Economic Commentaries

Stephan Ernharth, our lead strategist, shares his views in our Economic Commentary series.

China, Sun Tzu, and Gold Price Manipulation

“’The conventional view serves to protect us from the painful job of thinking.’
-John Kenneth Galbraith

In today's Ernharth Group Economic Commentary I'm going to explain why I believe China's latest update of its ‘official’ gold reserves is a gross and purposefully deceptive understatement…We'll also review the latest attempt to smash the gold price via the immensely-leveraged gold futures market…And lastly…I’ll address what I believe were ludicrous assertions that the Chinese were selling large quantities of gold bullion during the above-mentioned futures-based gold price-smash…


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The Hypocrisy Regarding Greece

“As central banker/centrally planned markets and economies in Europe, Japan, China, the United States, et al are held together by Keynesian-monetary-policy bailing wire and chewing gum (i.e. central bank created artificially low interest rates; $trillions in currency created by central banks out of thin air and used by said central banks to purchase $trillions in government, agency, and other debt - not to mention $trillions in stocks; all combined with record levels of debt)- it's my opinion we have now entered a timeframe where central bankers will be revealed (yet once again) to be utterly impotent. A period in time in which I believe those having complete faith in the omnipotence of central banker/planners will have their conventional illusions dashed - while those who have long maintained that economies and countries can't print (currency) and borrow their way to prosperity, and who have also warned that the suspension of the Dollar's conversion to gold in 1971; the resultant creation of previously non-existent and unlimited $trillions by central banks; and the resultant incurring of record $trillions in debt - would not be without significant consequence - will be vindicated.”

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Greece, the Euro, and the ECB - A Moment of Truth

“As the Greek economic tragedy continues to unfold in increasing orders of magnitude, I believe the world is about to witness in living color a profound, multi-faceted, and large-scale failure of redistributionist (is there any other type?) socialism. It’s my opinion that this socialist failure will come not only in the form of the near-complete breakdown of Greek social welfare programs (already happening), but will also manifest by blatantly and glaringly further exposing ongoing massive bank bailout schemes for what they really are...”

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Gold-Backed Chinese Yuan "Would be a Game-Changer”

M2 Money Stock/Money Supply in the US equals $11.8 trillion. The United states official gold reserves stand at 8,133.5 tons. Those 8,133.5 tons equal 261,498,092.6 ounces. 

To back every one of those Dollars of M2 Money supply with gold (dividing the $11.8 trillion of M2 Money Supply by the 261,498,092.6 ounces of official US gold reserves) would require a gold price of $45,160.94 an ounce.

Yes, the Dollar can be fully backed by gold - simply at a higher gold price.

Much higher.”


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Facts Are Stubborn Things

"I believe now more than ever it's time to be as discerning as possible, to question things, and to not simply accept information fed by the mainstream financial media.

A time to seek facts, whether we like what we find out or not. And to use positively the information we discover.”


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