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Special Message from the Chairman: Brexit Vote - Craig R. Smith

Gold last traded at $1,322 an ounce. Silver at $17.78 an ounce.

NEWS SUMMARY: U.S. stocks plunged over 3% Friday after U.K. citizens voted to end the country’s membership in the European Union - a historic rejection of Europe’s political order. Meanwhile, gold prices soared nearly 5% ($61/oz.) as investors scrambled for a safe haven in a financial world of increasing uncertainty.

BREXIT! Freedom and Liberty Prevail Over Big Government, Let the Markets Adjust!
by Craig R. Smith, Swiss America Chairman

It is interesting that Wall Street thought more about how to profit off of the Brexit vote than focus on the need for Britain's sovereignty. The world has decided status quo is no longer acceptable.

The time has come for things to change. Citizens of sovereign nations want to be heard and they are tired of politicians, crony capitalism and big business elites calling the shots.

Brexit The people are speaking, no they are screaming: “We want freedom, opportunity, less government interventions and global controls on our future!” Free people prefer trusting themselves versus self-serving, pompous politicians.

The talk all night was about how U.S. regulators were going to “step in” today to stabilize U.S. markets with gimmicks which will only make things worst.

It is time to allow markets to do what they always do; to reset at real prices, not by using pumped-up central bank manipulations. I expect the Fed WILL intervene, but they shouldn't.

The problem is the Fed never allowed the excesses of 2008 to be worked through the system, as we have said for the last seven years. It is time for central banks to do the right thing and allow the markets to dictate the politics instead of the other way around.

Brexit illustrates the world wants change; change that will bring back freedom, personal responsibility and individualism versus collectivism. If this sentiment persists in America, Donald Trump will be our next president - no matter how much money the Clinton camp spends.

The financial bubble world bankers have created has finally popped. It will be interesting to watch what the powers-that-be will do in a futile attempt to salvage the financial system.

The very best thing they could do would be to allow markets to normalize, but don’t hold your breathe. Returning to normalized markets will mean some short- term pain, but significant long-term gain.

This is a huge rebuke of Obama and Hillary. They voiced their opinions about staying in the EU and the British said, “Mind your own business - power to the people - not the leaders!”

I suspect we will soon witness many other EU nations start to break away. There is talk that the Netherlands, France, Spain and other nations will look seriously at following Britain's lead. NATO is the only security in Europe right now. Beware of moves by China and Russia during this uncertain time.

Financial markets HATE uncertainty. Stock markets worldwide are down 3-8%, oil is down 4% and gold is up 5%. The German 10-Year Bund just went negative.

Swiss America clients should be thankful for their wise decision to own physical gold. Gold and the 10-year Treasury may be the only safe havens in the world. While it is possible U.S. equities will be considered a safe haven, compared to the rest of the world, the truth is that freedom and liberty are on the march and the central planning manipulators in politics and economics are on the run!

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6.23.16 - World Awaits Brexit Outcome and Fallout

Gold last traded at $1,263 an ounce. Silver at $17.35 an ounce.

NEWS SUMMARY: U.S. stocks traded 1% higher Thursday on higher oil prices and expectations the U.K. will remain in the European Union. Precious metal prices traded mixed as the world awaits the outcome of the Brexit vote.

Leading indicators dip as unemployment claims spike -CNBC
"A measure of future economic conditions fell last month as claims for unemployment insurance rose sharply, according to a new report. The Leading Economic Index declined 0.2 percent to 123.7 in May, The Conference Board said Thursday. Economists expected leading indicators to rise 0.1 percent in May, after rising 0.6 percent the prior month....'While the LEI suggests the economy will continue growing at a moderate pace in the near term, volatility in financial markets and a moderating outlook in labor markets could pose downside risks to growth,' said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board, a trade group."

Brexit UK and Europe face Mutual Assured Destruction if they botch Brexit -Evans-Pritchard/Telegraph
"Whatever the result of Britain's referendum on the EU we can be sure of one thing: there will not be a global financial crisis the next day. Nothing dreadful will suddenly happen. The US Federal Reserve, the European Central Bank, the Bank of Japan, and the Olympian fraternity of money printers will stand with the Bank of England, ready to flood the international system with liquidity....The EU is unraveling already because the status quo is intolerable and a failed currency project is sapping its credibility....'More Economic Signs Point to a US Recession', warned a front-page headline across the Wall Street Journal this week. The labor market has buckled. Car sales have slipped. Business investment and profits are both falling....We face a daunting world where central banks have used up their ammunition, and there is no political consent anywhere for a fiscal New Deal or the nuclear option of helicopter money. But whether we vote Leave or Remain will not change any of this."

Gold: Beyond Brexit -Seeking Alpha
"Gold prices have rallied in June on Brexit anxiety but this event is only a short term momentum play and investors must not forget the long term fundamentals of Gold. History shows that Gold is a commodity currency, a store of (real) value and that it performs better than Fiat currencies in periods of negative real interest rates. Gold will thrive in the current environment of over-indebted Nations, with economies slowing down, where unemployment remains high and in which Central Banks balance sheets are skyrocketing....One of the reasons to be bullish on Gold is that the FED has failed to deliver its promises and is starting to lose its credibility among investors....Furthermore, all around the World, over-indebted Nations look at inflation as the only way of reducing their debt burden (inflation is the hidden tax)."

Regardless of the outcome of the Brexit vote on Friday, the fundamentals point to ongoing stock and currency market volatility in 2016. Price dips should be viewed as excellent buying opportunities, as we detail in our 2016 Gold Report - World Edition.

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6.22.16 - Is the Fed's Third Pillar an Economic Third Rail?

Gold last traded at $1,270 an ounce. Silver at $17.31 an ounce

NEWS SUMMARY: U.S. stocks traded lower Wednesday amid falling oil prices and rising angst over Thursday's Brexit vote. Meanwhile, precious metal prices held steady amid currency volatility.

Wall Street Not the Fed's "Third Pillar" -CNBC
"Fed Chair Janet Yellen rejected the notion that the Fed has a 'third pillar' of policy to keep stock market prices afloat. On the second day of her semiannual congressional testimony Wednesday, Yellen was asked by Rep. Edward R. Royce (R-California) whether the U.S. central bank's monetary policy is tied to boosting Wall Street's equity values - in effect a 'third pillar' to go along with the Fed's dual mandate of full employment and price stability. 'It is not a third pillar of monetary policy,' she said. 'We do not target the level of stock prices. That is not an appropriate thing to do.'....In other matters, Yellen said she believes the recent weakness in job creation is 'transitory' and does not reflect an otherwise growing economy."

"The lady doth protest too much, methinks," wrote William Shakespeare in the play Hamlet. The Fed has a long history of trying to boost confidence in the stock market, as Craig Smith and Lowell Ponte have pointed out in their six books published over the last decade. For example, on page 65 of The Great Withdrawal they write, "The Fed’s easy money in the stock market casino has been more than a stimulant. It is a drug that causes many disturbing side effects. Withdrawal from this drug could have devastating effects on our economy." Wall Street is in fact the Fed's third pillar of policy.

koolaid The Astonishing Audacity Of Central Planners -Hedgeye
"This week we've listened to the hand-wringing of Fed, ECB and BOJ officials. And it's only Wednesday. Here's a brief recap: What was striking about Fed head Janet Yellen's testimony before Congress yesterday was the surprising contrast between fact and fiction. Fiction: 'The U.S. economy is doing well,' Yellen said and continued by reiterating her 'expectation is that the U.S. economy will continue to grow.' Fact: 'Considerable uncertainty about the economic outlook remains,' Yellen continued, saying she was watching persistently low productivity growth, pressure from China's 'considerable challenges' economically, Brexit risk, and a 'loss of momentum' in the jobs market. Another bit of fiction. Yellen made sure to underscore that this jobs market weakness was 'not a deterioration.' It was likely 'transitory,' she said. Not true....On Tuesday, ECB head Mario Draghi, said that European policymakers 'stand ready' to act in the event of a Brexit vote."

Brexit on the Brink -Yahoo News
"British Prime Minister David Cameron and his euroskeptic opponents made final pitches for wavering voters on Wednesday on the eve of a defining referendum on European Union membership with the outcome still too close to call. The vote, which echoes the rise of populism elsewhere in Europe and the United States, will shape the future of Europe. A victory for 'out' could unleash turmoil on financial markets....Much of the heated debate has boiled down to two issues: the economy and immigration. The City of London financial center, the International Monetary Fund and the majority of British business leaders back Cameron and his Remain camp's stance that to leave the EU would plunge Britain into recession, costing jobs and raising prices. Supporters of a so-called Brexit have struck a chord with many voters by saying Britain would regain control of immigration if it cut itself loose from a bloc they see as domineering and out of touch."

The Scandal of Money: Why Wall Street Recovers but the Economy Never Does -Amazon Book Review
"In The Scandal of Money, George Gilder explains and elaborates on gold's most important property, that differentiates it from every other commodity and has defined its role as a monetary proxy since the beginning of organized society. That is gold’s unique relation with time and its annulment of technological and population growth advances in mining. This is why gold's value has remained stable for millennia and why when currency is linked to gold, inflation and deflation are eliminated. Gilder expands on his information theory of money, an important breakthrough in defining the stability of a return to a classical gold standard despite the advances of our modern, quantum age. He highlights the perverse effects of Fed policy, and provides an antidote to serial economic mismanagement by the Fed and big government. This is a very important book."

Global economic risk has never been greater! The economies of the world are slowing down and your savings are not immune to the fallout. Now is the time to protect your money by owning gold, the wisest form of wealth insurance. Read our free 2016 Gold Report - World Edition.

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