Increasing the money supply invariably leads to inflation—but that’s not the only
factor driving it. “Populist policies that are focused on protectionism and unionism will force inflation in America,” says Frank Holmes, CEO and chief investment officer at U.S. Global Investors. While he doesn’t anticipate across-the-board inflation, he does foresee certain commodities having stronger inflation than others. In this exclusive interview with The Gold Report, Frank discusses changing patterns in commodity prices and how investors can gauge where they’re headed next.
“Populist policies that are focused on protectionism and unionism will force inflation in America,” says Frank Holmes, CEO and chief investment officer at U.S. Global Investors. While he doesn’t anticipate across-the-board inflation, he does foresee certain commodities having stronger inflation than others. In this exclusive interview with The Gold Report, Frank discusses changing patterns in commodity prices and how investors can gauge where they’re headed next.
About 15 years ago, when China started becoming a significant buyer of copper, the pattern started to change. This pattern shows copper prices rising from January through May and then trading pretty much sideways for the rest of the year, with modest peaks and valleys along the way. A similar pattern is drawn to represent the past five years. The five-year and 15-year cycles are very much aligned with the infrastructure spending taking place in China, as well as with the lack of new mine supply coming on-stream from anywhere in the world to meet this increasing demand.
China has changed the demand for copper by making very strong commitments in infrastructure spending. Five years ago they were building power stations –now they’re building power lines. They’re basically expanding their spider web of copper wire all across the country to get more people access to electricity, especially in the rural areas, and this is setting up demand for copper that relates to their infrastructure spending.
TGR: One of the theories I’ve heard is that China has been divesting U.S. dollars by stockpiling basic commodities, one of which is copper. If that’s true, could China’s copper buying boom be short-lived?
Maryland dealer and ANA Life Member Julian Leidman is the inaugural recipient of the Harry J. Forman Dealer of the Year Award.
The annual award is presented to an ANA member dealer who shows uncommon dedication to strengthening the hobby and the ANA, and displays exemplary ethical standards as a dealer. The award is named in honor of Harry J. Forman, a Philadelphia coin dealer, author and ANA Life Member who died in 2008.
Julian Leidman began his career as a dealer and consultant over 40 years ago. He has an unbroken record of attendance at every major U.S. coin auction since 1968, and has handled some of the most important and valuable U.S. coins.
Read the rest of Julian Leidman to Receive Inaugural Harry J. Forman Dealer of the Year Award (183 words)
© American Numismatic Association for Coin News, 2009. |
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Mark Olanoff of Reisterstown, Maryland, will be honored with the American Numismatic Association’s 2009 Outstanding Government Service Award. He will be presented his award Aug. 7 at the ANA’s World’s Fair of Money® in Los Angeles.
An ANA member since 2002, Olanoff has served with Diane Piret as co-chair of the ANA Government Affairs Committee for four years. In this position, he has helped advance the hobby in Washington, D.C., and kept the ANA apprised of federal and state legislation that could impact numismatics.
Read the rest of Mark Olanoff Receives ANA’s Outstanding Government Service Award (117 words)
© American Numismatic Association for Coin News, 2009. |
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For the second time in two weeks, the US Mint has updated its 2009 Product Schedule.
Last week the schedule was revised to include dates for August offerings. Thursday the Mint provided specific dates for collector coin and set releases through to September.
Captivatingly within the new schedule are several coin products the Mint has mentioned but not yet fully described:
- 2009 Lincoln Bicentennial One Cent Proof Set
- United States Mint Braille Education Set
- United States Mint Lincoln Coin and Chronicles Set
Read the rest of US Mint Product Schedule Update for September (441 words)
© CoinNews.net for Coin News, 2009. |
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What’s New on CoinLink ……..
Heritage is going to be offering Two Spectacular Mercury Dimes at the Platinum Night Auction tomorrow night, July 31st in Los Angeles as part of the pre-ANA activities.
Baldwin’s auction department and Ma Tak Wo Numismatic Co. Ltd , will be holding its 47th Hong Kong Coin Auction, of banknotes, coins and stamps. A European collection of lots formed during the first part of the 20th century, entitled ‘The Viking Collection of Chinese Coins’, forms the core of the coin section.
The US MINT Gold will issue coins honoring first spouse Julia Tyler, to be available for sale on August 6, 2009. The one-half ounce 24-karat gold coin, struck at the United States Mint at West Point, will be available in proof and uncirculated conditions.
PCGS CoinFacts re-launched this week. The new site – ideal for both novices and advanced collectors – has been completely revamped with thousands of updates to its database and images files and a number of important new features.
The Society of Private and Pioneer Numismatists (S.P.P.N.) will hold its annual meeting Saturday August 8, 2009 11AM in the Los Angeles Convention Center ( ANA World’s Fair of Money). Dr. Robert Chandler will make a presentation titled “Wells Fargo, California’s Varied Monies, and Colorful Personalities.”, and there will be further revelations concerning the Controversial “Franklin Hoard” Gold Pieces.
Heritage will be auctioning off a Kellogg & Humbert 43-Ounce Gold Ingot at their sale in Los Angeles. Here is some background on the ingot.
The largest public array ever assembled in the United States of huge, modern, certified Chinese gold coins, ranging in size from five ounces to one kilo (32.15 ounces) each, will be displayed at the American Numismatic Association’s World’s Fair of Money® convention in Los Angeles, August 5 – 9, 2009.
Legend Numismatics announced the acquisition of the 35000+ coin McClaren Collection which contains coins from OLD HOLDERED MS 65FB Mercs to GEM MS68 Morgans all PCGS or NGC certified!
Wirtland, which claims to be the world’s first internet-based sovereign country, has released its first gold coin, known unofficially as “Wirtland Crane” or “Gold Crane”. The 1/10 oz. coin is minted in 24 carat gold, in cooperation with coin designer Daniel Carr and his company “Moonlight Mint”.
The American Numismatic Association has announced a number of Awards that will be presented at the ANA World’s Fair of Money® in Los Angeles on August 7th. – Tom DeLorey has been named the Numismatist of the Year and Julian Leidman was named the Coin Dealer of the Year.
The Royal Canadian Mint has launched the third and final issue of the world’s first series of bullion coins honouring the spirit of the Olympic Games. The Mint’s Ottawa facility will produce up to 50,000 gold coins for the 2010 issue and the silver version will be produced on demand.
Northwest Territorial Mint, the world’s largest private mint, has acquired the historic Medallic Art Company. As the industry leader for minting high-quality commemoratives for the military and Fortune 500 companies
We have just started a NEW CATEGORY in the Coin Guide Section of Coinlink called Key Dates. We will profile specific key date coins in each series:
- 1796 No Stars Quarter Eagle Profile by Doug Winter
Tim Shuck has added 2 new coin profiles in the US Type Coins Coin Guide Section of Coinlink as follows:
Continuing with News across the web, we have a new posting of – Coin News Daily – providing short excerpts and links to other news across the web that we have found, and which you may find of interest. We also provide Daily Updates on Precious Metals in The Bullion Report, with Charts, Video Headlines and News.
You can access ALL the News Here
By Rasmussen Reports, Asbury Park, New Jersey
So much for the ongoing secrecy of the nation’s independent central banking system. A new Rasmussen Reports national telephone survey finds that 75 percent of Americans favor auditing the Federal Reserve and making the results available to the public.
Just 9 percent of adults think that’s a bad idea and oppose it. Fifteen percent aren’t sure.
Over half the members of the House now support a bill giving the Government Accounting Office, Congress’ investigative agency, the authorization to audit the books of the Federal Reserve Board.
Support for the bill has grown now that the Obama administration is proposing to give the Fed greater economic regulatory powers. The Fed, which sets U.S. monetary policy, was created as an independent agency to keep it free of politically-motivated interference.
Fed Chairman Ben Bernanke in a town forum filmed on Sunday, which is airing this week on PBS stations, said he is strongly opposed to the audit legislation. “I don’t think the American people want Congress running monetary policy,” he said. Howard Rich addressed this issue in a recent commentary and concluded it was important to locate the “trillions of dollars” the Fed has spent over the last year and a half.
The new survey finds that an overwhelming majority of Americans in every demographic category — including age, gender, political affiliation, race, and income — disagree with Bernanke and favor auditing the Fed to make its secretive deliberations public.
Some Bank Pay Unmoored from Performance, NY Attorney General Says
By Grant McCool, Reuters
NEW YORK — Bonuses paid to executives at nine banks that received U.S. government bailout money in 2008 were greater than net income at some of the banks, the office of New York Attorney General Andrew Cuomo said on Thursday.
Cuomo, in a report on months of investigation into compensation paid by the banks, said employee pay “has become unmoored from the banks’ financial performance.”
Representatives of the banks either declined comment on the report or could not comment immediately.
“There is no clear rhyme or reason to the way banks compensate and reward their employees,” said the report by Cuomo, New York’s top legal officer, who began his probe last October amid taxpayer complaints about Wall Street pay.
Even in one of Wall Street’s worst years on record, at least 4,793 bankers and traders received more than $1 million in bonus payments, according to the report.
Cuomo argued that, if firms followed “a more principled” bonus system, they would be less susceptible to poaching of their employees by other firms offering more pay.
“This rationalization of the compensation and bonus system must be accomplished now,” said the report, which was sent to Edolphus Towns, chairman of the U.S. House of Representatives’ Oversight and Government Reform Committee Chairman.
Since nine banks received a total of $125 billion last October in taxpayer money under the Troubled Asset Relief Program (TARP) to help them survive the financial crisis, Cuomo has pressed them for details on billions of dollars paid to executives amid huge losses.
The report said bonuses for Goldman Sachs Group Inc., Morgan Stanley, and JPMorgan Chase & Co. were “substantially greater” than the banks’ net income.
Goldman earned $2.3 billion, paid out $4.8 billion in bonuses, and received $10 billion in TARP funding, the report said.
Morgan Stanley earned $1.7 billion, paid $4.475 billion in bonuses, and received $10 billion in TARP funding, while JP Morgan Chase earned $5.6 billion, paid $8.69 billion in bonuses and received $25 billion in TARP funding.
By Peter Grandich, Agoracom.com, Toronto
While I never felt that the gold market was manipulated to the extent some within the GATA (www.gata.org) community do, I believe their principal argument is correct. No one makes that argument better than Chris Powell of GATA. Chris is a true gentleman. I always look forward to being in his company.
The Prudent Investor submits:
click to enlarge
TABLE: If you still have doubts about allocating a little of your portfolio into silver, these historic gold/silver ratios may make you think twice. Table courtesy of John F. Chown’s "A History of Money"
Hard Assets Investor submits:
Last week, European ETF titan ETF Securities started trading its first U.S. fund, the bullion- backed ETFS Silver Trust (NYSE Arca: SIVR). But with five products already on the books, does the American silver market have room for another ETF?
That’s why we decided to sit down and talk silver fundamentals with Nicholas Brooks, head of research and investment strategy for ETF Securities. With over 15 years’ experience as a global economist and strategist, Brooks has worked with Henderson Global Investors, Deutsche Bank and Citibank. Recently, HAI associate editor Lara Crigger chatted with Brooks about the rise in physical silver investment, the connection between the gold and silver markets and whether the higher prices can be sustained.
Lara Crigger, associate editor, HardAssetsInvestor.com (Crigger): We’ve really seen an uptick in silver demand recently, especially physical investment. What’s driving that?
Nicholas Brooks, head of research and investment strategy, ETF Securities (Brooks): To some degree, what’s going on with silver is related to what’s going on with gold. Investors view silver as a safe haven asset in the same way they do gold, and as a hedge against inflation and possible paper currency weakness. So silver is benefiting from the still-high uncertainty over the outlook for the global financial system and over what government intentions are, given the aggressive quantitative easing and the rapid run-up in government debt levels.
Crigger: We’re starting to see physical investment in silver on the rise, while physical investment in gold is dropping. What’s the reason for this? What advantage does silver have over gold?
Brooks: Silver is a very interesting commodity, because it’s a hybrid between an industrial metal and a precious metal. About 53% of the end demand for silver is from the industrial sector, compared to around 12% for gold. So silver demand is more sensitive to swings in the business cycle than gold is.
In this environment, silver is in a very fortunate position. There’s still lingering uncertainty about structural risks to the global economy, but at the same time, lead indicators of global industrial activity have picked up strongly since late February, early March. We’ve seen a very strong run in many of the more cyclically oriented commodities, especially industrial metals like copper. So I think silver’s been benefitting from that, while at the same time, lingering concerns about the outlook for global financial stability, potential future inflation, rising government debt levels and the long-term outlook for the U.S. dollar are causing investors to increase their weightings in silver.