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Category Archives: Gold

Update on Gold

Gold: Gold routinely (every few years) sheds 30% of its value. It is a volatile asset –which is why I don’t want to have a larger position than 10% of the asset base. The price (in USD) fell through a technical support level last week ($1520). This initiated volume selling which generated a feedback loop of more selling earlier this week. There are rumors […] Read the rest of this entry »

Germany wants more of its gold held at home.

  Apparently Germany wants more its gold reserves held back home. It is pulling 300 tons of its 1500 tons parked at the NY Fed, and all of its 374 tons parked with the Bank of France. This smacks of political gamesmanship and populism related to the coming German election later this year.   That being said, I don’t blame them. To understand what’s […] Read the rest of this entry »

Year End Letter 2011 (& 2012 Forecast)

Strategic Indicator:  Greedometer Last week, the greedometer registered 5400 rpm, a respectable but not unexpected jump from the previous week 4800rpm. And with that, we have the end of the year-end rise in the greedometer.  The 2011 set of greedometer readings resemble that of 2007. Indeed, both years saw the last or second to last week finish with a 5400rpm reading. Uncanny.  And foreboding.   (the […] Read the rest of this entry »

Short Economic Stories: US

As of now, Congress has failed to approve an extension on the payroll tax cut and jobless benefit extension. Brinkmanship and polarized politics aside, most expected Congress to cook-up something before they head home for the holiday break.  The impact of not extending the fiscal candy is likely to be a 2%(ish) drag on an economy that is already only likely to see flat […] Read the rest of this entry »

Gold update

Having run back up (to $1800/oz) in tandem with stocks over the past 1.5 months, gold has pulled back for a breather again. This means it has primarily been driven by the risk-on / risk-off trade. The ECB & Germany announced (vehemently) that the ECB would not print euros // not use QE to get out of this mess. This is driving the price of gold […] Read the rest of this entry »

Weekly Short Economic Stories

US : Operation twist is doing its thing. US mortgage rates fell to their lowest ever. The average rate for a 30-yr fixed mrtg fell to 4%. When that drops to a more-Japanese-like 3.25% in a few months, I won’t be surprised. A 2.5% 15-yr fixed rate seems likely. Another result of operation twist is bank stocks are being hammered. Annaly Capital Mgmt (symbol […] Read the rest of this entry »

Gold takes a breather

Over the past few weeks gold has dropped from all-time highs in the $1900s to approx $1600. What’s going on?   The short and simple answer is: Gold’s price ran up too far too fast. The more insightful answer is: • The price moved too far above its 50-day exponential moving average (ema) — the gold line in the graph below. It needed to come […] Read the rest of this entry »