Had you been reading The Wall Street Journal in autumn ’71,” Frank Byrd, director of research at Fielder Research & Management, reminded the Grant’s conference-goers, “there would have been almost no clue that inflation was at hand… “But suddenly, within 18 months, a tremendous inflation emerged,” Byrd went on. “In response, the Fed tightened aggressively–hiking [the] fed funds [rate] from 4% to 10% within a year and a half. But it was too late. Huge imbalances had been building behind a wall of price and capital controls. When the dam finally broke, the Fed’s sand castles were no match for the crushing wave of inflation. CPI tripled from 4% to 12% within two years.” Not only could it happen again, it is happening at this very moment.– Jim Grant, Grant’s Interest Rate Observer
Except for that spike in the gold price when the U.S. dollar hit its nadir yesterday, nothing much of consequence happened in either silver or gold on Thursday. The obscene short positions are still sitting there… and we still await resolution on that. Volume was pretty decent in both metals. I also note that almost every open contract for November delivery was posted for delivery yesterday, so unless a big buyer comes out of the woodwork sometime during the new month, there won’t be much to see in the CME’s Daily Delivery report until November 30th. I’ll have more to say on that in my Saturday column.
Not much happened in Far East trading during their Friday session… and not much is happening in early trading in London, either. The dollar is up about 22 basis points as of this writing [4:14 a.m. Eastern time]… and both metals are slightly lower. Volume appears to be pretty average.
Eric King sent me a blog early this morning where he states that he expects the gold and silver commercial signal failure today. The link to that is here. I’m not prepared to stick my neck out that far, but if it does happen [or a reasonable facsimile thereof], I will be the first to bow down and apologize.
Two things that I consider of some importance before I close out this column. The first being that you shouldn’t forget that today is your last chance to become a BIG GOLD subscriber for $39 a year – a savings of $90 off the new list price. But even better than the price, you’ll have 3 FULL MONTHS to cancel for a full refund if you don’t absolutely love it, so you’ve got nothing to lose. If you don’t already subscribe to BIG GOLD, now is the time to try it. I urge you to check it out… and the link is here.
Lastly, and on a personal note… I will be taking another week off starting on November 1st for the full week. However, I will be watching what’s happening… and if the silver [and gold] market start running away to the upside while I’m gone, then I’ll have a very brief commentary. That’s not only for your benefit, dear reader… but for mine as well. I’ve been waiting for this moment for ten years… and I wouldn’t miss it for the world.
See you tomorrow.