Gold - nobody’s liability

Posted | 27/03/2015 / Views | 3495
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Analyst Gijsbert Groenewegen puts gold very nicely into perspective in this quote.

“Gold stands for discipline and control whilst paper money stands for manipulation or whatever you want to call it, facilitation, enabling, easing but ultimately debt. Physical gold is nobody’s liability. Gold’s value – unlike that of a banknote, or a share certificate, or a government bond – does not rely on someone else’s promise to pay. The value of the gold is in the physical gold itself and its value doesn’t depend on anybody’s financial performance or leadership ethics. Gold doesn’t have any counter party and thus also doesn’t carry counter party risk!

Gold restrains the creation of debt because of the need of fixing or indexing the amount of paper money to a certain amount of physical gold. And we are in dear need of a reset getting back to discipline restraining the creation of the all consuming and destructive debt. When our income doesn’t suffice anymore and we borrow, we basically borrow future income because we have to pay the loan back with income earned in the future. And when we don’t have any room left to secure or pay for a loan we are at the end of the road and that is where we are!!! Hence why the QEs [quantitative easing] and ZIRPs [zero interest rate policy] and NIRPs [negative interest rate policy] won’t work.

According to the Aden sisters the key level for gold is the 23-month moving average at $1275, which is also the resistance level on the gold chart here above [below].  Once this level is clearly surpassed, gold will turn bullish for the first time since 2012 according to the Aden sisters. This is confirmed by the ever-increasing open interest numbers for gold and silver on the CME [COMEX] even when gold and silver prices are falling. Normally falling prices are accompanied by lower open interest. The current divergence is therefore indicative of increased buying support, which may be enough to reverse the bear trend of the last three years. And of course what applies to gold in general also applies for silver. Things for gold and silver are looking up. And as JP Morgan said “gold is money everything else is credit”.”

Gold - nobody’s liability