Investors seem hopeful that Russia and the West can step back from their standoff over Ukraine. There are still plenty of reasons, though, for central bankers to be concerned. Markets around the world rallied this week, helped by indications of reduced tensions in Ukraine. Russia withdrew troops from the border.
Why Central Banks Worry about UkraineDetailsRussia is taking steps to ensure that it protects itself from any future dollar or euro sanctions. Moscow boasts the world’s 5th biggest foreign exchange reserves and the 6th largest gold reserves. In total, the assets amount to over $1.5 trillion. While the West is continuing to try and punish Russia via economic sanctions, the…
Russia Seeks Safe Haven in Gold, Away from Dollar and EuroDetailsFrom Ukraine to Gaza, geopolitical risks are weighing heavily on investors’ minds. But there are plenty more out there that may not be getting headlines. US mid-term elections Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery. Obamacare and a general ennui with the presidency means…
Three Geopolitical Risks Investors are IgnoringDetailsIn my last post, I wrote about prospects for civil war in Ukraine turning into a direct confrontation between Russia and the West, and what that would mean for gold prices. I said that markets had not yet woken up to this reality and when they did, gold prices would rise. Markets are now taking…
Developments in Ukraine — and goldDetailsWhat is the connection between the price of gold and civil war in Ukraine? Simple—gold has long been a refuge in times of political turmoil. When investors and savers realize the severity of a threat to their wellbeing, they rush to gold to protect their wealth, driving prices up quickly. In recent weeks, the conflict…
What Does War in Ukraine Mean for Gold?DetailsGold jumped $22 an ounce on news that a Malaysian Airlines flight (MH17) was shot down over eastern Ukraine. Later in the day, all signs were pointing to a missile strike on the aircraft, and persuasive evidence was developing that Russian-backed rebels launching a Russian-built missile were responsible. The world awaited the smoking gun of…
The safe haven: Gold moves on news from Ukraine and IsraelDetailsRead Part 1. In my last post, I discussed three myths about gold that Gary Alexander describes in a piece on Seeking Alpha. Understanding these myths is important because they deter many investors from making gold part of their financial portfolios. I’ll address four additional myths here. Myth #4: Gold is primarily a hedge against…
Debunking Gold Myths: Part IIDetailsI recently ran across an article entitled “The 12 Biggest Mistakes the Media Make When Covering Gold Markets,” by Gary Alexander. It’s a good article for potential gold buyers because it debunks many of the myths that lead investors, and their financial advisors, to exclude gold from their portfolios. For the most part, Alexander’s assessment…
Gold Myths that Confuse Gold BuyersDetailsFor weeks, I’ve intended to write a post on the current stock market bubble, and now, the New York Times‘ David Leonhardt has beaten me to it, but I’ll make some additional points. Robert Shiller, a Noble prize-winning economist, is among the market analysts and economists whose work I follow and admire. I discovered Shiller several years…
Gold in Another Stock Market BubbleDetailsRead Part 1 The story of the Sacagawea dollar is relevant, today, not just because it’s an interesting piece of our history, but also because it’s a window into how Washington, D.C. works — and doesn’t work. I’ve been around politics and government much of my career, in senior positions in the U.S. Senate, the Treasury…
The Inside Story of the Sacagawea Dollar, Part IIDetailsMy recent post on Fort Knox and Coin Week article continue to generate quite a few questions. Here’s one that inspired me to do a little research: Q: Is it true that the gold that was confiscated from American citizens by FDR’s government is stored at Fort Knox? Before I answer this question, let’s first look…
Did FDR confiscate Americans’ gold in 1933?DetailsMy recent post on Fort Knox and Coin Week article about Fort Knox generated quite a few questions. I’ll answer a couple of the most interesting questions here on the blog. Q: Since we are no longer on the gold standard and like you said, Fort Knox houses such a small percentage of the world’s…
Fort Knox follow-up: Why does the U.S. government keep gold reserves?Details
