In 1759, Scotsman Adam Smith, who is widely regarded as the world’s first true economist, published his first great work, The Theory of Moral Sentiments. In it, he postulated that all social evolution can be attributed to “individual human action,” as opposed to “individual human design.” By this, he meant that whatever understanding worked well between any two people was likely to lead to progress. The reason for this was that such agreements would, of necessity, be based upon “trust and empathy.” He believed that, if mankind were left alone to sort out all commerce and other interaction on their own, using truth and empathy, they’d succeed at moving the society forward.
I know someone who is very good at technical analysis. So good, in fact, he’s a multi-millionaire primarily from trading via technical analysis. His name is Dominick Graziano, and we’ve become friends over the years. Despite our friendship, he absolutely refuses to tell me what I want to hear (gold’s going through the roof!). So I know when I get a chart from him that it will be dispassionate and solely about a trade he thinks will make him money. I also know I should probably pay attention to what he has to say, because he’s been right a whole lot more than he’s been wrong.
I’m often asked how I see the warning signs that allow me to gauge the timing of the coming economic crisis. Although careful research into an economy can result in a relatively accurate prognostication, the timing is always the most difficult aspect to pinpoint.
However, a good indicator is to track how others within the economy are surviving the situation. This tells us much more than their questionable claims that they’re doing just fine.
In any country, during prosperous times, the great majority of people go to work each day with the understanding that productivity results in an improved life. Even for those of humble means, the existence of prosperity around them is a daily assurance that, if you work hard and/or work smart, your life will steadily improve.
It happened with little fanfare, with virtually no reporting by the mainstream press. But this development signaled that one of the biggest gold-buying entities sees a growing need to own gold right now. Not only does it mean they will continue to buy, but their buying lends long-term support to the gold price. Here’s what’s happening and how it impacts the gold market going forward…
Recently, many political hopefuls on the Left in the US have “come out” as socialists. Some may have been socialists all along, whilst others may merely be hoping to cash in on the popularity of avowed socialist Bernie Sanders in 2016. Whatever the answer, those on the Right have gone into attack mode, fervently stating that, “The US will never be a socialist country!” This will unquestionably become the primary emotionally-based issue until the 2020 election.
A lot of readers liked our article on how much cash could flood the gold market once institutional investors start buying. Now it’s time to look at silver. And as most readers know, the silver market is much smaller than gold, meaning it could be easily overwhelmed—much more than gold—if these investors begin to take interest.
Governments are in the flim-flam business. Pared down to the bare essentials, governments can be very useful in passing and enforcing a small number of very basic laws. These laws should be limited to policing those who would seek to aggress against others, or their property. Governments may also have a value in providing protection from invasion – organizing an army of able-bodied people to address this collective problem, if and when it occurs. And that’s about it. Beyond that, the private sector can, and almost always does, do a better job at virtually everything else. Therefore, a government should be small, cost very little to run and do as little as possible.
I once asked my institutional investor friend, who used to work at Goldman Sachs and has been a gold owner for many years, what would make him buy more bullion. Without hesitation he said, “When the price breaks out.” Well, as is clear to the world, gold has broken out of its long-term trading range. My friend is not alone in this sentiment of waiting to buy an investment until it’s rising. Institutional advisors, brokers and managers sit on the sidelines until a dormant asset class comes alive and establishes an uptrend— then they jump in.