Gold At a Record High; Negative Gold Lease Rates Are a Tale of Woe for the Banks; Economy Struggles; A Bacon Shortage Thay May Never Happen
Some brief thoughts. I am on the road this week.
First, gold is at a record high once again … in Europe, or priced in euros. The new new euro gold record high is €1,377.91as of non ET.
2. Gold lease rates remain negative in the one, two and three month spheres. This is a measure worth noticing, especially in light of the move to QE3 by the Fed and the ongoing troubles within Europe. Ignore the mainstream poppycock that would say negative leasing rates area a sign of a large supply of gold. You need to look at this from the perspective that Central Banks are supplying gold to their member banks to provide dollar liquidity as tha banks would sell their leased gold to raise dollar liquidity. These are short term operations in the one to three month realm. THIS ANOTHER CANARY IN THE COAL MINE SIGNAL of the precarious state of the financial system. Given recent data showing central banks as being dominant buyers of gold, it is doubtful that the short term leasing rates are a signal of outright gold sales by central banks.
3. It’s very scary that with trillions aleady generated to boost the financial system that it has led to only a modest pace of economic growth. This is yet another indication that Bernanke’s actions which send more junk to its balance sheet is to aid the banks alone and of themselves. US second quarter growth estimate revised down to 1.3% as recovery slows http://trib.al/uLrQOe
3a. More bad stats… and this is a key data series: Durable goods drop worst since recession http://reut.rs/VNvSVt via @reuters
4. There Will Be No Bacon Shortage http://tinyurl.com/dyhdm2y via @slate
5. Housing is still struggling. Yes, existing home sales rose in August, but… Pending sales of existing homes fall below mark considered healthy http://lat.ms/VOI8VU
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Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
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