# Note added 11th April 2016
Monday 4th April was an ambitious date to commence publishing on an issue of enormous international interest. Publication will commence when the information framework has been designed and tested as a useful resource,
Posted on March 30th 2016 Commencing Monday 4th April . This website will, as a content aggregator, publish links to news and commentary on the 23rd June British Referendum on either remaining in or leaving The European Union.
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GOLD PRICES FROM JANUARY 2016 TO 10th MARCH
CHART COURTESY WWW.KITCO.COM
Are Central Banks Pushing on a string?
In the first west week of January I posted this Goldwatcher note
“Gold is insurance against the unexpected and the unthinkable. Gold is poised to breach the psychologically and technically important $1100 threshold…Gold pundits like to punt gold demand as coming from fear or love trades. But they ignore the more important trade trades – i.e. the speculative punts that can account for most the money flowing in and out of gold”
The global risk landscape this time last year was fairly tame and I posted several comments on gold price prospects for the year that proved to be useful. The landscape this year has been different and recent posts on gold have included Ray Dalio on Central Banks Risk Pushing on a string
Messages from The Goldwatcher Book:
The manuscript for The Goldwatcher was submitted to the publisher, at the end of 2007. At the time the gold price was a little over $800 – about double the where it was when I first submitted the book proposal to Wiley.
The Goldwatcher (Page 186) included this comment under the heading
Messages From History
.”…Pundits had been calling for the Gold Price to reach $850, the level it spiked to in 1980. That’s equivalent to about $1900 in 2007 money. However a price spike and a price average over a longer period are very different situations. “
As we all know the price spiked to above $1900 in September 2011, fell again below $1100 in January this year and is now in sight of breaching $1300.
Motivation, Strategy & Timing
My contribution to investing in gold has been based on motivation strategy & timing. Yesterday’s dramatic responses to ECB President Draghi’s package of stimulus measures was followed by dramatic prices movements that are settling down today with these among other price changes:
GOLD +0.60%, COPPER+ 0.68%
OIL + 2.27%, LEAD +1.15%,, ZINC +1.61%
MOMENTUM, ALGORITHMS & ANIMAL SPIRITS:
Price overshoots and undershoots are par for the course in currency and commodity markets. As it’s likely that future price movements will also be driven by momentum, algorithms and animal spirits it will make sense for investors to monitor these influences themselves or keep well informed from a reliable information source.
All postings on this blog (The Goldwatcher) will remain freely accessible in the public domain. For further Goldwatcher comments please follow Investor Literacy
From previous Goldwatcher postings:
# GOLDRUSH PERFORMANCE CHARTS :
SOURCE THE ECONOMIST
“The film has provoked an intense conversation, sparking a discussion of whether mortgage-backed securities were the primary driver of the crisis, as opposed to broader economic forces and whether those responsible were adequately punished.
On Wednesday, January 27, the film’s director, Adam McKay (who also directed and co-wrote “Anchorman,” “Talladega Nights,” and “Step Brothers”), visited Washington for a screening of “The Big Short” hosted by Economic Studies at Brookings.
After the screening, McKay joined a panel of financial experts and journalists to discuss whether the film’s narrative is the right one to explain the crisis to the public…”
# 5th February : Above Chart added reflecting negative Govt Bond Yields across the yield curve notified by The Daily Shot
## Note Added 3rd Feb 2016: Link to Bloomberg Quick Take on negative interest rates – Link to Goldwatcher comment on the end of the long term debt cycle and negative interest rates
The total balance of government bonds with negative yields hit $5.5 trillion after the BOJ action on Friday according to JPMorgan (via the Financial Times) and noted in The Daily Shot letter today
I posted a comment on www.thegoldwatcher.com yesterday on approaching the end of the debt supercycle that started with the end of WW2 over seventy years ago. The comment addresses Ray Dalio’s warning that policy makers could find themselves pushing against a string.
Monetary policy works with a lag. When central banks were fighting inflation the analogy of pulling a stone with an elastic band was a popular way of explaining the lag – you pull and pull and nothing happens ….. then the elastic tightens and wham, the stone rockets back!
What happens when central banks find themselves pushing against a string? Trillions of dollars and other currencies with negative yields?
This Bloomberg comment by Peter Coy addresses the question whether the US is heading for a recession. It is state of the art analysis for objectivity and content. Key issues are highlighted and the link takes the reader to detailed information
Hat tip to Barry Ritholtz – The Big Picture Newsletter for drawing attention to the article
World Economic Forum have published their 2016 Global Risks Report. Key risks identified for the next 18 months and the next 10 years follow. The greatest risk is large scale involuntary migration.