andy gause and the real world of money, july 16, 2014, hour one

Andrew Gause answers the following questions in this podcast

-Can you please ask Andy the following questions: Part 1-When is the best time to resell my numismatic coins; during inflation, deflation, or what economic condition the country is expreincing and if you can explain why?

Part 2- When time comes to sell the numismatic coins and everyone else is selling too, don’t you think the supply will increase the price will decrease therefore not making profit?

-I have received an offer from citi cards 0.99% APR for 12 months and not the usual 0.00% APR. I am planning to invest in some coins from SDL and maybe stocks if I get the loan, is it worth it or am I going to end up paying too much interest? And what would be the monthly interest on $7000 with 0.99% interest?

-Can Andy comment on the amount on actual land(not buildings), in America and Canada, that is owned by foreigners?
Would there be any benefit, economically/ morally, spiritually, for both our countries, to have laws that allow only citizens,or Government of said Country, to be owners of Land.

-I remain a broken record on US stocks, but we are in a huge secular bull market. The bottom was Mar. 6, 2009 and we’ll likely see a 20 year bull market from those lows. A word to the permabears — we will never see the Dow below 10,000 again. The Dow at 100,000 is likely. However, and with apologies to Pres. Truman, on the other hand, currently the market is giving off warning signs for a selloff into October. Any large selloff should be bought.. Never buy into strength, only buy on weakness.

Gold — we’ve had 3 major selling climaxes in the last 15 months. For anyone wishing to see what I’m talking about, these climaxes occurred last year on April 20, June 30, and Dec.31. Each successive low occurred on less volume with the Dec. low showing the least volume. That’s very bullish as it’s showing that the downside pressure is abating. Gold is currently in the accumulation phase, preparing for a major rally. But be patient, gold’s big moves are down the road. Use any weakness in gold to buy.

A quick word about charts. 99% of the people who claim they can divine the future of markets by looking at charts are clueless. Market moves can NEVER, EVER be predicted. To make consistent money in markets, you have got to somehow become a master of supply and demand. Charts are only a tool.
I will continue with this in the coming weeks.

-You and Andy talked about having a special show that Andy would talk about little known
but very interesting ways to play the governments game. Has that show happened
and I missed it or has it not happened yet?

-I’m a great fan of the Real World of Money. I never miss a show in fact I still have the shows I started listening to 5 years ago on my computer. I’m from Auckland New Zealand I was recently reading a book published by a former public official in NZ

He states:

“Alas limited understanding of basic economic concepts is much more widespread .and lists some examples
(One of those examples was )

“Banks create money out of thin air” This nonsense was pedalled as a factual on TV1 Seven Sharp programme early in 2013.Yes, the banking system creates money but individual banks don’t and can’t .If they could why would they bother paying interest on deposits? Why do banks in NZ have to borrow abroad to enable then to meet loan demand in NZ? Why do banks occasionally fail when there is a “run” on deposits? Fortunately no political party since the disappearance of Social Credit has been taken in by this fallacy though there are still plenty of people looking for a party which believe it?”

What is Andy’s take on this?
He tells us banks “monetize” debt instruments with new created money then lend out with interest!!

NB ( After Andy’s answer tell him this guy was the Governor of the Reserve Bank (Central Bank ) of New Zealand for 12 years?)
What does he say to that?

-Janet Yellen announced the end of bond buying will occur this October. Based on what Andrew has stated over the last few years I am sure he is shocked. Curious to hear his thoughts.

Also, what does he think will cause the next recession?

-Lately I’ve seen people commenting online about the drop in the gold price and complaining about it being rigged lower. I agree that it is being rigged lower. But, if you step back from the daily machinations of the gold price and compare it to the Dow Jones Industrial Average index, which we’re constantly being reminded is hitting new all-time highs, you’ll notice that the gold price trend has done very well over the last 15 years – even with all of the rigging.

The Dow bottomed at about 7400 in 1998, topped at about 11700 in 2000, bottomed near 7400 again in 2002, topped at about 14000 in 2007, bottomed at about 6600 in 2009, and is now near 17000. With that, I say what’s all the fuss about? The Dow is currently not even 3 times what it bottomed at 16 years ago. Yet, gold is over 5 times what it bottomed at 12 years ago. If that’s the best they can do with all of the rigging, then on behalf of all savers(as opposed to traders) I say keep on riggin’.