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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Gold and precious metals
April 16, 2013 at 9:46 AM

After the gold rush, a lesson in gravity

I wondered what wonders the Wall Street Boyz had been spinning that played a role in Monday’s gold sell-off, the worst drop in more than 30 years. Sure enough, “new financial instruments” tied to gold were an accelerant in the collapse just as they helped artificially boost gold’s price in recent years. Prominent among the…

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March 22, 2013 at 10:31 AM

Vote: Is the economy getting better for you

The stock market is up and housing sales are recovering. Unemployment remains stubbornly high and mandatory government cutbacks will be kicking in with the sequestration. Job openings increased slightly in January, but there are 3.3 job seekers for every position. The Seattle area is booming; the rest of Washington, not so much. Today’s poll asks how you are faring personally compared with six months ago:

Read on for the best links of the week and the haiku:

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Comments | More in Amazon.com, Global economy, Gold and precious metals, Google, Great Recession, H1-B skilled foreign worker visas, Income/living standards, Jobs/Unemployment, Nordstrom, Outlook

May 4, 2011 at 10:00 AM

Bye-oh, silver: Maybe the precious metals top has been reached

So much for the silver bubble-ette. After rising 84 percent last year, the price of silver suffered its worst one-day fall Tuesday in 30 years, a decline of 7.6 percent. Today, it was down another 3.6 percent, or $1.516, to $41.060 per troy ounce on the New York Mercantile Exchange. According to the Wall Street Journal, a big for the drop is, essentially, that some major investors are getting out while the gettin’ is good.

Herein lies the trouble with average investors getting into precious metals, commodities, options, etc., especially with borrowed money. Even more than the way the Wall Street playerz affect your mutual funds, they totally own the corner of these more complex and volatile investments. Silver may have risen as a hedge against a weaker dollar, but pretty quickly it turned into a mania working on the greater-fool theory. In other words, buying based on the belief there’s a greater fool who will buy it from you at a higher price, or further bid up the price, before the roof falls in. It’s a dangerous hobby, but who knows how many cubicle proles are getting margin calls today from their brokers? (Or watching their precious metals mutual funds further decline, and not paying attention to the load fees, etc.).

Gold is down a bit, but holds an aura that silver lacks. I know that nobody ever lost money underestimating the intelligence of the American people, but even we and our elected representatives are not stupid enough to return to the gold standard or let the dollar slip away as the world’s reserve currency.

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