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7.27.16 - Voters, Clinton and the Economy

Gold last traded at $1,334 an ounce. Silver at $19.99 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain hunting and anticipated Fed inaction. Meanwhile, U.S. stocks traded mixed on upbeat Apple earnings and downbeat Coca-Cola earnings while yawning at the Fed statement.

Gold Should Comprise 25% of Your Portfolio -NewsMax
"Marc Faber, author of the Gloom, Boom & Doom Report, urged investment professionals at a recent Chicago conference that 25 percent of a portfolio should be dedicated to gold....Faber said rates are so low that investors can't make money in bonds so they keep buying stocks even though the prices are inflated. Central banks want rising stock prices to make people feel wealthy and therefore spend their money, but the end result is income inequality and investor resentment, he said....Faber said that is all the fault of central banks. 'It's ludicrous to think that slashing rates will get people to spend.' When rates are low, you feel more financially insecure even though your savings earn nothing. 'You save more,' Faber said."

As expected, the Fed is paralyzed on interest rates in the near future; but Fedspeak is a bit more upbeat than the statement in early June. Bottom line: We will look back at $20 silver and $1,325 gold as a real bargain, just as we did back in 2000 at $6 silver and $300 gold. Still not sure? Please read our 2016 Gold Report - World Edition.

Obama’s Economy Left Behind Voters Clinton Needs To Win -Bloomberg
"The young people and minorities who propelled President Barack Obama into office have lagged behind the economic recovery he’s shepherded, with blacks and Hispanics continuing to lose wealth even as whites gained after the recession. That’s posing a special challenge for Hillary Clinton, who’s vowing to largely continue Obama’s fiscal policies even as she counts on his coalition to keep the White House in Democratic hands. Economic data suggest these voters could be ripe for the picking by Republicans....The median net worth for black households fell to $11,000 in 2013, a 33.7 percent drop from $16,600 in 2010, as the racial wealth gap continued to widen even after the recession, according to the most recent Federal Reserve data."

Here is a chart showing how Progressive political and economic policies have impacted nine major U.S. economic measurements in recent years, courtesy of Zero Hedge.

charts

Silver Surges Over $20 After Dismal Durable Goods Data -Zero Hedge
"After 21 straight days of economic improvements, today's dismal durable goods orders appears enough to prompt 'the QE trade' as bonds, stocks, and bullion surge (and dollar drops). Silver just spiked to $20/oz. breaking a major downtrend. And Gold is surging on heavy volume..."

It’s an exciting time for SILVER - which in on track to become the best performing asset of the year! Take Advantage of the silver window of 2016! Read our free 2016 SILVER REPORT - The Global Metal.

Restaurants Predicting U.S. Recession -The Reformed Broker
"The catalyst for the current weak pre-recessionary restaurant spending trend is likely multi-faceted (US Politics; Terrorism; Social Unrest; Global Geo-Politics; Economic Uncertainty) but, if history is a guide, we warn investors that restaurant industry sales tend to be the 'Canary that Lays the Recessionary Egg' (i.e. the current -2% cut-back in dining out sales is a possible harbinger of a -2%-plus cut-back in the US consumers’ entire spending basket within 3-to-9 months (which accounts for 70% of the US Economy).... To note, most of us are unaware that a recession has begun until several months after economists go back and pick a start-date."

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7.26.16 - Gold Up Again on Fed Chatter

Gold last traded at $1,320 an ounce. Silver at $19.68 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying, a weaker dollar and a trapped Fed. Meanwhile, U.S. stocks traded mostly lower amid a slew of earnings reports and further declines in oil prices.

Gold climbs, dollar retreats ahead of Fedspeak -Reuters
"Gold prices rose on Tuesday as the dollar fell, but remained hemmed into a range ahead of a two-day Federal Reserve policy meeting this week, which will be closely watched for clues on the outlook for U.S. interest rates....The Fed is expected to leave policy unchanged at its meeting starting later in the day, but investors are watching for any signs that the U.S. central bank may move back to tightening later this year....A scaling back of expectations for further increases in U.S. interest rates, which rose for the first time in nearly a decade in December, has helped push gold up 24 percent this year."

What will the remainder of 2016 bring? More uncertainty seems a wise presumption given the political and economic shocks we've witnessed so far. One asset class is set to benefit - no matter what the future brings - precious metals. Don't wait for the next crisis to strike, take action now to discover The Timeless Truth About Gold & Silver.

chart Is China About to Shock the Market? -Stockman/Daily Reckoning
"Did the U.S. just double-cross China under the Shanghai Accord? If so, China will act on its own to devalue the Chinese yuan. In that case, the DJIA could plunge to 16,450, and the S&P 500 could plunge to 1,925 in a matter of weeks, wiping out trillions of dollars of investor wealth....What do all of the currency wars moves have to do with U.S. stocks? The answer is the USD/CNY cross-rate may be a more powerful determinant of stock prices than traditional barometers such as earnings, stock multiples or economic growth....As the chart shows, that process of a new crash had already started in early June, but the crash was 'saved by Brexit.' The Brexit vote caused an immediate collapse in sterling and the euro and led to a 'risk off' flight to quality in dollars, gold and U.S. stocks. Now that the Brexit bounce is over and stocks are at nosebleed levels, the question is will history repeat itself, or will this time be different?"

The global impact of China’s busts and booms indicates exactly how much economic clout they now wield. Today China is making every attempt to fix their currency to gold in order to undermine the value and power of the US dollar and potentially mark the last days of American economic supremacy. Prepare now for more economic shocks in 2016 by reading our three Special Reports on Gold, Silver and Money.

U.S. corporations hoarding cash -Marketwatch
"U.S. companies returned to hoarding cash with vigor in the second quarter as compared with the first, pressured in part by the uncertainty created by the U.K. vote to leave the European Union, known as Brexit, according to a new study. The vote on Brexit, a sluggish domestic economy and a weak global economy combined to lead companies to hold on to their cash and defer investment decisions, according to the Association for Financial Professionals....‘Any likelihood of organizations deploying their cash has been curtailed with the outcome of the Brexit referendum, a tepid domestic economy and continued sluggishness in the global economy,’ the association said in a statement.”

If U.S. major companies are hoarding cash based on rising uncertainty, a stagnant economy and zero bank returns; should you be doing the same? Yes and no. Yes you should have a reserve of liquid cash for emergencies and the unexpected, but beyond that you should consider converting paper money into the only form of money that fears no crisis; real gold!

Public Pensions: Much Worse Than Appears -Manhattan Institute
"When financial markets slumped in 2008, the assets in government-worker pension funds plunged and public sector retirement debt soared. Although pension officials rushed to assure the public that their funds would recover as soon as stocks rebounded, the long bull market that began the following year didn't do much to cut states steep retirement debt....The nation's largest pension fund, the California Public Employees’ Retirement System, earned a mere 0.6% in the last year, significantly below its 7.5% target. Its sister fund, the California State Teachers Retirement system, which also aims for a 7.5% annual return, instead notched a 1.4% gain for the year....The news illustrates a fundamental problem with these systems: recovering from market turmoil is more difficult than pension officials concede....Some owe so much that asking taxpayers to foot the rest of the bill would be an enormous burden."

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7.25.16 - Sharks Are Circling Wall Street

Gold last traded at $1,319 an ounce. Silver at $19.64 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday as investors brace for a rash of economic indicators this week. U.S. stocks fell on rising uncertainty ahead of Fed meeting.

Japan joins China in opening a physical gold exchange -The Daily Economist
"The Tokyo Commodities Exchange (TOCOM) is joining with the Shanghai Gold Exchange (SGE) to become the second major physical gold market in Asia. Beginning on July 25, the TOCOM will begin deliveries for spot contracts, and is the only gold exchange accepted for futures contracts in Japan. Since Japanese bonds fell into negative yields, investors and consumers have been buying physical gold at incredible rates. And now that their market will have an official gold exchange like the one that opened in Shanghai last year, the precious metal will become even more liquid and draw more customers into gold."

The Japanese and Chinese gold rushes are becoming a major supporting factor for precious metals this year, as we cover in our our 2016 Gold Report - World Edition.

fish Don't Buy Equity Market All-Time Highs -Hedge Eye
"Sell low, cover high, baby! That's the latest expressed by consensus macro positioning as the S&P 500 hit a new all-time high last week. 'The S&P 500 (index + E-mini) net LONG position ramped another +94,526 contracts last week to +154,009 futures & options contracts. To put that in context, that’s a +2.37x move on a 1-year Z-score (at the lows in February, it was a net SHORT position of -280,000 contracts),' Hedgeye CEO Keith McCullough writes this morning. On a related note, a no confidence vote for the all-time high came by way of total equity market volume which crashed -23% versus its 1-year average on Friday....The VIX is registering a foreboding level....None of this bodes well for the bulls blindly buying the all-time high."

The Day Central Bank Money Helicopters Crash -Telegraph
"We are sailing through uncharted waters. Interest rates have been close to zero for seven years across the developed world. Investors are paying for the privilege of lending money to their governments. Stock and bond markets, which usually move in different directions, are simultaneously hitting record highs in the face of a corporate earnings retreat and Brexit threatening the UK and Europe with recession. These are not normal times. If you think all of this is odd, prepare yourself for things to get a whole lot stranger. That whirring in the background is the sound of helicopters preparing to drop trillions of yen on the streets of Tokyo....But there are no free lunches for central bank policy-makers. For one thing, printing more money devalues the purchasing power of all the existing money in circulation....It’s not sustainable in the long run, of course, but it is hard to see what might persuade central bankers to stop topping up the punch bowl."

Central bankers have been pushing the outer limits of centuries-old monetary laws for nearly a decade now without consequence; but eventually - and inevitably - it will catch up to them. In The Great Withdrawal Craig R. Smith and Lowell Ponte explain the coming great withdrawal from banks and how to protect yourself now, before you pay personally for central bank sins.

Ungovernable: Debt & The Sudden Outbreak Of Utter Insanity -Zero Hedge
"When you borrow too much your life spins out of control. For national and multi-national entities that means elections become unpredictable, economies function erratically, and public policies become more ad hoc and less effective. And civil unrest becomes the rule rather than the exception. In the US, for instance, it’s suddenly open season on both black men and the police....This sudden outbreak of apparent insanity doesn’t seem closely tied to the recent change in our borrowing habits. But it is, in several ways. First, the ability to borrow effectively-unlimited amounts of money has set major governments free to intervene militarily in the Middle East and elsewhere, leading to the flood of refugees now destabilizing Europe....Poor, desperate people are inherently more volatile and more likely to crack under the strain of their poverty....People are figuring out that trucks and tools work just fine for mass slaughter as long as the attacker doesn’t mind dying at the end. This opens up myriad possibilities for creative nihilists."

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