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3.26.15 - Mid-East Turmoil Boosts Oil and Gold

Gold last traded at $1,204 an ounce. Silver at $17.06 an ounce.

OIL: Today, investor worries over Yemen security boosted crude oil prices above $50 a barrel. UPI reports, "Multilateral military operations in a collapsing Yemen injected a layer of risk to global oil markets, pushing crude oil prices up 2 percent Thursday." Enjoy lower gas prices while they last, which may not be much longer.

DOLLAR: The buck bounced up modestly today on rising geopolitical concerns. But the stronger dollar also has a downside for businesses, such as Buffalo, NY-based manufacturer Eastman Machine. "As Dollar Heats Up Overseas, U.S. Manufacturers Feel a Chill," reports The New York Times. "Confronted with a steep drop in the value of the euro against the dollar, customers in Europe warn that they can no longer afford to buy Eastman’s American-made cutting equipment without deep discounts." Meanwhile, the IMF may boost the Chinese Yuan currency's status. Marketwatch reports, "In what would be a huge milestone in China’s emergence as a major world financial power, the International Monetary Fund looks likely to adopt the country’s currency into the basket that makes up its global forex benchmark." Move over Dollar, Euro, Pound and Yen; China's Yuan will soon be joining you at the table.

FED: "The Federal Reserve's efforts to stimulate the U.S. economy after the financial crisis ended up costing savers nearly half a trillion dollars in interest income, according to report released Thursday," reports CNBC. "In a landmark report, Swiss Re quantifies just how much savers and others have languished while the policy has pushed the Fed's balance sheet past the $4.5 trillion mark but failed to generate above-trend economic growth or substantial core inflation." Swiss Re went on to say that 'financial repression' has taken its toll not only on savers but also on investors. Sound familiar? If not, read The Biggest Bank Heist In History! ?

STOCKS: U.S. stocks gyrated Thursday, ending lower for a 4th session. U.S. stock returns have been impressive in recent years, but what about the longer term? Numismatic News reports Gold, Silver and Mint-State U.S. coins have all out performed stocks over the last 15 years - by a long shot.

15-Year Comparison (1999-2014)

Gold +337.0%
Silver +219.8%
$20 St Gaudens MS-63 +171.0%
$20 Liberty MS-63 +161.0%
Morgan Silver MS-65 $1 +73.9%
DJIA +53.7%
S&P 500 +39.5%
NASDAQ +16.2%

GOLD: Precious metal prices rushed to fresh 4-week highs Thursday, for an 8th-straight session, despite a firmer U.S. dollar. It appears the dollar volatility is not distracting buyers from gold's long-term upward trajectory. The World Gold Council thinks changing global currency landscape is trumping the usual dollar-gold price relationship. "While the fact that the gold price is quoted in U.S. dollars gets a lot of attention, its relevance is overstated,” said Juan Carlos Artigas, director of investment research at the World Gold Council. "Changes in global markets and the structure of the gold market should soften the dollar’s influence on gold in the long run."

The trend is your friend. Over the last 10 to 15 years, precious metals have been one of the top performing asset classes. Let Swiss America help our you balance your portfolio with physical gold and silver - the best performing wealth insurance assets on earth.

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3.25.15 - Gold Outshines Zero Interest Economy

Gold last traded at $1,197 an ounce. Silver at $17.00 an ounce.

STOCKS: The DJIA suffered a triple-digit decline for 3rd day after weak durable-goods data and despite the Kraft-Heinz mega-merger announcement. "U.S. Stocks are overpriced, over-leveraged, headed for trouble," says the U.S. Government's Office of Financial Research. Meanwhile, merger mania is off and running in this year. Marketwatch reports this year's merger and acquisition tally is at about $802 billion globally - the highest year-to-date global M&A total since 2007. Hard times can bring together strange bedfellows.

ECONOMY: The recovery took another step backward on Wednesday as orders for durable goods unexpectedly dropped 1.4 percent in February, a sign the slowdown in global growth may be weighing on American manufacturers. Today 47% of American households live paycheck-to-paycheck, unable to save anything. The Middle Class is shrinking, but that is not necessarily a bad thing, according a new Pew Research Center study. "The share of adults in middle-income households has fallen from 61% in 1970 to 51% in 2013. But many households are moving up. The share of upper-income households grew from 14% to 20% in that time period, while low-income households narrowed from 29% to 25%.

FED: At least one Federal Reserve policy maker sees no need to raise interest rates this year. "I see no compelling reason for us to be in a hurry to tighten financial conditions until inflation rates rise," Chicago Fed President Charles Evans said to the Official Monetary and Financial Institutions Forum in London. This may be yet another example of Fedspeak. Some Fed leaders talk tough about returning to normalization of interest rates while other explain why zero interest rates are in our best national interest ... indefinitely, as Craig Smith and Lowell Ponte explain in The Biggest Bank Heist In History!

GOLD: Precious metal prices rose to their highest level in three weeks on Wednesday, as weak U.S. data bolstered the argument the Federal Reserve would likely take its time before raising interest rates. WSJ reports, "The data subdues growth expectations and implies further upside for gold," said Bart Melek, head of commodities strategy at TD Securities. "Prices are likely to reach $1,250 an ounce in the second quarter," Mr. Melek said. The mainstream gold bears have begun a slow retreat, which confirms today is a smart buying opportunity for physical U.S. gold and silver coins. Precious metals have great upside potential even in a zero interest world!

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3.24.15 - Capital Controls in America?

Gold last traded at $1,191 an ounce. Silver at $16.98 an ounce.

STOCKS: The major U.S. indices finished lower Tuesday in choppy trading, despite upbeat economic news. The U.S. consumer price index (CPI) rose 0.2% in February for the first time in four months. Meanwhile, New home sales hit 7-year high in February, however we are still at less than half the average new homes sold a decade ago - before the housing boom.

DOLLAR: The U.S. dollar recovered slightly against the euro following two straight sessions of losses on word the Fed may still hike interest rates this year. We shall see. Did you know the word "dollar" is defined as a weight measurement of physical gold or silver according to the U.S. Constitution and Coinage Act of 1792? It's true. But today the U.S. dollar is a weight measurement of nothing, except debt and public confidence. As former Fed economist John Exter has said, "Today's U.S. dollar is a I.O.U. Nothing".

GOLD: Precious metal prices continued their upward climb despite a stronger dollar. $1,200 an ounce gold could be surpassed this week. This is no time to delay precious metal purchases. Dollar-denominated assets are at risk and gold serves as the perfect wealth insurance. As we have discussed, gold is more than a commodity or an investment, it is the world's ultimate form of currency - accepted worldwide.

BANKS: The U.S. Justice Department calls for capital controls in America, reports WSJ. "The U.S. Justice Department's criminal head said banks may need to go beyond filing suspicious activity reports when they encounter a risky customer. We encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem. A tip-off from a bank about a suspicious customer could lead law enforcement to seize funds or start an investigation."

This is Major Risk #20, covered in the book DON'T BANK ON IT!, which says ... "Banks increasingly are resisting and refusing depositor requests for large withdrawals, much as would happen under government 'capital controls.' To most Americans, it seems incredible that your bank would refuse to let you withdraw your own money. We challenged them, as we challenge you right now ... test this. Go to your bank where the tellers are always friendly and say you want to withdraw $5,000, $10,000 or $15,000 from your account in cash. What others we challenged have told us, in astonishment, is that their bank refused while asking why they wanted the money. In many banks the tellers and assistant managers appear to have been trained in techniques of putting such customers on the defensive by insisting that they justify such a withdrawal."

Meanwhile, Fox News reports, Congress is launching hearings on complaints from businesses targeted by 'Operation Choke Point' ... "Banks and other financial institutions were reportedly pressured to cut off accounts for targeted businesses. This included gun stores, casinos, tobacco distributors, short-term lenders and other businesses. the FDIC put out a list of 30 high-risk businesses, but that list has since been rescinded. The U.S. Consumer Coalition claimed taking down that list only removed a guideline, and without a specific list of businesses, the subjectivity of who gets targeted was increased." ['Operation Choke Point' is also covered on pages 156-157 in DON'T BANK ON IT!]

DEBT: "The world's next credit crunch could make 2008 look like a hiccup," according to the Telegraph. "A solar eclipse, a super moon, the FTSE 100 breaching 7,000 and the US Federal Reserve speaking in tongues - truly some kind of financial apocalypse must be nigh. Let’s say that US interest rates do rise sooner and faster than the market expects. That means bond prices, which always move in the opposite direction to yields, will plummet. US Treasury bonds are like a mountain guide to which most other global securities are roped - if they fall, they take everything else with them. Who will get hurt? Everyone. But it’ll likely be the world’s banks, where even little mistakes can create big problems, that suffer the most pain."

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