Gold Standard News Daily - Real Money Blog
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3.6.15 - When Good News Becomes Bad News
Gold last traded at $1,164 an ounce. Silver at $15.80 an ounce.
JOBS: U.S. nonfarm payroll jobs for February totaled 295,000 - about 50,000 above economists' consensus - which sent the unemployment rate to 5.5% (down from 5.7%). However, the average hourly wage remained stagnant, rising just 0.1%; much less than expected. Another weak economic point is the U.S. Labor Force Participation which has stubbornly hovered near a 37-year-low for 11 months now. This is not a robust recovery by any measure.
STOCKS: U.S. stock indexes fell over 1% following the upbeat jobs report. With such good jobs news today, why did stocks fall so sharply? What has investors so spooked? According to CNBC's Art Cashin of UBS, the markets are 'terrified' the Fed is boxing itself in. Investors fear the sooner interest rates begin rising, the sooner stock prices could be revalued lower. Meanwhile, Apple stock will finally join the Dow Jones Industrial index, to replace AT&T on March 18. Telegraph reports, "Apple will make up 4.66% of the Dow, but will not impact the value of the DJIA which is up 1.8% this year."
DEBT: The U.S. will hit its debt limit on March 16, according to Treasury Secretary Jack Lew, who is urging lawmakers to begin taking "extraordinary measures" to finance the government on a temporary basis. So we may again face a political battle to kick the debt can further down the road. Keep in mind it took the U.S. over 200 years to increase the federal debt from zero to $9 trillion. But just since 2007, U.S. debt has more than doubled from $9 trillion to over $18 trillion. Wise economists know this rate of debt increase is unsustainable.
FED: After February's surprisingly strong jobs report, the Fed is now more likely to signal an interest rate hike is near, perhaps as soon as June. It is amazing that in just eight short years Fed Chairs Bernanke and Yellen have presided over a debt creation of more than $9 trillion - which previously took the U.S. over 200 years to achieve! As the old saying goes, 'When your outgo exceeds your income, your upkeep becomes your downfall.'
GOLD: Precious metal prices fell over 2% Friday on the jobs news, while the dollar soared to 12-year highs and Treasury yields jumped up. Question: Has anything fundamentally changed in the economy or financial markets? Answer: No, just the public perception. Gold is still the world's most trustworthy asset, whether daily prices rise or fall. According to Matterhorn's Egon von Greyerz, "We are now in Wonderland, where anything is possible. Real money disappeared a long time ago and we have only fiat money that can be created out of nothing. And whatever needs governments have, they can just print more money to achieve it." Owning physical gold is one of the only assets that is not someone elses' liability!
3.5.15 - U.S. Jobs Recovery: Coming Soon?
Gold last traded at $1,196 an ounce. Silver at $16.16 an ounce.
STOCKS: U.S. stocks inched higher Thursday ahead of jobs data on Friday. Meanwhile, the European Central Bank announced they will kick off a trillion-dollar plan to purchase government bonds (Q.E.) next Monday. Richard Russell's Dow Theory Letter is issuing readers a new warning about exiting stocks and Marketwatch reports, "Tech bubble worse now than 15 years ago."
JOBS AND ECONOMY: The recession of 2009 has never ended in the jobs market. Economic uncertainty has stunted U.S. hiring for the last six years. In fact, companies big and small are planning layoffs; but why? Craig Smith explains why here in his latest appearance on Fox Business Network's Cavuto. "The economy has not turned around yet Neil," says Mr. Smith, author and Chairman of Swiss America. "Brick and mortar companies have some lessons to learn from Kmart, JCPenney, Sears and Radio Shack." Smith reminded Neil that major companies, like Target, have spent more than $2 trillion since 2009 on stock buybacks, pushing their stock prices up much faster than is healthy; given we are living in an economy only growing at 2%. Lower gas prices added $100 billion into the economy, yet even that has not boosted the economy much. Consumers are beginning to spend less and save more. Mr. Smith hopes the Obama administration will stay out of the way of a free market which knows how to grow jobs.
Also a factor, "Boomers Won't Budge," reports Marketwatch. Many older workers are holding on to their jobs instead of retiring - and that's causing a logjam in the labor market. Americans have either decided to remain in the workforce due to finances or because they like working, "and that has meant greater competition for jobs," says Mark Hamrick, Washington bureau chief at personal finance site Bankrate.com. Only 26% of Americans have a traditional notion of retirement in which they plan to stop working altogether, according to a new survey of 7,000 households released last week by The Pew Charitable Trusts.
BANKS: "Citigroup, Morgan Stanley, Merrill Lynch Received $6 Trillion Backdoor Bailout from Fed," reports WallStreetOnParade.com. The Senate Banking Committee held the first of its hearings on widespread demands to reform the Federal Reserve to make it more transparent and accountable. Their is a growing public outrage over how the Federal Reserve conducts much of its operations in secret and appears to frequently succumb to the desires of Wall Street to the detriment of the public interest. Nearly all the money went to too-big-to-fail institutions. For example, in one emergency lending program, the Fed put out $9 trillion and over two-thirds of the money went to just three institutions: Citigroup, Morgan Stanley and Merrill Lynch.
GOLD: Precious metal prices steadied near $1,200 (gold) and $16.20 (silver). Such a deal! Despite lower gold prices, Sprott Asset Management’s Rick Rule tells Kitco he isn’t disappointed with the yellow metal. "I've seen a room at Motel 6 where an ounce of gold would by you 6 nights, and now an ounce of gold buys you 16 nights. That's what gold is supposed to do," he says. "For people like me, gold hasn't disappointed at all." Rule adds that he sees gold as a good store of value.
3.4.15 - Markets Adrift Need A Golden Anchor
Gold last traded at $1,200 an ounce. Silver at $16.16 an ounce.
STOCKS: U.S. stock indexes sunk on Wednesday following disappointing ADP jobs data showing just 212,000 private sector jobs added last week. Traders and investors will focus on Friday's U.S. jobs report. Meanwhile, Target announced they will cut 26,000 jobs in Minneapolis and India to trim costs by $2 billion. [NOTE: Swiss America Chairman Craig Smith will be discussing the Target job cuts and the trend of brick and mortar stores toward online sales on Fox News with Neil Cavuto tonight at 8:50pm ET.]
FED: Fed Chair Janet Yellen fretted over the weak recovery starting in 2009, according to WSJ. After six years of experimenting with zero interest rate policy (ZIRP) she is still worried, as we all should be. The Fed knows they have now fostered bubbles in stocks, bonds and the dollar. What they don't know is how to escape without causing a painful market revaluation. Discover the only four choices the Fed has to exit in our new White Paper, The Biggest Bank Heist In History.
BANKS: "Poor Values May Undermine Bank Safety," according to CNBC. Fed Chair Janet Yellen lashed out at the culture in the nation's biggest banks on Tuesday saying, "there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness." Yellen also said that banks' so-called resolution plans still had shortcomings. By "poor values," Yellen is referring to charges of market manipulation of interest rates (libor), sub-prime lending practices and precious metal price suppression - all of which have been practiced by the Fed for many, many years! Talk about the Fed pot calling the bank kettles black!
CYBER-THREATS: Is your Fridge Spying on You? Technology companies have a financial agenda to tie us all to an "Internet of Things" (IoT). Beware of the loss of privacy modern conveniences may include. Meanwhile, The Fiscal Times warns, "Your Next Flight Could Be Hit By a Cyber Attack." "The National Airspace System is vulnerable to cyber attacks," says the GAO, "and the Federal Aviation Administration has not done enough to address the weaknesses." The GAO also faulted the agency for not properly training its cyber security workers to respond in the event of a breach. It said some workers may not recognize and respond appropriately to potential security threats and vulnerabilities.
GOLD: Precious metal prices dipped as the U.S. dollar index posted an 11.5-year high. In today's uncertain economic environment, investing your hard-earned wealth without a proper plan for diversification is like trying to build your dream home without a blueprint. More and more, savvy investors are including hard assets in their retirement plans to provide a balance for their paper investments. It is vital to diversify retirement investments in this way to both safeguard and grow wealth in a variety of financial market conditions. Every portfolio needs a golden anchor to withstand the storms of life. Call (800) 289-2646 to discuss establishing or rolling over an existing retirement plan or IRA into precious metals.
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