The Investment Bedrock of Monetary Systems

“How To Preserve Wealth During Crises… And Why Central Banks Are Bad For Your Financial Health”

Last week we talked about the grave dangers of a Depression and recent media discussion as to whether or not we’re about to enter one (or already are). That of course raises the question: if worst comes to worst, how did investors survive the last one?

We don’t have the time or space to go into every possible detail of a comprehensive comparison and contrast between the 1930’s and today. Instead, let’s focus our efforts and take a look at historical charts like this one:

If you were…

Is Now the Time to Buy Gold?

Just a few months ago the race was on for gold. In March, gold blew past $1,000 an ounce. Commentators were jumping over each other to make a more attention-getting prediction than anyone else.

$1,500 an ounce…$2,000…$3,000 – they would say.

The gold bulls were getting very aggressive. Some even started adding a time element to their predictions (i.e. “gold will hit $1,500 an ounce within a year” – that really only happens when bullishness is at an extreme high). I even saw a few – back of the envelope – calculations to justify $10,000 an ounce gold…or higher!

At the time, inflation…

The Gold Market

Bulls and Bears Still Fighting Over Trend

The charts are playing tricks. A bear trap in April stopped short of turning into an all-out bearish failure with a bull trap in July.

In English, please? The bulls got suckered.

Gold prices fell through their $850 May low now, which means that I was wrong to think that the market had discounted a reversal in oil and the dollar, both of which we fully expected.

But could the market be setting up the bears here?

The last time that we saw two false signals in a row was in 2004, when a marginal new high reversed…

Global Derivatives Market now valued at $1.14 Quadrillion!

The Bank of International Settlements, which seems to be the only institution that tracks the derivatives market, has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional/OTC derivatives.

Yes, that is Quadrillion. One and 15 zeroes!

A Gold-Eagle article sheds some light on the mess:

Derivatives, as you may know, are essentially unregulated, high-risk credit bets. Unlike the earnest farmer who might employ a futures contract to hedge the price of the beans he’s worked so hard to grow, many of today’s institutions use futures, forwards, options, swaps, swaptions, caps, collars…

Six Ways to Play Money Morning’s Prediction That Gold is Headed for $1,500 an Ounce

By Martin Hutchinson
Money Morning

Back in October – when gold was trading at only $770 an ounce – I told Money Morning readers that the “yellow metal” was looking like a very good bet

Since then, gold soared to more than $1,000 an ounce, creating quite a nice return for investors who acted on our prediction. Since achieving that peak, gold prices have declined a bit. In fact, just last week, gold prices dropped below the $900 mark, prompting gold bears to say that the great gold bull market has reversed itself.

Let me say right now: They’re wrong.

In fact, now I’m…