Tag: stocks

Following Gold Share Prices – Selection of Sites

Whilst we publish a few of the leading US gold shares such as Agnico-Eagle Mines and Newmont Mining there are a lot of useful resources online where you can use tools to track and perform analysis on your Gold stock portfolio. Here are a selection of a few of the best we have found. Please note we are not affiliated with any of these suggestions and they are for reference purposes only.

USA Gold Stocks

Some of the big US stock sites offer excellent portfolio tools and news monitors. Obviously you have the big guns such as MarketWatch and TheStreet, but for those who are more focused on data rather than big news headlines then websites like BarChart.com offer a really sweet array of data that will be of use to any investor. Not only do they offer prices of Gold stocks but they also have a comprehensive futures section which shows Gold futures contracts for the whole year. In addition they offer charts and forecast tools which are really unique. We would suggest this as a go to resource for any investor in Gold.

UK Gold Shares

There are many small listed Gold mining shares on the London Stock Exchange. There are also some major players too, such as Anglo American and Fresnillo which is a large cap silver stock. There are some really nice useful sites for tracking your portfolios of UK shares. One of the oldest and most comprehensive is Interactive Investor. It has been around for a very long time, and although the format is now not as user friendly, they do have some excellent tracking features. Another decent website is LiveCharts.co.uk. The design is a bit limiting but they provide real time charts for Gold and Silver futures with some excellent indicators and analysis tools, you can also follow share prices on this site, and get a free portfolio to keep a watch on your investments.

Germany Shares

The largest by far is Finanzen. This site pretty much provides everything you need to track shares in Germany, including news and portfolio tools. It’s been around for well over a decade and is highly trusted. There are competitors which offer stocks, but this has to be the first stop for any investor.

Gold Investing and Your IRA – Why You Should Look At Stocks

Central banks keep currency reserves so that they can purchase the domestic currency, which is considered a liability for the central bank since it prints the money or fiat currency as IOUs). Gold reserves are held in large quantity by many countries as a means of defending their currency, and hedging against the U.S. dollar, which makes up the bulk of liquid currency reserves.

Gold preserves wealth which is why countries hold large gold reserves, and why investors buy Gold stocks. If their own currency comes under attack, they can use their gold reserves to defend and protect the value of their own currency. A great example of this is Iran. International sanctions against Iran for their nuclear program caused the Iran’s paper currency, the rial, to plunge over 50% in value. Iran has started on an massive gold acquisition program to protect its rial currency. Turkey is Iran’s biggest natural gas customer, but Western sanctions prevent it from paying Iran in U.S. dollars or euros. Iran is instead paid in gold. Gold exports from Turkey to Iran jumped to $6.5 billion in the first 11 months of 2012 from just $54 million for all of 2011, as the United States tightened sanctions over Iran’s disputed nuclear program.

The U.S. State Department said in December that U.S. diplomats were in talks with Turkey over stopping the flow of gold to Iran. Turkish Economy Minister Zafer Caglayan said last week that the gold sales to Iran would continue, saying the trade was carried out entirely by the private sector rather than between states and was not subject to sanctions.

Some are even speculating that Iran will try and accumulate enough gold to put its currency, the rial, on the gold standard thus defeating sanctions by the West aimed at destroying the value of its currency.

“Iran is very keen to increase the share of gold in its total reserves,” says Gokhan Aksu, vice chairman of Istanbul Gold Refinery, one of Turkey’s biggest gold firms. “You can always transfer gold into cash without losing value.” Think about that for a minute. This is exactly what you and I will be doing with our gold IRA investment one day. We accumulate gold now and when it’s time to pull it out when we retire, we will have the IRA custodian sell our gold and precious metals inside our IRA on the open market and send us the cash.

The West targeting Iran’s currency via restricting trade in euros and U.S. dollars is making Iran’s allies dump the U.S. dollar at an even faster rate. In most regions in the Middle East and certainly around Iran, the U.S. is viewed as an outsider, a bully if you will, affecting trade in their region via the bully U.S. dollar.

One of the unexpected, and unintended consequences of the draconian sanctions against Iran, is that Iran is forced to find alternative ways to buy and sell outside the hegemonic U.S. dollar based global financial system.

One such method is to pay for stuff, and accept payment in, gold.

And apparently, that is what is happening – as it has now been confirmed by Turkey that it is paying Iran in gold for natural gas.

This is a very interesting development, because as other regional players participate in this gold exchange, it creates an awareness that paying in the U.S. dollar or euro is not the only game in town and that with the gold trade, they can no longer be bullied by Europe or the U.S.

So again we see that gold preserves wealth.

China To Continue Buying Massive Amounts Of Gold For The Next 20 Years

China has doubled its gold reserves in the last five years but still holds much less gold than most other nations.

In a country-by-country comparison, the figure was 1.8 percent in China, while it was 76.6 percent in the United States, 73.7 percent in Germany and 71.8 percent in France, according to data from the World Gold Council and the International Monetary Fund.

Gold Reserves

China will be buying gold for many, many years as it pushes its gold reserves from 1.8 percent up to the 70 percent level inline with other developed countries around the world.

Gold Has Renewed Role In Global Monetary System

The Official Monetary and Financial Institutions Forum report concluded, “Gold will increasingly have a renewed role in the global monetary system, attracting a higher level of attention from policy makers and financial market practitioners.”

We can see gold’s rise to dominance in the global financial system by looking at how central banks have bought more gold in 2012 than any time since the 1960s.

Remember, for the better part of the last 50 years central banks had been net sellers of gold. But all the central banks stopped selling gold altogether in 2009, instead becoming the net buyers they remain today.

gold reserves

Amount of gold purchased by central banks

The abrupt shift in policy was brought about by the global financial crisis that began in 2008.

The massive increase in the global money supply and the high level of systemic risk spawned by the crisis drove central banks to diversify their foreign reserves by buying gold.

The Bank of Korea increased gold reserves 20 percent last month. The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2 percent of total reserves, the bank said. “Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said.

The National Bank of Ukraine raised the percentage of gold in its reserves this year to 7.72 percent from 4.36 percent a year ago. Since the beginning of 2012, the amount of monetary gold in Ukraine’s international reserves had increased by 25.5 percent, or 230,000 troy ounces, to 1.13 million troy ounces. The bank said it is boosting its gold reserves “to avoid the negative impact of the global crisis on the economic development of the country as it works on diversifying the components of international reserves in Ukraine.”

Brazil doubled its gold holdings in two months, buying 17.2 metric tons in October and 14.7 metric tons in November of 2012.

In August and September of 2012, Iraq increased its gold reserves to 31.07 metric tons from 5.8 metric tons, a nearly 600% increase.

The central banks of the following countries showed increasing gold purchases in 2012: South Korea, The Philippines, Kazakhstan, Russia, Mexico, Turkey, Argentina, Ukraine, along with several others. The central banks are buying gold to reduce their reliance on the U.S. dollar as a reserve asset. The purchases made by the central banks of developing countries have been increasing in recent years, as those nations diversify holdings, partly because of rising foreign-exchange reserves through export-led growth, but also, more recently, as a reaction to the sovereign-debt crises affecting traditional reserve currencies, like the U.S. dollar.

Gold is beginning to re-establish itself as part of the fabric of the financial system.

Gold’s fundamental property as a vehicle for capital preservation continues to endure. It does not matter whether you are talking about Iran trying to preserve its national wealth in the face of crippling sanctions, central banks trying to preserve their wealth against the sovereign debt crisis, governments trying to preserve their wealth against the falling value of their currencies, or you trying to build and preserve your personal wealth in your retirement account. The truth remains that there is no better way to preserve wealth than with physical gold. This confirms that a gold IRA investment is the best and only way to preserve wealth.

Somebody may have told you that learning how to invest in a gold IRA is complicated. If you look at the entire process and try to do it yourself, yes, it can be a little intimidating. But you don’t have to go it alone.

Currency Wars, Gold and How The Stocks React

Back when I started stock trading blog in 2008, the idea that the U.S. dollar could be devalued to such a point that people would begin losing confidence in it, was a wacky fringe idea passed around in gold bug circles and so called “alternative news” sites. I was critical of this concept and thought it was total BS back in 2008.

Fast forward to today. The national debt just crossed above $16.5 trillion and the debt to GDP ratio broke above 100% for the first time since World War II. As of December 2012, the debt to GDP ratio was 103.9%! Back in 2008, the debt to GDP ratio was 74%. In 2008, the national debt had just broke above $10 trillion. In just the last 5 years, the national debt has increased by 53.6%!

Both Parties Keep The Spending Binge Going

I chuckle when I hear someone say that the most recent President is to blame for the national debt. That’s just not true. BOTH parties are to blame for the national debt. Between 1977 and 1980 during the Carter administration, the national debt increased by 42.3%. From 1981 to 1988, Reagan exploded the national debt by a whopping 188.6%, the biggest increase by any President on record. From 1989 to 1992, Bush senior increased the national debt by 55.6%. From 1993 to 2000, Clinton increased the national debt by 35.6%. From 2001 to 2008, Bush junior increased the national debt by a whopping 89%. From 2009 to 2012, President Obama increased the national debt by 53.6%

So much for the incorrect stereotype that one party is better or worse when it comes to increasing the national debt!

Both parties talk a good game when their running for election but as soon as they get into power and the magical checkbook and pen is handed off, they spend like there’s no tomorrow. At this rate, maybe there’s not, at least for the U.S. dollar.

What Was Once Fringe Thinking Has Now Gone Mainstream

I’ve totally evolved in my position on gold since 2008. Take a look at the performance chart below.

gold chart

Since January of 2008, the S&P 500 is up a pathetic 2%. Gold, over that same time span, is up a whopping 100%!
I’m all about the charts folks. Politics and all other personal opinions aside, this is about money and the chart shows that your money would have doubled in gold, since 2008, while in stocks it went absolutely no where. You can’t argue with this chart and everyone knows it.

Is the S&P 500 Going Up, Or Is the U.S. Dollar Going Down?

It has been difficult to try and make money trading since 2008. It can be done and I’ve built up my blog at GuerillaStockTrading.com showing people the tools I use to do just that. But it’s hard work and the returns are small. It’s sort of disheartening to learn that I could have just put my money into gold in 2008 and today I’d have double the money. No constant trading. No constant brokerage fees. No sitting in front of a computer monitor hours a day. No charting. Just park myself in gold and do nothing and I’d be up 100%.

When I learned about the concept of the petrodollar trade got me thinking. When a currency is devalued, the cost of everything goes up, including stocks. You can study this relationship in real time by considering Iran and how their currency plunged 50% in value due to economic sanctions and their stock market has gone up 30% as a result!

So the question came to my mind to ponder: has the S&P 500 really gone up since the Global Financial Crisis of 2008, or is really the U.S. dollar going down?

This is a difficult concept to chart because currencies are measured relative to each other. Just because the U.S. dollar might be going down because the euro is going up, it doesn’t mean that the U.S. dollar’s absolute value is going down. Trying to find a benchmark for the absolute value of the U.S. dollar is tricky because currencies aren’t measured that way. One method is to consider how a gram of gold buys the same amount of oil today as it did back in the 1950s but it takes many more U.S. dollars to buy oil. You can read more about this method by going here. However, there’s another way to test this thesis.

We can use what is called an inverse formula to test if the S&P 500 is indeed tracking the U.S. dollar. While the absolute value of the U.S. dollar being devalued is masked by the fact that currencies are measured in relative value to each other, we can still plot what are known as perturbations and see if a positive correlation exists between the S&P 500 and the U.S. dollar. We do this by using the inverse variation formula: y = k/x.

If the S&P 500 is indeed being influenced by the U.S. dollar, we would expect to plot the two on a chart and see an inverse relationship between the two. Below is that chart.

gold chart

The chart above should send chills up your spine. It’s an almost perfect mirror image of the other! Since 2008, we see an inverse relationship between the U.S. dollar and the S&P 500. When the U.S. dollar goes up, the S&P 500 goes down and vice versa. It proves that the price action on the S&P 500 is directly connected to the U.S. dollar.
In a Wall Street Journal article entitled Currency War Has Started by Francesco Guerrera, Francesco writes:

Currency wars have been a staple of modern finance ever since the collapse of the Bretton Woods system of fixed exchange rates in the early 1970s. As Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co., says: “Most governments believe that their currencies are too important to be left to the markets.” So policy makers have often tried to manipulate the value of their currencies by intervening in the markets. (Source: http://finance.yahoo.com/news/currency-war-started-034400974.html)

This is incredible! This article was carried over the mainstream Yahoo News service and it comes as courtesy of the Wall Street Journal! Back in 2008, the only places on the Internet where you would find such an article would be on gold bug blogs and other alternative news sites.

The Bretton Woods system of fixed exchanged rates was an agreement for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the IMF could bridge temporary imbalances of payments. The U.S. dollar, in turn, was tied to the price of gold. It was a system developed to prevent the kind of currency wars we are seeing today.

On 15 August 1971, the United States unilaterally terminated convertibility of the U.S. dollar to gold. This brought the Bretton Woods system to an end and ushered in the era of currency wars.

Since 1971 and the end of the gold standard, the U.S. dollar has lost an estimated 90% of its value. We experience this loss in value of the U.S. dollar in terms of how much everything costs, or what is called inflation. See this article for what things cost in 1971 to what they cost today.

What the 1990s Can Teach Us

Critics of my inverse formula applied to the S&P 500 and U.S. dollar as proof the S&P 500 is going up because the dollar is going down will argue that the relationship between the price of stocks and the dollar has always been there and is not something new since 2008. But that would not be true.

If we chart the S&P 500 and the U.S. dollar’s price performance during the 1990s and the huge run up in the stock market, we see that during this time, the inverse relationship between the S&P 500 and the U.S. dollar was absent.

gold chart

In fact, if you look at this chart carefully you’ll notice that for years both the U.S. dollar and stocks went up together. This is the normal relationship where the Federal Reserve has to raise rates to cool off a rip roaring economy and stock market. The increase in interest rates makes the dollar go up in value. That is the normal relationship between the dollar and the S&P 500.

So what has changed since the 90s? The national debt went from $4.9 trillion in 1995 to $16.5 trillion as of January 2013. Assets of the Federal Reserve’s balance sheet went from an operating average of about $700 million at the end of 2007, to $3 trillion as of January 2013. This is the result of massive government intervention to try and jump start the economy via TARP, QE1, QE2, Operation Twist, Dollar Swap, and QE3 over the last 5 years. All this government action has caused the value of the U.S. dollar to drop.

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