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GOLD... what could this rise really mean ?
Posted on 10/19/25 at 11:25 am
Posted on 10/19/25 at 11:25 am
If it's truly a central bank rush to buy, what does that mean ? Wouldn't it be up more than 100% if it was that ? Wouldn't gold already be over 10k?
What does this current rise actually indicate ?
What does this current rise actually indicate ?
6
Posted on 10/19/25 at 11:30 am to Zilla
Nothing.
Gold's price has never been a reliable checkup on the economy's health. It's always had a place beside Treasury bills and bonds as a hedge for the chronically worried. Those fretting over America's debt, deficit, and dollar have been polishing their coins for forty years now, waiting for the reckoning.
Gold's price has never been a reliable checkup on the economy's health. It's always had a place beside Treasury bills and bonds as a hedge for the chronically worried. Those fretting over America's debt, deficit, and dollar have been polishing their coins for forty years now, waiting for the reckoning.
Posted on 10/19/25 at 11:35 am to Zilla
It’s a vote of no confidence in fiat currency.
Posted on 10/19/25 at 11:40 am to SloaneRanger
quote:
It’s a vote of no confidence in fiat currency.
Well, people better be careful. Because the last time people did that FDR confiscated it all.
Posted on 10/19/25 at 5:36 pm to lsuconnman
I recall some 14 years ago when a prominent New York real-estate investor named Donald Trump said gold’s soaring price was a sign of collapsing faith in the US dollar and US economy, clearly the result of the terrible Obama administration. That gold boom peaked in 2011 at about $2,000 an ounce. From there the price went sideways for a year before falling 40% over three years.
May I suggest the Extra Large Polishing Cloth?
May I suggest the Extra Large Polishing Cloth?
Posted on 10/19/25 at 9:57 pm to Zilla
Sovereign bonds are becoming worthless and gold is absorbing the value that has been stored in them. Just the beginning.
Posted on 10/20/25 at 6:19 am to beaverfever
The gap between yields on corporate bonds and government debt is extremely small. A Microsoft bond maturing in Q1 2027 traded at a spread of -1.9 basis points. The negative risk premium suggests the buyer sees Microsoft debt as more valuable than its Treasury counterpart. Is this lack of faith in government or confidence in megatech?
Posted on 10/20/25 at 6:31 am to beaverfever
quote:
Sovereign bonds are becoming worthless and gold is absorbing the value that has been stored in them. Just the beginning
Correct. Central bank buying has been steady for a couple of years now … but the big shift lately has been traditional bond buyers that are instead shifting toward gold.
quote:
In a seismic shift, Morgan Stanley CIO Michael Wilson recently came out with an investment strategy that includes a 20 percent allocation to gold.
Now a Sprott executive has followed suit, telling a mainstream financial network's audience that investors should consider shifting from the traditional 60/40 portfolio to a 60/20/20 allocation. This isn't typical messaging on mainstream financial networks.
Historically, the conventional wisdom on Wall Street was a 60/40 portfolio, with 60 percent of the holdings in equities and 40 percent in fixed-income investments, primarily bonds. The theory is that these asset classes balance each other, with stocks strengthening in a strong economy and bonds creating a hedge during downturns.
However, bonds have lost their safe-haven status in recent months. Last spring, at the height of tariff uncertainty, gold and silver rallied as bonds sold off. Gold and silver seem to be the last safe havens standing.
This post was edited on 10/20/25 at 10:10 am
Posted on 10/20/25 at 7:10 am to Zilla
Lots of smoke that a major dollar devaluation is inevitable to deal with the debt situation. If so debt holders will get crushed and may be trying to get out of it.
Posted on 10/20/25 at 2:57 pm to Decisions
quote:
Lots of smoke that a major dollar devaluation is inevitable to deal with the debt situation.
We cannot devalue it much more than $.03. $.03 in 1913 is worth $.99 today.
Inflation calculator
This post was edited on 10/21/25 at 8:35 pm
Posted on 10/20/25 at 5:07 pm to RoyalWe
quote:I’ve heard people suggest a company’s bonds could trade at a premium to treasuries and I’ve never been able wrap my head around the concept.
The gap between yields on corporate bonds and government debt is extremely small. A Microsoft bond maturing in Q1 2027 traded at a spread of -1.9 basis points. The negative risk premium suggests the buyer sees Microsoft debt as more valuable than its Treasury counterpart. Is this lack of faith in government or confidence in megatech?
The government will pay its bond holders. I don’t see any reason to doubt that. The question is if that payment is worth anything when the bond matures. Mega cap tech companies are definitely more credit worthy than the federal government but that seems irrelevant as long as the debt is denominated in USD.
Point being, I can’t grasp how anyone’s USD denominated debt could be more valuable than debt directly from the issuer of the USD. Someone let me know if they have an idea what I might be missing. I’ve run across this concept a few times now.
Posted on 10/20/25 at 5:33 pm to beaverfever
The Treasury being risk-free refers to default risk, not value retention or liquidity premium.
Corporate bonds can yield less than Treasuries, but it's not irrational.
Large institutions, especially banks, insurers, and foreign sovereign funds, are mandated to hold certain types of bonds. If Treasury supply surges (due to deficits) and yields rise, demand can temporarily shift toward specific high-grade corporate bonds (e.g. Microsoft).
Certain corporate issues are in such high demand for use as repo collateral or liquidity buffer that their yields compress below Treasuries. In other words, investors aren't just buying yield but are paying for collateral utility.
Ironically, when Treasury yields are volatile (like during political debt-ceiling drama or heavy issuance), some investors perceive large corporate bonds as more stable stores of value over short windows. Microsoft isn't going to default and they don't face political theater risk.
Finally, the synthetic hedging cost for corporates can turn negative -- meaning if you own the corporate bond and simultaneously sell protection via credit default swaps, your combined yield exceeds Treasuries. That arbitrage drives the cash bond yield below the Treasury curve.
Bottom line is Treasuries define nominal risk-free, but are not always the most desired asset. It's not about who's more likely to pay. It's about who's more useful to hold right now.
Corporate bonds can yield less than Treasuries, but it's not irrational.
Large institutions, especially banks, insurers, and foreign sovereign funds, are mandated to hold certain types of bonds. If Treasury supply surges (due to deficits) and yields rise, demand can temporarily shift toward specific high-grade corporate bonds (e.g. Microsoft).
Certain corporate issues are in such high demand for use as repo collateral or liquidity buffer that their yields compress below Treasuries. In other words, investors aren't just buying yield but are paying for collateral utility.
Ironically, when Treasury yields are volatile (like during political debt-ceiling drama or heavy issuance), some investors perceive large corporate bonds as more stable stores of value over short windows. Microsoft isn't going to default and they don't face political theater risk.
Finally, the synthetic hedging cost for corporates can turn negative -- meaning if you own the corporate bond and simultaneously sell protection via credit default swaps, your combined yield exceeds Treasuries. That arbitrage drives the cash bond yield below the Treasury curve.
Bottom line is Treasuries define nominal risk-free, but are not always the most desired asset. It's not about who's more likely to pay. It's about who's more useful to hold right now.
Posted on 10/20/25 at 5:35 pm to Hangit
quote:
We cannot devalue it much more than $.03. $.03 in 2013 is worth $.99 today.
Just used the calculator and it says 3 cents in 2013 is 4 cents today
Posted on 10/20/25 at 5:44 pm to Dawgfanman
Wow. That sounds like we have decreased our money supply by 33% in the last dozen years.
Money printing machine goes BRRRRRRRR!
Money printing machine goes BRRRRRRRR!
This post was edited on 10/20/25 at 5:45 pm
Posted on 10/20/25 at 6:16 pm to RoyalWe
Damn bro, good stuff. I’m going to have to take that to ChatGPT and do some homework.
Thanks for sharing
Thanks for sharing
Posted on 10/20/25 at 8:47 pm to Zilla
Posted on 10/20/25 at 9:16 pm to beaverfever
I get a weekly economics/market/investing newsletter and that was actually one of the topics this week. You just caught me at the right time otherwise I wouldn’t have given such a detailed response. But since you asked and I just read it I thought I’d share. I also ask ChatGPT these kinds of questions all of the time. It’s a really excellent tool for this kind of stuff.
Posted on 10/20/25 at 9:28 pm to Zilla
It doesn’t make any logical sense. They’re so restrictive they have mainland currency and offshore currency. Not to mention they intentionally depreciate their currency…so their plan is to own hitch their currency to gold? If you have any faith in that, they’ll sell you some prime real estate to go with it.
Posted on 10/20/25 at 10:37 pm to Zilla
The monetary game theory is coming on so much faster than I would have ever imagined.
And can we all just agree that we’re in a quasi Cold War with China? And right now it looks like China has the upper hand.
Side note: I like that this thread is actually about money. Hope these catch on.
And can we all just agree that we’re in a quasi Cold War with China? And right now it looks like China has the upper hand.
Side note: I like that this thread is actually about money. Hope these catch on.
This post was edited on 10/20/25 at 10:45 pm
Posted on 10/21/25 at 8:54 am to RoyalWe
Never understood this premise. Alan Greenspan shared that gold price is the main inflation indicator.
He divulged this sometime in the 2000s, but it just means more inflation is coming.
He divulged this sometime in the 2000s, but it just means more inflation is coming.
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