Chinese banks extended over US$ 15 trillion in loans (140% of Chinese GDP) over the past five years. Yet credit in itself is not an evil; when it’s backed by savings it only represents a certain amount of unclaimed resources, which can now be used in production. Our societies thrive on credit. It is indispensable in almost every walk of life and it was perhaps even the catalyst that freed th... »
What Is Happening in China?
March 21 2014
The Great Unwinding of Chinas Credit Bubble
March 14 2014
China is heading for short-term disaster. For years it embarked upon a tremendous credit expansion which led to a miscoordination of scarce resources, especially in housing. Now the Chinese credit bubble is quickly unravelling, exactly as the Austrian business cycle would indicate. I warned that a Chinese readjustment would have “a rippling effect on gold, as well as other commodities tha... »
The Political Tug-of-War and Higher Gold Prices: Russia, Ukraine, Europe & the US
March 7 2014
The recent upheaval in Ukraine and the subsequent intervention by Russia almost escalated into a whopping international conflict, after Obama threatened president Putin with “economic isolation” (trade sanctions). It was yet another clash between the US and Russia on the political stage, after... »
When Will Pension Funds Buy Gold?
February 28 2014
Between 2000 and 2014 the gold price has risen from US$300 per troy ounce to over US$1,300. However, this run-up in prices has been driven mostly by demand from retail investors, especially from China and India. So far, institutional investors — especially pension funds — haven’t been very eager to jump on the bandwagon. Pension funds invest less than 1% of their assets in gold o... »