electronic-money

The Move Toward A Cashless Society Goes Global

OWNx Team Global Finance and Economics, News & Commentary 2 Comments

First India.  Now Australia is considering removing some banknotes from circulation. These are opening salvos toward a move to remove physical currency from circulation. Speculation abounds as to why this is the case. One of the major reasons is taxes.

If every transaction must pass through a network, then it can be calculated where it took place and the amount. The taxing authorities then would be able to automatically deduct them even if the transactions were held at a private location.

Gold and silver have long filled a role as money. In a cashless society, would the price of gold and silver rise or fall? It is too early to tell, however if history has proven anything, it is that people are innovative. If they feel the need to be able to conduct transactions outside of any closed system, they will find a means to do it.

For them, it’s not about avoiding taxes. It’s about the principle of maintaining privacy. It would be wise for our future monetary authorities to insure transaction privacy (blockchain technology anyone?). Gold and silver may then have a role as a means to stabilize a future monetary system.

The Global Move Toward a Cashless Society

 

higher-rates-sign

Fed Raises Rates For Second Time in a Decade

OWNx Team Global Finance and Economics, News & Commentary 0 Comments

Twice.

That is the number of times the Federal Reserve has raised rates in a decade. Ten years. This is not how a normal economy works. It is also evidence that we are far from having escaped the shadow of the financial crisis of 2008.

So what happens over the next decade? That is the subject of a lot of electronic ink being spilled. Rising rates are not friendly to $20 trillion in US government debt. Nor is it friendly to the tens of trillions of debt on the books of other world nations.

But what happens when the market forces rates higher? When the Fed is not in the front seat driving, but rather in the back seat watching?

It’s commonly thought that the price of gold and silver fall with rising rates. That correlation holds early in the cycle. However, if either deflation or inflation begins to rear it’s ugly head the price of gold and silver take on a life of their own.

With the glut of debt around the world, it is not out of the realm of possibility that we see one or the other. Just the possibility will send gold bullion prices higher until this situation is truly and finally resolved, and that may take years.

Fed Raises Rates for First Time This Year

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Gold Coins Dropped in Salvation Army Kettles

OWNx Team Gold & Silver Market, News & Commentary 0 Comments

We thought we’d pass on a “feel good” story for those of us who love silver and gold bullion. Seems like Fargo, N.D. is developing a bit of a Christmas tradition. Dropping gold coins into Salvation Army Kettles has been occurring for a decade.  Just last week, three more were found.

Timeless value. That is gold and silver. When expressed as a gift during the Christmas season, it further identifies just how precious the metal is.  Gold. Frankincense. Myrrh.  Although we hope the last two aren’t dropped into the kettles.

3 more gold coins found in Salvation Army red kettles

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Could Silver Replace Gold as India’s Preferred Investment?

OWNx Team Gold & Silver Market, News & Commentary 0 Comments

Could it happen? About 100 years ago, silver was the preferred precious metals investment in India. Because of the government crackdown on the underground economy by restricting its paper currency, the question is a good one.

India has long held a quasi-dual currency system. Paper rupees used in daily transactions, with gold bullion being a preferred savings currency. The removal of India’s two largest paper currency denominations have had a major impact on the price of gold in India, reviving the question of silver’s role in the country.

Gold demand in India has risen only 25% over the last decade while silver demand has risen by 600%. This isn’t the first time the Indian government has fought precious metals as a currency in their country. Last time it happened the shoe was on the other foot. Silver was taxed and gold became the preferred savings vehicle.

Turnabout is fair play, and people around the world will always seek for a way to protect their wealth.

Read the full article:

A century later, could silver beat gold to become India’s preferred investment option once again?

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bloomberg-gold-price

Price of Gold Nearing 10 Month Low After Italy Vote

OWNx Team Geopolitics, Global Finance and Economics, Gold & Silver Market, News & Commentary 0 Comments

Geopolitical uncertainty is supposed to help the price of gold right? Over the long term that is certainly the case. However, short to intermediate term fluctuations have more to do with capital flows and traditional correlations. This is likely the reason why the gold and silver price has performed poorly over the last few months.

Traditional correlations say that when the dollar and interest rates rise, the gold spot price falls. That certainly has been the case recently. The US dollar has soared since Brexit, and gained momentum after the election of Donald Trump. These combined with the vote by Italy to reject constitutional reforms (and thus their current government leadership) and we have a well entrenched trend toward increasing geopolitical uncertainty.

It is likely that Italy will now have a change in government that is much more open to leaving the European Union. The geopolitical and economic implications of this are significant. Once the reality of the magnitude of the changes coming becomes manifest in the market place and financial systems, we will likely see gold and silver prices reverse to the upside for a sustained period. In fact it could likely be the catalyst for a new multi-year bull market in gold and silver.

Gold Heads for 10-Month Low as Investors Look Past Italy Vote

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gold-torc

Large 3,000 year old golden ‘belt’ found in the UK

OWNx Team Gold & Silver Market, News & Commentary 0 Comments

A mysterious 3,000-year-old gold torc, described as one of the largest ever discovered, has been found in the UK. A torc is a stiff ring of metal, made in a single piece or from several strands twisted together. The size of this torc (nearly 50 inches in length) has left open speculation as to what it was actually used for.

Discoveries like this remind us of the timeless value of gold. Whether used by Kings as a store of wealth, priests in ceremonies, or ornamentation, gold bullion has been a significant part of cultures for thousands of years.

In cultures such as India, gold is still a widely used metal for jewelry and ornamentation. These items also serve a dual purpose as a long term store of savings and thus Indian consumption of gold drives a substantial portion of overall gold demand. Meanwhile, in the United States, jewelry usage is more limited and gold demand is now primary investment related.

Regardless of its use, gold bullion has been, and always will be something that fascinates all of mankind.  It’s future will be just as exciting as its past.

You can read the full article about this interesting discovery here.

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Govt Debt and Liabilities May Support Gold and Silver Prices

OWNx Team Blog, Money & Finance 0 Comments

When we think of cities that are struggling with debt, we tend to to look at Detroit, Chicago, and some of the larger cities in California. However the problem extends across the nation and into nearly every major metropolitan area, including Dallas, where the economy seems to be relatively strong. This widespread combination of debt and underfunded liabilities represents a significant factor in the looming debt crisis that threatens the financial system. And it could be a major catalyst for rising gold prices in the years to come.

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gold bullion

Exchange-traded products continue to drive gold demand in 3Q16

OWNx Team Gold & Silver Market, News & Commentary 0 Comments

The World Gold Council recently released a report on gold demand for 3Q16. In it they note that there was a sharp increase in gold investment primarily through Exchange Traded Products. While ETPs such as GLD stock mimics the gold spot price, it does not provide you with the true utility value of gold bullion. At some point, one has to ask themselves why they choose to buy gold and silver in the first place. For the vast majority of people it is more than merely to trade the price. They want to own physical silver and gold.

Central bank and jewelry demand may be down, however the average person is giving gold and silver a strong look based on the reality of our economic and geopolitical situation. They have come to the conclusion that we are in a period of time when the precious metals’ place as a hedge against inflation and/or geopolitical tensions needs to be activated.

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3 Reasons Why 2017 Could Be Good For The Price of Gold and Silver

OWNx Team Blog, Money & Finance

This spring we sent out an alert to our clients stating that we believed the price of gold had finally broken out of a four-year decline. Since then, gold has made a confirming move to over $1,370 per ounce. The recent drop to the $1,250 level may leave some wondering if this move was a false move or just a healthy pullback.

When bull markets turn, they rarely do so in dramatic fashion. The painful bear market is still fresh in people’s minds, thus initially the market climbs what long time market participants call a “wall of worry.” Where does the price go from here between now and the beginning of 2017?

The answer is, nobody knows for certain. One can draw on history to make a case for a gold to pull all the way back and retest the $1,050 breakout level. Others can make a case for the immediate resumption of the upward trend. We take no sides in these predictions. Many a gold dealer has used hype and cheer leading to drive short term sales. That’s just not our style.

Rather, we like to focus on why our clients own gold and silver in the first place and how to best use our technology platform to serve them as they seek to achieve their goals in 2017 and beyond. And as we turn the corner on 2016, there are several factors that we believe support the resumption of a longer term bull market in gold and silver.Read More