Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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NIA: Gold’s Previous Bottoms vs. Today

Please disregard our email from Sunday evening, which stated that gold’s high of $850 per oz in 1980 is the equivalent of $5,301.24 per oz today after adjusting for growth in real U.S. money supply and above ground gold stocks. Gold’s 1980 high of $850 per oz is actually the equivalent of $7,944.83 per oz in today’s economy. Furthermore, gold’s 1976 low of $103.50 per oz is the equivalent of $1,096.12 per oz in today’s economy. Gold’s 1985 low of $285.75 per oz is the equivalent of $1,276.25 per oz in today’s economy.   The average of gold’s lows in 1976 and 1985 are the equivalent of $1,186.19 per oz in today’s economy. This is within 0.5% of gold’s June 28, 2013, low of $1,192 per oz, which gold once again dipped to last week. This could be a double bottom for gold.   During its 1971-1980 nine year bull rally, gold rose from a low of $35 in 1971 to a high of $195 in 1974 for a gain of 457.1%, followed by a dip to a low of $103.50 in 1976 for a decline of 46.8%, and then an additional gain of 721.3% to a high of $850 in 1980 – for a total gain of 2,329%. After the Fed raised interest rates to 20%, gold over the following five years lost 2/3 of its value, bottoming in 1985 at $285.75.   Mid-way through its secular bear market, when gold dipped 46.9% to a low on August 25, 1976, of $103.50 per oz: the real U.S. money supply as of August 23, 1976, was comprised of: 1) currency component of M1: $77.5 billion, 2) total checkable deposits: $219 billion, and 3) total savings deposits at all depository institutions: $185.9 billion – for a total real money supply of $482.4 billion.   Currently, the real U.S. money supply as of December, 16, 2013, is comprised of 1) currency component of M1: $1.1596 trillion, 2) total checkable deposits: $1.4828 trillion, 3) total savings deposits at all depository institutions: $7.1513 trillion – for a total real money supply of $9.7937 trillion. The real U.S. money supply has grown 20.30X in size since August 23, 1976.   According to the World Gold Council, the world’s total above ground gold stocks mined throughout history as of the end of 2012 were 174,100 tonnes, and after production from this past year – their figures will likely show total above ground gold stocks of approximately 177,000 tonnes. However, in recent days, several NIA members have contacted us with compelling evidence that the World Gold Council’s data is overstating above ground gold stocks by approximately...

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Anglo Far East – Flying by Sight Versus Instruments

Flying by Sight Versus Instruments “VFR”Visual Flight rules “IFR” Instrument Flight Rules As sponsor of a GATA presentation in Auckland by the chairman- Chris Powell over the weekend, I had the pleasure of spending time and picking his brain on many subjects. High on the list was the current correction in gold and its seeming long and sustained period of flat or lower prices. There are many measures to gauge the market but one of the best is outright sentiment and he said that for every 100 people that would have had contact with him in times past, the number is more like 20 now. If I take that same sentiment gauge and cross it over to the exploration/ junior mining sector and even the mid-tier and senior one you get a really sad story. Here is what a professional capitulation looks like from a seasoned mining writer that makes his living selling information 1/ convince me that the resource sector recovery expected this fall is no longer valid. Even the strongest companies are now weakening again and I think this is a strong indica­tion that our market troubles will continue well into next year. This unfortunate chain of events leads me to believe that we should not be buying any junior mining stocks right now. 2/ Many of us, including myself, beefed up positions in companies like “%$” thinking this would be the start of getting our portfolios back on track. It hasn’t happened and I have never felt more discouraged about anything I have dealt with in my entire life. It has felt like an emotional earthquake to my soul. 3/ Even during the 2008 meltdown situation, I felt more composed and confident because I knew we would rebound, which we did within a relatively short-period of time. But this current market situa­tion has gone from bad, to worse, to intolerable with further downside very likely. 4/ I even wrote many times in the last several years that before the screaming, parabolic market in our favour would happen we may have to deal with downside volatility that would shake us to the core. But what we are experiencing now is beyond even what I thought could happen. This is a wipe-out that will basically eliminate at least another 35% of the junior mining companies that are currently still in business. This is after those who have already shut their doors. Many more are hanging by their fingernails right now. I thought by moving towards those companies with the best assets or near-term production stories that we would protect ourselves until the dust you spoke about settled. I...

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2014 – Helicopter Money is Coming! Jim Rickards, Currency War Update

PARTIAL TRANSCRIPT: FutureMoneyTrends.com: Greetings and thank you for joining us at FutureMoneyTrends.com. I’m here at the Casey Summit with Jim Rickards. He’s the author of Currency Wars. He has a new book coming out as well. What is it called? James Rickards: It’s called The Death of Money: The Coming Collapse of the International Monetary System. It’ll be out in April; April 8th is the publication date. I finished writing it about a month ago and we’re in editing. It’s a funny thing, Dan. We live in a world of what I call instant digital gratification, whether it’s YouTube or Twitter, everybody wants to put everything out there immediately, but a book is still an old-fashioned process. It takes a year to write it and edit it and bind it, so it’ll be out in April and I’ll be talking more about it between now and then. FutureMoneyTrends.com: It should be very interesting because I’m sure some of your analysis will have either been proven right or proven wrong in the book, am I right? James Rickards: Well, that’s right, I mean it is forward-looking, so I say a lot of things in the book that I will be looking over in the years ahead, but sure. It’s something coming out in six months, it’ll be a good test to see how things play out. We’ll see if they play out as expected. That’s exactly right. FutureMoneyTrends.com: I’ve always wondered in the dollar crisis scenario if right on the cusp of the market just melting down and going crazy that Obama and whatever Fed chairman of that time, say, next to him and they’re instituting a gold standard. Do you think it’s possible that they, right before a major crisis is about to happen, they come in and switch the currency? James Rickards: I don’t think so. I think there are several scenarios: one is that we get to a gold standard by design. In other words, people look at the system and they say that it really is not sustainable, it really is based on confidence, but we’re in the process of eroding confidence. There is no exit from quantitative easing. We should say there’s no good exit. You can back away from it, but then you’ll implode the economy in a deflationary crash. Or you can keep going and eventually cause a loss of confidence in the dollar and then have a hyper-inflationary crash, so you got a crash either way. One looks like the Great Depression, one looks like the late ’70s but worse. Those are the only two paths, but there’s no other path. There’s...

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Robert Kiyosaki Rich Dad’s Opinion on US & Global Economy, Gold, Silver & Debt (December 2010)

Robert Kiyosaki talks about QE / Quantitative Easing / Money Printing and why savers in cash are losers and why it is better to save in gold and silver instead of paper currencies. Robert Kiyosaki also talks about using debt as a means of getting richer, by having assets that offset his liabilities, and the opportunity to pay back his debt with cheaper dollars, as the dollar keeps losing it’s...

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Is China Ready to REPLACE the US DOLLAR – Interview with David Morgan

BREAKING Is China Ready to REPLACE the US DOLLAR David Morgan, Part...

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Gold Backed Money: The Choice of a Free Society

Is there a connection between human freedom and a gold-redeemable money? At first glance, it would seem that money belongs to the world of economics and human freedom to the political sphere. But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty. I hold here what is called a $ 20 gold piece… But today the ownership of such gold pieces as money… is outlawed. Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing-press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom. In that case, then certainly you and I as Americans should know the connection. We must find it even if money is a difficult and tricky subject. I suppose that if most people were asked for their views on money, the almost universal answer would be that they didn’t have enough of it. In a free country, the monetary unit rests upon a fixed foundation of gold or gold and silver independent of the ruling politicians. Our dollar was that kind of money before 1933. Under that system, paper currency is redeemable for a certain weight of gold, at the free option and choice of the holder of paper money. That redemption right gives money a large degree of stability. The owner of such gold-redeemable currency has economic independence. He can move around either within or without his country, because his money holdings have accepted value anywhere. For example, I hold here what is called a $ 20 gold piece. Before 1933, if you possessed paper money, you could exchange it at your option for gold coin. This gold coin had a recognizable and definite value all over the world. It does so today. In most countries of the world this gold piece, if you have enough of them, will give you much independence. But today, the ownership of such gold pieces as money in this country, Russia and all divers other places is outlawed. The subject of a Hitler or a Stalin is a serf by the mere fact that his money can be called in and depreciated at the whim of his rulers. That actually happened in Russia a few months ago, when the Russian people, holding cash, had to turn it in — 10 old rubles and receive back one...

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Crash Course by Chris Martenson – 38 minute condensed version

Join Dr. Chris Martenson as he explains the three E’s of the economy, energy, and the environment and how they are interrelated in this condensed version of his three hour Crash Course. As Chris often reminds us in the Crash Course, “The next twenty years are going to be completely unlike the last twenty...

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Get ready, the silver price is heading up, Interview with David Morgan

Get ready, the silver price is heading up, Interview with David...

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Fed QE Tapering: Quanticlimax for Gold & Silver Bears?

Gold and silver rose on QE. So tapering must drive precious metal prices lower again, right…? Ben Bernanke, head of the US central bank, will announce the beginning of the end for quantitative easing at this month’s policy meeting in Washington. Everyone thinks so. Gold and silver prices seem to agree, drifting to new multi-week lows Wednesday morning in a reversal of their pattern when QE was ramped up from 2009 to 2012. And Bernanke pretty much said in June that QE’s end would start this month. Policy-makers have been talking about it since April. Those two months loom large for anyone trading gold or silver. But looking at this week’s 4% drop so far, traders have to ask: Is it a case of sell the rumour, buy the news? It was always the reverse when QE was growing. Acting in what we christened “quanticipation”, gold and silver prices tended to rise ahead of the US Fed’s various QE launches (you remember – QE1, QE2, and so on). They then fell back once the announcement was made, only to resume their longer-term rise. So the outlook today? The aim of QE is to juice assets which might help boost the economy, or at least make it look that way. So since March 2009, the very depths of the post-Lehmans’ banking collapse, the Fed’s QE program has created and spent some $ 2.735 trillion by our maths. That’s greater than the sum total of all US cash and household savings in existence only 25 years ago. It’s equal to one Dollar in every four held by US savers today. This flood of money, you’ll recall, has been used primarily to buy US Treasury bonds. The stated plan was to push up the price of “risk free” government debt investments, pushing down the interest rate they offer. That way, investors would be forced to make riskier bets if they wanted any hope of a decent return. Borrowers could then raise loans at cheaper rates, greasing the wheels of the economy. Did it work? US consumer debt is lower today by 12% from the peak of end-2008, just before QE began. That fall has been driven entirely by a drop in mortgage debt, despite a good chunk of the Fed’s electronic cash also going to buy mortgage-backed bonds as well as Treasury debt. Wall Street’s own debt has meantime shrunk by one fifth, while corporate borrowing by non-financial firms has risen, but not by much when you account for inflation. What has soared, of course, is the stock market, with the S&P rising to all-time record highs as QE has been piled...

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Gold and Silver Prices — Mapping Short Term Volatility

After years of paying attention to the price action and not the mainstream market commentary. — thanks in large part to Ted Butler and GATA — here are some of the dominate forces that currently seem to be determining price movements in the precious metals: Downside Probability Jobs data comes out every few weeks. This almost always puts downside pressure on the market, with about a 90% probability. Also, presidential press conferences tend to have a 70% downside probability.  The powers that suppress the precious metals prices cannot have metals surging while the president speaks. The Fed’s FOMC meetings and the following minutes have greater than a 90 percent downside probability, unless a surprise QE announcement is made. The surprise has been effectively quelled by taper signaling and the Summers versus Yellen issue. The beat of war drums is another factor. Interestingly, the closer that the country gets toward war or crisis, the more likely precious metals are to head counter-intuitively lower. Options expiration dates are also notable, as well as the times immediately before or after they occur. Rarely do precious metals options expire for the benefit of the buyers. Whenever the price of gold is strong, but the price of silver is weak the day before, this is another pending downside signal. The performance of the NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index or HUI Index (an index of the stocks of companies engaged in gold mining) also seems to be influential. Gold shares may lead the way up or down. If PM shares are weak on an up day for the precious metals, the next day’s follow through is rare, and the subsequent price action is often downward. Daily Gold Price Movements The downside for assets like silver and gold may be unlimited, but true upside potential of these assets is rarely demonstrated. The upside is rarely more than 2%, and often reverses lower on the nose or just below that percentage gain. (The gain and intraday moves on Wednesday, September 18th, 2013  were of the largest ever). In sideways rather than trending markets, the upside it typically limited to only 1%. Also, intraday upside reversals seem extremely rare. Furthermore, the phenomenon of “overnight dumping” is almost always synonymous with New York selling pressure. This can occur in a bull market unless recent support levels were already cleared out in a technically oversold period. The Technicals are Secondary Resistance levels seem to be the most reliable technical factors, and everything else seems not to matter so much. The most closely watched medium term moving averages include the 20 day, 50 day, 100 day...

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