in M&A and consolidation in the sector.
‘Larger companies are realising it is costing them twice as much as some of the juniors to produce the same ounce of gold and that is simply because they do it better.'
'They are more efficient and if we follow economic logic, it is unnecessary for the larger companies to do it when they could buy a firm which will do it better.’
Meanwhile, Siegfried, who runs the Precious Capital Global Mining and Metals fund, said he is concentrating his fund on producing mines and junior names, rather than large-caps or companies dependent on having a dominant market position.
‘We see potential particularly in the mid-tier stocks, which is where we want to be. A lot of them have the ability to adjust to the environment we see coming, which is the big scaling down in size, which favours those not investing $500 million into new projects.’
‘The interesting change is going to be where companies move with cash generation, it is not going to be about growth anymore, it is going to be about profitability. This means they are going to be smaller but more profitable.’
Siegfried recently added to his position in Canadian gold producers Kirkland Lake Gold and San Gold Producers. Both companies, Siegfried said, are examples of producing mines likely to benefit while firms dependent on exploration struggle.
‘We feel, at the moment, that producing mines have a much easier way for funding exploration projects and they are much more effective in spending cash. This is much more so than exploration companies, so we are avoiding some of these names.’
The Craton Capital Precious Metal Fund has returned 27.72% over the past three years. Its Citywire benchmark, FTSE AW/Mining TR, rose 21.54%.Meanwhile, the Precious Capital Mining and Metals fund returned 40.85% over the same period against the same benchmark.
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

14:11:2012 Glenn Olnick’s Thought for the Day
As far as I’m concerned, the US is entering an ‘era of entitlement’ which is why and how the Democrats won.  For example if you rob Peter to Pay Paul, Paul is always going to vote for you.  Whilst having Obama as President gives us continuity from an investment strategy perspective moving forward (Romney was an unknown quantity), there are some serious consequences in relation to the up and coming fiscal cliff.  I couldn’t say it better than Eric Sprott who was recently interviewed on Bloomberg.  He outlines the situation we’re facing with the on-going QE and especially the role gold has to play in our economic future: http://www.thefinancialphysician.com/blog/2012/11/great-gold-interview-with-eric-sprott/.
In addition, indications show Bernanke isn’t going to renew after February 2014, and in that case, Obama will more than likely appoint someone who will print even more money than Bernanke.  He will forever be known as the ‘print and spend’ President in my books. 
Was there any real alternative to Obama?  I’m not sure.  During the election campaign, it appeared that the Republicans had lost a grip on who they were and are.  They have to understand that it’s no longer appropriate for the religious right to take control.  They need to better understand the role that immigrants play, and rethink their approach to issues such as gay rights and abortion.  Until then I don’t believe they have a fighting chance to regain the Presidency.
The more startling facts to come out of the election relate to the apathy of the voting public.  In light of the fact that this was probably one of the most important elections in my lifetime with regard to the direction of the US, the following statistics should sound alarm bells:
• 8m fewer people voted in 2012 than in 2008
• 2.7m fewer people voted for Romney than John McCain in 2008
• 11m fewer people voted for the Presidency in 2012 than 2008
Surely this lack of interest is worrying when you think of the US’ diminished position on a global economic and political scale.  It may be because the entrepreneurial society that the US was renowned for has shifted to a society of entitlement.  With so many people receiving welfare, and fewer paying taxes, we are entering a time when the assessment’ of individuals’ assets and income status will be the norm. 
If I had been able to, I would have supported a nomination for former Senator Alan Simpson and former White House Chief of Staff Erskine Bowles as President and Vice President.  They were the team who headed up the production of a report making recommendations on discretionary spending, tax reform, health care savings, social security, and other mandatory programs.  Their recommendations are sound and make real sense, but the report didn’t get the support they needed.  See more at http://www.thepoliticalguide.com/Issues/Simpson-Bowles/.  I’m not sure why I’m surprised at this in a time when ‘real sense’ seems to have no role in politics today.
The upside of all this is that it’s good for gold and silver.  Whatever the future may hold, I’m still a strong believer in owning physical gold and gold equities; not paper.  James Turk talks a lot of sense; see his comments at http://jamesturkblog.blogspot.com/.  He also has one of the best known gold funds where you can buy physical gold, store it and take delivery of the physical gold when you want it.  Not always the way with paper ETFs.  http://www.goldmoney.com/buy-precious-metals.html?gclid=CNvFyf7bz7MCFcN_QgodJxwAiQ
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).



31:10:2012 Glenn Olnick’s Thought for the Day
However you buy gold; whether stocks or shares, I thought I would share with you the top 5 gold managers as identified by Citywire, the online financial news service.  Citywire caught up with the top returning gold equity managers from the period 2005-2010 to see whether their funds have maintained their outperformance.  See those they identified as top performers as follows:

Dominic Casai – Share Gold Cap
Joe Foster – Falcon Gold Equity Fund
Bob Farquharson, - Smith & Williamson Global Gold & Resources
Daniel Sacks  - Investec Global Gold
Thiebaut de Buyer – Allianz Multi Actions

For the full article, visit their site at http://www.citywire.co.uk/global/where-are-they-now-tracking-down-the-best-managers-in-gold/a630132?ref=citywire-global-latest-news-list

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


24:10:2012 Glenn Olnick’s Thought for the Day
Will the US presidential election have an effect on the gold and silver price? In my view; yes.  There’s a very high probability that QE3 will happen soon after the election which will more than likely serve to push up the price of gold and silver further.  I’m predicting that gold will rise to over $2,000 in 2013.  However, if you don’t want to take my word as Glenn Olnick the investor, then perhaps Charles Oliver's view from Sprott may be of interest.  I echo many of his sentiments.  See his interview at http://www.theaureport.com/pub/na/14628?utm_source=delivra&utm_medium=email&utm_campaign=Gold%20Finalstreetwise-reports%2010/24/2012%2015:19:10

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

08:10:2012 Glenn’s Olnick’s Thought for the Day

I continue to watch the situation in South Africa with a degree of horror and disbelief.  But at the same time, it’s a good example of where political risk really means risk.  The impact on Anglo American Platinum extends far beyond South Africa; it’s share price has already dropped by 13% since the unrest began.  If you look at Lonmin, they suffered the same fate despite their strike ending; a share price that fell by 27% since August.  And it doesn’t stop there… AngloGold Ashanti, has lost nearly all local production due to its workers being on strike.  Harmony Gold has also apparently taken a hit according to a report in The Guardian; a UK newspaper on Friday 5th October.  It also states that Gold Fields evicted 5,000 striking employees from company dormitories, saying they were intimidating fellow workers.

What affect this will have on the global supply and price is yet to be seen. However, Credit Suisse suggested last week that Anglo American is understood to be considering closing some of its South African mines as it considers its position in the country.  That is a big decision for a country that is the largest exporter of gold and platinum, and where mining contributes to 8.6% of GDP (2010).

In addition, gold production was already predicted to fall according to BullionStreet.com:
“South Africa was predicted to drop further in the gold rankings in 2012 with a projected gold production of only 220 tons for the year. According to Statistics South Africa, country's annual gold production is set to be close to 220 tonnes which is a level of gold production not seen since 1922.
South Africa's gold output fell 11.3% in volume terms in January while mine output dropped 2.5 percent in the first month of the year.  South Africa as recently as two decades ago was the world's largest producer of gold by a huge margin. Only 40 years ago South Africa produced more than 1,000 tonnes of gold per annum. The almost 80% fall in South African gold production has led to it being overtaken by China, Australia”.  http://www.bullionstreet.com/news/south-africa-gold-production-set-to-fall-further-in-2012/1353
For more reading, go to these sites.

http://www.guardian.co.uk/...

http://www.bullion.org.za/...

(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

23:09:2012 Glenn Olnick’s Thought for the Day
I continue to watch China closely and also those commentators whose job it is to interact with its economy and businesses.  The recent conference in Gstaad, Switzerland, hosted by Citywire, provided a platform for many of these people.  One that caught my eye was Pippa Malmgren, president of Principalis Asset Management, who believes there is a very real threat that food and energy inflation spikes in China could result in mass demonstrations and protests like last year’s Arab Spring.  According to Citywire’s follow-up report, Malmgren had previously warned of inflationary risks ‘ripping the emerging markets apart’ but she added this has become a real very concern in China, with residents over areas such as Wukan protesting over government policies.  For the full article, go to Citywire’s site here.
My advice as Glenn Olnick, is to watch closely and especially the continued contraction in China’s economy.  This will all have repercussions for the natural resource sector.    (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

04:09:2012 Glenn Olnick's Thought for the Day
Whatever the commodity, China is the dominant factor when it comes to the market.  However getting a clear picture on what China’s growth prospects look like, and the ultimate knock-on effect to commodity suppliers globally is difficult.  I recently read an interesting article featured in The Energy Report by Keith Fitz-Gerald from Money Morning.   He answers some of those questions and clichés that constantly circle about China.  Read on for an interesting view point, or click through to the website here

Q - The Chinese copy everything. Companies can't make money there, especially lately. A - That's simply not true. Domestic Chinese companies have made plenty of money. So have foreign companies like McDonalds, ABB, Coke, and even GM, which have been fabulously successful there because they've taken the time to localize their products.
Not many people know this, but the ultimate sign of executive status is a jet–black Buick minivan in Beijing at the moment. How's that for a contradiction?!
As you might imagine, I get a lot of questions about China—it's topical and it's very important to our future.
Most are really just reincarnations of concerns voiced since 1970 when China first began to open up. In that sense, they're really nothing new.
So rather than tackling the same old "they'll never succeed because they're not democratic" or "ghost cities" arguments that seem to incessantly make the rounds, let's frame them in terms of what's in the news lately and dig into the subtleties that escape most Westerners.
And, let's start with one of the questions I get the most.
Q - Is China going to have a "hard" or "soft" landing?
A - This one stumps me. Where have the people asking this question been? China's had a soft landing for the last four years. They are already there—the economy is slowing, debt is rising, and the urban migration may be closer to an end than people think.
The fact is that nobody can define what a Chinese soft or hard landing actually is because Western metrics don't apply. It's just a catch phrase that gets bandied about in the media.
That's why I believe this question is really a matter of perspective. For example, there is no question China faces huge challenges, but those challenges are no different than many we've faced here in our own past.
During the last century we experienced two world wars, multiple recessions, a depression, and a presidential assassination—and still the Dow rose more than 20,000%.
China will, too. The genie is not going back in the bottle.
As I recall, many people in England thought that America was a pretty silly venture at one time. And don't forget that the world thought Japan was good for nothing more than cheap tin toys following WWII.
Looking at China through Western lenses is a mistake. The losers are those who show up simply expecting to "show the Chinese a thing or two" by virtue of their success in Western markets.
In their rush to condemn China, people have conveniently forgotten that European markets were problematic to crack, too.
It wasn't all that long ago, for instance, that executives anxious to sell into Germany via the Internet didn't understand that many German consumers still prefer cash. Eventually they began to understand that the payment framework was a big deal and the key to profitability.
With regard to imitation and copycats, both frustrate Western executives unused to the practice, which has existed for centuries as a matter of China's cultural fabric.
In reality, both speed up the product development cycle and sales.
Companies that are unprepared or do not have the right partners cannot compete no matter where in the world they operate (an argument, by the way, that is laid out very well by Kal Raustiala and Christopher Sprigman in their new book, "The Knockoff Economy" (Oxford University Press).
People may not like how the Chinese handle things, but that's a different story and one that requires a different set of responses.
Q - Export growth is failing, therefore China must be failing. . .right?
A - Nope. The inconvenient reality is that China is still operating at 3–5 times the speed of Western economies, which will be extremely lucky to eke out 1% growth this year despite the trillions thrown into the hopper.
I find that people who voice the connection between exports and China's complete collapse are often voicing their own frustrations about the lack of growth in the West, or perhaps outright jealousy that it continues practically unabated there.
Even if the data is completely faked, Chinese demand backed by 1.3 billion people completely outstrips anything we have in the West and creates a tailwind that will last for decades. Like every country that's gone before it, this will involve ups and downs both political and economic. It will not be a flawless nor smooth journey by any stretch of the imagination.
The challenge - and what makes so many people so uncomfortable—is that China's goals are now intertwined with the world's fiscal future.
Q - Doesn't Bo Xilai's recent removal imply that China's leadership is more fractured than ever?
A - I hear this one a lot lately.
By way of background, in case you are not familiar with him, Bo Xilai was China's version of a political rock star.
Rising from meager beginnings as Dalian's mayor, he became one of the most powerful men in the Communist Party as its Secretary in Chongqing and a member of China's Central Politburo. He was widely considered to be in line for President of the People's Republic of China.
Unusually charismatic for a senior Chinese politician, he seemingly could do no wrong. . .right up until his top lieutenant and police chief sought asylum in the American consulate in Chengdu and exposed all sorts of conduct unbecoming of a senior politician.
It didn't help that his wife, Gu Kailai, was charged and subsequently found guilty of murdering British business man Neil Heywood, possibly with Bo's help.
Contrary to what most Westerners believe, the speed and totality of Bo Xilai's dismissal is not a sign of weakness.
Instead, it reflects significant strength because it suggests that the Chinese leadership is consolidating power and closing ranks to keep the system strong, just as they have over 2,000 years of history whenever a dynastic structure was threatened.
And yes, before somebody gets going on that one, I consider the Communist Party to be another dynastic structure for all intents and purposes, even though technically speaking it's something entirely different.
Q - There's no way the dollar can lose out to the yuan as the world's reserve currency. Besides, the amount of trading allowed now is so small that it can't possibly have an effect on the U.S. dollar and the euro. . .Right?
A - I know this is the perception, but the reality is different.
First, the United States has gone from the world's single biggest creditor to the greatest debtor in the history of the world. We owe ourselves more than $222 trillion at last count, according to Boston University Professor Lawrence Kotlikoff and the CBO. The dollar is a disaster enjoying temporary strength by virtue of the EU crisis.
Second, it's already well under way. China has quietly set up hundreds of billions in bilateral yuan swaps with nations all over the world to safeguard against the global financial crisis, strengthen the yuan outside the normal currency pairs, eliminate currency risk and strengthen trade ties.
As of last February, China had signed agreements with 18 nations, the most recent of which is the $30 billion bilateral contract with Brazil.
Lest you think this is isolated to second tier players, it's worth noting that the Bank of England was actively considering such an agreement until March when it was kyboshed. Germany is also rumored to be considering the possibility.
At the same time, there are also new "panda-bonds" being floated that further tie the international community into yuan. Shanghai, meanwhile and on a related note, has set up futures markets already trading in yuan-denominated instruments.
Citi just became the first Western bank to launch a yuan-denominated credit card, obviously with a local partner.
The implications are clearly global and already in process. The dollar is already being supplanted. It's only a matter of time before traditional dollar-based markets find themselves outgunned by the amount of yuan-based trade that bypasses traditional currency channels. The same can be said for the euro, although on a lesser scale. . .so far.
Not only that, but I believe there is a good argument to be made that the establishment of these agreements actually takes a lot of pressure off the dollar, too.
At the end of the day, what Western leaders and bankers fail to grasp is that a parallel currency exchange mechanism is being built right under our noses.
So what should you do?
That's up to you, but the way I see things you've only got one decision to make. Imagine the Dragon is coming to lunch next Tuesday; ask yourself if you want to be at the table or on the menu?
Then, consider this bit of common sense advice from the legendary Jim Rogers: it's far easier to get rich in China with its tailwinds than it is to get rich in America with its headwinds.


28:08:2012 Glenn Olnick's Thought for the Day
Very interesting piece from Reuters on Aug 23rd regarding the Republican party and the gold standard.  A controversial move and something that would be heavily debated I'm sure! 

(Reuters) - The Republican Party is set to call for the creation of a commission to look at restoring a link between the U.S. dollar and gold severed 40 years ago, the Financial Times reported on its website Thursday.
Drafts of the party platform to be adopted at the Republican National Convention next week in Tampa, Florida, also call for an audit of Federal Reserve monetary policy, the paper said.
Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, was quoted as saying these points are not an effort to placate libertarian Representative Ron Paul and the delegates he picked up during his campaign for the party's nomination.
"These were adopted because they are things that Republicans agree on," Blackburn told the Times. "The House (of Representatives) recently passed a bill on this, and this is something that we think needs to be done."
Blackburn could not immediately be reached for comment. A spokeswoman for the Republican National Committee did not respond to a request for comment.
The proposal is reminiscent of a "Gold Commission" created by former President Ronald Reagan in 1981, 10 years after President Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis. That commission ultimately supported the status quo.
The Republicans are finalizing their platform, a nonbinding statement of principles that will come up for a vote at the convention to nominate Mitt Romney as President Barack Obama's challenger in the Nov. 6 general election. 

 (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).

26:08:2012 Glenn Olnick’s Thought for the Day
I have admired Eric Sprott; his views and his companies for many years.  His latest interview with The Gold Report echoes my own sentiments when it comes to the wider global financial system, and the relationship with gold.  It’s worth a read, and here’s a snippet from that interview to whet your appetite:
The dire economic situation that persists globally despite the best efforts of central planners to make things seem normal leads Sprott Inc.'s legendary Chairman Eric Sprott to broadcast a loud message of caution: "Fear the financial system." In this exclusive interview with The Gold Report, Sprott says it's time for people to take matters into their own hands and that means pushing further and further into precious metals equities as well as physical gold and silver. With 80% of his own portfolio in that arena, he certainly puts his money where his mouth is.
The Gold Report: You've stated before that the price of gold should be above $3,200/ounce (oz) and the price of silver above $200/oz but market manipulation keeps both metals artificially low. Who is manipulating it?
Eric Sprott: I suspect the G6 central banks have a hand in subverting the gold price because as the canary in the coal mine, high gold prices might tip everyone off to the severity of the ongoing financial crisis. I don't think anyone can doubt that we're in the middle of a financial crisis, primarily in the banking system, when month after month one program after another is rolled out to save somebody, whether it's Long-Term Refinancing Operations (LTROs), quantitative easings (QEs), bank bailouts in Spain or rollovers of debt in Greece. http://www.theaureport.com/ (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).


20:08:2012 Glenn Olnick's Thought for the Day
Sometimes, rather than Glenn Olnick's 'thought for the day', I like to include other people's views that I like.  One such writer is Ben Traynor; Editor of Gold News, the analysis and investment research site from the gold ownership service BullionVault.  Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.  His recent article "Central Bank Stimulus Hopes Give Boost to Gold" is a good summary of what's going on in the world in relation to the gold price, and some of the influences on the current price.  See his full article on the Gold Report at http://www.theaureport.com/pub/na/14152(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation). 

Glenn Olnick Icon

17.02.2012  Glenn Olnick's Thought for the Day
I hold gold as a store of value as I believe gold is in fact a currency.  In holding physical gold, and shares of gold mining stocks, I am trying to protect my purchasing power in the event of a financial meltdown. It is my belief that, in a financial crisis or financial meltdown, gold will lose far less in purchasing power than all of the Fait currencies.  All the central banks in the world can with simply the press of a button increase their Fait currency supply; this is NOT possible with gold. At the end of the day I simply want to protect my net worth for the benefit of family, and not see it destroyed by a financial crisis as we are possibly witnessing today in the EU, the USA and Japan. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

Over the weeks, I will highlight particular events and situations pertinent to gold, and their influence on the gold price, demand and supply. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

19.03.2012 Glenn Olnick's Thought for the Day
Nothing has been solved.  If people think Greece is solved, then they are mistaken.  Greece had more debt today than they had before the write-down.  If they couldn’t pay the old debt, how can they pay the new debt?  Therefore, as far as I am concerned there is no difference for gold and silver. Nothing has changed.  Gold is a better buy today because the world is worse off. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

21.03.2012 Glenn Olnick's Thought for the Day
The city of Detroit is virtually bankrupt and is in debt by $12bn.  Payton Manning signs with Denver Broncos for $96m over 5 years.  In my view, the world is nuts.  And bankrupt. In addition, California is issuing IOUs as they fall into bankruptcy.  It therefore makes sense that gold and silver are the only real value. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

26.03.2012 Glenn Olnick's Thought for the Day
I sound repetitive, but I still believe that gold and sliver are good investments in the longer term.  The current weakness in gold and silver is providing us with a world class buying opportunity.  Silver will always be more volatile as it's regarded as the poor man's gold; its downs will be lower and its highs often higher.  But in my view, based on today's market, both provide purchasing power and real wealth. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

28.03.2012 Glenn Olnick's Thought for the Day
Everywhere I look I see increasing deficits and high unemployment in the US, Eurozone and Japan.  All these governments will continue to do QE to try in vain to revitalize their failing economies.
From my point of view, all that they are doing is delaying the inevitable of a large correction. The longer governments around the world try and delay the correction, the bigger the correction will be.  Gold has been holding above $1600 and silver above$ 30. It is my belief that both physical gold and silver are going much higher. It is simple supply and demand.  As governments continue to print more and more, they are devaluing their currency against gold and silver (both gold and silver cannot be created by a printing press). (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 
 

03.04.2012 Glenn Olnick's Thought for the Day
Today the US Fed hinted at a possible increase in interest rates in the near future. As a result, gold crashed.  In my eyes, this is just another buying opportunity for both gold and silver.  In the US, when your debt is $15 trillion+, you can't afford to raise interest rates.  You are therefore trapped.  Hence my rationale for owning gold. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

05.04.2012 Glenn Olnick's Thought for the Day

When it comes to paper gold and silver, I am very clear on the matter.  Just look at the impact when MF Global filed for bankruptcy; it had a catastrophic effect on gold and silver ETFs and prices. In my view, owning physical gold is key.  In my experience, you can’t trust ETFs and mutual funds to hold it for you.  I believe that Kyle Bass did the right thing; he asked for the physical gold. See link to the article. http://goldnews.bullionvault.com/gold_bullion_delivery_031320122.  I think that the likes of Eric Sprott’s Gold & Silver Bullion Funds and James Turk’s Gold Money http://www.goldmoney.com/ have it right  as they continue to sell physical gold and silver. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

11.04.2012 Glenn Olnick's Thought for the Day
It looks to me as though Sarkozy is in trouble.  If Sarkozy loses, then Merkel loses her closest ally.  If that happens, then there’s no way we wouldn’t have further QE – perhaps to infinity!  Joking aside; printing more money isn’t fun for the rest of the world, and especially for global inflation.  But when it comes to gold and silver; they should run.   (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

21.04.2012 Glenn Olnick's Thought for the Day
Silver seems to remain in a band between $30 and $32.  It should go up, and when it does, it should go big.  That’s because the demand is there.  However people are selling paper, and as this drives the price down, then real people such as sovereigns buy the hard assets.  This in turn will move the paper up.  It’s the same with gold which seems to operate around $1620.  At this price, the real buyers (sovereigns) are buying physical gold as well as silver.  But there is still a big disconnect between gold the commodity and gold equities.  In my view, it is better to buy gold shares as its buying gold in the ground. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

30.04.2012 Glenn Olnick's Thought for the Day
The United States is imposing sanctions against Iran by eliminating their ability to transfer money via Swift. Belgium-based Swift, the Society for Worldwide Interbank Financial Telecommunication, is considered the "glue" that holds the financial system together. China and India have said they will still buy Iranian oil, but without the aid of Swift to make payments, the only obvious way for Iran to be paid now is with gold. This makes gold a valid currency and erodes the US dollar as the world’s reserve currency.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

06.05.2012 Glenn Olnick's Thought for the Day
I could not state this any better myself, so I will quote Michael Pento of Pento Portfolio Strategies.

“Gold stocks are now trading as though peace, prosperity, balance budgets, and the repudiation of fiat currencies were about to break out across the globe, sending the metal back to $1,000 per ounce in the very near future. But given the stagflation conditions in the developed world, and governments’ proclivity to use money printing in order to jump-start an economy, it may be wise to take advantage of the current discount being offered on mining shares."

I believe gold stocks are on sale; they may get cheaper in the short run, but believe me they are definitely on sale. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

18.05.2012 Glenn Olnick's Thought for the Day
Wall Street in the past two years has made some horrific errors.  First we had the flash crash and to date, not one change has occurred to prevent it from happening again.  Second we had MF Global, and at one point $5bn of client funds disappeared.  And then last week, JP Morgan announced a $2bn loss on a derivatives trade.  To date, it appears that JP Morgan has not unwound the transaction. and the final loss could be much bigger.   It’s interesting that the Department of Justice and FBI are now investigating this transaction – even though the trade was made with JP Morgan funds and was a legitimate transaction.  Whereas the MF Global situation involved client money.  The Wall Street ‘control mechanism’ seems to be non-existence. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

All of these situations are to the detriment of the small retail investor who is effectively being forced into the stock market in order to protect their wealth due to the record low rates of 1.8%.  However, it appears that the retail investor is currently suffering as a result of Wall Street’s malaise.  This comes back to my belief that gold and silver equities are favourable in an effort to protect purchasing power.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

29.05.2012 Glenn Olnick's Thought for the Day
After reading "Time to Start Thinking: America in the Age of Descent" by Edward Luce I came to a realisation. If the state of Oregon on an annual basis spends more money on prisons than it does on education, how can the USA ever expect to get out of its debt situation? If future generations are to ever pay this mammoth debit burden down, they need to be educated.

This lack of planning for the future is just another reason to own gold and silver.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

4.06.2012 Glenn Olnick's Thought for the Day
New player on the horizon, Cyprus is now looking for EU money because they are buried with Greek debt. The plot thickens.  Warm up the printing presses.  At this point, shares in gold mining producers are a better way to own gold than owning gold itself.  (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

10.06.2012 Glenn Olnick's Thought for the Day
The G7 met on a phone conference call last Monday, this cannot be good for the European Union. The banking problem in Spain continues to worsen and the EU is running out of time. Whatever they do or do not do will, over time, be bullish for gold. If they do a EURO bond issue it will, in my view, only buy time and continue to ignore the problem of too much debt.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

I still like gold at these current prices and although the share price of the gold producers has risen somewhat, I still believe that they are a value buy at these prices. Whatever you do (buy physical gold or buy gold miner shares) everyone in my view should have at least some exposure to gold.

19.06.2012 Glenn Olnick's Thought for the Day
The Spanish banking bailout is about 100B Euro’s and the money is coming from ECB countries as a loan at 3%. Italy, as an example, has to come up with 22% of the 100B loan, but to come up with the money they have to borrow the funds. Their borrowing rate is approximately 6%, therefore to effect the loan, Italy has increased its debts by more than the 22% of the 100B because of the 3 plus % spread on the interest. Why would any sane person borrow at 6% to invest it at 3%? Madness, utter Madness!  (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation).(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

29.06.2012 Glenn Olnick's Thought for the Day
Glenn Olnick recently went to hear 2 quality speakers; Leo Abruzzese, Global Forecasting Director from the Economist Intelligence Unit in the US, and James R Steel, Precious Metals Analyst from HSBC Bank USA. The topic was mining, gold and the future presented. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

Both experts discussed some interesting facts that point to gold’s continued strengthening. Gold has broken away from traditional model of performing inversely to risk in the market place and now is reacting in a direct relationship to risk. With continued market uncertainty, Gold is an excellent portfolio diversifier especially considering that Gold held its value better than anything else during the economic crisis.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

50% of Gold demand is from jewellery with India and China leading the way in yearly consumption. The Chinese demand is likely to continue to increase as the Chinese population is now able to access gold via retail outlets as they spread throughout country. When discussing growth forecasts - both speakers believe that the US will mend slowly; that there will be fairly slow and uneven growth for the rest of 2012 and 2013. They also believe that Greece won’t leave EU, but that remains to be seen.(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation) 

11.07.2012 Glenn Olnick's Thought for the Day
Investors are eagerly awaiting the contents of the minutes of the last Federal Open Market Committee (FOMC) meeting to see if there are hints about further QE.  If so, then we could see the gold price spike in the next week.  If QE3 isn’t imminent, then the gold price should continue to steady around the $1,600 mark in the back-drop of continued European unease and US general election uncertainty. What is clear is that gold still remains a currency and a commodity; and as central banks continue to increase their reserves, it’s still deemed as the best currency in the world. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation)  

25:07:2012 Glenn Olnick's Thought for the Day
In my view as Glenn Olnick, investor in gold and gold equities, what makes gold such an excellent portfolio diversifier is the fact that gold is now uncorrelated to risk-off and risk-on assets.  In days gone by, gold performed opposite to equities markets.  However, since 2007/2008, gold has behaved differently.  Therefore, portfolio managers are now opting for gold because they want an asset that’s not correlated. If you get to see him, James Steel, analyst from HSBC Securities in New York, talks widely on this subject and model, and possesses some very interesting analysis.
(Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation)

08:08:2012 Glenn Olnick's Thought for the Day
According to various reports, The Bank of International Settlements has now opened the discussion to include gold bullion as part of the Tier 1 asset category.  Therefore, you could see gold classified as a Tier 1 asset by the start of 2013.  This is significant news as not only would gold be given the highest classification as an asset, it would more than certainly mean a rise in the price of gold as banks and institutions buy bullion.  It doesn’t take a genius to work out that, if this happens, the knock-on effect on the gold equities market will be positive.  We wait with baited breath to see what happens. (Author: Glenn Olnick.  The views included in this website are the personal views of the author Glenn Olnick and should not be regarded as advice or recommendation)