A Brief History of Money and Banking and Reflections on Gold
From our friends at Global Gold comes the following micro-documentary on the monetary system, monetary history and gold's historical role as money:
The paper the video is based on is available as pdf:
Real vs. Fake Money, How Our Monetary System Works and Fails.
Meanwhile, in Gold-Land
Overnight in Asian trading, the August gold contract jumped above short term resistance at the $1,300 level and briefly tested the more important resistance zone that begins at $1,320 from below. At the time of writing it is not yet known how gold will fare once the COMEX opens, but if the $1,300 level should turn into short term support, it would certainly be an encouraging sign:
Gold, August contract, 30 minute candles. Short term resistance at $1,300 was overcome in Asian trade on Monday. The initial medium term resistance level lies approximately between $1,320 and $1,350 – click to enlarge.
On Friday, the HUI had a relatively solid performance, which left the HUI-gold ratio another tick higher at a one month high. It is once again attempting to get above its 50 day moving average:
HUI-gold ratio end last week at a one month high, and just above its 50 day moving average – click to enlarge.
It remains to be seen how the market will take the upcoming quarterly earnings reports by producers, which will undoubtedly not be much to write home about. The reports as such are not all that important – everybody who hasn't been in a coma knows already they won't be good. What is going to be important is the market reaction to the reports, as we will find out to what extent they have been discounted in share prices already. It should also be pointed out that earnings reports in recent quarters most of the time resulted in falling share prices, but last quarter there were a few exceptions. Most of these exceptions were based on better than expected costs, which will hopefully become a new trend.
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