2020 Blog Archives

2020 Blog Archives


Real Money Podcast

Dec 31, 2020


12.31.20 - Expect Widespread Stimulus Fraud

Gold last traded at $1,894 an ounce. Silver at $26.34 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday in thin, pre-holiday trading. U.S. stocks traded mostly lower as Wall Street wrapped up one of the most volatile years for the market in recent memory.

Thanks to new law, expect more widespread stimulus fraud -Washington Examiner

"We've all heard the apocryphal quote attributed to Albert Einstein: 'Insanity is doing the same thing over and over again and expecting different results.' Einstein might not have actually said it, but the quip nonetheless describes what Congress is doing right now with COVID-19 stimulus efforts to a T.

Remember that the $900 billion behemoth bill legislators just passed is actually their second major 'stimulus' effort. The new spending bonanza comes as a follow-up to the $2 trillion CARES Act Washington passed in March - yet it hasn't fixed any of the first bill's glaring problems.

The CARES Act sent 1 million stimulus checks to dead people and untold thousands more to random European citizens. So, too, its uber-expanded welfare system lost more to unemployment fraud than the entire unemployment system paid out in 2019. And while many conservatives misguidedly view the Paycheck Protection Program as the saving grace of the CARES Act, the grant program ostensibly intended to help small businesses stay afloat was also rife with fraud and co-opted by big, wealthy corporations.

Of course, Congress decided to fix essentially none of this in the new bill.

'The new Covid-19 relief plan for small businesses that President Trump signed this week doesn't address some weaknesses in the original stimulus legislation that allowed companies with checkered histories to get billions of dollars in payments,' the Wall Street Journal reports.

'Nearly 1,500 companies that received about $2 billion in PPP loans have faced allegations of violating government regulations or of criminal conduct,' it continues. 'Another 432 firms laid off workers after getting approved for nearly $1 billion in loans.'"

gold Gold on course for best year in a decade -CNBC

"Gold prices were little changed in holiday-thinned trade on Thursday, but the yellow metal was en route to register its best annual performance in a decade. Spot gold last traded at $1,897.40 per ounce, up more than 24% for the year, its best since 2010.

'We look for a move towards $1,950 in the first quarter of 2021, with the expansionary monetary and fiscal policy pushing inflation expectations up and with U.S. real rates falling further,' said UBS analyst Giovanni Staunovo.

The dollar index fell to a more than two-year trough, making gold cheaper for other currency holders....Unprecedented stimulus measures and low interest rates to cushion economies from the impact of the pandemic this year have benefited gold, as it is seen as a hedge against inflation.

Silver fell 0.6% to $26.44 per ounce but was up more than 48% this year, its best performance since 2010."

Morgan Stanley's Top 10 Surprises For 2021 -Zero Hedge

"While we all could use a year without surprises, it would be a surprise itself if we didn't get any in 2021. As such, Morgan Stanley's chief rates strategist Matthew Hornbach discusses 10 scenarios which 'would surprise consensus and thus could move global macro markets in meaningful ways.'

Surprise #1: Developed Market (DM) liquidity avoids Emerging Markets (EM) and drives a DM asset bubble...fear of missing out creates the most buoyant DM asset price bubble of all time.

Surprise #2: A divided government agrees on an infrastructure package: While a Democrat-controlled Senate would be a surprise, a bigger surprise in 2021 could be a bipartisan agreement on an infrastructure plan.

Surprise #3: ECB strategy review advises greater housing weight in HICP....

Surprise #4: BoJ rate cut once again on the table....

Surprise #5: EUR/USD positive correlation with equities reverses...EUR becoming a funding currency could catalyze this scenario.

Surprise #6: Immigration causes the northern lights to shine brightest: Canadian growth could meaningfully outperform versus dour market expectations driven by pent-up migration flows, raising the attractiveness of Canadian assets to foreign investors."

How to Become a Better Investor Than the Rest -Bonner/Rogue Economics

"First, I have been publishing investment advice since 1980. But I only became interested in investing itself, not economics, when I became serious about my children's and grandchildren's money.

It's one thing to make money in a business or profession. It is quite another thing to protect your fortune by investing it properly.

Investing is not economics. Economics is the study of how people work together to build wealth"¦ what kind of conditions help them"¦ what kind of circumstances and policies hinder them"¦ and why some people prosper and others don't....

Two of the investment letters we publish in the U.S. more than doubled the performance of the S&P 500 over a 10-year period. Could it be luck? Well, there may be some luck involved. But it seems unlikely for lightning to strike twice in such a small place.

Time, patience, energy, hard work, and discipline - in almost every aspect of life, these qualities pay off. I believe they pay off in the investing world, too. That is, it makes sense to invest the time and effort to try to discover what stocks are really worth.

And if you work at it long and hard enough, I think you can beat the market....Most investors are not doing their homework. They're using their tribal brains to try to beat the stock market. This leads them to make serious errors of judgment as to the value of companies.

The prudent investor, with a sharp pencil and a sharp mind, profits from these errors by buying, or selling, the mispriced equities....

Most investors use their small-scale, small-group brains. They buy and sell investments based on what someone told them"¦ or rumors"¦ or what they read in the papers"¦ or half-baked ideas of all sorts. They root for stocks like they root for a football team....

Taken together, stocks are almost never really worth a price-to-earnings (P/E) ratio of greater than 20. The only exception might be when you have a fast-growing economy. Then you can expect the stream of income to increase.

But if the market is trading at more than 20 times earnings, there is likely more downside ahead than upside....When the animal spirits run wild, markets - bonds, U.S. stocks, contemporary art, real estate - head toward bubble territory. That's when you should sell out of these things rather than try to pick the absolute top."

**Swiss America Trading will be closed New Year's Day. We hope you have a wonderful holiday.**

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 30, 2020


12.30.20 - 2020: The Year Liberty Was Torched

Gold last traded at $1,890 an ounce. Silver at $26.48 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and dollar weakness. U.S. stocks rose as the market tried to reclaim record highs in the final days of 2020.

Gold Analysis - Year in Review and Forecast -Kenjaev/FX Empire

"What a year for Gold, we have witnessed a sudden excitement of Gold investors and Central Banks as the Covid-19 pandemic hit the World economy and forced many states to lock their borders and hibernate.

Regardless of the beginning of the uptrend on January 1, 2016, and the beginning of the new motive wave on August 27, 2018, the true excitement started on March 17, 2020. The hike of March 17 this year was similar to the one on August 12, 2010, when the US Dollar collapsed.

This year, when the new coronavirus was spreading in drastic speed and caused a Global pandemic, Gold hit the new ATH at $2072 on August 06, 2020. Central Banks of some countries when the pandemy started filled their basket with Gold.

The new year ahead might surprise with the new Gold-bull-movement as countries which opened the border during the pandemic are going for another lockdown amid a spread of the new virus strain."

king dollar King Dollar Is Abdicating and That's OK -Wall Street Journal

"There are many reasons to expect a weaker U.S. dollar next year and perhaps for longer, but none more important than the new policy stance of the Federal Reserve.

The U.S. dollar briefly rallied in March due to its haven role in investment portfolios. Since then, it has dropped around 12% against a trade-weighted basket of currencies as the U.S. turned out to be even harder hit by the coronavirus pandemic than most major economies.

As vaccines are rolled out and the global economy snaps back, this trade won't necessarily run in reverse. Rather, currencies of countries that export commodities and manufactured goods are likely to keep strengthening against the dollar, as would be seen in a typical global recovery. Some Asian exporters already are quietly intervening to limit their currencies' rise.

But this time, reasons to expect a weaker dollar run even deeper....

After all, the Fed pledged in August to let inflation run above its 2% target for an extended period and not to respond to falling unemployment with pre-emptive rate increases. Meanwhile, peer central banks around the world continue to target inflation rates of around 2% while falling well short of that.

If markets take the Fed at its word, they won't bid up the dollar as they normally might in response to robust inflation or growth data out of the U.S. This is why TS Lombard economist Steven Blitz calls the new framework an effective end to the traditional 'strong dollar' policy of the U.S. government....

Consider, for instance, the likely market reaction to a large stimulus package early in the Biden administration. Big doses of deficit spending are typically seen as dollar-negative because they mean the U.S. will have to import more foreign savings.

Investors whose net worth is concentrated in dollars should make sure they are diversified...The perennially strong dollar may be a thing of the past."

Ways Covid-19 Has Changed the World Economy Forever -Bloomberg

"Economic shocks like the coronavirus pandemic of 2020 only arrive once every few generations, and they bring about permanent and far-reaching change.

Measured by output, the world economy is well on the way to recovery from a slump the likes of which barely any of its 7.7 billion people have seen in their lifetimes. Vaccines should accelerate the rebound in 2021. But other legacies of Covid-19 will shape global growth for years to come.

Some are already discernible. The takeover of factory and service jobs by robots will advance, while white-collar workers get to stay home more. There'll be more inequality between and within countries. Governments will play a larger role in the lives of citizens, spending - and owing - more money. What follows is an overview of some of the transformations under way....

In the longer run, a big rethink in economics is changing minds about public debt. The new consensus says governments have more room to spend in a low-inflation world, and should use fiscal policy more proactively to drive their economies. Advocates of Modern Monetary Theory say they pioneered those arguments and the mainstream is only now catching up.

Central banks were plunged back into printing money. Interest rates hit new record lows. Central bankers stepped up their quantitative easing, widening it to buy corporate as well as government debt.

All these monetary interventions have created some of the easiest financial conditions in history - and unleashed a frenzy of speculative investment, which has left plenty of analysts worried about moral hazards ahead. But the central-bank policies will be hard to reverse, especially if labor markets remain fractured and companies continue their recent run-up in saving.

And history shows that pandemics depress interest rates for a long time, according to a paper published this year. It found that a quarter-century after the disease struck, rates were typically some 1.5 percentage points lower than they otherwise would have been."

2020: The Year The Tree Of Liberty Was Torched -Whitehead/Zero Hedge

"No doubt about it: 2020 - a terrible, horrible, no good, very bad year for freedom - was the culmination of a terrible, horrible, no good, very bad decade for freedom.

Government corruption, tyranny, and abuse coupled with a Big Brother-knows-best mindset and the COVID-19 pandemic propelled us at warp speed towards a full-blown police state in which nationwide lockdowns, egregious surveillance, roadside strip searches, police shootings of unarmed citizens, censorship, retaliatory arrests, the criminalization of lawful activities, warmongering, indefinite detentions, SWAT team raids, asset forfeiture, police brutality, profit-driven prisons, and pay-to-play politicians were accepted as the norm.

Here's just a small sampling of the laundry list of abuses - cruel, brutal, immoral, unconstitutional and unacceptable - that have been heaped upon us by the government over the past two decades and in the past year, in particular.

The government failed to protect our lives, liberty and happiness. The predators of the police state wreaked havoc on our freedoms, our communities, and our lives....

The courts failed to uphold justice. With every ruling handed down, it becomes more apparent that we live in an age of hollow justice, with government courts more concerned with protecting government agents than upholding the rights of 'we the people.'....

COVID-19 allowed the Emergency State to expand its powers. What started out as an apparent effort to prevent a novel coronavirus from sickening the nation (and the world) became yet another means by which world governments (including our own) could expand their powers, abuse their authority, and further oppress their constituents....

The takeaway: Everything the founders of this country feared has come to dominate in modern America. 'We the people' have been saddled with a government that is no longer friendly to freedom and is working overtime to trample the Constitution underfoot and render the citizenry powerless in the face of the government's power grabs, corruption and abusive tactics.

America was meant to be primarily a system of local governments, which is a far cry from the colossal federal bureaucracy we have today. Yet if our freedoms are to be restored, understanding what is transpiring practically in your own backyard - in one's home, neighborhood, school district, town council - and taking action at that local level must be the starting point."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 29, 2020


12.29.20 - Home Prices Surge, People Flee Cities

Gold last traded at $1,877 an ounce. Silver at $26.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks traded mostly lower as traders weighed the possibility of even more fiscal stimulus being approved by Congress.

5 Reasons Why High Yield Investors Need Gold -Seeking Alpha

"Gold has millennia of history and intrinsic qualities that make it an excellent store of wealth in the midst of economic uncertainty and runaway spending and money printing.

The market value of gold has numerous fundamental tailwinds, making it arguably one of the most attractive investments right now on a risk-adjusted basis. In particular, it makes for an essential portion of a high yield portfolio these days for the following 5 reasons:

1) Economic conditions increase safe haven value
2) Inflation is coming
3) The Gold-to-M1 ratio favors gold
4) The Gold-to-S&P 500 ratio favors gold
5) Gold diversifies High Yield well....

As long as the future is inflationary (which history and current trends strongly point to) and contains growth in it (which the history of the United States and the momentum of the advancement of knowledge and technology favor), the combination of the two in a portfolio should provide very attractive risk-adjusted returns.

With the stock market's detachment from the state and risks of the economy, Ray Dalio's timeless wisdom should motivate us all, now more than ever, to maintain holdings in what history has proven time and again to be true money: gold."

candy Super Bowl Advertisers Gravitate to Humor in a Hard Time -Wall Street Journal

"Madison Avenue is expected to rely more heavily on its funny bone in the upcoming Super Bowl, despite the upswing in Covid-19 cases and other challenges that have engulfed the country this year.

The laundry list of issues has forced many brands to think hard about what tone to strike during the biggest night on television. But with fewer than seven weeks until the planned Feb. 7 kickoff, a consensus approach has begun to emerge: relief.

Ad-agency executives say the country is looking for a reprieve from its problems, including the surging virus, an uncertain economy and political divisiveness.

'People want to laugh and they want to feel normal again,' said Susan Credle, global chief creative officer at Interpublic Group of Cos.' FCB, which is crafting several big-game ads this year.

Candy-maker Mars Inc. will air a comedic ad in the first quarter of the game featuring its M&M candy characters....

Comedy has long played a significant role in Super Bowl commercials, of course, but ad executives anticipate that more brands are likely to employ a humorous approach for Super Bowl LV....

'We are finding that celebrities who wouldn't necessarily want to do commercials before are willing to be part of it because they are not working,' said Rob Reilly, global creative chairman of Interpublic's McCann Worldgroup. McCann has enlisted a high-profile celebrity to appear in one of the Super Bowl ads it is creating....

Avoiding creative fumbles, such as jokes that go too far or political references that don't go over well, can be harder today because the divisiveness in the country has made it hard to predict which commercials will prompt backlash."

U.S home prices surge to 6-year high as more people flee cities -Marketwatch

"The cost of buying a home surged again in October, a closely followed index showed, and prices rose at the fastest rate in six years in a clear sign the housing market is still booming despite a raging pandemic.

A measure of home prices in 20 large cities rose at a 7.9% yearly pace in October, according to the S&P CoreLogic Case-Shiller price index. That's up from 6.6% in the prior month.

A broader measure by Case-Shiller that covers the entire country, meanwhile, showed a similarly large 8.4% increase in home prices over the past year. That's also up sharply from 7% in the prior month.

Prices have risen at the fastest clip since 2014 owing to record-low mortgage rates and an influx of people leaving cities to escape the coronavirus and find more space. A short supply of homes for sale has also been a contributing factor....

The biggest yearly increases in home prices took place in Phoenix (12.7%), Seattle (11.7%) and San Diego (11.6%).

The smallest increases occurred in New York (6%) and Chicago (6.3%) and Las Vegas (6.4%) - cities that have been hit hard from the virus or whose local economies have suffered the most.

'The data from the last several months are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,' said Craig J. Lazzara, global head of index investment strategy at S&P Dow Jones Indices."

Why Bill Uses the "Royal We" -Bonner/Rogue Economics

"From time to time, dear readers write to question Bill's use of the 'royal we' in his writings. Far from being an affectation, Bill explains that it is, in fact, the 'common' we"¦ used with no delusions of grandeur whatsoever.

The Queen uses the 'royal we' to signify that she is not speaking for herself, but for the Crown"¦ an institution that was around for hundreds of years before she was born and will, presumably, outlast her by hundreds more.

Here at the Diary, we do not use the 'royal' we. We use the 'common' we"¦ a plebian, down-market, gutter kind of we, with no pretension to grandeur, nor even mediocrity.

For here we are, writing from a house we didn't build"¦ in a country that is not ours"¦ wearing clothes we didn't design"¦ looking out on rain we didn't cause"¦

"¦and passing along ideas that are not original. Even when we think we have had a new idea, we discover later that someone had the same idea 2,000 years ago.

Not one molecule in our body, thought in our brain, or feeling in our heart is of our own making. It would be vanity to use first-person singular; there is nothing singular about who we are or what we do.

No, we have neither scepter nor orb; all we have is a laptop computer.

We wear no royal purple. We favor brown and grey. We dress in dull colors so we may think in vivid ones.

We have no throne, no influence, no privilege, no position, and no armed guards to protect us.

We speak not for the Crown, but for all those common people who try to put two and two together....'We' speak for them all - as best as we can.

As time passes, the conceits of youth"¦ the illusion of timelessness"¦ the passions and competitions - to have the biggest bank account, the biggest car, the biggest house, the biggest muscles, and the biggest you-know-what - all get dropped along the way, like discarded pianos on the Oregon Trail.

All that is left is the shriveled up, naked reality"¦ of time, love"¦ and death....So let us at least speak for a group"¦ not of royals, but of commoners"¦ and use 'we' in sympathy with all those sinners, geniuses, half-wits, saints, and jackasses that came before and will come after us"¦"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 28, 2020


12.28.20 - Silver Price to Shine in 2021

Gold last traded at $1,876 an ounce. Silver at $26.36 an ounce.

NEWS SUMMARY: Precious metal prices zig-zagged Monday on a firmer dollar. U.S. stocks rose in the final trading week of 2020 as President Donald Trump signed an economic relief bill.

Silver price to shine the brightest in 2021 -Kitco

"The silver market is garnering a lot of attention heading into 2021 and according to Main Street retail investors, it is the precious metal they will be keeping an eye on in the new year.

Investors have been waiting a long time for silver to finally live up to its reputation and outperform gold. For the fifth consecutive year, retail investors see the grey metal as the top asset in the precious metals sector.

This year, 1,015 people participated in Kitco News' Outlook 2021 online survey. A total of 568 Main Street voters, or 56%, said they expect silver to fare better than other metals in the year ahead.

The bullish outlook for silver come as the precious metal has seen a historic rally since falling to $12 an ounce due to financial market turmoil due to the COVID-19 pandemic. Since its lows, silver prices have rallied more 115%.

In comparison, gold prices are up 25% from its March lows around $1,500 an ounce.

Many analysts also see silver outperforming gold prices in 2021. Low interest rates, a weaker U.S. dollar and rising inflation pressures will drive both gold and silver, which are both seen as monetary metals. However, improving economic activity next year will add another pillar of support for silver.

Some analysts see potential for silver prices to retest their all-time highs above $50 an ounce."

markets Market Edges Toward Euphoria, Despite Pandemic's Toll -New York Times

"Investors of all stripes piled into stocks this year, creating levels of froth reminiscent of the dot-com boom. Analysts say there's room to go higher, but some worry about a bubble.

Already notable for its mostly unstoppable rise this year - despite a pandemic that has killed more than 300,000 people, put millions out of work and shuttered businesses around the country - the market is now tipping into outright euphoria.

Big investors who have been bullish for much of 2020 are finding new causes for confidence in the Federal Reserve's continued moves to keep markets stable and interest rates low. And individual investors, who have piled into the market this year, are trading stocks at a pace not seen in over a decade, driving a significant part of the market's upward trajectory.

'The market right now is clearly foaming at the mouth,' said Charlie McElligott, a market analyst with Nomura Securities in New York.

The S&P 500 index is up nearly 15 percent for the year. By some measures of stock valuation, the market is nearing levels last seen in 2000, the year the dot-com bubble began to burst....

'We are seeing the kind of craziness that I don't think has been in existence, certainly not in the U.S., since the internet bubble,' said Ben Inker, head of asset allocation at the Boston-based money manager Grantham, Mayo, Van Otterloo....

Perhaps the clearest example of unbridled investor enthusiasm comes from the market for I.P.O.s. With more than 447 new share offerings and more than $165 billion raised this year, 2020 is the best year for the I.P.O. market in 21 years, according to data from Dealogic....

For companies that went public in December, shares on the first day of trading jumped roughly 87 percent, on average, as of the week that ended Dec. 18. That's the highest since early 2000, when the tech bubble began to burst.

'It's not as obvious a bubble as 20 years ago,' said Jay Ritter, a finance professor at the University of Florida who studies initial public offerings. 'But we're close to bubble territory.'

The market appears overheated by another gauge that investors often use to determine how cheap or expensive a stock is: its price relative to the profits it's expected to make. Currently, the so-called price-to-earnings ratio for S&P 500 companies is above 22, and has been for much of the year. The last time the market was consistently above that level was in 2000."

Covid-19 Propelled Businesses Into the Future. Ready or Not. -Wall Street Journal

"Spurred by the pandemic, business changes that normally might have taken years unfolded in months. Now, shifts that began as temporary fixes are likely to become permanent.

For many who crossed the digital divide this year, there will be no going back.

The Covid-19 pandemic forced Americans to collectively swap the physical for the digital world in a matter of months. As retailers learn to operate without stores, business travelers without airplanes, and workers without offices, much of what started out as a temporary expedient is likely to become permanent.

'Covid has acted like a time machine: it brought 2030 to 2020,' said Loren Padelford, vice president at Shopify Inc. 'All those trends, where organizations thought they had more time, got rapidly accelerated.' Merchants using the company's e-commerce platform shot up more than 20% between January and June to 1.4 million, according to broker Robert W. Baird & Co.

The reverberations are already apparent in everything from the stock market to corporate spending patterns to the decline of physical cash....

In many ways, digitization is simply the next chapter of a process under way for a century: the dematerialization of the economy. As agriculture gave way to manufacturing and then services, the share of economic value derived from tangible material and muscle shrunk while the share derived from information and brains grew....

The shift from physical to virtual commerce went hand-in-hand with the rise of remote and contactless payments and the decline of cash. The virus prompted some bastions of cash such as casinos to introduce more cashless technology."

What They Don't Tell You About Electric Vehicles -American Spectator

"Would you wait 15 minutes to get a fast-food hamburger?

Electric cars will make you wait longer. This includes even those touted as being capable of receiving a 'fast' charge in 15 minutes or so. Because you'll have to wait for the car plugged in ahead of you to 'fast' charge.

This assumes you're second in line. If you're third... To achieve the same capacity to charge as many electric cars as a gas station is capable of refueling in an hour, it would be necessary to at least quintuple the physical size of the charging station to compensate for the quintupling of the time it takes to recharge each electric vehicle (EV) versus the time it takes to refuel a non-electric car.

At a gas station, a car occupies its spot at the pump for about five minutes; thus, in 15 minutes it is possible for a single pump to refuel three cars. But if it takes 15 minutes to recharge a single EV, it would take two more places to plug in - and the space for those additional two cars - to equal the throughput capability of the gas station's single pump.

The problem there is that the faster you recharge a battery, the more you reduce its life - and increase the odds of a fire. There is a reason why you trickle charge batteries - if possible....

There's another problem, unique to things powered by electricity.

You cannot just pour in electricity, as you do with gasoline. Electricity doesn't sit ready to go in storage tanks, underneath the pumps. It has to be transmitted as demanded - via cables from the generating source - and this requires cables of much greater capacity than your household extension cord.

This is why it is not possible to 'fast' charge an EV at most private homes. You can reduce the waiting time from eight or more hours but not to 15 minutes. Not without upgrading your house to commercial-grade electric capacity. And then there's that increased risk of burning your house down.

And a word about 'fast' charging - which even where feasible is only partial charging. You cannot fully 'refill' a battery quickly - as you can fully refuel a non-electric car's tank.

Which means more frequent charging....These are basic EV facts, but most people aren't aware of them."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 24, 2020


12.24.20 - A Christmas Poem For a Most Bizarre Year

Gold last traded at $1,879 an ounce. Silver at $25.79 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday in thin, pre-Christmas trading. U.S. stocks rose slightly as Wall Street tried to wrap up the holiday-shortened week on a high note.

What Is In Store For Gold In 2021? -Aslam/Forbes

"The precious metal is up nearly 22% year-to-date, but it has been under selling pressure for the past three days, as traders have been busy booking their profits as 2020 comes to an end. There is no doubt that this year has brought glory for gold traders as the gold price made an all-time high of $2,075 in August this year....

The big question for investors and traders is whether the gold price is going to make another record high next year....The answer is very much dependent on a few factors. Firstly, it is all about containing the coronavirus and any other future variant of these viruses... If the coronavirus situation doesn't come under control, traders will seek shelter in safe-haven assets, and gold prices will likely move higher.

Secondly, the economic data, the stock market, and businesses' actual health are completely out of sync. That is because the U.S. stock market is still sitting near its record high while enterprises are consistently forced to close.

Something that is surely going to influence the gold price is the trend in the dollar index, which is determined by the Federal Reserve's monetary policy stance."

holidays A Christmas Poem For A Most Bizarre Year -Resler/Real Clear Markets

"Every Christmas season, I have composed a 'review and outlook' for the economy set to the rhythm and meter of Clement Moore's classic, 'A Visit from St. Nicholas.' This, my 37th annual rendition, is primarily a 'review' of what has been undeniably the most bizarre year in a lifetime. The poem ends with a brief but, as always, hopeful outlook for the year ahead.

'Twas the Night Before Christmas

'Twas the night before Christmas, all calm and serene,
As moonlight bathed the marsh grass in a silv'ry sheen.
But my spirit was troubled and lacking in cheer
For we'd come to the end of a truly bizarre year.

First, we'd endured a month-long impeachment trial
Brought by those annoyed mainly by Donald Trump's style.
Although for acquittal most Senators voted
To Trump's removal would his foes stay devoted.

At the year's start, our economy was quite strong,
But no one foresaw how fast it'd go terribly wrong.
For, unseen to all, a global pandemic did loom
That would bring a quick end to our decade-long boom.

Hoping to avert a fate we'd all come to dread,
We halted most commerce to slow the Covid's spread.
With shutdowns and lockdowns the world over decreed,
Economies collapsed with incredible speed.

Policymakers quickly sprang into action
Budgeting trillions to give spending some traction
The Fed did its part, setting interest rates low
And vowing also to let its balance sheet grow.

That these bold and quick actions did help I'm quite sure,
But the pandemic's left wounds that will surely endure.
Dining and travel could take years to recover,
While new ways of spending we'll surely discover.

School closures and remote learning have come at high cost
And it'll take years to make up what our school kids have lost.
The real estate market has also been altered,
As big cities shrink 'cause their leaders have faltered.

We'll keep meeting remotely with Facetime or Zoom,
Though something gets lost when we're not in the same room.
Social distance and masking have become the new norm
And we're told the virus will spread unless we conform.

Daily, we heard the count of deaths and new cases
All duly sorted by region, ages, and races.
Rarely though did the press give context or perspective,
So the policy response too oft proved defective.

The self-righteous claimed we must - 'follow the science.'
And insisted their rules get total compliance.
But true science is complex with many dimensions,
That advances through debate and often dissensions.

And if a pandemic wasn't enough of a curse,
Late in the Spring things took a turn for the worse.
When Mister George Floyd died 'neath the knee of a cop
The outrage that followed brought chaos no one could stop.

Protesters and marchers in cities large and small
Cried out demands of 'equal justice for all.'
But too often all that hollering and hooting
Gave way to lawless riots, arson and looting.

This deadly brew of disease and social unrest
Has put long-held traditions and norms to the test.
And when we tried voting modes not used in the past,
We found more ballots than ever had somehow been cast.

Trump challenged the outcome through appeal and recount
But Biden's vote margin prov'd too wide to surmount.
So early next year a new President takes charge,
Still the challenges ahead remain just as large.

Our future will again be more hopeful and bright,
When, at last, we can end this dread Covid blight.
And thanks to 'Warp Speed,' that day soon may arrive,
And, once more in good health we will prosper and thrive."

Covid-19 vaccine: Will the U.S. trust it? -CNBC

"The U.S. began vaccinating the population against the coronavirus last week, but mass adoption is not a guarantee. Nearly 4 in 10 Americans say they would 'definitely' or 'probably' not get a vaccine, according to a Pew Research Center survey of 12,648 U.S. adults from Nov. 18 to 29.

While this is better than Pew results from September, which showed that nearly 50% of respondents were leaning toward not getting the vaccine, it still falls short of what is needed to adequately protect the country. To achieve herd immunity, about 70% of the population needs to be vaccinated or have natural antibodies, experts say.

Widespread mistrust could be a product of the fact that the Covid vaccine was researched and developed in just eight months, breaking the speed record of four years.

Or it might have something to do with the fact that if anything goes wrong with the vaccine, the drugmakers that produced them - Pfizer, BioNTech and Moderna - have total immunity against lawsuits related to injuries resulting from the vaccine until 2024.

Central to closing this trust gap is a robust and reliable national education campaign. The Department of Health and Human Services will spend $250 million on this effort."

**Swiss America Trading will be closed Christmas day. We hope you have a wonderful holiday.**

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 23, 2020


12.23.20- Relevance of Gold as a Strategic Asset

Gold last traded at $1,865 an ounce. Silver at $25.36 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed after President Donald Trump criticized the new Covid-19 relief package, which could delay deployment of funds.

The relevance of gold as a strategic asset -World Gold Council

"Gold is a clear complement to stocks, bonds and alternative assets for well-balanced US investor portfolios. As a store of wealth and a multi-faceted hedge, gold has outperformed many major asset classes while providing robust performance in both rising and falling markets.

Gold can enhance a portfolio in four key ways - 1) generate long-term returns, 2) act as an effective diversifier and mitigate losses in times of market stress, 3) provide liquidity with no credit risk and 4) improve overall portfolio performance....

The increased relevance of gold - Investors have embraced alternatives to traditional stock and bond investments in pursuit of diversification and higher risk-adjusted returns. The share of non-traditional assets among global pension funds, for example, increased from 7% in 1998 to 23% in 2019 - this is 30% in the US. And a similar pattern can be seen in the portfolio composition of individual investors.

Gold allocations have been recipients of this shift. Gold is increasingly recognized as a mainstream investment as global investment demand has grown by an average of 14% per year since 2001 and the gold price has increased by almost six-fold over the same period....

Beating inflation, combating deflation - Gold is long considered a hedge against inflation and the data confirms this. The average annual return of 10% over the past 49 years, has outpaced the US consumer price index (CPI).

Gold also protects investors against extreme inflation. In years when inflation was higher than 3% gold's price increased 15% on average (Chart 3). Over the long term, therefore, gold has not just preserved capital but helped it grow."

stock chart This Man Lost Everything Betting on Stocks -Roche/Pragmatic Capitalism

"The headline of this article is something you'll very rarely, if ever, see in the financial press. You're much more likely to hear something along the lines of:

'Joe Schmo made $1,000,000 buying Tesla stock'... 'Jane Doe retired early buying Bitcoin'....Most of this is survivorship bias that promotes an imprudent gambler's mentality. Let me explain.

Back in 2015 there was a great study from Longboard called The Capitalism Distribution. They found, unsurprisingly, that roughly 80% of the markets entire gains came from 20% of all stocks from 1989-2015. 80% of stocks had a 0% gain.

JP Morgan came to similar conclusions in a research paper titled 'The Agony and the Ecstasy - the Risks and Rewards of a Concentrated Stock Investing'. In a study ranging from 1980-2013 they found: 'The median stock underperformed the market with an excess lifetime return of -54%.' In other words, in most cases, a concentrated holder would have been better off invested in the market....

This is why I am a big proponent of treating our 'investment portfolios' like 'savings portfolios'. What most of us do on the stock market is an allocation of savings as opposed to actual investment, which is technically what a firm does when it spends for future production. Yes, we want to get wealthier when we allocate our assets. But most of us need to do so in a manner that not only optimizes our upside, but does so without haphazardly risking the downside along the way. After all, this is literally our life's savings. It shouldn't be treated like money we take to Vegas for a weekend....

I think there's two very important lessons to remember when reading these kinds of articles: 1) Stock picking is very, very difficult and most of us benefit from some degree of diversification. 2) Given the relatively high potential of catastrophic loss in stocks make sure to never bet more than you can afford to lose."

How to End Lockdowns Next Month -Dr. Bhattacharya/Sunetra Gupta/Wall Street Journal

"The approval of several Covid-19 vaccines is an impressive technological development that should rapidly end the lockdowns and allow normal life to resume. But authorities like Anthony Fauci and Bill Gates argue that lockdown restrictions may have to continue through the fall and even into 2022, notwithstanding the catastrophic harms the lockdowns have caused, especially to young people, the poor and the working classes.

The imminent dissemination of vaccines can help end lockdowns by the end of January. The Great Barrington Declaration, which we wrote with Martin Kulldorff of Harvard Medical School, provides the key idea: focused protection of people who face a high risk of mortality should they become infected.

The risk of mortality from Covid-19 infection is now well established by seroprevalence studies conducted world-wide...There is a sharp age gradient in the survival rate after infection. At least 99.95% of people under 70 survive infection; that figure is only 95% for 70 and older.

Covid-19 is thus especially deadly for the old and others with chronic conditions. But the lockdowns are deadly as well. The harms include plummeting childhood vaccination, worse cardiovascular disease outcomes, and less cancer screening, to name a few. It's impossible to quantify the total deaths they have caused and will cause, but it's safe to conclude that for people under 70 without chronic conditions - especially children and young adults - Covid-19 is far less deadly than a lockdown....

Some 50 million people in the U.S. are over 65. The number of vaccine doses expected to be available over the next two months will be enough to vaccinate every elderly person who wants to be inoculated, as well as health-care workers and other vulnerable people. With a 90%-plus efficacy rate in protecting against Covid-19 symptoms, we will achieve near-perfect focused protection.

At that point, the lockdown should end immediately and forever. For healthy young and middle-aged people, especially for minorities and the poor, the lockdown's harm far outstrips the harms from infection."

Goldman Says Bitcoin's Surging Popularity Won't Harm Gold -Bloomberg

"Gold and Bitcoin can coexist, according to Goldman Sachs Group Inc., which said, while the largest digital currency may be pinching some demand from the oldest of havens, the precious metal's standing will endure.

'Gold's recent underperformance versus real rates and the dollar has left some investors concerned that Bitcoin is replacing gold as the inflation hedge of choice,' the bank said in a note. While there's been some substitution, 'we do not see Bitcoin's rising popularity as an existential threat to gold's status as the currency of last resort.'

Bitcoin has seen a blistering rally this month, exceeding $23,000 per token on Thursday, having only surpassed the $20,000 milestone for the first time on Wednesday. Its ascent has prompted debate about whether the upstart will cut into gold's role....

Institutions and wealthy investors avoid cryptocurrencies due to 'transparency issues, while speculative retail investment causes Bitcoin to act as an excessively risky asset,' Goldman said. 'We do not see evidence that Bitcoin's rally is cannibalizing gold's bull market and believe the two can coexist.'

Bitcoin has more than tripled this year, while gold's up 24% after setting a record above $2,075 an ounce in August."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 22, 2020


12.22.20 - Rand Paul's Speech Goes Viral

Gold last traded at $1,865 an ounce. Silver at $25.36 an ounce.

NEWS SUMMARY: Precious metal prices fell Tuesday on profit-taking and a firmer dollar. U.S. stocks drifted lower after Congress approved a long-delayed coronavirus relief package.

Gold, Past And Future -Seeking Alpha

"Gold, at various times and to various degrees, has correlated with inflation. Inflation is most commonly measured according to the CPI (consumer price index), but the CPI does not capture the effect of the prevailing interest rate....

It would not be unreasonable to expect that, in the present situation, gold and inflation might behave in a similar fashion to 2008-9 where both trended higher....

In the short-term, there is room for the momentum indicators to move higher, but there is resistance at $1900 and then at $1960. If that resistance can be overcome, then new highs are likely....

In summary: Gold, the Fed funds rate, and inflation (relative to the 2y T-yield) are repeating the pattern from 2008-9, which implies that gold will rise over the next several years."

rand paul Rand Paul's Senate floor speech against COVID-19 bill goes viral -Fox NEWS

"Sen. Rand Paul, R-Ky., addressed the Senate Monday afternoon as his colleagues prepared to vote for a $900 billion coronavirus relief package and told his fellow Republicans who backed the stimulus that they are no better than the Democrats they criticize who align themselves with socialism.

'To so-called conservatives who are quick to identify the socialism of Democrats: If you vote for this spending monstrosity, you are no better,' Paul said.

The House passed the relief package and lawmakers tacked on a $1.4 trillion catchall spending bill prior to the Christmas holiday. The relief package will send a $600 direct stimulus payment to most Americans, along with a new round of subsidies for hard-hit businesses, restaurants and theaters.

'If free money was the answer... if money really did grow on trees, why not give more free money?' he said. 'Why not give it out all the time? Why stop at $600 a person? Why not $1,000? Why not $2,000? Maybe these new Free-Money Republicans should join the Everybody-Gets-A-Guaranteed-Income Caucus? Why not $20,000 a year for everybody, why not $30,000? If we can print out money with impunity, why not do it?'....

The House voted 359-53 in favor of the relief bill. The bill combines coronavirus-fighting funds with financial relief for individuals and businesses. The 5,593-page legislation - by far the longest bill ever - came together Sunday after months of battling. Treasury Secretary Steven Mnuchin, a key negotiator, said on CNBC Monday that the direct payments would begin arriving in bank accounts next week."

Want Real Economic 'Stimulus'? End Economy-Killing Lockdowns Now -Issues & Insights

"Congressional negotiators, we're told, are inching ever closer to a deal for what's being called a 'second round of stimulus spending.' Sorry, but what's planned has nothing to do with supercharging the economy. Want to really 'stimulate' growth? End the foolish COVID-19 lockdowns that have decimated small businesses and hundreds of thousands of jobs.

The sound you'll no doubt soon be hearing is hundreds of Washington, D.C., politicians and policymakers clapping themselves on the back for the pending stimulus package.

As it now stands, the $900 billion-plus deal is likely to include 'direct payments to all Americans, funding for vaccine rollout and delivery, and an extension of unemployment benefits as well as much-needed aid to small businesses,' according to The Week.

But this is not 'stimulus' by any means. It is the economic equivalent of putting a dying patient on life support. So call this bill what it is. Government relief for a problem the government itself caused through mandated lockdowns....

It's the old Keynesian fallacy writ large. That government spending boosts the economy. It's false. It's the functional equivalent of transferring money from one pocket to the next and pretending you now have more money to spend. You've been 'stimulated.'

Not true. A major study of U.S. economic data under COVID-19 published by the National Bureau of Economic Research in November concluded that 'that traditional macroeconomic tools - stimulating aggregate demand or providing liquidity to businesses - have diminished capacity to restore employment when consumer spending is constrained by health concerns.'

Just as bad, the same study found that the Paycheck Protection Program spent an average of $377,000 for each job saved, and that school closures were seriously damaging the future income prospects of low-income minority students....

Already, policymakers view the COVID-19 pandemic not as a tragedy, but as a massive opportunity to increase the size of government, raise taxes to stratospheric levels, and limit long-cherished freedoms for people around the world.

They're arguing for a 'Great Reset,' in which global bureaucratic and political elites, along with corporations closely tied to governments, will make the world's economic decisions - not free markets, not supply and demand. This is no mere conspiracy idea; it's well on its way."

The Cyber Threat Is Real and Growing -Rogers/Wall Street Journal

"The SolarWinds breach could be the most significant cyber incident in American history. Russian intelligence - likely the SVR, the foreign-intelligence branch - infiltrated and sat undetected on U.S. government networks for nearly 10 months. It was a sophisticated, smart and savvy attack that should alarm the public and private sectors.

We may not know the full extent of the damage for some time. Don't be surprised if more government entities disclose that they too were victims of this attack. Don't be surprised either if it emerges that private companies were hit. SolarWinds says it has more than 300,000 customers, including 400 companies in the Fortune 500. That's a lot of potential victims.

It appears that this was purely an intelligence-gathering effort. The SVR sat on government networks collecting as much data as it could, whenever and however it wanted. It was less like tapping into phone lines and more like breaking into the library and wandering around.

Every country conducts espionage. That's not the alarming part. What is truly scary is that the Russians are inside the house now. Who knows where they've planted malware, corrupted or deleted data, locked users out of systems, or destroyed systems entirely? Turning off the system and uninstalling SolarWinds software isn't enough. It may take years and thousands of hours to unpack fully where the Russians hid themselves and their code....

The U.S. needs to respond in a smart, considered manner. Shutting off the lights in Moscow isn't an appropriate or proportional response. Disrupting the networks of the SVR or GRU - Russian military intelligence - may well be. If the U.S. doesn't define red lines today and demonstrate that there are consequences for crossing them, we will continue to be the victim of cyberattacks. The breaches will only get worse....

The SolarWinds damage is done, but it isn't too late to strengthen our cyber defenses, work to deter foreign actors, and prepare for future breaches. And there will be more."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 21, 2020


12.21.20 - Americans in Full Revolt Against Lockdowns

Gold last traded at $1,878 an ounce. Silver at $25.71 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying despite a firmer dollar. U.S. stocks fell as enthusiasm over a coronavirus stimulus deal was overwhelmed by worries over a viral new Covid strain in the U.K.

Gold and silver now in a perfect storm scenario -Wagner/Kitco

"Sadly, the events that began in March when the Covid-19 epidemic officially became a global pandemic has led to the current state of the economy. Actions by the Federal Reserve and the U.S. Treasury have resulted in a perfect storm of events that have taken gold to its highest price ever in August 2020. The fundamental events that have led to the series of massive rallies in gold and silver are still very much with us....

The timeline for the vaccines to become available to the general public is still many months away. This means that the economic contraction which has affected millions of Americans leaving them unemployed, and the millions of Americans that we're able to stay in their homes due to the moratorium on eviction are still in an extremely fragile and tenuous situation....

The fundamentals which have been at the root of recent gains throughout the year in gold remain fully intact at least until the beginning of the second quarter of 2021. More alarming is the fact that once the vaccine is available and enough individuals have created a herd immunity, the economic fallout that will occur will continue to grow, and the financial repercussions that this will cause will continue.

This is why I believe that we currently have a perfect storm scenario in which gold pricing will continue to rise, and over 2021 will trade to a new record high, as the U.S. dollar's value will continue to diminish."

central banking How Stimulus Kills the Economy -Bonner/Rogue Economics

"The 'experts' most in demand are those that tell the lies the public wants to hear. Such as"¦ how to bail out the U.S. economy....The experts say that if we just give people money, they will spend it. Businesses will make sales. Consumers will consume. It will look like a healthy economy again.

But where do the feds get the money? Never mind. You know as well as we do that they don't have any. The federal government is already scheduled for a $2 trillion deficit this fiscal year.

The feds will 'print' the currency...And, ultimately, one way or another, the 'money' the feds distribute today has to come from the people tomorrow. Well, that may not be so bad"¦ If drawing on the resources of tomorrow helps us out of a problem today"¦ what's so bad about that?

But wait"¦ The burden of today's letter is that the funny money does funny things to the economy. That is, the 'stimulus' actually depresses investment and output. Over the long haul, people will be worse off, not better.

According to Bonner's Law, bad capital drives out good capital. Free money is not just a fraud, but a curse. There is no example in history where giving people printing-press money - that is, money not connected to real products and services - ever did any lasting good....

Experts argued that classical theories of money and economics were all wrong. The new Modern Monetary Theory (MMT) taught that the government was the source of all money"¦ and that it should spend its money creating a better world for everyone.

They insisted, too, that the government - with its armies of Ph.D. economists - should decide how high stock prices should be"¦ how much it should cost to borrow money"¦ what the rate of 'inflation' should be"¦ how many people should be unemployed"¦ and what the 'capacity' of an economy ought to be.

Above all, they learned that when capitalism fails, the experts need to get to work. They need to give the people money. A bailout. A giveaway.... Not only do the giveaways turn valuable capital into a consumable"¦ they also reduce the economy's ability to produce. Everyone - except the insiders - gets poorer."

Americans Are in Full Revolt Against Pandemic Lockdowns -Tuccille/Reason

"Echoing New York Gov. Andrew Cuomo, New York City Mayor Bill de Blasio warned city residents this week to prepare for a 'full shutdown' as part of ongoing efforts to slow the spread of COVID-19. The two elected officials better not hold their breath waiting for compliance. Evidence from around the country shows that many Americans are thoroughly sick of impoverishing, socially isolating lockdown orders, and are revolting against the often-hypocritical politicians who issue them....

From coast to coast, businesses and individuals are ignoring restrictive rules that threaten their livelihoods, stifle social contact, and threaten to strangle the necessary interactions of everyday life.

'Another shutdown just isn't an option for us,' the Seven Sirens Brewing Company of Bethlehem, Pennsylvania, announced last week on its Facebook page. 'We, and thousands of other small businesses throughout the country simply will not survive. ["¦] After speaking with our bank, staff members, families, attorneys, and local government officials"¦we have decided we will not comply with future shutdown mandates. We will continue to operate with the same, proven-safe measures we implemented 5 months ago.'....

On the West Coast, many restaurants also open their doors to customers despite state orders to the contrary. 'While some of the larger chains and corporations are following the orders, many of the mom and pop shops say going to takeout only would put them out of business,' ABC News reported last week.

The city council in Solvang, a tourism-fueled community in Santa Barbara County, recently voted to ignore shutdown orders that threaten locals' livelihoods....

'As of today, 17% of restaurants - more than 110,000 establishments - are closed permanently or long-term' as a result of this year's economic distress, the National Restaurant Association announced on December 7. Fatigue with lockdown orders was predicted by experts months ago, and voiced by the public in growing numbers....

In distress and after due consideration, many Americans have decided that they shouldn't comply. Individually and in organized groups, often with the support of their communities, people are pushing back against lockdown orders that they find more threatening than COVID-19."

3 in 4 say 2020 pushed the country into an 'existential crisis' -StudyFinds

"From the pandemic to the presidential election, there's no question 2020 has been a turning point moment in United States history. Unfortunately, most believe the year's problems haven't left them in a good position moving forward. A new survey finds nearly eight in 10 Americans say 2020 caused an existential crisis for the country.

The OnePoll survey asked 2,000 Americans about their experiences throughout this tumultuous year and finds that 77 percent agree 2020 has sent the U.S. into crisis over its identity. Baby boomers are the most likely to agree with this statement (82%), compared to 76 percent of Generation X and 75 percent of millennial respondents.

As America deals with its major issues, it's no surprise that 65 percent of respondents feel like they've had their own personal crisis at some point during 2020. The survey, commissioned by Vejo, finds 68 percent of Americans said the year has left them feeling defeated....

With all of these events adding up, over half of respondents have felt too overwhelmed throughout the year to take proper care of their health and wellness. Fifty-six percent said they've been struggling now more than ever to find a wellness routine that works for them."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 17, 2020


12.17.20 - California Is the Grinch Killing Christmas

Gold last traded at $1,884 an ounce. Silver at $25.94 an ounce.

NEWS SUMMARY: Precious metal prices traded sharply higher Thursday on safe-haven buying and a weaker dollar. U.S. stocks rose as investors monitored progress on additional stimulus aid.

Gold jumps over 1% as surging virus cases renew stimulus hopes -CNBC

"Gold prices gained more than 1% on Tuesday, bolstered by expectations of more coronavirus relief aid in the United States as mounting COVID-19 cases renewed concerns over the pandemic's economic toll.

'There is the possibility of getting stimulus passed and that is what the gold market has been waiting for,' said Jeffrey Sica, founder of Circle Squared Alternative Investments. 'Most people have come to terms with the fact that the vaccine will stop the next wave, but will have very little to do with the current wave.'

A staggering COVID-19 U.S. death toll put pressure on lawmakers to roll out relief aid, buoying optimism around a $1.4 trillion bill. Gold, regarded as a hedge against likely inflation and currency debasement, has risen over 22% so far this year amid the unprecedented stimulus unleashed globally....

Silver jumped 2.7% to $24.45 an ounce, and palladium gained 1.9% to $2,336.62. Both metals rose more than 3% earlier in the session.

'Silver's dual roles as a precious metal and an industrial material makes it more appealing during times when economic activity is expected to rebound,' said Fawad Razaqzada, market analyst with ThinkMarkets."

grinch California Is the Grinch Killing Christmas, Small Businesses, and Maybe Even the Democratic Party -Bridge/American Consequences

"Governor Gavin Newsom has locked down California as though a tropical storm were about to make landfall. Yet the 'safety' measures mostly target the 'small guy,' and this hypocrisy could be the Democratic Party's undoing.

Residents of America's largest state once took pride in the maxim that commanded 'as goes California, so goes the country.' Today those words sound more like a curse than the promise it once held. But it didn't have to be that way.

Gavin Newsom, resembling a Roman consul drunk on power on the edges of empire, has announced stay-at-home measures that may ultimately prove deadlier than the pandemic it was meant to halt. Here are just some of the businesses his regime has ordered to be shuttered: hair salons and barbershops, personal care services, movie theaters, wineries, bars, breweries and distilleries, family entertainment centers and amusement parks....

Like so many other Democratic leaders who have taken draconian steps to halt the virus, Newsom's brutal strategy assumes people cannot be trusted to protect themselves"¦ Therefore, the brilliant idea of wrecking the economy in the name of 'safety' is considered the best possible solution. That's a cold slap in the face to his constituents, coming as it does in the middle of the holiday shopping season, which is make-or-break time for many small businesses....

If there was a single story that captures the palpable anger and frustration that has gripped citizens in this state of some 39 million souls, it would be hard to top that of Angela Marsden, the owner of Pineapple Hill Saloon and Grill in Los Angeles. In an effort to keep pace with the ever-mutating anti-COVID regulations, Marsden spent over $80,000 to construct an outdoor patio so she could keep serving customers amid the pandemic. With the latest lockdown measures, however, city officials denied her permission to serve clients on location - even in the parking lot. Unfortunately, the story does not end there.

To add insult to injury, the city granted permission for a film company to set up a large outdoor eating pavilion for its employees just yards away from where Marsden had built her outdoor patio....

Meanwhile, not even the Grinch governor could abide by his own rules. Last month, Newsom and his bejeweled wife were photographed at a lavish birthday party for some lobbyist at the upscale French Laundry restaurant, which included about a dozen people from several households - and not a surgical mask in sight. In other words, exactly the type of gathering - minus the filet mignon and Dom Perignon - Newsom's administration has cracked down on.

California's harsh response to the coronavirus, combined with the double standards from elitist Democrats, is already having consequences. First, conservatives are reportedly fleeing the state in droves....Gavin Newsom is playing with fire, and if he's not careful he may just destroy California and the Democratic Party with it."

Winning The (Keynesian) Beauty Contest -Calhoun/Alhambra Partners

"One of the hardest things to understand as an investor is that markets sometimes - often - don't line up with economic reality. Markets rarely reflect current economic conditions and at times they seem to discount a future that seems highly unlikely at best, and delusional at worst. That seems to be the case today, as stocks sit near all-time highs and the economic recovery falters in the face of the renewed virus outbreak....

The title of this article is a reference to the Keynesian beauty contest view of markets...Investing is not like the lottery where the numbers are what they are and you win or you don't. Investing is much more like poker where the cards are important but how the other players react is much more so. In investing, the data is important but much more important is how Mr. Market reacts to it.

Markets don't reflect the economy of today. Markets move based on the majority's view of how the present will change in the future. An investor's job is to judge whether that future is realistic, whether the economy can bridge the divide between where we are and where everyone thinks we're going....

Commodities have rallied strongly over the last month, even as the economic recovery has moderated. The V portion of the recovery is obviously over but markets - people - look ahead and they are increasingly positive about the post-pandemic future. That doesn't mean they'll be right of course, but economics is, more than anything, about human behavior, so maybe the markets are making the future rather than just reflecting some misplaced hope about it....

Right now, the dollar is in a downtrend and growth is rising. What has changed with the economy is the second derivative - the improvement is continuing but it is decelerating. Disposable personal income is up 5.7% over the last year with the help of various government income support programs.

The savings rate hasn't been this high since the 1970s. Some of that is no doubt precautionary, but some is due to a desire to avoid crowds and forced lockdowns. Regardless of the reason, savings is future investment or consumption so this isn't a bad thing....

Gold is still in a bull market but the correction from August continues...The long-term bull market is intact with real rates still in a downtrend."

If There's No Inflation, Then Why Do Inflation Expectations Keep Going Higher? -Zero Hedge

"Despite the very tame CPI reading, alternate measures of inflation were telling a different story. Chief among them are inflation expectations as priced by the Treasury bond market. Well, this week we again got another inflation data print that showed a rather subdued inflation backdrop....

Inflation expectations across the short to intermediate legs of the yield curve are hitting cycle highs again. Moreover, the message from the most inflation sensitive assets is confirming the message from inflation expectations.

This setup reminds us of the Groucho Marx/Richard Pryor line, 'who you gonna believe, me or your lying eyes?'....

Along with those inflation expectations, small stocks are outperforming big tech. Small stocks tend to be more sensitive to changes in inflation than larger firms....

We are getting similar confirmation within stock market sectors. Materials companies are outperforming consumer staples companies right on queue with inflation expectations rising....

Finally, the copper to gold ratio is telling us the same thing, that the bond market's inflation expectations aren't operating in a bubble....So who are you going to believe, the inflation indexes or the bond market? And, does it even matter? Financial asset prices are clearly choosing to believe in the bond market's take."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 16, 2020


12.16.20 - Is This the End of Cities in America?

Gold last traded at $1,856 an ounce. Silver at $24.96 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on momentum buying and a weaker dollar. U.S. stocks traded mixed as traders weighed progress in U.S. fiscal stimulus talks and disappointing economic data.

GOLD: Fire Insurance For Burning Currencies -von Greyerz/Gold Switzerland

"After an extraordinary rally, gold recently entered an anticipated correction phase, which both math and history suggest is about to re-enter a continued trend dramatically upward. A primary driver for such sustained precious metal strength is an historically undeniable (as well as approaching) paradigm shift toward rising inflation....

It is critical to first distinguish true vs. popular notions of inflation. From the Austrian School to Milton Friedman, the true definition of inflation has always been understood (and measured) by money supply. As the supply increases, inflation follows. The popular/media-driven definition, however, uses consumer prices as measured by such broken scales as the CPI to measure inflation....Dishonesty at the policy level is nothing new. Since Nixon welched on the Gold Standard in 1971, policy makers have been acting like college party boys without a chaperone....

COVID and the misguided policy reactions thereto, have only accelerated such insane debt levels and the creation of fake money to pay for it-all of which points to more inflation-namely, the kind that kills currencies and sends gold prices significantly upward....

But Where's the Inflation?....'Price inflation' went to places like the S&P, not the deliberately false CPI. This explains why the DOW and S&P can break new highs as the real economy endures record lows....The next (and desperate) option, however, is to make one's currency weaker, inflate the same, and pay yesterday's debt with tomorrow's inflated/printed currency, a policy now openly embraced by the Dr. Frankensteins at the Eccles Building in D.C.

In the current paradigm shift, gold will rise not because gold only rises in inflationary periods (after all, gold recently hit new highs in an openly deflationary global setting). Instead, gold will rise simply because currency purchasing power will tank (and is already tanking) as inflationism progresses from a slow trot, to a cantor and then to a full gallop.

That is, gold will rise because currencies (diluted daily via money printing) are falling by the second. This is not an opinion, but a mathematical certainty."

Russia Russian government hackers compromised U.S. agencies, including Treasury and Commerce -Washington Post/MSN

"Russian government hackers breached the Treasury and Commerce departments, along with other U.S. government agencies, as part of a global espionage campaign that stretches back months, according to people familiar with the matter.

Officials were scrambling over the weekend to assess the nature and extent of the intrusions and implement effective countermeasures, but initial signs suggested the breach was long-running and significant, the people familiar with the matter said.

The Russian hackers, known by the nicknames APT29 or Cozy Bear, are part of that nation's foreign intelligence service, the SVR, and they breached email systems in some cases, said the people familiar with the intrusions, who spoke on the condition of anonymity because of the sensitivity of the matter. The same Russian group hacked the State Department and the White House email servers during the Obama administration....

The Russian Embassy in Washington on Sunday called the reports of Russian hacking 'baseless.' In a statement on Facebook it said, 'attacks in the information space contradict' Russian foreign policy and national interests. 'Russia does not conduct offensive operations' in the cyber domain.

All of the organizations were breached through the update server of a network management system made by the firm SolarWinds, FireEye said in a blog post Sunday....

'This is a big deal, and given what we now know about where breaches happened, I'm expecting the scope to grow as more logs are reviewed,' said John Scott-Railton, a senior researcher at Citizen Lab at the University of Toronto's Munk School of Global Affairs and Public Policy. 'When an aggressive group like this gets an open sesame to many desirable systems, they are going to use it widely.'"

Is this the end of cities in America? -The Hill

"This is the year that officially ended the boom of cities that started in the 1990s. The mirage of cities buffeted by white-collar jobs and supported by wealthy citizens willing to take on just one more tax increase is officially kaput. It is easy to blame the deluge on the coronavirus, but in reality a unique combination of factors heralded the end of the growth in places like New York while introducing population booms in medium-sized cities and suburbs across specific regions of the country. Significant populations of each social class decided it was no longer worth living in major metropolitan areas.

What developed this year is a cascade of residents leaving large cities in blue states. Among the biggest losers this year, in terms of total population loss, were New York, San Francisco, Los Angeles, Chicago and the District of Columbia. New York lost at least 300,000 residents this year. San Francisco saw 90,000 postal changes of address out of the city, while its median apartment rent took a nosedive of 20 percent in 2020. Los Angeles recorded more than 25,000 moves out of the city, while Chicago logged over 20,000. Even the District of Columbia lost 15,000 residents. Other cities that had sustained growth in the last decade also face severe drops in interest.

Residents who fled large cities in blue states overwhelmingly relocated to red-state cities, mostly in the Sun Belt or the West outside of California. Phoenix, already booming before the coronavirus, retained its spot as the fastest growing city in the country; its metro population now displaces Boston. The other overall winners in the demographic game this year are Nashville, where home prices continue to surge while real estate inventory is down 40 percent; Las Vegas, which tempted Bay Area techies to follow the Raiders to Sin City; Charlotte, which now has a larger population than San Francisco; and the greater Charleston area, which is likely the home of Boeing's next expansion and has benefited from manufacturing jobs moving south....

The trend is comprehensive: Mega-cities that have been traditionally led by the Democratic Party face the steepest loss in population while mid-level cities either stemmed the decline or have booming populations. For young people leaving college, or those entering into the middle of their careers, there is little allure left in these concrete jungles. The safe cities inspired by Rudy Giuliani that emerged in the 1990s are no more, with surging poverty and violent crime."

Covid-19 Vaccine Trial Volunteers Note Occasional Harsh Side Effects -Wall Street Journal

"Jocelyn Edwards wasn't sure she got Moderna Inc.'s experimental Covid-19 vaccine or a placebo when she received her first of two doses in August. Hours after the second shot, she said she was sure it was the genuine article.

'I woke up around midnight freezing,' said the 68-year-old retired nurse. 'For the next 24 hours I had intense chills, serious neck pain, headache, all my joints were aching.' She had a fever that peaked at 102.4 and poured out so much sweat that she lost 3 pounds, she said. The following day she woke up and felt fine. Ms. Edwards, like the other 30,000 volunteers who took part in Phase 3 clinical trials for Moderna's Covid-19 vaccine, wasn't told whether she got the vaccine or a placebo....

As the first vaccine from Pfizer Inc. and BioNTech rolls out this week and the next one from Moderna looks poised to start reaching people soon, some Americans have expressed reservations about getting vaccinated. One concern has been possible side effects. While the data show that some Moderna and Pfizer trial volunteers experienced side effects, even those who had harsh reactions recommend the shots....

Pfizer's vaccine, which uses technology similar to Moderna's, showed similar side effects, according to data released last week. Among its volunteers aged 18 to 55 receiving their second dose, 15.8% got a fever, compared with 0.5% of the placebo group; 35% got chills versus 4% of placebo recipients; and they also got more headaches and were more fatigued than those who got the placebo. Volunteers in both trials who received the vaccine also reported pain at the injection site more frequently than placebo recipients....

In both the Pfizer and Moderna trials, most side effects were reported as mild or moderate, and they occurred at a lower rate in older volunteers.

'It's a really good sign that there is a signal from your body that there is something different inside you,' said Paul Duprex, director of the Center for Vaccine Research at the University of Pittsburgh. 'It's being recognized by your immune system to make all important SARS-CoV-2 antibodies.' The FDA granted Pfizer's vaccine an emergency-use authorization on Friday and health-care workers started receiving the vaccine this week....

To reach herd immunity for Covid-19, public health authorities estimate that 60% to 70%, but possibly as low as 50%, of a given population would need antibodies to protect against infection. If Americans decline to be vaccinated in large numbers for any reason, including fear of side effects, it may cost the nation a chance to stamp out the disease."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 15, 2020


12.15.20 - Fake Science Destroying the Economy

Gold last traded at $1,853 an ounce. Silver at $24.54 an ounce.

NEWS SUMMARY: Precious metal prices rebounded sharply Tuesday on bargain-hunting and a weaker dollar. U.S. stocks rose on economic relief hopes and Covid-19 vaccines began to roll out nationwide.

The Covid-19 vaccine's 2 big challenges -VOX

"The US has authorized a coronavirus vaccine. That doesn't guarantee a quick end to the pandemic. America has, finally, authorized a Covid-19 vaccine for the general public. Priority groups - health care workers and people in nursing homes - are now starting to get a vaccine. And if things go right, most of the country could be vaccinated by the end of next summer.

But that's the caveat: if things go right. The development and authorization of a vaccine don't mean that the US is guaranteed to get people inoculated quickly, or even that the country is on a certain path to conquer the coronavirus. Experts caution, instead, that the country still faces two major challenges in its vaccination efforts.

First, the US has to manufacture and distribute a vaccine to more than 300 million people. As Johns Hopkins Center for Health Security senior scholar Crystal Watson told me, 'This is going to be the largest mass vaccination campaign that the US has ever attempted.' It's an effort so big, some experts have compared it to a New Deal. The logistical challenge isn't just to produce all the vaccine doses required, it's also shipping and storing them around the US at cold temperatures, and then administering them to people....

But even if the US is able to pull off a feat of logistics, a second challenge looms: People will need to be persuaded to get a vaccine. That this will happen is not guaranteed. Polls suggest as many as half of Americans are resistant to getting a Covid-19 vaccine. Those hesitant people will need their concerns addressed, including worries about whether the quick development process sacrificed safety, what common side effects are expected, and what rare side effects may pop up....

On the second challenge, experts say, the US is falling behind. When I asked if the country is prepared on the public opinion side for widespread Covid-19 vaccination, Texas State University medical anthropologist Emily Brunson told me, 'No, we're not.' So far, no real federal education and awareness campaign is underway. 'It would have been ideal to begin months ago,' Brunson said.

Experts caution that how the US deals with both these challenges could determine if Covid-19 remains a widespread problem by late 2021 or even 2022. It's what will decide whether we get back to normal, and how many lives are saved - or unnecessarily lost - along the way....

'If we do [vaccination] right, it can be positive and have long-term implications for public health generally,' Brunson said. 'But the opposite is also true: If this is done badly, you run the risk of undermining public trust in your entire public health system.'"

gold Ranking Asset Classes by Historical Returns (1985-2020) -Visual Capitalist

"Mirror, mirror, on the wall, is there one asset class to rule them all?

From stocks to bonds to alternatives, investors can choose from a wide variety of investment types. The choices can be overwhelming - leaving people to wonder if there's one investment that consistently outperforms, or if there's a predictable pattern of performance....

The top-performing asset class so far in 2020 is gold, with a return (21.9%) more than four times that of second-place U.S. bonds. On the other hand, real estate investment trusts (REITs) have been the worst-performing investments. Needless to say, economic shutdowns due to COVID-19 have had a devastating effect on commercial real estate.

Over time, the order is fairly random with asset classes moving up and down the ranks. For example, emerging market stocks plummeted to last place amid the global financial crisis in 2008, only to rise to the top the following year. International bonds were near the bottom of the barrel in 2017, but rose to the top during the 2018 market selloff....

Upon reviewing the historical returns by asset class, there's no particular investment that has consistently outperformed. Rankings have changed over time depending on a number of economic variables. However, having a variety of asset classes can ensure you are best positioned to take advantage of tailwinds in any particular year. For instance, bonds have a low correlation with stocks and can cushion against losses during market downturns.

If your mirror could talk, it would tell you there's no one asset class to rule them all - but a mix of asset classes may be your best chance at success."

The Fed's Fake Science Is Destroying the Economy -Bonner/Rogue Economics

"The government is broke"¦ already headed to a $2 trillion deficit for fiscal year 2021. Its pockets are empty. Its bank account is overdrawn. It has already looked under the seat cushions; there is nothing there. How, then, could it possibly help people in need? That's just one question"¦

'And why should it?' is another. Why does anyone think giving out fake money to offset a real downturn is a good idea? Or even giving out real money, for that matter?

If the economy needs a reset"¦ a recession to reprice assets and clean out bad investments and bad businesses"¦ why stop it?

Why should the unemployment rate be below 5% and not above 10%? Why should the Dow be near 30,000"¦ rather than closer to 15,000? Why not just let the chips fall where they may, in other words?

Where's the science behind that?....

Economics is no real science. It is mostly quackery mixed with flimflam.

But its practitioners nevertheless have Ph.Ds. And in the 20th century, they tried to upgrade their discipline from a subset of moral philosophy - don-t spend more than you earn! - to a pseudo-science, with numbers"¦ formulae"¦ sigmas"¦ alphas"¦ and deltas, too.

The foundational science of today's money system - monetarism - was a terrible mistake. It failed to appreciate the importance of the traditional gold standard. It thought it could do better with the Federal Reserve standard.

But while the U.S. dollar of 1913 (when the Fed was created) was just as good as the dollar of 1791 (when the dollar was created), the dollar of 2020 is worth, relatively, only about 3 cents! Why?

Because in a crisis, the temptation to 'print' more money is always irresistible. The Fed's balance sheet - a measure of how much printing is going on - was only 6% of U.S. GDP in 2008. By the end of 2021, it will likely be near 50%. Where's the science behind that?"

The New Frontier of Aging -Conley/MEA

"Policymakers better take note. My friend Andrew Scott, co-author of 'The 100-Year Life,' outlines the following in his essay for the International Monetary Fund entitled The Future of Aging for Policymakers.

'In 1965 there were 129 million people over 65 in the world; today there are nearly 750 million, and this figure is expected to reach 2.5 billion by 2100. The number of centenarians is also rising - from 20,000 in 1965 to a projected 19 million by 2100.'

The message is clear: anyone looking at what they think is a static society today better recognize that we are ill-prepared for people living this long. I'm not peddling fear here. I'm suggesting that employers start thinking about how they will seek out smart, motivated 75-year-olds who still 'got it.'

I'm suggesting that the future of housing will be very different from the recent past (although much like the distant past), with multigenerational households proliferating.

I'm also suggesting that certain places in the world are going to become havens for the 'young old' ('yolds'). People will move from focusing on their livelihood in the suburbs to moving to a 'lively 'hood.' Sun City and Rossmoor Leisure World represent the past, not the future....

One hundred years ago, 'adolescence' was an academic theory, and 'retirement' was ten years from becoming a mainstream concept. 'Midlife' didn't exist as a life stage. Over the 21st century, we're going to see remarkable changes in longevity and how we view a well-lived life."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 14, 2020


12.14.20 - Gold to Move 'Way Past' All-Time Highs

Gold last traded at $1,827 an ounce. Silver at $23.87 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on a sharply weaker dollar despite upbeat vacccine news. U.S. stocks tried to shake off a downtrend on stimulus progress hopes and a vaccine rollout.

Billionaire Investor says gold prices to move 'way past' all-time highs -Kitco

"Silver may be Thomas Kaplan's first love as he sees the potential for the precious metal to eventually push to $100; however, he is also not giving up on gold as he sees the yellow metal in the third-wave of a secular bull market that will take it 'way past new highs.'

Many investors turned bullish on gold in mid-2020 as central banks and governments flooded financial markets with massive liquidity to support the besieged global economy, devastated by the COVID-19 pandemic; however, Kaplan noted that gold was already in a bull market long before the pandemic hit.

'All the pandemic has served to do is to make people now understand that the question of money and what is money when clearly it can be printed at will,' he said. 'The debasement of currencies is obviously very, very bullish for gold.'

Not only is gold backed by solid fundamentals as a monetary metal, but Kaplan noted that gold looks good from a supply and demand outlook. He said that he sees the industry struggling to replace the ounces of gold that it has produced." ESG

Federal Government Spending Nearly Twice as Much As It's Taking In -Nextgov

"Two months into fiscal 2021, the federal government has spent nearly twice as much money as it has taken in through revenue after posting a 14th consecutive month of deficit spending.

According to the Treasury Department spending data released Dec. 10, the federal government ran a $145 billion deficit in November, driven heavily by spending on Social Security benefits, health care and national defense. Combined with October's $284 billion deficit, the federal government has spent $887 billion in fiscal 2021 - nearly twice the $457 billion it has captured thus far through taxes and other forms of revenue.

The government's deficit spending follows a record-breaking fiscal 2020, wherein agencies combined to spend a record $6.5 trillion, with a total deficit of $3.1 trillion. A sizable portion of spending in late fiscal 2020 was driven by spending on coronavirus relief packages and some decreases in collected revenue. Congress is currently considering another COVID-19 relief bill worth more than $900 billion."

How to fix the post-COVID economy and keep the socialists at bay -Tucker/Fox News

"The year 2020 has been a tough one for a lot of Americans, but it's been especially difficult for the experts who claim to analyze data for a living. A lot of these people (pollsters, public health experts) have been exposed as frauds.

If you still don't know that dishonest people can easily manipulate data to tell you any story they want to tell you, consider the condition of our economy...People at the very top are thriving, but many other Americans are withering away. Tens of thousands of independent businesses have been shut down for good, entire sectors of the economy have been wiped off the map....

So what is our government's solution to the disaster they created? Well, more money from the Federal Reserve, printed out of nowhere and backed by nothing. Trillions of new dollars spent to fix a problem they created, and more on the way soon. Keep in mind, this is stimulus money, designed to help those hurt by the lockdowns. In many cases, it did help and it will help. But in many other cases, the money has gone to people with the right political connections....

You can't keep printing trillions of dollars without getting serious inflation. There's no getting around it. The people making these decisions know that perfectly well. But that's the secret: They want inflation. In fact, they need inflation. Why? Because they've gotten rich from debt. That's the real economy. Leverage is their entire business model. So for the finance class, inflation is the only way out of all that debt. When money is worthless, you owe less. Meanwhile, hard assets - like upscale real estate on Martha's Vineyard - will be worth more.

So inflation may crush you, but it will make the people making the decisions richer. Everyone else - regular wage earners, people living on fixed income, every middle-class retiree in the country, anyone who bothered to live like a responsible person and save money - will be in serious trouble when inflation arrives.That's not speculation. It's coming, and anyone who's paying attention knows it's coming."

[Ed. Note: On Friday, Dec. 11, 2020, Tucker Carlson had a very interesting interview with Ned Ryun discussing how, given all the proposed increased spending by Democrats in 2021, inflation could easily spin out of control into hyperinflation. If/when that happens, precious metals could become your only practical means of preserving wealth.]

Vision and Breathing May Be the Secrets to Surviving 2020 -Scientific American

"We are living through an inarguably challenging time. The U.S. has been facing its highest daily COVID-19 case counts yet. Uncertainty and division continue to dog the aftermath of the presidential election. And we are heading into a long, cold winter, when socializing outdoors will be less of an option. We are a nation and a world under stress.

But Andrew Huberman, a neuroscientist at Stanford University who studies the visual system, sees matters a bit differently. Stress, he says, is not just about the content of what we are reading or the images we are seeing. It is about how our eyes and breathing change in response to the world and the cascades of events that follow. And both of these bodily processes also offer us easy and accessible releases from stress.

Huberman's assertions are based on both established and emerging science. He has spent the past 20 years unraveling the inner workings of the visual system...And a small but growing body of research makes the case that altering our breathing can alter our brain.

This growing understanding of how vision and breathing directly affect the brain - rather than the more nebulous categories of the mind and feelings-can come in handy as we continue to face mounting challenges around the globe, across the U.S. and in our own lives.

According to Dr. Andrew Huberman: 'You can't control your heart rate directly. You can't control your adrenals with your mind. But you can control your diaphragm, which means you control your breathing, which means you control your heart rate, which means you control your alertness. You can control your vision, which thereby controls your level of alertness, your level of stress and your level of calmness. Vision and breathing are essential as levers or entry points to autonomic arousal because they are available for conscious control at any point.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 11, 2020


12.11.20 - Science Is But a Hypothesis

Gold last traded at $1,839 an ounce. Silver at $23.97 an ounce.

NEWS SUMMARY: Precious metals climb higher Friday on growing safe-haven demand. U.S. stocks traded lower amid setbacks on U.S. fiscal relief package.

Why is gold considered valuable, even today? -ZME Science

"Few metals throughout history can boast the same desirability as gold. It has served as a hard currency for virtually every civilization that had access to it, fueled exploration and exploitation, and directly underpinned the dominant economic policy for at least two centuries.

It is, by and large, one of the most valuable and impactful metals humanity has ever used, despite it being quite soft and very shiny. So what exactly made gold so valuable and expensive, and why did various peoples show such interest in beating it into coins? Surprisingly, it's not so much the properties that gold has, it's what other elements don't have. The fact that it's pretty and shiny also helps, too....

Ultimately, what you want in a coin is for it to be a small but dense repository of value so you can carry a lot of purchasing power easily, long-lasting so you can store it and it won't just waste away, distinctive (so it's easy to tell it's the real deal), in limited supply to some extent (either through natural or policy constraints), and safe to handle.

Which brings us neatly to gold. There are around 118 elements on the periodic table, most of them natural, some of them only seen in the lab for fractions of a second at a time. Not many of them are usable for coinage, because not many of them share in those traits listed above....

Gold is, to this day, seen as a solid repository of value. But the inability to control its supply (to either increase or decrease it) when needed shackled governments and rulers in regards to their fiscal policy. Once you link your coinage to gold and silver, your economy is at the mercy of how much of them is available in your area.

In olden, golden times, this wasn't much of an issue; economies were pretty small, local things that moved quite slowly, had low output, and limited technological ability. Gold's longevity, scarcity, portability, the fact that it was verifiable and safe to use made it an ideal tender, despite its limited supply....

Gold's properties made it ideal for the minting of coins...Gold has value because people say it has value - for its uses, its looks, or its association with status, wealth, and power."

science Science Is But a Hypothesis -Bonner/Rogue Economics

"Now in its tenth month in the U.S., the coronavirus is becoming as familiar as bad breath. And many of the things we knew for sure about it in March"¦ well"¦ we're not so sure anymore.

At first, we were told that face masks weren't important. Later, we were told that the public health officials simply lied scientifically; they were afraid people might buy up all the available masks"¦ thus depriving the 'first line defenders' of their precious armor.

Then, face masks became compulsory. 'The science' tells us that they help prevent the spread of the coronavirus. But if that were so, how come places that require face masks don't have lower case counts?

According to the COVID Tracking Project, there is no difference in caseloads between places where face masks are required by law"¦ and places where they are not.

We don't know whether face masks help or not. But neither do the 'scientists.' Today, we write with no new information. Instead, we have an old observation: Science is overrated.

Every society has its elites - people with brains, ambition, talent, and confidence. These elites turn to government to get power. Then, they use that power to get money.

But science is never fixed"¦ never solid"¦ never, ever figured out. Instead, it drifts on a river of uncertainty"¦ picking up useful insights along the way"¦ but never knowing where it is going, and never arriving at its final destination. One hypothesis is put forward. And then, discredited, another takes its place....

Scientists never know anything for sure. Everything is a hypothesis. And it is only valid until it is disproven. Always and everywhere is doubt....

Dear Readers who have been doing their homework also know that the 'science' supporting lockdowns"¦ close-outs"¦ and button-ups is weak, at best.

Wearing a mask may or may not prevent you from spreading the virus"¦ or from getting it; we don't know. But we also know that the Constitution was written to limit the power of the feds - even when there's a nasty bug going around."

"˜Suicide Is A Very Real Threat': Pandemic Depression New, Growing Disorder Linked To COVID-19 -CBS

"Pandemic depression is a new disorder linked to COVID-19 and it's growing. Research shows people in major metropolitan areas, like Philadelphia, are being hit harder by mental health challenges.

It's not just physical ailments as emergency departments are also being bombarded with the emotional fallout from the pandemic. Over a six-week period this summer in Montgomery County, 400 people went to hospitals because of self-injury or suicidal thoughts.

A new study in Britain shows school lockdowns are having a big impact on children.

'We found quite a substantial increase in ratings of depressive symptoms during lockdown,' said Duncan Astle, a developmental psychologist for the University of Cambridge.

The research tracked about 200 elementary students before and after the lockdown and found a 70% chance that depression increased with isolation.

'What the data suggests is you can't simply pluck a child from one context and isolate them from it without it having knock on consequences,' Astle explained.

Hannah Smith's decline started with the cancelation of a cheering championship.

'I had no motivation for anything, even school work,' Hannah said. 'I didn't care. I didn't get up and do anything.'"

The Best Is Yet to Come -Laffer/American Consequences

"There is little that I can say or write about the current wonderful state of affairs of the U.S. that Debbie Downers can't rebut. If you are hell-bent on making the negative case, there's no changing your mind. But if you're open to facts and logic, there's one hell of a good case to be made for being grateful for all we do have and to be optimistic about the future. And as an 80-year-old economist, I firmly believe that the glass is half full....

In the 1950s and 1960s, it was against the law for any store to sell products at a discount below the manufacturer's suggested retail price ('MSRP'). There was no Walmart, Costco, or Home Depot. Deregulation worked miracles, and we're a lot better off as a result. Today, retail price competition is the standard, and consumers are the winners.

Airlines and trucking were deregulated under President Jimmy Carter and championed by Senator Ted Kennedy, if you can believe it. Forty years later, real airline prices have dropped by half, and Americans travel by air five times more frequently. To boot, the reduction in airline prices has not come at the cost of safety, reduced wages, or lower customer satisfaction. And if you think air travel is better, just look at what Uber and Lyft are doing to make taxi prices and services better"¦ Wow!....

After some 40 years of literal stagnation, real median household income is at the highest level ever recorded as of 2019, and just posted the largest year-over-year increase at 6.8% from 2018 to 2019. Purchasing power for Americans is rising to unprecedented levels....

The impact of the coronavirus on both U.S. health and the economy could have been a lot worse than it was for two reasons. First, the economy was in an exceptionally strong state when the virus hit...Second, the medical facilities in the U.S. were also up to the challenge of a pandemic and responded quickly and effectively."....

The best is yet to come for America."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 10, 2020


12.10.20 - Locked Down in La La Land -WSJ

Gold last traded at $1,835 an ounce. Silver at $23.99 an ounce.

NEWS SUMMARY: Precious metals remained stable Thursday as the ECB expanded its bond-buying program by 500 million Euros. U.S. stocks traded mixed as U.S. jobless claims see sharp rise.

Gold Markets Continue to Look Very Healthy -Lewis/FX Empire

"Gold markets have rallied a bit during the trading session on Tuesday to break above the 50 day EMA. Ultimately, this is a market that is going to go looking towards the $1900 level, which is a large, round, psychologically significant figure, and a target for buyers....

The $1800 level is of course a large number that people will be paying quite a bit of attention to due to the fact that it was the scene of a major breakout previously. I do like the idea of buying dips going forward and I have no interest in shorting gold. The US dollar falling will continue to help gold, and I think that it is only a matter of time before that continues.

I am looking for value and I think that a lot of people will be as well. Gold has recently pulled back roughly 20%, and that of course will continue to attract a lot of value hunting for longer-term traders out there."

solar Saxo Bank Unveils Its 'Outrageous Predictions' For The Year Ahead -Zero Hedge

"Saxo Bank has released its 10 Outrageous Predictions for 2021. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets:

1. Amazon 'buys' Cyprus, 2. Germany bails out France, 3. Blockchain tech kills fake news, 4. China's new digital currency inspires tectonic shift in capital flows, 5. Revolutionary fusion design catapults humanity into energy abundance, 6.Universal basic income decimates big cities, 7. Disruption dividend creates Citizens Technology Fund, 8. A successful Covid-19 vaccine kills companies, 9. Sun shines on silver, which sizzles on solar panel demand, 10. Next-generation tech supercharges frontier and emerging markets.

It's an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year's unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus. Commenting on this year's Outrageous Predictions, Chief Investment Officer at Saxo Bank, Steen Jakobsen said:

'Our not-so-outrageous prediction is that 2021 will bring the beginning of a reality check to the idea that 'extend and pretend' can stretch to infinity and beyond, even as markets have been pricing in that very expectation. Covid-19 has accelerated all major super-trends....'

The Outrageous Predictions 2021 publication is available here....

9. Sun shines on silver, which sizzles on solar panel demand...2021 brings the usual suspects that power silver higher on its hard asset/precious metal side as the US dollar weakens, and as investors are faced with the harsh reality of no relief in sight from negative real interest rates. This is exacerbated as inflation suddenly jolts higher in 2021 and policymakers are slow to respond, wanting to offer maximum support for their still-recovering economies. With a Covid-19 vaccine in rapid rollout by the middle of the year, the excessive liquidity and over-easy policy drives a powerful bid into any hard asset.

Turbocharging the rise in the silver price in 2021, even relative to gold, is the rapidly rising demand for silver in industrial applications. In fact, a real silver supply crunch is on the cards in 2021, and it frustrates the full throttle political support for solar energy investments under a Biden presidency, the European Green Deal, and China's 2060 carbon neutral goal, among other initiatives.

Another challenge on the supply side for silver is that more than half of mined silver supply is a by-product of zinc, lead and copper mining, making it tough for miners to meet the surging excess proportional demand for silver.

Trade: Long silver as the price races to an all-time high of $50 per ounce in 2021."

Locked Down in La La Land -Finley/Wall Street Journal

"On Sunday, Gov. Gavin Newsom's stay-at-home order shutting down nonessential businesses took effect across Southern California (the Bay Area locked itself down last week). 'Essential' is essentially a term of liberal politics.

During the state's first stay-at-home order this spring, cannabis shops were classified as essential. Ditto entertainment production. But hair salons and outdoor dining? Nope - unless of course these businesses cater to the state's entertainment industry.

A Los Angeles restaurant owner who had to close her outdoor patio posted an emotional video on social media late last week begging Gov. Newsom and Mayor Eric Garcetti to let her and other mom-and-pop restaurants reopen. Right across the street from her, she pointed out, a film studio had set up an outdoor cafeteria for its production workers.

Big-shot producers like Steven Spielberg and Jeffrey Katzenberg donate heavily to Democrats. But the Hollywood dispensation probably owes more to the political clout of production unions, including the Teamsters, which are worried studios will move production to other states like Georgia if they can't film in California....

Asked last Thursday about the scientific evidence to support the state's business closures and whether a ban on outdoor dining could lead to an increase in private gatherings, Mr. Newsom replied, 'The evidence you ask? Very significant evidence, overwhelming evidence.' He couldn't cite any.

Meantime, Democratic legislators led by Assemblywoman Lorena Gonzalez - a Teamsters member who championed the state's AB5 law reclassifying hundreds of thousands of independent contractors as employees - have sent a letter to Gov. Newsom beseeching him to reopen playgrounds, noting the disparate impact the closures have on low-income families without backyards. Maybe once kids, parents and small-business owners start paying union dues Mr. Newsom will start to care about their interests."

7 things to raise kids with flexible, resilient brains -Harvard psychologist Lisa Barrett/CNBC

"A child's brain is not a miniature adult brain. It is a brain born under construction that wires itself to the world. And it's up to parents to create a world - both physical and social - that is rich with wiring instructions.

Based on years of research in neuroscience and psychology, here are seven parenting rules to help your kid build a brain that is flexible and therefore resilient.

1. Be a gardener, not a carpenter. - Carpenters carve wood into the shape they want. Gardeners help things to grow on their own by cultivating a fertile landscape.

2. Talk and read to your child. A lot. - Research shows that, even when children are just a few months old and don't understand the meanings of words, their brains still make use of them.

3. Explain things. - It can be exhausting when your child is constantly asking, 'Why?' But when you explain something to them, you've taken something new and novel from the world and made it predictable.

4. Describe the activity, not the person. - When your son smacks your daughter in the head, don't call him 'a bad boy' Be specific: 'Stop hitting your sister. It hurts her and makes her feel annoyed. Tell her you are sorry.'

5. Help your children to copy you. - Have you noticed how some tasks that seem like work to you (i.e., cleaning the house or weeding a garden) can be play to a child? Children learn naturally by watching, playing, and most of all, by copying adults.

6. Expose children (safely) to lots of people. - Along with people that your kids may normally encounter - grandparents, aunts and uncles, friends, other kids - try to exposing them to as much diversity as you can, especially when they are infants.

7. Applaud agency. - Children love to try things on their own without your help, like getting dressed or assembling puzzles. This is good. You want them to develop a sense of agency."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 9, 2020


12.9.20 - How to Invest in Gold -WSJ

Gold last traded at $1,829 an ounce. Silver at $23.69 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on profit-taking despite a weaker dollar. U.S. stocks traded mixed amid rising optimism around a $916B fiscal stimulus proposal and a coronavirus vaccine.

How to Invest in Gold -Ramkumar/Wall Street Journal

"Gold is an alternative to stocks and bonds that many investors use as a safe haven: an asset that can hold its value during times of market volatility or economic uncertainty. There are several different ways you can invest in gold from futures contracts to exchange-traded funds, and many on Wall Street recommend having at least a small portion of your portfolio invested in the metal through one of these methods.

When investors say they own gold, that typically means they hold one of the following assets: physical gold bars or coins; gold exchange-traded funds; gold futures; or shares of gold miners. There are nearly 200,000 metric tons of gold above ground in the world worth more than $11 trillion at today's prices, according to the World Gold Council.

A main reason to consider buying gold as an investment is to cushion your portfolio from volatility and economic uncertainty...Gold prices tend to rise when investors are worried about the economic outlook or geopolitical shocks, helping offset possible declines in stocks during times of market turbulence.

You can also use gold to hedge against rising inflation. Higher consumer prices mean it would take more dollars to purchase the same amount of gold, boosting the metal's price. Climbing inflation also means the dollar would weaken. A weaker dollar makes it easier for someone overseas to purchase dollar-denominated assets like gold.

Gold can also be used to bet on falling interest rates. Lower rates make gold more appealing by diminishing the returns you would expect from government bonds."

inflation The Biggest Janet Yellen Red Flag -Tamny/Real Clear Markets

"In Phishing for Phools, a 2015 book that George Akerlof co-authored with Robert Shiller, the authors wrote without even a hint of irony that people 'do not do what is really good for them, they do not choose what they really want.' Please think about the previous bit of absurdity from the two economists.

If they're to be believed, we're all just a collection of idiots. That's what their allegedly careful economic analysis concludes. Explicit in the authors' disdain for the hoi polloi is that we're all easy marks for manipulative advertisers who, backed by copious funds, can easily trick us into buying all manner of things we don't need. Better yet, they can allegedly trick us into doing what we otherwise wouldn't do....

Akerlof, the co-author of what might be one of the most ridiculous books on 'economics' ever written, is married to Treasury secretary nominee Janet Yellen. Much more important, Akerlof recently told the New York Times that he and Yellen have 'always been in all but perfect agreement about macroeconomics.' If so, it might be useful for the senators questioning Yellen at her Treasury confirmation if near 'perfect agreement' between her and her husband includes admiration for Phishing for Phools?....

While Yellen is surely smart in the book sense, there's absolutely nothing remarkable about her economic knowledge. In truth, her ideology is very unoriginal, and is rooted in the hard-to-credit view that economic growth can be engineered via the forced redistribution of wealth from producers to consumers."

Our National Debt Denial -Cochrane/National Review

"The U.S. has avoided a debt crisis for decades. That doesn't mean it can't happen, absent real policy changes.

Does debt matter? As the Biden administration and its economic cheerleaders prepare ambitious spending plans, a radical new idea is spreading: Maybe debt doesn't matter. Maybe the U.S. can keep borrowing even after the COVID-19 recession is over, to fund 'investments' in renewable energy, electric cars, trains and subways, unionized public schools, housing, health care, child care, 'community development' schemes, universal incomes, bailouts of student debt, state and local governments, pensions, and many, many more checks to voters.

The argument is straightforward. Bond investors are willing to lend money to the U.S. at extremely low interest rates...What could go wrong? This scenario requires that interest rates stay low, for decades to come, and remain low even as the U.S. ramps up borrowing. The scenario requires that growth continues to outpace interest rates. Most of all, this scenario requires that big deficits stop....

Yet an end to big borrowing is not in the cards. The federal government borrowed nearly $1 trillion in 2019, before the pandemic hit. It borrowed nearly $4 trillion through the third quarter of 2020, with more to come....

The end must come in sharp and sudden inflation or default. And that is a catastrophe. When Washington can no longer borrow, our normal crisis-mitigation policies disappear - the flood of debt relief, bailout, and stimulus that everyone expects - together with our capacity for military or public-health spending to meet the roots of the crisis.

Yes, the U.S. prints its own money and Greece does not. But that fact only means that a crisis may end in sharp inflation rather than chaotic default. And it is not obvious that the U.S. government will choose inflation over default."

Remote Work Is Here to Stay and That's a Good Thing -Tuccllle/Reason

"Since the beginning of the pandemic, businesses able to shift their employees to remote work have done so with varying degrees of eagerness. Telecommuting became a lifeline for operations that were resistant to work-from-anywhere arrangements in the past but found them to be the only way to continue operating amidst lockdown orders and public fear of infection. But will the changes stick for the long term? Or will workplaces revert to their pre-pandemic forms?

It's looking more and more like there's no reason for some of us to change out of pajamas; the evidence suggests that remote work has been a boon for many people and is here to stay. That has big implications for expanding people's choices about where they live and why. But it may also widen the divide between those can work where they live and those who must live where they work.

'More than 20 percent of the workforce could work remotely three to five days a week as effectively as they could if working from an office,' the U.S.-based consulting firm McKinsey & Company reported in November...'If remote work took hold at that level, that would mean three to four times as many people working from home than before the pandemic and would have a profound impact on urban economies, transportation, and consumer spending, among other things.'....

Part of the stickiness of remote work arrangements may be that their time has come. The technological capability has existed for many years for desk-based jobs to be performed from anywhere, yet managers were often hesitant about allowing employees out of their sight. COVID-19 overcame that hurdle for many businesses.

The pandemic has helped workers and organizations overcome inertia related to the costs of experimentation, as well as inertia stemming from biased expectations about working from home. Importantly, too, the experience has proven positive for workers and employees alike....'Many workers report being more productive at home than on business premises, so post-pandemic work from home plans offer the potential to raise productivity as much as 2.4 percent,' say BFI researchers....

For those who do benefit from increased acceptance of remote work, life should become a bit easier. People will enjoy increased opportunities to live where they want while working jobs that appeal to them. Couples won't have to prioritize one partner's employment over another's. Able to do our jobs from where we please, life for many of us will, happily, reflect a bit more of what we want rather than what we have to do to get by."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 8, 2020


12.8.19 - Facts - Not Fear - Will Stop the Pandemic

Gold last traded at $1,870 an ounce. Silver at $24.60 an ounce.

NEWS SUMMARY: Precious metal prices advanced again Tuesday, gaining over 5% so far in December, amid rising uncertainty and a falling dollar. U.S. stocks fell as traders kept an eye on negotiations for additional fiscal stimulus while the U.S. coronavirus caseload continued to rise.

Gold Prices Have Soared. Expect More of That in 2021. -Saefong/Barrons

"Gold prices have climbed sharply in 2020, but they are still off more than 10% from the record high in August. The moves cap a year rocked by a pandemic that led to economic restrictions and fiscal stimulus measures, feeding the precious metal's appeal as a haven investment.

Many of these same reasons are expected to lift prices in the new year. 'It is likely that the uncertainty of how the economy is going to recover and how fast and large the recovery will be, coupled with increasingly historical levels of fiscal and monetary stimulus, puts gold on the path of a bull run for several years,' says Ed Moy, a former director of the U.S. Mint, who is currently chief strategist at gold seller Valaurum....

For the year, soaring debt ratios in major economies and 'monetary and fiscal stimulus leading to increases in money supply' were the top two factors for gold's rise, says Peter Grosskopf, chief executive officer of Sprott. 'Heightened uncertainty and fear due to the pandemic' ranked third, though he believes Covid-19 accelerated the first two factors.

To Moy, however, the pandemic and the economic uncertainty it caused, increased demand for haven assets, and the limited supply of gold, along with massive amounts of stimulus measures in a short period, were the key reasons for gold's gain this year....

Grosskopf sees the recent pullback in gold as 'a healthy correction and a buying opportunity,' for investors. In 2021, prices should rally to more than $2,000, with a climb to fresh record highs by mid-year, he says."

back to normal No, the World Economy Will Not Return to "Normal" -Bonner/Rogue Economics

"Investors believe - correctly - that more money is on the way. And though the bailout is meant to fill nearly all the glasses at the bar, stock market investors expect to get especially sloshed. The other reason (if the word can be used in such a loony context) stock prices are so high is that investors expect a vaccine will soon bring the coronavirus to heel, allowing the world economy to return to 'normal.'

This is extremely unlikely. Normal is not on the menu. Debt has reached such high levels that any return to normal interest rates will be disastrous.

So vaccine or no vaccine, the feds have to keep printing more and more money, just to keep interest rates low (they use it to buy bonds, thereby driving up bond prices"¦ and driving down interest rates). This will create more distortions, crises, crashes"¦ and ultimately, a total collapse of the U.S. economy.

But the debacle will take years to fully express itself. 'Normal,' we predict, will not return during our lifetimes.

When the money gets out of whack, so do prices. In the 1999 bubble, it was dot-com stocks. In the 2007 bubble, it was the mortgage finance companies. And now?....

Tesla produces electric cars. Its margins are determined by the difference between the cost of making the cars and the money it brings in from sales and service - now about 6 cents per dollar of revenue. And its future depends, mostly, on how many cars it can sell.

Today's stock market valuation suggests that the company would have to generate $600 billion in sales in order to justify the current share price...About $1.8 trillion in sales revenue. ...Goldman Sachs is setting a new price target for Tesla - over $700 billion. At that price, an investor relying on current net income to make himself whole will wait more than 1,000 years!....

But Tesla is just one of many stocks that are trading in cuckoo land. The averages are at their highest levels since"¦ well, since they were last in cuckoo land, in 1999 and 2007. And it seems unlikely that Mr. Market would take prices back to the cuckoo land of 1999 and 2007"¦ without wanting a rerun of the crashes of 2000 and 2008, too.

What will Tesla be worth then?"

Why the US dollar could be the big loser of 2021 -Horowitz/CNN

"The US dollar is on the back foot, and Wall Street doesn't expect that to change any time soon.

What's happening: The dollar has weakened by nearly 12% against a basket of top currencies since peaking in March. Last week, it hit its lowest level since April 2018. The last time the greenback was on the skids like this was 2017. The slump can be explained by a few factors, strategists say.

Faith in the global recovery: When the US and global economy are performing strongly, the dollar - a safe-haven currency - tends to weaken....

Central bank policy: The Federal Reserve has made clear it will keep interest rates low and keep printing money for as long as necessary to stimulate the US economy....

Tariffs have contributed to a stronger dollar in recent years... In disputes with countries like China, President-elect Joe Biden is expected to rely more on other tools. That's a positive for global growth, and a negative for the dollar....

Another effect: Other currencies like the euro have been rapidly appreciating in part because of the dollar's decline...'This is a broad-based dollar weakening move driven by global reflation repricing,' said George Saravelos, a Deutsche Bank analyst."

Facts - Not Fear - Will Stop the Pandemic -Dr. Bhattacharya/AIER

"The media relish negative news. 'If it bleeds it leads' still holds, and perhaps it's never been truer than in the COVID-19 era. Every day the news highlights the spread of the virus and tells the sad stories of some of its victims.

And yet, much of the media does not pay sufficient attention to the good news regarding improved treatments and survival of patients with the coronavirus....

The case fatality rate from the virus has dropped sharply since March. The infection survival rate is 99.95 percent for people under 70 and 95 percent for people over 70. Hospitals are much better equipped to handle patients, with improved ventilator protocols, improved management of outpatients and new therapeutic strategies to provide relief and recoveries. Moreover, thanks to multiple ongoing clinical trials around the world, there may soon be a safe and effective vaccine.

By contrast with their focus on COVID deaths, the media have paid scant attention to the enormous medical and psychological harms from the lockdowns in use to slow the pandemic.

By lockdowns, we mean the all-too-familiar shuttered schools and universities, closed playgrounds and parks, silent churches and bankrupt stores and businesses that have become emblematic of American civic life these past months. The relative dearth of reporting on the harms caused by lockdowns is odd, since lives lost from lockdown are no less important than lives lost from COVID infection. But they've received much less media attention....

Internationally, the lockdowns have placed 130 million people on the brink of starvation, 80 million children at risk for diphtheria, measles and polio, and 1.8 million patients at risk of death from tuberculosis. The lockdowns in developed countries have devastated the poor in poor countries. The World Economic Forum estimates that the lockdowns will cause an additional 150 million people to fall into extreme poverty, 125 times as many people as have died from COVID....

Finally, the neglect of the good COVID news breeds panic and fear, which is never a good public health strategy...With wise and informed policy choices, we can reduce its ultimate toll of death and human misery."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 7, 2020


12.7.20 - Hype Surrounds ESG Investing

Gold last traded at $1,858 an ounce. Silver at $24.41 an ounce.

NEWS SUMMARY: Precious metal prices traded sharply higher Monday on safe-haven buying and a weaker dollar. U.S. stocks traded mostly lower as Covid-19 cases continued to rise and Wall Street searched for clues on additional fiscal aid.

Is Gold Bullish Again? -Rosputnia/FX Empire

"Gold is a safety hedge in an uncertain world. There is no surprise we saw a massive sell-off with Covid vaccines being announced. Both vaccines are still waiting on final FDA approval. The real game-changer however could be Johnson & Johnson's vaccine which only requires one shot and no special refrigeration outside that already widely required for current vaccines. Johnson & Johnson are expected to have interim data on its vaccine sometime in January which could mean emergency use authorization as soon as February.

So overall, the vaccine news is still very promising. However, the damage to the economy is already done and it will take years to recover after COVID. Despite massive stimulus key economic data is very weak. Last week gold rebuilt its correlation with the greenback. MA200 turned out to be a buyers zone....

Formation of higher low or kind of base formation is needed to have confidence in buying gold. However, we already can identify a bullish setup: Cycles point we are close to the bottom and new rally. The seasonal indicator is turning to the upside. The valuation model shows gold is undervalued...There are early signs gold is getting ready for the next wave up with another flagging formation....Lets not forget the huge government debt and potential asset bubble. Gold and Dollar are both means of safe haven."

ESG The Hype Surrounding Environmental, Social, And Governance Investing -Wright/AIER

"ESG (environment, social, and governance) funds are the hottest investments going. The only problem is that they are like free trade coffee - the consumer (investor) pays more for the same product. They might 'feel good' in the process but their feelings are irrational because they are paying for a brand label rather than anything substantive.

A recent study by Barclays shows that while one in four investment dollars are currently in mutual funds labeled ESG, most investors do not realize that those funds are virtually indistinguishable from non-ESG-labelled funds in terms of portfolio composition or returns. Only fees differ and, unsurprisingly, are considerably higher for ESG-labeled funds - on average almost 0.75 percent vs. less than 0.50 percent for non-ESG-labeled funds.

P.T. Barnum once claimed that there is a sucker born every minute but thanks to population growth and an increasingly complex world, it is closer today to every second....

Organic food fraud is small potatoes compared to ESG-labelled funds. If they charge just 0.25 percent higher fees for essentially nothing extra in return, irrational investors are gifting the fund managers big bucks, billions of extra fees per year in an industry with $18 trillion under management.

No, I do not think we need additional government regulation, I think we need investors (citizens, neighbors) who are rational and informed, who care about actual outcomes and not just feeling good through virtue signalling. It is no virtue, after all, to invest in something merely because it is labelled something that sounds or seems good....

So what is ESG really about? I doubt anything substantive but, perhaps, someday ESG-labelled funds will actually be ESG funds, or in other words will meaningfully differentiate between ESG and 'wicked' companies. But then, as the Financial Times recently pointed out, they will face a conundrum. To the extent ESG successfully diverts investment away from 'wicked' companies, their share prices will decline, i.e., they will become inexpensive and hence set up to outperform so long as any subset of investors continues to maximize returns/minimize waste. Meanwhile, the shares of ESG companies will get wicked expensive as more and more money piles into them....

In the end, then, the hip hop group Public Enemy was actually the investing public's friend; when it comes to ESG, 'Don't Believe the Hype' because investors 'Can't Truss It.'"

America's hidden depression -Rabouin/Axios

"There is a recovery happening. But it's helping some people immensely and others not at all...Two big reasons: 1. Big business, investors, and the wealthy are thriving. But restaurant and bar employees, hotel and airline staff, and other service workers are in a pretty hopeless situation right now: A 'depression' is an apt description of what they're facing - especially folks in rural and middle America who are parents.

700,000 Americans have been filing unemployment insurance claims every week for 37 weeks - nine months. Plus, 20 million people are still on the pre-pandemic unemployment rolls. 2. As Axios has been telling you, government statistics - because of the way they've always been reported - understate lots of red flags.

The official unemployment rate has been dropping, but that's because: It never really counted gig economy workers well in the first place. Its data collection abilities have been severely crimped by the pandemic. Lots of people are falling out of the labor force - not working and not looking. What's next: 13.4 million people are on pandemic unemployment programs that expire at the end of the year - 27 days from now. That's unheard of, and incredibly bad."

Walter Williams Achieved Goal of Dying While Teaching -Sowell/Townhall

"Walter E. Williams (1936-2020) loved teaching. Unlike too many other teachers today, he made it a point never to impose his opinions on his students. Those who read his syndicated newspaper columns know that he expressed his opinions boldly and unequivocally there. But not in the classroom.

Walter once said he hoped that, on the day he died, he would have taught a class that day. And that is just the way it was, when he died on Wednesday, December 2, 2020.

He was my best friend for half a century. There was no one I trusted more or whose integrity I respected more. Since he was younger than me, I chose him to be my literary executor, to take control of my books after I was gone.

But his death is a reminder that no one really has anything to say about such things. As an economist, Walter Williams never got the credit he deserved. His book 'Race and Economics' is a must-read introduction to the subject. Amazon has it ranked 5th in sales among civil rights books, 9 years after it was published....

Despite his opposition to the welfare state, as something doing more harm than good, Walter was privately very generous with both his money and his time in helping others. He figured he had a right to do whatever he wanted to with his own money, but that politicians had no right to take his money to give away, in order to get votes....

We may not see his like again. And that is our loss."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 4, 2020


12.4.20 - Bears Vindicated As Dollar Spirals

Gold last traded at $1,834 an ounce. Silver at $24.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weak dollar. U.S. stocks seesawed amid a disappointing jobs report and worsening pandemic.

Gold Prices Rise as the Dollar Continues to Slide -FX Empire

"Gold prices rebounded for a second consecutive trading session after recapturing the 200-day moving average. The dollar index closed at a 31-month low paving the way for higher gold prices. The US Beige book was darker than expected as regions in the US show no growth. ADP private payrolls came in softer than expected but failed to weigh on US yields.

Resistance is seen near the former breakdown level at 1,851. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 31, up from 18, which reflects accelerating positive momentum.

Private companies added 307,000 jobs in November below the 475,000 expected. The October figure was revised higher to 404,000. This was the smallest gain since July's 216,000."

dollar Dollar Bears Vindicated as Spiral Accelerates -Bloomberg/Yahoo Finance

"It's turning into a week of vindication for proponents of a weaker dollar as the case they've been making for years may be gaining steam.

The greenback is spiraling lower, probing levels last seen in April 2018, judging by a Bloomberg index. The tumble is part of a broader move across financial markets to price in brighter growth prospects for 2021 and the potential for superior investment opportunities outside the U.S., in large part as hopes for a coronavirus vaccine build.

Dollar bears are feeling encouraged by the breadth of the currency's declines this week: The euro, the Australian and Canadian dollars and the Korean won have all touched their highest levels in more than two years, while the Swiss franc is at its strongest since 2015. The pound is at the highest in a year, even amid the uncertainty surrounding Brexit.

'We are seeing money being put back to work after the defensive positions held in the dollar,' said Chris Turner, a currency strategist at ING Groep NV. 'Vaccine news is adding weight to the view of a synchronized global upturn in 2021; the dollar can fall another 5-10% next year.'

More weakness in the greenback may come as asset managers build record short bets. The Congress's renewed focus on fiscal stimulus in recent days delivered the latest blow to the dollar."

Coronavirus-Stimulus Efforts Pick Up Speed -Wall Street Journal

"Democratic leaders signaled Wednesday they were prepared to reduce their demands for the next round of coronavirus relief, fueling hopes that an agreement could be reached with Republicans by year's end to boost struggling businesses and households.

House Speaker Nancy Pelosi (D., Calif.) and Sen. Chuck Schumer of New York, the chamber's Democratic leader, said that a new, bipartisan $908 billion coronavirus relief proposal released Tuesday should serve as the starting point for talks to try to resolve months of disagreement with GOP leaders and the White House.

Democrats had coalesced earlier around a $2.4 trillion bill passed in the House, which contains measures including funding for state and local governments and food stamps, among others, which GOP proposals have excluded. Republican leaders' most recent bill cost around $500 billion. But on Tuesday, a new bipartisan group unveiled the $908 billion proposal, designed to help buoy workers and businesses through March....

Senate Majority Leader Mitch McConnell (R., Ky.) didn't comment on the Democratic leaders' statement, but he said earlier in the day that they were showing 'a new willingness to engage in good faith.'....

'The president will sign the McConnell proposal that he put forward yesterday,' Mr. Mnuchin said Wednesday. Mr. Mnuchin said the White House was reviewing the new bipartisan proposal. President Trump hasn't weighed in on the discussions, but White House press secretary Kayleigh McEnany said Wednesday that Covid-19 aid was a priority."

Tesla Isn't A Car Company -Calhoun/Alhambra

"The most common view of stocks is that they are overvalued and a fall - a large fall - is inevitable. And there is no stock that embodies that view more than Elon Musk's Tesla Incorporated.

It was once known as Tesla Motors but Musk changed the name in early 2017. At the time of the change the stock traded for about $50 and it was expensive for a car company. Today it trades for $585 and it is not, as I have been told repeatedly by every Tesla bull I've encountered, an automobile company....

Of the FANMAG stocks everyone is so enamored with (Facebook, Apple, Netflix, Microsoft, Amazon, and Google), only one trades for more than 10 times sales (Microsoft at 11 times). Amazon, the stock all value investors have shunned due to its 'insane' valuation is the cheapest of the bunch at just 4.7 times sales.

Tesla stock, meanwhile, trades at a nose bleed inducing 21.5 times sales. Not being a mere car company allows investors - and I use that term very loosely - to imbue the company with qualities that cannot be quantified. Tesla is whatever investors can imagine might emerge from the obviously brilliant mind of Elon Musk. Tesla is indeed 'not a car company'. It is an abstraction and therefore un-valuable, if not invaluable....

Tesla is not an isolated case. Indeed, I think global financial assets in general are viewed in very much the same way as Tesla. 'Investing', as practiced by the new indexers, is no longer an exercise of valuing assets and liabilities, assessing business plans, or understanding industry dynamics. It no longer requires knowledge of such fundamental metrics as price/sales, price/earnings, or, heaven forfend, such anachronistic concepts as book value....

Tesla has been a wildly profitable speculation, exhibiting classic momentum characteristics. Its price is rising because its price is rising. And that describes large parts of the markets today, where uninformed speculation has driven prices to levels that are hard to justify based on realistic expectations about the future....

Markets today are dominated by speculators, people who don't know what they own and don't care, as long as the price goes up. We are not speculators. We are investors and we think it matters quite a lot how one achieves portfolio returns. From Tesla to Bitcoin to any of the other of today's overly popular assets, a rising price does not magically transform a speculation into an investment. I don't know when fundamentals will matter again, but I am certain they will. And when they do Tesla will be just a car company again."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 3, 2020


12.3.20 - Stocks: "100% Loss Probability"

Gold last traded at $1,839 an ounce. Silver at $24.10 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on upbeat jobs data and a weaker dollar. U.S. stocks steadied as investors monitored progress on a stimulus deal as well as new economic data.

Stocks Are "Overbought And Frothy" Warns Wall Street's Most Accurate Analyst -Zero Hedge

"Two weeks ago we dubbed Morgan Stanley's Michael Wilson, the bank's chief US equity strategist, Wall Street's most accurate forecaster. Here's why:

Over the past year, Morgan Stanley's Michael Wilson has done something virtually none of his colleague have been able to do: he called market moves correctly before they happened and also timed the market's inflection points with uncanny precision: turning bullish at the depths of the March crisis, when most of his peers were apocalyptic, then remaining bullish until just over a month ago, when he warned "brace for a very difficult trading environment over the next five weeks" - which followed with the early September tech dump - and then two weeks after he again correctly predicted that US stocks were due for their second 10% correction in as many months as "investors were a bit too complacent on the uncertainty surrounding the election outcome, unlikely passage of a fiscal stimulus before the election and second wave of Covid-19", the S&P 500 has indeed fallen 9% while the Nasdaq and Russell 2000 have fallen 10% and 7%, respectively.

He was, again, right.

Then, at the start of November, he reversed his bearish bias, when as we reported he predicted that "the correction we expected is now mostly finished and adding to equities on further weakness this week is recommended."

Since then, the S&P is up +13.5% to a new all time high, the Nasdaq is up +10.8% also to a record high, and after today's Pfizer news, the Russell has exploded 16% higher.

In short, he was right again.

Wilson ... cautioned that in the last few remaining weeks of 2020 he saw the risk of yet another drawdown in stocks, which would be the third 10% correction since September. This will be catalyzed by the market's realization of the "bad news" that "the vaccine won't be ready for mass distribution for another 3-4 months as case counts and deaths increase." Still, once this small correction is in the rearview mirror, which perhaps may even trigger additional Fed easing during the Dec FOMC meeting when the Fed is expected to extend the maturity of its TSY purchases, Wilson remains "a steadfast bull on a 12-month view in terms of both the earnings outlook and the market."

fear vs greed Citi Warns "100% Probability Of Loss" In Most "Euphoric" Market Since Dot Com Bubble -Zero Hedge

"Sometimes 'greed' is not good. The last time the market was this 'extreme' in its greed did not end well, but as FOMO dominates any downside fears, Citigroup's Panic-Euphoria indicator - which tracks metrics from margin debt to options trading and newsletter bullishness - has reached its highest since the August tumble and equaled its highest since the peak of the dotcom bubble.

'Current euphoric readings signal a 100% probability of losing money in the coming 12 months if we study historical patterns - indeed, we saw such levels back in early September as well right before a selloff in stocks.'

All of this exuberance as Bloomberg notes that uncertainties from the timing of further fiscal stimulus to the roll-out of a vaccine to the pace of economic recovery remain...As Peter Boockvar, chief investment officer at Bleakley Advisory Group, warned: 'The Bull boat right now is standing room only.' When does FOMO morph into OHNO?"

How Much Debt Is Too Much? -Ragan/Project Syndicate

"The new conventional wisdom in these unconventional times is that advanced-economy governments can take advantage of today's ultra-low interest rates to borrow and spend without limit in order to support the economy. But the fact is that there is always a limit, and it may come into view sooner than many realize.

As the COVID-19 pandemic rages, governments in advanced economies have opened their coffers to support households and small businesses, spending on the order of 15-20% of GDP in many cases. Cumulative debt levels now exceed GDP in many developed countries; and, on average, debt as a share of GDP is approaching post-World War II highs....

In this strange world of ultra-low interest rates, what limits are there on government borrowing? According to advocates of Modern Monetary Theory (MMT), there are none, at least not for countries that issue debt in their own currency and have spare productive capacity. After all, the central bank can simply print money to pay off maturing debt, and this should not result in inflation as long as there is sizable unemployment. No wonder MMT has become the go-to idea for politicians advocating government spending to alleviate every problem.

Of course, any 'theory' that promises a free lunch should be approached with skepticism....The monetary financing advocated by MMT is just smoke and mirrors....Advanced economies will not become Zimbabwe any time soon - if ever. But some of them are permeated by divisive politics that typically encourages higher spending but not higher revenues - as many an emerging market can attest. If so, it would not be surprising to see somewhat higher inflation in a few years. This is not an argument for immediate austerity...Public spending, however, must be sensible, not based on magical monetary thinking."

All the Happiness Money Can Buy in the Winter of Covid-19 -Carmichael/Bloomberg/Yahoo

"As the saying goes, money can't buy happiness. That certainly seems to be true in 2020 - rates of depression and anxiety are up, even though many households have more cash on hand than usual. Savings rates in the U.S. spiked to a previously unfathomable 34% in April and sat at a still-high 14% in September.

There must be some way to use this extra cash to brighten our spirits. Even if gyms, cafes, hotels and restaurants aren't safe. Even if travel is restricted. Even if the best things in life are free....

To find out whether it's realistic to throw money at the problem of Covid-induced unhappiness, I called Elizabeth Dunn, a psychology professor at the University of British Columbia and a coauthor of 'Happy Money: The Science of Happier Spending.'

One area she says is definitely worth the money: exercise. Physical activity is really good for our emotional well-being; it can be just as effective as medication in treating depression, studies have found, even if it's just 30 minutes of walking three times a week....

A raft of studies have linked spending time in nature to better mental health. And, of course, Covid transmission rates are far lower outdoors, making it possible to socialize relatively safely as long as you stay outside....

Another way to invest in happiness is to buy experiences. We're happier buying experiences than material goods, several studies have suggested....

Another way to buy an experience is to buy more free time. People feel much happier when they outsource tasks they find unpleasant, Dunn's research shows....

The last and best way to buy happiness: Help others. A tranche of Dunn's research focuses on what academics call 'prosocial spending' and its powerful effects. Charitable donations bring us joy; we feel even better when we can see the tangible effects of our giving. So make a donation to your local food pantry, or send a DoorDash order to a friend going through a hard time."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 2, 2020

12.2.20 - Gold Price Jumps 2% on Dollar Slide

Gold last traded at $1,826 an ounce. Silver at $23.96 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Wednesday on bargain-hunting and a flat dollar. U.S. stock retreated from historic highs on a stimulus stalemate and declining jobs data.

Gold jumps 2% on dollar slide, stimulus bets -CNBC

"Gold prices jumped over 2% on Tuesday, rebounding from a five-month low in the previous session, and silver soared nearly 5% as the dollar fell and as U.S. stimulus bets due to mounting COVID-19 cases eclipsed the optimism around a vaccine-led economic recovery....

'We saw gold recapture the $1,800 level and a lot of that has to do with the weakening dollar trade,' said Edward Moya, senior market analyst at OANDA. 'The unwind of the gold trade has run its course' and we are likely to see more efforts from the U.S. Congress to support the economy. Making gold more attractive to investors holding other currencies, the dollar fell on expectations of more U.S. stimulus, with focus shifting to Federal Reserve Chair Powell's testimony before the Senate Banking Committee...Powell highlighted challenges of production and mass distribution before the economic impact of a vaccine becomes clear....

'The bottom was in for gold now and we see prices north of $2,000 next year,' said Daniel Ghali, commodity strategist at TD Securities. 'Gold's actually now in a new regime' with vaccines a likely catalyst for higher inflation expectations as the economy recovers, supporting gold longer term, especially amid lower real rates, Ghali added. Silver gained 4.3% to $23.58 per ounce, having earlier risen as much as 4.9%."

economy Economic outlook 'extraordinarily uncertain' -Powell/CNBC

"Federal Reserve Chairman Jerome Powell emphasized the importance of the lending programs it has deployed during the coronavirus pandemic, telling senators in testimony to be delivered Tuesday that they've been integral in keeping the economic fallout from being worse....

Many of the key programs that the central bank has used since March are expiring at the end of the year, and the Fed will be forced to return the funding that supports them....Addressing the economy, Powell provided a lukewarm outlook that he again said will be dependent on the progress of the virus, which has been spreading rapidly lately.

'As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check,' he said. 'The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months. A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.'....

Powell repeated that the Fed stands at the ready to use its policy tools. In addition to the lending and liquidity programs, the Fed has cut its benchmark borrowing rate to near zero and is buying at least $120 billion of bonds a month."

Dow 30,000: 'The Fed Did It' Narrative Becomes Even More Ridiculous -Tamny/Real Clear Markets

"There are so many reasons the Federal Reserve will never be abolished, but none of them have anything to do with its existence being necessary...The Fed began as a lender of last resort in 1913 to solvent banks, but it's never fulfilled that role. With good reason. If you're a financial institution with quality assets, you don't need the Fed to help you through near-term cash crunches. Private lenders line up to liquefy that which is well run.

The Fed regulates banks. Ok, and what's the point there? The same central bank has bailed out Citi how many times? At least five by the count of those in the know. It's just a reminder of the obvious: the Fed's regulators can't see around the corner in order to detect trouble spots ahead of time for the banks they oversee. If they could, they wouldn't be Fed regulators. They would be stunningly rich investors....

The Fed aims to influence the short rate for credit? Oh please. The Fed exists to buy government debt. Sure, but that's government buying from government, which means it's a wash. As always, imagine if the Fed didn't exist. All of the above functions would likely still be federal functions to the detriment of the U.S. banking system and the U.S. economy more broadly....

Wealth extracted from the private sector and that is utilized by the Fed can influence markets to a degree...Hence, to pretend our central bank can stimulate economic growth or engineer happy times of the economic kind is as lamebrained a belief as the one that says Congress can stimulate economic growth by extracting wealth created in the private sector, only to redistribute it to favored constituents....

In reality, a stock's value is a market speculation on all the dollar's a specific company will earn over its existence. The view in November 2020 is that Apple's future is bright, but Chevron''s isn't....In short, markets work. They reflect reality. Not only is 'the Fed did it' an insult to American ingenuity on par with Barack Obama's 'you didn't build that,' such a stance ignores the basic truth that if U.S. stock markets were rigged by the Fed, they would be too depressed to be worth rigging."

The death of the department store and the American middle class -Del Rey/VOX

"The collapse of America's middle class crushed department stores. Amazon and the pandemic are the final blows....Across the US, department stores are shrinking or shuttering altogether. In 2011, US department stores employed 1.2 million employees across 8,600 stores, according to estimates from the research firm IBISWorld. But in 2020, there are now fewer than 700,000 employees in the sector, working across just over 6,000 locations.

The reasons for the struggles are both shared and unique. Since the Great Recession began in late 2007, the vast majority of income growth in the US has gone to high-income households, squeezing middle-class households and altering where they spend money. As a result, chains that sell brands at sharp discounts like TJ Maxx, Ross, and Dollar General have become more popular, siphoning away shoppers from full-price department stores like Macy's and JC Penney that were designed to cater to a stronger middle class of yesteryear.

Department stores are also facing the reality that they are no longer the main way most shoppers discover or access new brands - which was once perhaps their main appeal as onetime innovators....

'The department store genre has been taking the great American shopping mall down with it, slowly but inevitably,' said Mark Cohen, the director of retail studies at Columbia University who was previously the CEO of multiple department store chains in the US and Canada.

What happens when an entire sector of retail, one that employs more than half a million people, is in free fall - and is slowing or dragging down shopping malls like with it?...We're about to find out....The communities across the country that depended on these stores and malls as job creators will have to get creative to rebuild around their ruins."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Dec 1, 2020


12.1.20 - Inequality And The Gold Standard

Gold last traded at $1,814 an ounce. Silver at $23.96 an ounce.

NEWS SUMMARY: Precious metal prices rebounded sharply Tuesday amid bargain-hunting and a weaker dollar. U.S. stocks rose as investors cheered upbeat fiscal relief news despite the Fed's "extraordinarily uncertain" economic outlook.

Are Precious Metals Starting a 10-Year Bull Market? -Thompson/FX Empire

"After a prolonged bear market, commodities reached a major inflection point in 2020. In response to the global pandemic, governments began unprecedented money creation. Ultimately, I believe this will lead to a decade of sharply higher inflation and a 10-year bull market in precious metals...We saw similar periods of commodity outperformance during the 1970s and 2000s....

I believe precious metals and commodities are starting another bull market that could last well into 2030. From a technical set up, I believe we are in a similar position to 2004. Though gold could drop a little further near-term, I think prices are going much higher over the next 10-years....Longer-term, buying gold at or below the rising 200-day MA is historically a favorable opportunity....Silver is shaping up to be an excellent long-term buying opportunity, in my opinion."

income growth Inequality And The Gold Standard -Howden/Mises Institute

"The income inequality debate is not as straight forward as it is commonly framed. It is not just a question of one group getting a larger piece of the pie, but of increasing the size of the pie so that everyone can benefit....

Relying on data from Berkeley economist Emmanuel Saez, Cassidy shares the following graph showing changes in real income growth over the past century (1913-2013). First let's look at the top 1 percent. There seem to be about three distinct periods their incomes have gone through. The first from 1913 to roughly 1973 is more or less flat. Real incomes for the top 1 percent were no higher in 1973 than they were around 1930. After 1973 however there is a sharp and mostly uninterrupted spike upwards which seems to stop around the year 2000. After 2000 their real incomes have ebbed and flowed, primarily in response to capital gains and losses on their stock portfolios.

Compare this with the bottom 99 percent. There seem to be about four distinct periods of real income growth. From 1913 until the end of the Great Depression, real income remained more or less constant. The 1940s, 50s and 60s saw a rapid increase in real income growth, far more rapid than what the 1 percent experienced. This came to a sudden end around 1973 and a stagnation until the early 1990s. Then from 1993 onwards we see the same final stage as the 1 percent. Increasing real incomes....

The one year that probably pops out for people who think income inequality is a bad thing is 1973. So what happened in 1973?...What was the biggest event to occur in 1973?...The most important thing to happen in 1973 actually happened in 1971, August 15th to be exact. On that date Richard Nixon closed the gold window. The US dollar was convertible by foreign governments into gold under the then-existing Bretton Woods system at the great price of $35 per ounce...No longer was the US dollar tied to gold and the US no longer had to worry about spending beyond its means...The US dollar still functioned on a fixed exchange rate standard relative to gold until 1973....1973 was also the year that set off the most inflationary episode in America's history....

All this takes us back to the original question: why did income inequality increase so much after 1973? We can look to two factors both related to the loss of the gold exchange standard in 1971 and the arrival of flexible exchange rates two years later....The reason why there is growing income inequality since 1973 is a direct result of this monetary mayhem. All this new money needs an entry point into the economy....The 99 percent that have become relatively poorer over the past 40 years are those who get access to this new money last."

Biden Era Brews As the Times Plumps Socialism -Stoll/New York Sun

"Anyone under the illusion that Joe Biden's victory over Bernie Sanders in the Democratic presidential primary had vanquished the threat of socialism from American shores can get a reality check by picking up the Sunday New York Times, which features four articles pressing the anti-capitalist agenda....

'Boeing's 737 Max Is a Saga of Capitalism Gone Awry,' is the headline over one such article, by a business reporter for the Times...Absent from the article is any mention of how alternatives to capitalism do at building safe aircraft. Not so well, it turns out....How did the Russian airline turn things around? 'Soviet aircraft have been replaced by Western-built jets.'...

Elsewhere in the Sunday Times, under the headline "'What Facebook Fed the Baby Boomers,' is a long article about what the Times calls 'disinformation,' 'hyperpartisan fearmongering' and 'conspiratorial misinformation.'...

The Times article headlined 'The Rich Kids Who Want to Tear Down Capitalism' reports on an heir who 'wants to put his inheritance toward ending capitalism.' This is some sort of trend. The inheritance angle may help explain it. People who are already rich and who are aspiring to become less so are understandably more prone to be hostile to capitalism than the larger number of people who are hoping one day eventually to become rich thanks to the opportunities that the free enterprise system provides."

Retiring Retirement: The Rise Of Life's Third Age -Dychtwald/Morison/Forbes

"Worldwide, nearly a billion people are in or near retirement, and they enjoy many more options and opportunities for how to spend their newfound time affluence....We now believe the word 'retirement' is reaching the end of its line. It's far too small and narrow for what is now emerging....

A compelling philosophy has emerged from the European tradition of adult education that provides a simple yet visionary orientation. Referred to as the 'third age,' this point of view has three 'ages' of man, each with its own special focus, challenge, and opportunity.

In the first age, from birth to approximately 30 years of age, the primary tasks of life center around biological development, learning, and survival....In the second age, from about 30 to 60, the concerns of adult life focus on issues pertaining to the formation of family, parenting, and productive work...Until the last century, most people couldn't expect to live much beyond the second age, and society at that time was thus centered on the concerns of this age.

However, with the rise in longevity and the coming of the age wave, a new era of human evolution is unfolding, the third age. There are new purposes to this third age of life....Will the Boomers use their experience and assets to help shape a future based on mindfulness and generosity of spirit? Or will they act only to promote their own interests?...

A few years ago, when we interviewed renowned psychologist and author of Emotional Intelligence Daniel Goleman, PhD, he reflected, 'The legacy to the boomer generation won't be the 'me first' image of their early years, but rather the potential huge surge in volunteerism that might characterize their later years. It's not how you begin the act, it's how you leave the stage that people remember.' "

[Ed. Note: PBS debuted an excellent 1-hour TV special last weekend entitled: Life's Third Age hosted by Ken Dychtwald, co-author of new book What Retirees Want: A Holistic View of Life's Third Age.]

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 30, 2020


11.30.20 - 5 Trends Accelerated by Covid-19

Gold last traded at $1,778 an ounce. Silver at $22.53 an ounce.

NEWS SUMMARY: Precious metal prices traded lower Monday amid upbeat vaccine news despite a weaker dollar. U.S. stocks traded mostly lower on month-end profit-taking after strong gains.

Why Gold Prices Could Be Set For Another Rally -Sieron/Oil Prices

"This last week hasn't been great for gold. The price of the yellow metal plunged then from $1,840 to $1,780....President-elect Joe Biden announced the beginning of a formal transition of power from Trump's administration to his. Biden also started to announce nominations for top positions, which served to reduce the risk that a contested election had for uncertainty among investors.

In particular, there are rumors that Biden is likely to tap former Fed Chief Janet Yellen to become the next Treasury secretary...Yellen, who is seen as a dovish person, is believed to be supportive of bigger government economic aid in order to stimulate the economy and recover quickly from the coronavirus crisis. Actually, she has for some time been calling for increased government spending to help combat the recession and has always been concerned about the labor markets, low participation rates and high unemployment.

What does it all mean for the gold market?....The long-term fundamentals haven't significantly changed. The real interest rates actually remain deep below zero while the U.S. dollar remains weak. These factors should support gold prices and the expanding public debt should also help the yellow metal. Investors also shouldn't forget about the possibility of a debt crisis or the risk of accelerating inflation when the pandemic ends and people increase their spending.

In other words, the ongoing fiscal and monetary stimulus should support or even push gold prices higher in the medium to long-run."

financial impact 5 Big Picture Trends Being Accelerated by the Pandemic -Routley/Visual Capitalist

"As every email introduction has reminded us in 2020, we're living in 'unprecedented times'....Today, we'll highlight five of these accelerating trends.

#1: Screen Life Takes Hold - In the decade from 2008 to 2018, screen time on mobile devices increased 12x...44% of people under the age of 18 now report four hours or more of screen time per day - up from 21% prior to the pandemic....

#2: The Big Consumer Shake-Up - The consumer economy has been innovating on two fronts: making physical buying as 'frictionless' as possible, and making e-commerce as nimble as possible. COVID-19 broke old habits and sped up that evolution....

#3: Peak Globalization - Globalization went on a tear starting from the mid-1980s until it hit a plateau during the financial crisis. Since that point, global trade as a percentage of GDP has flat-lined in the face of trade wars, and now COVID-19...The dip in merchandise trade this year looks eerily similar to the one that took place in 2008....

#4: The Wealth Chasm - Inequality has grown over the last few decades. Those in the top 50% wealth bracket have seen increasing gains, while the bottom 50% have seen stagnation. This issue is sure to be compounded by economic turmoil brought on by COVID-19. Younger generations face the dual challenges of being more likely to be negatively impacted by the pandemic, while also being the least likely to have savings to cover an interruption in income....

#5: The Flexible Workplace - As of 2019, over half of companies that didn't have a flexible or remote workplace policy cited 'longstanding company policy' as the reason...The pandemic has forced many companies to rethink these policies...Global commercial property investment volume falling by 48% in Q3 2020...Thousands of people are moving out of pricey urban areas, presumably because they are able to work remotely from a cheaper location."

Covid vaccine: CDC should warn people the side effects from shots won't be 'walk in the park' -CNBC

"Public health officials and drugmakers need to warn people that coronavirus vaccine shots may have some rough side effects so they know what to expect and aren't scared away from getting the second dose, doctors urged during a meeting Monday with CDC advisors. The recommendations come as states prepare to distribute the potentially life-saving vaccinations as early as next month.

Dr. Sandra Fryhofer of the American Medical Association said both Pfizer's and Moderna's Covid-19 vaccines require two doses at varying intervals. As a practicing physician, she said she worries whether her patients will come back for a second dose because of the potentially unpleasant side effects they may experience after the first shot. 'We really need to make patients aware that this is not going to be a walk in the park,' Fryhofer said during a virtual meeting with the Advisory Committee on Immunization Practices, or ACIP, an outside group of medical experts that advise the CDC. She is also a liaison to the committee. 'They are going to know they had a vaccine. They are probably not going to feel wonderful. But they've got to come back for that second dose.'

Participants in Moderna and Pfizer's coronavirus vaccine trials told CNBC in September that they were experiencing high fever, body aches, bad headaches, daylong exhaustion and other symptoms after receiving the shots....'The first dose is no big deal. And then the second dose will definitely put you down for the day for sure. ... You will need to take a day off after the second dose.'"

Blessings in a Hard Year -Noonan/Wall Street Journal

"It's been a fairly gruesome year - pandemic, lockdowns, economic woe, death and illness....There was a lot of surprised gratitude for technology. A subtext emerged, unexpected gifts of the pandemic. Most of all and strikingly there was deep gratitude for the people who work on the ground in America, who kept the country functioning. Almost everyone mentioned personal thanks for grocery-store workers and truckers...

Tim Cook, CEO of Apple, found himself awed this year by 'the resilience of the human spirit'...Technology helped save the day: 'When it was crucial to remain apart, technology brought us closer together in ways unimaginable just a few years ago - helping families stay connected . . . helping us all stay productive, entertained, and healthy.'....

Our institutions may have failed us and our civic trust been savagely corroded, but everywhere you turned there were countless individuals bravely doing what they could for their neighbors. Those fine old words from William Hazlitt finally became a visceral reality for me: 'I do not love war, but I love the courage with which men face war.'

America, I hate this pandemic but I adore your bravery, and am grateful to you for showing it to me....Father Roger Landry, a Massachusetts priest working at the United Nations, spoke of the courage of police officers, doormen, waiters and chaplains. 'Courage is not the absence of fear but doing what one should despite one's fears. I'm grateful for those who boldly carried on while others cowered.' For some, the pandemic was a spiritual catalyst: 'In the midst of widespread spiritual lockdown the hunger of so many for God was stoked.' People 'started asking deeper questions about life, death and suffering, how to be selfless, to grieve with hope.' He has this year accompanied 'several newly restless hearts to find the God for whom their hearts were made.'....

For me this holiday weekend is quieter than usual, a traditional, raucous house party pushed back. It's reminded all of us how we cherished our old lives of bubbling affection, and how grateful we'll be when they return. For now life wants to increase itself."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 25, 2020


11.25.20 - Covid-19 Vaccine May Unleash Inflation

Gold last traded at $1,808 an ounce. Silver at $23.32 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday on bargain-hunting and a weaker dollar. U.S. stocks traded mostly lower as investors digested the economic impact of rising jobless claims and record high Covid-19 hospitalizations.

Gold Bullish -Miller/FX Street
"Gold has been trading sideways for a couple of months....There has been talk about bitcoin replacing gold for years now and that idea has gained new life recently with bitcoin's strong performance versus gold....While bitcoin may affect gold in the short-term, when retail traders and speculators sell gold for bitcoin to catch momentum moves, I don't think it will have much of an effect on gold's price over the medium-to-long term. There are still plenty of gold bugs out there to say the least. Also, I still believe gold will act a hedge against monetary policy failure going forward. So, any pullbacks in gold are only going to create a great buying opportunity.... I think once gold bottoms, the next stop will be new all-time highs, between the $2,300-2,500 area."

free market Three Conditions for a Free Market Economy -Dyson/Rogue Economics
"Porter Stansberry's 'Three Conditions' for regulating the relationship between government and a free-market economy are: 1) Sound money. 2) A flat tax on all income, excluding capital gains. 3) A mandatory balanced budget. Porter is the founder of the financial publishing company Stansberry Research, and a longtime friend of mine. 'The idea,' says Porter, 'is to use real money, or else you will never know what is actually happening in the economy or with the government's spending. Money is a form of communication across the economy. When that channel is distorted, the economic costs are enormous. Second, we know that people will always vote for more government if they don't have to pay for it. So get rid of progressive taxation. The most important principle in the American experiment is democracy while protecting the rights of the minority. You do that by making everyone equal in the eyes of the law. What's more important than taxing everyone in the same way, and at the same rate? Yes, rich people will pay far more, but only in the same proportion. Second, we know that people will always vote for more government if they don't have to pay for it. So get rid of progressive taxation.We would never leave debts for our children to settle, so why do we allow our government to do so? Besides, debt allows politicians to create the illusion that you can get something for nothing, via socialism. We know it's not true, but millions still believe Social Security works"¦So you can see what really happens is one generation (or two) wins while multiple future generations will suffer. That's completely immoral.'....The U.S. government is broke, it just hasn't admitted it yet. The only way it stays in business is if the Federal Reserve prints trillions more dollars. Out-of-control currency printing and spending will devalue the dollar"¦ and the entire system of paper currencies that revolve around the dollar. Bonds and other savings instruments will have sharply negative interest rates, especially after accounting for inflation, possibly for decades to come. Gold will hyperinflate as investors and traders flee from bonds and currencies, and into hard assets."

Janet Yellen to Treasury? So Much for Fed Independence -New York Sun
"News that Vice President Biden intends to nominate the former chairman of the Federal Reserve, Janet Yellen, to be treasury secretary certainly has its ironies. We're still in the midst of watching the Democrats maneuver to defeat the nomination to the Fed board of Judy Shelton on the grounds that she would compromise the independence of the Fed from the Treasury. Mr. Biden's move is practically a merger. How is that going to be handled by the Republicans who used Fed independence to libel Ms. Shelton? Are Senators Susan Collins, Lamar Alexander, and Mitt Romney going to go after Mrs. Yellen the way they did Ms. Shelton? What of Senator Sherrod Brown and the rest of the Banking Committee Democrats who are rallying against Mrs. Shelton in the most demagogic fashion? Not to mention the New York Times and the Washington Post. Ms. Shelton herself, we've pointed out, is no particular enemy of Fed independence....Most of our coverage of Mrs. Yellen has been in the context of her accession to chair the Fed. It was a time when the central bank was being eyed as a culprit in the Great Recession. At one point, Mrs. Yellen actually apologized. 'I'm sorry that light bulbs didn't go off in my head a couple of years before they really did, but there was no question,' she told the New Yorker's Nick Lemann. 'I was hearing stuff that was scary. And I wouldn't have seen it in the data.' If we're inclined to mark the point yet again, it's because it was plain as day in the data, at least to our sources. In late 2005, James Grant, writing on our op-ed page, warned that since George W. Bush had acceded to the presidency, the value of the dollar had plunged by 46% to barely a 500th of an ounce of gold. We editorialized until we were blue in the face. In early 2008, the Sun warned that New York apartment prices, measured in gold, had begun collapsing. The collapse of real estate and the 2008 financial crisis began soon thereafter. Mrs. Yellen, we don't mind saying, wasn't the only one who didn't see it in the data. Ben Bernanke was also quoted by Mr. Lemann in the New Yorker, in his case as saying 'The crisis came from causes not captured by the new Keynesian models used at the Fed.' We'd like to think that someone in the Senate might open up these questions when Mrs. Yellen comes up for confirmation as Treasury Secretary. It's not just the question of the independence of the Fed. It's also the question of monetary reform itself...The logic of having Judy Shelton on the board grows clearer by the day."

A Covid-19 Vaccine Could Unleash Pent-Up Demand, Bringing Along Inflation -Wall Street Journal
"Inflation could be poised for a comeback. Some economists are starting to embrace the idea that a prospective Covid-19 vaccine could allow people to once again spend money on travel, restaurants and other services - and drive up prices in the U.S. That would be a change from the past 10 years, when inflation rarely hit the Federal Reserve's 2% target despite a strong economy and low unemployment. The economy's progress since the sharp, pandemic-induced recession in the spring has made forecasters more confident of a strong recovery once a vaccine enables people to resume their pre-pandemic lives. Airlines and hotels, which laid off thousands of workers and slashed prices at the start of the pandemic, could struggle to meet the surge in demand, sending prices higher. And city rents, which dropped as people hunkered down, could start creeping up again as they look at alternatives....In the near term, some economists expect a short-lived boost of inflation for a month or two next spring. That is because prices fell sharply in March and April of this year as the first wave of the virus hit....How the Fed responds to a resurgence of inflation under their new framework will be closely watched. 'For the Fed to build credibility it's going to take some time,' said Ms. Zentner. 'It's going to take proof where inflation is running above their 2% goal and indeed they don't raise rates.' Paul Ashworth, chief U.S. economist at Capital Economics, who also forecasts stronger upward pressure on prices, said the Fed's new hands-off policy could itself drive inflation."

**Swiss America will be closed Thursday and Friday in observance of the Thanksgiving holiday. We wish our readers a blessed holiday!**

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 24, 2020


11.24.20 - Morgan Stanley: "Expect a Correction"

Gold last traded at $1,807 an ounce. Silver at $23.29 an ounce.

NEWS SUMMARY: Precious metal prices dipped to 4-month lows as optimism over COVID-19 vaccines drove investors to riskier assets. U.S. stocks rallied after the Trump administration moved to begin the transition process.

Why Gold Could Be Heading To $5,000 -OilPrice
"Gold prices were already on a tear amid wild pandemic, economic and electoral uncertainty, with big banks predicting $3,000 gold "¦Or even $5,000 gold...Right before Biden's electoral victory, JPMorgan had called another 5% price hike in a 'blue wave'....What gold loves more than anything is the Biden-backed promise of monetary stimulus. Historically, gold has risen consistently on similar economic packages...And today is no different....In times like these, gold isn't just a safe haven, it may be a massive opportunity."

correction Why Morgan Stanley Expects A Correction: "Market Pressure Is Necessary To Get Congress Or Fed To Act" -Zero Hedge
"'Wall Street's most accurate analyst' - the bank's chief US equity strategist Michael Wilson - is bullish over the next 12 months...yet bearish into year end, expecting another corrective 'drawdown' in the S&P500...More than a few people were surprised and worried about the inability of the market to break through 3600 on a deluge of good news from vaccine efficacy and lower election related overhangs....The following concerns emerged: 1) Case counts are rising and so is lockdown risk which could damage consumer confidence and balance sheets. 2) The vaccine doesn't do anything for the economy until April. 3) We don't have clarity on fiscal support for the consumer between now and the time the vaccine is available. 4) The transition of power is not going smoothly...What gives Wilson the most pause is the technical picture due to 'repeated failure to break through long term resistance lines'....Wilson's bottom line is that 'both fiscal and now monetary policy have become reactive rather than proactive. For markets, that becomes the itch that needs to be scratched - i.e. market pressure is necessary and likely to get Congress and/or the Fed to act.' Stated even more simply, stocks can drift higher, but to shoot up and break the resistance level, the market will first need to slide to provoke the 'appropriate' response either from the Treasury or the Fed."

Dems Pick the Worst Time to Propose Doubling the Minimum Wage -Wilford/Real Clear Markets
"Raising the federal minimum wage from its current $7.25 an hour rate has been a progressive dream for some time. So much so, it seems, that Democrats are willing to push for it despite the worst economic climate for such a change in years. Democrats in Congress are expected to push for a $15 an hour minimum wage as part of the next major COVID-19 relief bill. Though this would likely be paired with some business tax incentives to blunt the impact on small businesses, it remains a dangerous idea that could hamper the economic recovery from the pandemic. The minimum wage has always enjoyed a disproportionate amount of focus in progressive parlance, in large part due to a pervasive belief in left-wing circles that businesses will pay workers the absolute legal minimum that they can get away with. This just isn't the case - in January, prior to the onset of the pandemic, just 1.1 percent of full-time American workers were paid at or below the federal minimum wage. Nevertheless, hiking the federal minimum wage to more than double the current minimum could have severe consequences for businesses still dealing with the economic consequences of the pandemic and its associated lockdowns....For one, $15 an hour means different things in different areas - while the median worker makes over $35 an hour in the District of Columbia, the median Idahoan makes less than half that rate per hour. While a New York City business may expect to pay entry-level hourly wage workers around $15 an hour already, in line with the city's inflated cost of living, a $15 an hour minimum wage in rural areas could put some smaller operations out of business. Paired with the fact that the latest coronavirus wave appears to behitting rural communities disproportionately hard, this could prove a one-two punch for small businesses ill prepared to take even a single hit....Only when businesses are back on their feet should Congress even consider policies that could saddle them with new burdens. Until that time, it just risks putting more Americans on the unemployment rolls."

The Price of Bad Polling -Editors/Wall Street Journal
"The 2020 polling autopsies are still being written, and there are many unanswered questions: How did Republicans win 27 of 27 House districts identified as tossups by the Cook Political Report? How did Sen. Susan Collins win Maine by nine points when she didn't lead in a single major poll for months? How are President Trump and Joe Biden separated by a little under four points in the national popular vote when Nate Silver's FiveThirtyEight average showed an 8.4-point Biden lead on Election Day?....The polling industry and statistical models make claims to objective expertise, yet they again clearly missed Republican strength. Combined with media conformity, this can lead pundits and the public astray. The prognosticators make projections - shaped by assumptions about demographics, turnout and response rates - which influence the press. These views are reinforced on social media, especially Twitter....The predictions that Democrats would gain 10-15 seats or more in the House were so wrong that they may have hurt the GOP chances to take House control in what was a very close result....'In my judgment, there was a blue wave building, a pretty big one, then something happened, like a fish getting spooked before taking a bite out of a lure,' Charlie Cook of The Cook Political Report explained. 'Too many of the most experienced political operatives in both parties could see it coming. My guess is that while a majority, albeit a small one, wanted to unseat Trump, they got skittish about giving Democrats unified control.'....Pollsters are working on better models, but it would be healthier if politics and media narratives were shaped less by instant snapshots of quantified opinion...Journalists and opinion leaders could develop insights on popular sentiment the old-fashioned way - by actual reporting. Those insights might also be shaped by bias, but at least they wouldn't be presented with an imprimatur of scientific authority."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 23, 2020


11.23.20 - The High Cost of Lockdowns

Gold last traded at $1,840 an ounce. Silver at $23.62 an ounce.

NEWS SUMMARY: Precious metal prices fell Monday on profit-taking and upbeat economic data. U.S. stocks rose as investor cheered promising results from a third potential Covid-19 vaccine by AstraZeneca.

Bitcoin no match for gold in coronavirus world -Fox Business
"The recent surge in bitcoin's price has created some new believers, but the cryptocurrency will never supplant gold as a store of value or medium of exchange, some Wall Street investors say. The cryptocurrency's price has soared more than 70% over the past six weeks to more than $18,000 a coin and is 11% below its all-time peak of $20,089. At the same time, gold's price has traded in a tight range between $1,850 and $1,950 an ounce. 'To try to act like bitcoin is some kind of improved version of gold, it's going to disrupt gold because it's a better store of value, it's a better medium of exchange, all that is pure nonsense,' said Peter Schiff, CEO of Westport, Conn.-based Euro Pacific Capital. 'It's not a store of value because it has no value to store.' Gold, widely viewed as a safe haven for investors seeking to preserve wealth during periods of market upheaval such as the coronavirus pandemic, has value not only in trade but its use in fine jewelry and electrical conductivity. Bitcoin, generated - or mined - by the verification of transactions in a blockchain digital ledger, has no use other than as a limited medium of exchange and has historically been subject to wide price swings....'Crypto is the mother or father of all scams and bubbles,' Nouriel Roubini, CEO of Roubini Macro Associates and a professor at New York University's Stern School of Business, said in testimony before the U.S. Senate Committee on Banking, Housing and Community Affairs....'There's no real use for bitcoin,' Schiff said. 'All you can do with Bitcoin once you buy it is sell it, but you need somebody else to buy it from you. It's a massive pump-and-dump.'"

advice If We Want People To Accept A COVID-19 Vaccine, We Should Stop Lying To Them About The Disease -Fumento/Issues & Insights
"COVID-19 vaccines when ready should be available for those who want them. Yet it's possible, nay probable, that the fabricated hysteria over COVID-19 virus will make people reject injections. Why? Because authorities have lost their trust regarding everything to do with the virus. If they can't trust them over cases and deaths, why trust them over safety and efficacy of vaccines. Indeed, polls show a steady decline in those who said they would immediately receive a coronavirus vaccine, only 58% of Americans in the latest survey. There are actually several good reasons for trepidation...In the past, haste has made not just waste, but death. In 1976, after being warned that the death of a single soldier from influenza might portend a new 'Spanish flu' - then-President Gerald Ford ordered a turbocharged program overseen by the CDC...After 45 million injections the government slammed the brakes when it was realized too many recipients developed a rare and often permanent form of paralysis called Guillain-Barré syndrome. Some died....Just three years ago the Philippines shut down a dengue fever vaccination program after it was associated with 'hundreds' of excess deaths. There were accusations of approval with 'undue haste' and indeed some dengue experts had warned that the vaccine should only be given to those who had had previously been infected. They were ignored. Both of these disastrous vaccines still did pass their allocated human clinical trials just as the announced Pfizer/BioNTech and Moderna, vaccines appear to be doing. The side effects apparently weren't clear until the general vaccination programs began. Modern technology can't change that. The Pfizer vaccine so far has been tested on less than 45,000 people, Moderna's on about 30,000. That can hardly be representative of the 330 million unique individuals that comprise the United States...Despite the steady stream of slogans like 'We're all in this together' we are all by now long aware that young people with no pre-existing conditions are at almost no risk of severe illness. This notwithstanding the media's desperate effort to comb through every obituary and local news story on the planet for possible exceptions....If governments and health authorities want to gain public trust in a vaccine, they need to win back public trust regarding coronavirus generally. By telling the truth...There's no quicker way to scare people off than by trying to make the vaccine mandatory. Denmark announced it would do so and then backed down after nine days of protests."

Cost of Lockdowns: A Preliminary Report -Staff/AEIR
"In the debate over coronavirus policy, there has been far too little focus on the costs of lockdowns. It's very common for the proponents of these interventions to write articles and large studies without even mentioning the downsides. Here is a brief look at the cost of stringencies in the United States, and around the world, including stay-at-home orders, closings of business and schools, restrictions on gatherings, shutting of arts and sports, restrictions on medical services, and interventions in the freedom of movement. 1) Mental Health: During late June 2020, 40% of US adults reported to be struggling with mental health or substance abuse. Of adults surveyed, 10.7% had thoughts of suicide compared to 4.3% in 2018...More than 40 states have reported increases in opioid-related mortality....2) The Economy: This year, between 71 and 100 million people will fall into extreme poverty...Q2 2020 GDP decreased at an annual rate of 32.9%, and Q1 2020 GDP decreased at an annual rate of 5%....3) Unemployment: Unemployment rate increased to 14.7% in April 2020. This is the highest rate of increase (10.3%) and largest month over month increase in history of available data (since 1948)...The unemployment rate between February and April increased by 12% for women and 10% for men...One out of four women who were surveyed reported their job loss was due to lack of childcare, twice the rate of men surveyed....4) Education: About 24 million children may drop out of school next year as a result of the lockdown's economic impact...A decrease in life expectancy by 5.53 million years of life is found to occur for US children due to the closing of US primary schools....5) Healthcare: Diagnosis for 6 cancers (breast, colorectal, lung, pancreatic, gastric, and esophageal) has declined 46.4% compared to 2018...Breast cancer diagnosis has dropped 51.8% compared to 2018...Admissions for chemotherapy decreased 45-66% while urgent referrals for early cancer diagnosis decreased 70-89%....6) Crime: During the first six months of 2020 murder and nonnegligent manslaughter offenses increased 14.8%, and aggravated assault offenses were up 4.6%...Between June and August 2020 homicides increased 53% and aggravated assaults increased 14% compared to the same period in 2019....7) Food and Hospitality: The restaurant industry is set to lose $240 billion in revenue and 8 million employees in 2020...1 in 3 restaurants are expected to close."

The Economic Emergency In 2020 and Beyond Won't Be Covid -Snyder/Real Clear Markets
"The economic emergency facing the global economy in 2021 is not COVID. Overreactive governments arbitrarily imposing their authority, sure, that's a big problem. The economic damage, however, has already been done; twice. In each case, as consistent with depression economics, the labor market has suffered. As it has suffered, unrest and disarray become more the operative state in political and social factors. Some things never change. While the unemployment rate had dropped to a 50-year low during 2019, the labor force participation rate had 'achieved' something similar; which meant the two major employment measures directly opposed one another. The inflation which should have accompanied the unemployment rate view never materialized, therefore joining the disinflationary (or deflation) evidence already including everything from bond yields to productivity. Now another great deflationary shock unleashed in March 2020. On top of the other one not yet solved, a second from which the same symptoms have already arrived. The unemployment rate falls while the participation rate barely improves for an even lower number. More immediate, initial jobless claims halfway into November, eight months after the initial shock and dislocation, continue to be above weekly rates that previous to this year would've been record highs. Following the absolute peak (record) reached in October 1981, it had taken only about the same eight months for the level of initial jobless claims to recover back all the way to the prior 'normal' levels. Following the 2008-09 Great 'Recession', it would take five years - a relatively sobering demonstration for how the labor market had never really recovered from it at all. Which course does it sound like we're currently following? More to the current point, and our future worries, what had distinguished 2008-09's 'great recession' from the rather nasty one in 1981-82? The answer...stop looking to central banks for answers."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 20, 2020


11.20.20 - Fed May Extend Emergency Programs

Gold last traded at $1,872 an ounce. Silver at $24.35 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a flat dollar. U.S. stocks fell on rising new coronavirus cases and doubts over central-bank funding for key emergency programs.

Gold Is a Hedge Against Bad Government Decisions -Dillian/Bloomberg
"Investors don't really have a handle on what gold is or what it represents....Gold is a hedge on government authorities making poor economic choices. Inflation is usually the result of those poor decisions, but people confuse cause and effect here. Gold is a hedge on policy makers screwing up, and there has been a lot of screwing up in the last 20 years. Gold has significantly outperformed stocks this century, gaining about 555% versus 79% for the MSCI All-Country World Index of stocks and 146% for the S&P 500 Index. This is a direct result of significantly looser financial conditions, and no constraints on monetary and fiscal policy. From a financial perspective, the global economy is in a much worse place than 20 years ago, and there is no evidence that things are going to improve."

hyperinflation The Velocity of Money Is Increasing -Bonner/Rogue Economics
"Inflation in Argentina is running at about 50% per year. if history is any guide, pesos will continue to lose value against the U.S. dollar. And then, the dollar will lose value against everything else. The post-1971 dollar has already lost 96% of its value, in terms of gold. In the years ahead, it will almost surely lose the rest of it. This week the Dow leapt to absurdity, coming to rest only 50 points shy of 30,000 - a new record. What is driving stocks higher? Two things"¦ First, there was more 'good news' about a coronavirus vaccine. According to the popular narrative, the economy will soon get a shot in the arm and life will return to normal. But it is not normal for stocks to be so expensive. And it is not normal for an economy to depend on printing-press money. Businesses have had the life crushed out of them. Jobs have been permanently lost. Habits have changed. States are telling families not to get together for Thanksgiving. Santa is shopping for a face-protector. The second reason is even more absurd. Now that Sleepy Joe Biden is packing up for his move into the White House, investors expect the fake money to flow...Nancy Pelosi and Chuck Schumer announced last week that their last proposal - $3.4 trillion of additional fake money - was now just a 'starting point.' Is this 'normal?' And the Federal Reserve is 'printing' new money - debasing its own currency - at the rate of $11 billion per day. Is that 'normal?' Far from it. The whole program - spend, borrow, print"¦ boom, bubble, crash"¦ pain, panic, bailout"¦ spend, borrow, print"¦ boom, bubble, crash"¦ pain, panic, bailout"¦ - is grotesque and unnatural. And the weak link in this freakish chain is the U.S. dollar. The feds can print 'em. But they can't control their value....The St. Louis Fed reports that the 'velocity' of money - the rate at which money changes hands - has suddenly turned up. Zero Hedge: 'In a Friday note from Goldman's chief FX strategist Zach Pandal, he predicts that 'depreciation in the broad Dollar can continue in 2021' and writes that his USD cross forecasts translate into a 6% decline in the broad trade-weighted Dollar index over the next 12 months, and a 'sustained but orderly' 15% real depreciation from its 2020 peak to the end of 2024.' Is this the beginning of the end for the fake dollar"¦ the fake interest rates"¦ the fake stimulus"¦ the fake bailouts"¦ the fake recovery"¦ the fake stock market boom"¦ and all the rest of the fakiness? It is too early to tell."

Fed's Powell signals emergency credit programs should be extended -Reuters
"Federal Reserve Chair Jerome Powell said on Tuesday it was not time to shut down emergency programs aimed at battling the economic fallout from the coronavirus pandemic, with cases again surging and the economy left with 'a long way to go' to recover. 'I don't think it is time yet, or very soon,' to shutter the suite of credit programs set up by the Fed last spring with the authorization of the Treasury Department and funding from Congress, Powell said in the clearest indication yet he feels the programs are likely needed beyond Dec. 31, when many are due to expire. Extending the programs would require Treasury's approval under the 'lame-duck' Trump administration. Some Republicans in Congress have balked at keeping them open, particularly the program of lending for local governments. But Powell and other Fed officials are concerned about how competing perceptions of where the economy stands may bog down debate over the proper policy response....Powell said the recent news that experimental vaccines had been highly effective in trials is 'certainly good' in the medium term, but he noted that in the best case they won't be widely available for months. 'With the virus now spreading at a fast rate, the next few months will be very challenging,' he said."

Coronavirus Surge Drives Down U.S. Consumer Confidence -Morning Consult
"Morning Consult's daily U.S. Index of Consumer Sentiment reads 88.51 as of Nov. 17, down 2.13 points from the prior week. The drop in confidence this past week primarily reflects the increase in the spread of the coronavirus across the United States. The relationship between consumer confidence and the coronavirus has essentially become a rule at this point: When the average number of new daily coronavirus cases in a country increases, consumers in that country grow less confident in the economy. However, the inverse is not true: When new cases stabilize or decrease, confidence does not necessarily increase; rather, the effect of the virus on confidence weakens. In this sense, the relationship between the spread of the virus and consumer confidence is asymmetric. This rule has been on display across the largest economies in Europe over the past month, and now it's front and center again in the United States."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 19, 2020


11.19.20 - Feds Propose More Bank Spying

Gold last traded at $1,863 an ounce. Silver at $24.07 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on profit-taking and a firmer dollar. U.S. stocks fell amid disappointing U.S. unemployment data and rising coronavirus cases.

$3,000 Gold Could Be Just the Beginning -Sjuggerud/Daily Wealth
"The 1970s was the decade our country's monetary system changed forever. Until the 1970s, gold was what backed the value of our currency. If you wanted to convert your dollars to physical metal, you could do it. President Richard Nixon broke that structure in 1971. He removed gold's convertibility. And overnight, our gold-backed currency became backed only by full faith in the U.S. government. That change allowed the price of gold to fluctuate on its own for the first time. And it's why the 1970s gold boom was possible in the first place. There was another key driver though. Today, we'll look at what it was... and why it could push gold to $3,000 an ounce... or even higher....Clearly, the 1970s are the banner example of rising inflation triggering a gold boom. But that's far from the only time we've seen the trend play out. Importantly, the same kinds of things that set off inflation in these past scenarios are happening today...The Fed has once again lowered interest rates to zero in order to boost the economy. Even more, Fed Chairman Jerome Powell announced that he wants to keep interest rates low for at least three years...Today, inflation is at 1.3%. And if the Fed has any say in it, we could see that number rise to 4% - or even 6% - in the coming years. That will be enough to send gold on a multiyear bull run. And it means the metal could double - or more - from here. That means $3,000 could be just the beginning for gold. It won't happen overnight. But the setup is in place. And that means you need to own the metal now."

climate Joe Biden's Net-Zero Isn't Normal -Darwall/Real Clear Energy
"Those hoping that a vote for Joe Biden would be a ticket to normalcy will be disappointed. 'At this moment of profound crisis,' the Biden-Harris transition website states, 'we have the opportunity to build a more resilient, sustainable economy - one that will put the U.S. on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050.' Resilient and sustainable? The U.S. has just achieved energy independence - a goal sought by every president since Richard Nixon. Those economic and strategic advantages will be thrown away by a Biden administration as it moves to outlaw domestically produced oil and gas in favor of vast quantities of imported minerals from countries such as China, the Democratic Republic of Congo, and Russia for use in wind turbines, solar panels, and electric vehicles. As for resiliency, better check out California, the state of the rolling blackout, to get an idea of the results that come from pursuing such a strategy. Of course, a Biden administration promises millions of 'green jobs' - because generating energy from wind and solar is highly labor-intensive. A 2017 analysis found that to produce the same amount of electricity as one worker in the coal sector required two in the natural gas sector and 79 workers in the solar sector. One megawatt hour of electricity generated from wind and solar is worth less than one from gas- or coal-fired power stations because wind and solar produce electricity only when the wind is blowing and the sun is shining - and not necessarily when people want it....Economic logic, therefore, suggests that energy prices will be higher and wages lower in an economy using more wind and solar power. In January 2020, before Covid struck, the national payroll average weekly wage was $971.15. For workers in the oil and gas sector, weekly pay was $2,059.28 - more than double the national average. By contrast, in 2019, the average wage for wind turbine technicians was $1,014.71 a week; for solar panel installers, it was $860.91. Solar panel installers must work 2.4 times longer to earn the same pre-tax wages as workers in the oil and gas industry....Since 2005, American has boosted its production of natural gas by 75% and since 2008, of crude oil by a spectacular 145%. To give up being the world's hydrocarbon superpower represents a huge strategic and economic sacrifice that no other country is making. And yet an even greater one is being demanded. Enforcing net-zero requires continuous state interventions across society to bring about unprecedented changes in people's lifestyles and habits, with more bans, rules, and taxes sustained not over a few electoral cycles but over the next three decades. Put simply, net-zero is incompatible with federalism and the separation of powers." [Rupert Darwall is a senior fellow of the RealClear Foundation and author of THE CLIMATE NOOSE: BUSINESS, NET ZERO AND THE IPCC'S ANTICAPITALISM.]

Feds Propose Even More Surveillance of Your Banking Habits -Reason
"It is remarkable just how unremarkable America's massive financial surveillance system has become to most people. Americans were rightly outraged when Edward Snowden revealed the government's widespread spying campaigns on online communications. Yet every day, our financial transactions are subject to similar scrutiny. The programs aren't even secret: you can read up about them on official government websites. But for some reason, we accept this surveillance as a fact of life. We shouldn't. If you give an agent a surveillance program, he will try to expand it. This is the case with the many legally questionable financial reporting requirements sprung forth from the Bank Secrecy Act of 1970 (BSA), which is kind of like the PATRIOT Act for money. Most recently, the Federal Reserve and Treasury Department have proposed expanding what is called the 'travel rule' to capture international funds transfers above $250. Currently, financial institutions are required to make certain reports on customers when they send international transactions in excess of $3,000. This has been the threshold since the travel rule was first adopted in the U.S. in 1996, despite inflation since then. Here's how it works: Let's say someone wants to send $5,000 to someone else in the U.S. or abroad. That person goes to their bank and tells them where they'd like to send the money. The bank, by law, must collect, store, and send certain identifying data to the receiving financial institution, including the name, address, and account information for the sender and receiver. This data must be passed along intermediary financial institutions and stored for at least five years. It isn't immediately shared with the government unless it is determined to be 'suspicious' enough to trigger Suspicious Activity Report (SAR) requirements under the BSA. In other words: banks must keep this data on hand in case the government needs it. These surveilled people are suspected of no crime, nor are they given any opportunity to opt out of this data collection. Still, the government preemptively requires that their transactions be tagged and tracked as if they had done something wrong. The threat of government involvement is apparent. It has effectively deputized banks to keep treasure troves of transaction data on hand in case it should become useful. But there are many other good reasons that innocent people should oppose these programs that don't have to do with the government at all. Forcing third parties to maintain financial records on transactions gives them an intimate window into your life....If the Federal Reserve and Treasury Department had considered the proposed $250 travel rule's privacy costs on individuals, perhaps it would not pass a cost-benefit test. Actually, maybe it would prompt the agencies to rethink the architecture of our financial surveillance altogether."

A Way Forward for Judy Shelton -Editors/New York Sun
"The Democrats may be celebrating this evening their success in at least temporarily blocking the Senate from voting on the nomination to the Federal Reserve of Judy Shelton. It might not be the end of the line, though. For it looks like Ms. Shelton has the votes - if they can only get to the Senate floor before the end of November. Senator McConnell and the White House seem determined to stick with it, and we certainly wish them luck. It's an important moment in America's long debate over monetary reform. The vote in the Senate this afternoon against ending debate on Ms. Shelton was 50 to 47. Mr. McConnell switched to the Democratic side at the last moment, a maneuver that preserves his right to move to reconsider, which he promptly did. Two other Republicans were quarantining, either because of Covid (Senator Grassley) or because of exposure (Senator Rick Scott). If they can get back, the odds on reconsideration are for a vote of 50 to 49 in favor. That's without Vice President Pence having to come back from vacation to break a tie. It's amazing to us that three Republican senators - Susan Collins, Lamar Alexander, and Mitt Romney - have fallen away on this issue. Ms. Shelton's positions on the Federal Reserve, after all, strike us as fitting in fine with the GOP's, as outlined in the party platform on which Mr. Trump stood in 2016. The platform's most important feature relating to the Fed is the establishment of a monetary commission - similar to one President Reagan and Congress convened - to consider the feasibility of a metallic basis for U.S. currency. We're coming up on the 50th anniversary of fiat money, meaning money that is not defined in law and is not backed with specie, such as gold or silver. How does the era of fiat money compare to, say, the era of the gold-exchange standard that obtained during Bretton Woods? That was the world's monetary system between 1945 and 1971. America redeemed dollars held by foreign governments at a 35th of an ounce of gold. The record of that period ought to be the envy of Democrats as well as Republicans. Unemployment averaged something like 4.6%...Why in the world would either party rule out of consideration for the Fed a nominee who has studied this for a whole career? It's easy to see of what doctrinaire Democrats are so scared. The vast deficits and government debts Congress has been racking up would be harder to take on under a sound money system. It's much harder to comprehend the opposition to Ms. Shelton by the several members of the GOP who are voting against her or failing to vote at all."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 18, 2020


11.18.20 - Interest Rates Could Go Deeply Negative

Gold last traded at $1,874 an ounce. Silver at $24.45 an ounce.

NEWS SUMMARY: Precious metal prices eased slightly Wednesday despite a weaker dollar. U.S. stocks traded mixed as investors digested more positive news on the coronavirus vaccine front.

When Gold Prices Go Up, Jewelry Prices Follow -New York Times
"The sharp rise in gold prices this year has affected more than just investors looking for safer places than the stock market to stash their money. Designers of demi-fine jewelry - the popular category designed for casual wear, and priced to encourage just modestly guilty shopping - are struggling with the increased cost, as are the retailers that carry their brands. On Jan. 1, gold was priced at slightly less than $1,550 an ounce; by Oct. 1, it was hovering at $1,900 for the same amount. And prices have continued to fluctuate, including in the wake of the American presidential election. The change has been driven, as it often is during uneasy times, by the perceived security of investing in gold....Jane Collins, a senior strategist at the trend forecasting company WGSN, said the design industry was being forced to adapt: 'The challenge will be in creating fun and highly creative design solutions.' But customers also will, in most cases, pay more. 'It does make a huge difference and we have to be incredibly conscious about it,' said Zoe Chicco, the founder and designer of her namesake Los Angeles-based jewelry line...'I need to hit a price point that is between $500 and $700 to keep myself in this category, so what does that look like?' she said....Although sales of gold jewelry are down over all - they decreased globally by about 29 percent from July through September in comparison with the same period last year, according to a recent report from the World Gold Council - demi-fine sales have stayed strong....Bank of America predicted gold might rise to as much as $3,000 an ounce by the end of 2021. With that in mind, more cost-conscious jewelry innovations look likely. 'Once it gets past the $2,000-per-ounce price point, that's when there starts to be an issue,' Ms. Collins said. 'That's when we'll see designers and buyers start to really reconsider strategy.'"

percentage Interest Rates Could Go Deeply Negative -Dyson/Rogue Economics
"A new, terrifying idea is gaining traction"¦ Deeply negative interest rates. (When I talk about 'deeply negative interest rates,' I'm talking about short-term interest rates anywhere from -1% to -5%.) No nation has dared to try this yet. (Switzerland has the world's lowest interest rates, currently at -0.75%.) But it's been 'under discussion' in academia and the civil service for a couple of years now. Hugh Hendry, a former hedge fund manager, is probably the loudest advocate for this. Hendry is an unconventional thinker and one of my favorite financial analysts to follow. He called for deeply negative rates again last week in a major tweet storm on Twitter"¦ Paraphrasing his tweet storm"¦ 'The global economy needs a much lower dollar if the feds want to stimulate the economy and stoke investors' 'animal spirits' again. The Federal Reserve understands this but is not able to implement it because the rest of the world - especially the big exporting nations - is holding the dollar 'hostage' at a high valuation by hoarding dollars and refusing to let the dollar's exchange rate fall. The Fed, therefore, needs to set interest rates at -2%, -3%, or even -5%. In essence, by taking rates deeply negative like this, the U.S. government would be telling other countries, 'You're welcome to hoard dollars and exploit our dollar-based system if you want, but we're going to charge you a 3% user fee for the privilege.' I have two comments on this. First, deeply negative interest rates are probably coming, and we'll see them in the U.S. within a couple of years"¦Deeply negative interest rates are how the Fed 'rescues' the dollar from its high exchange rate and lowers the value of the dollar. Second, I personally will not tolerate my bank charging me negative interest rates. There's no way I'd pay my bank to hold a deposit for me. If they charged me negative interest rates, I would immediately remove my funds and invest them in gold, silver, or oil tankers. I think many others would feel this way, too. If I'm right and deeply negative interest rates are coming, it's going to be very bullish for the prices of gold, silver, and other hard assets."

America Locks Down From Atlantic to Pacific as Covid Rages -Bloomberg
"In a matter of days, America's long effort to revive its virus-battered economy has been put on pause - or thrown into reverse - as new infections soar at the fastest pace since the pandemic's earliest days. California on Monday reinstituted bans on many indoor businesses, and its governor warned he may impose a curfew. Michigan has ordered a three-week partial shutdown, while states including Oregon, Washington and New Jersey tightened curbs. Even the governor of Iowa, long resistant to virus rules, issued a limited mask mandate Monday. The new restrictions follow a rapid surge in cases - with the country adding a million infections in the first 10 days of November alone - that has led health officials to issue dire warnings about the prospect of uncontrollable outbreaks as the Thanksgiving holiday approaches. 'The whole country is on fire,' said Ellie Murray, assistant professor of epidemiology at the Boston University School of Public Health. 'Since people can be infectious before they have symptoms, a lot of people right now are infectious and transmitting to people and don't know it. We're trying to get a grip on this large explosion.' The nation's average new-case count for the past seven days has jumped 37%, according to Johns Hopkins University data, the fastest at any point in the U.S. since late March....Businesses that have already endured lockdowns and restrictions on how they operate face the prospect of even more disruption. Barry Gutin, a co-founder of Cuba Libre, a Philadelphia restaurant that will mark 20 years in December, said losses already were piling up with capacity restricted to 50%. On Monday, the city said it would ban indoor dining, as well as close performance spaces, gyms and libraries. Gutin called it 'another gut punch which will make it much more difficult.'...'Right now we're living on borrowings and my partner's and my savings,' Gutin said. 'Our job is to find ways to lose less money.'"

Will Biden "Listen To The Science"? -Paul/Zero Hedge
"Former Vice President Joe Biden has not been officially declared the winner of the 2020 presidential election, but that has not stopped him from forming a coronavirus task force. The task force is composed of supporters of increased government control. One idea Biden and his task force are considering is a four to six weeks nationwide lockdown. However, supporting a nationwide lockdown would violate Biden's campaign pledge to 'listen to the science.' The evidence regarding lockdowns is so overwhelming that even the World Health Organization (WHO) has been forced to admit the truth: lockdowns do more harm than good. Lockdowns result in more instances of depression, suicide, domestic violence, and alcohol and drug abuse. Lockdowns also cause people to not go to hospitals or doctors' offices, leading to people dying because they failed to obtain medical assistance in a timely manner. Biden also is working with governors, mayors, and other state and local officials to create a de facto national mask mandate. Biden has also declared he will mandate mask wearing in all federal buildings and for people traveling interstate. A mask mandate for interstate travel could mean you will be required to wear a mask on airplanes, trains, and even when driving in your own car if you cross state lines. Yet again, Biden is ignoring the science. In this case the science has demonstrated that most masks are ineffective at preventing the spread of a virus. Medical science also shows that wearing a mask for extended periods of time can cause health problems. For example, mask wearing interferes with proper breathing....Biden is not the only politician pushing authoritarian 'solutions' to coronavirus. The government of Washington, DC is considering authorizing vaccinating of children without parental consent...This is especially important these days, as we are dealing with a vaccine that is being rushed into production for political reasons and that even the manufactures admit will have serious side effects."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 17, 2020


11.17.20 - Recognizing Data Uncertainty in COVID Debate

Gold last traded at $1,885 an ounce. Silver at $24.56 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on mixed economic data and a weaker dollar. U.S. stocks fell as a sharp decline in drug store shares and disappointing retail sales weighed on the broader market.

Are precious metals a buy after the US election? -Capital
"Gold prices climbed above $2,000 per ounce in August, an all-time high, then retreated to trade between $1,850-1,950 per ounce. The gold price after election results was initially higher, rising to the top of the range....The next resistance level for gold is the September 16 high of $1,975 per ounce, followed by $2,015 per ounce and $2,075 per ounce - bringing it back to the all-time high....Technical gold price analysis shows that the Bollinger bands suggest scope for a pullback on gold and the relative strength index (RSI) was overbought, but selloffs in the market are opportunities to buy. The moving average convergence divergence (MACD) gave a buy signal after the election and the market remains in an upward trend for the medium term....Silver reached its highest level since 2013 in August, rising above $29 per ounce, then dropped back to trade around $23-25 per ounce....Silver is likely to find some support from rising industrial production in China, a large proportion of the metal is used in physical applications rather than investment. Silver mining has been disrupted by Covid-19 lockdowns, tightening supply during the year....The gold/silver ratio - the number of ounces of silver needed to buy one ounce of gold - dropped from a record high of 114.77 in April to 68.99 in August and has slipped to around 76 currently from 79.50 in October....US-based Citibank is bullish with its gold price forecast, setting a three-month price target of $2,200 per ounce and a six-to-12 month target of $2,400 per ounce. Its 2021 base case forecast is $2,275 per ounce."

news Time to Recognize Data Uncertainty in COVID Debates -National Review
"As we rush to embrace an 'obey the experts' technocracy in the fight against COVID, media and commentators often assume that the epidemiological data justifying proposed draconian policies - such as lockdowns - are clear. But that's not true. And that should give our policymakers pause before attempting to impose policies that are likely, in some cases, to be popularly resisted. This cogent point was made recently by the editor of a professional epidemiology journal. From, 'Data Versus Truth in the Midst of a Pandemic,' by Jim Rohrer: 'Uncounted scientific articles have been published about the pandemic. Missing from all this information and analysis is frank recognition of the uncertainty in the assumptions upon which data analysis and forecasts are based. State mitigation strategies are based partly on guidance from the Centers for Disease Control and Prevention (CDC) and partly on local politics. The effectiveness of different mitigation strategies is not strongly supported by population-based evidence, yet television news programs constantly bring out 'experts' who insist that if we only did this or that, pandemic deaths would have been avoided.' Rohrer points a finger at media outlets use of talking heads to opine about the pandemic who may be unqualified or too impacted by conditions on the ground to see the bigger picture....This much seems true: 'The experts' need a little more humility in their policy prognostications. Perhaps more important, the media and social platforms need to be less censorious of heterodox opinions and policy advocacy about COVID. Otherwise, crucial democratic deliberation about the advisability of proposed policies will be shortchanged and trust eroded."

Biden Hires Economic Team With Focus On Systemic Racism -Zero Hedge
"Reflecting the influence that blacks, particularly black women, are expected to have in an administration that will feature the first female, and first black AND the first Indian vice president, the Biden team has already made a point to fill its transition team with minorities, moreso than any previous administration. According to Bloomberg, the Biden team has already selected dozens of progressive economists to help with the transition, including Mehrsa Baradaran, whose book 'the Color of Money', is a critical text for contemporary left-wing economists. She's joined by Lisa Cook, an economist at Michigan State University, on the 'landing team' for banking and securities regulators, including selecting potential new members of the Federal Reserve board of governors (for which there is presently one vacancy). They are among more than 500 experts who will be called upon to deliver an important racial 'perspective' as Biden and his team hash out reforms related to health-care, housing and other issues. Unsurprisingly, the radical 'economists' quoted in the Bloomberg story praised Biden's staffing decisions as an 'incredible signal to the black community'....While 50% of the Biden-Harris 'landing team' will be made up of women, more than 40% of the administration's advisers are expected to be from outside groups that are historically underrepresented in the federal government, including racial minorities, people with disabilities and those who identify as LGBTQ....The big question right now, though, is how might Biden react when these same advisors urge him to throw the full weight of his influence in supporting the Green New Deal?"

Finding Hope When Everything Feels Hopeless -Bernstein/Wall Street Journal
"I've got the perfect four-letter word for the moment: Hope. Yes, it feels increasingly elusive - seven months into a pandemic, during an emotionally exhausting election cycle, as winter bears down. Yet hope is the very best reaction for the moment, psychologists say. It's crucial to our physical and mental health. It guards against anxiety and despair. And it protects us from stress: Research shows that people with higher levels of hope have better coping skills and bounce back from setbacks faster. They're better at problem-solving and have lower levels of burnout. They have stronger relationships, because they communicate better and are more trusting. And they're less-stressed parents - more able to teach their children to set goals and solve problems. 'You can think of hope as a PPE - a Personal Protective Emotion,' says Anthony Scioli, a professor of psychology at Keene State College in Keene, N.H., and co-author of 'Hope in the Age of Anxiety' and 'The Power of Hope.'....Think of it like this: If you want to lose 10 pounds, you need a plan - a healthy diet or an exercise program - and the willpower to follow it. Without this, you've got no real hope for a fitter body. Just wishful thinking....The good news: Hope is malleable. You can boost it. Scientists say it's important that the area of the brain that activates when we feel hopeful - the rostral anterior cingulate cortex - sits at the intersection of the limbic system, which governs our emotions, and the prefrontal cortex, where thoughts and actions are initiated. This shows we have some influence over feelings of hope (or hopelessness). 'Hope is a choice,' says Rick Miller, clinical director of the Center for the Advanced Study and Practice of Hope at Arizona State University....Remember: Hope begets hope. 'When people around you are energized, that can energize you, as well,' says Dr. Milona."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 16, 2020


11.16.20 - 'Voter Fraud' in Key States -FEC Chairman

Gold last traded at $1,888 an ounce. Silver at $24.72 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday amid upbeat vaccine news and a flat dollar. U.S. stocks cheered Moderna's announcement of positive preliminary CV-19 vaccine trials which sparked economic recovery hopes.

Gold's bull market will continue into 2021 for these 3 reasons -Goldman/Business Insider
"The more than 20% rally in gold year-to-date is set to continue into 2021 as the structural bull market continues on for the precious metal. That's according to Goldman Sachs, who said in a note on Friday that recent weakness in gold prices could be explained by the rotation towards value from defensive assets like gold and long term growth stocks. In the short-term, gold prices could continue to consolidate sideways...but in the longer-term, gold 'should benefit from continued strong investment demand.' 1) 'Inflation expectations move higher.' - With policies surrounding the COVID-19 pandemic focused on fiscal spending, combined with household balance sheets at better levels than they were coming out of the 2008 recession, 'the Fed appears more willing to tolerate a temporary inflation overshoot,' Goldman said....2. 'The US dollar weakens.' - Goldman expects the falling US dollar to continue trending lower into 2021, which should help support gold prices....3. 'Emerging Market retail demand continues to recover.' - 'We see a strong rebound in EM gold demand which should support higher gold prices through the wealth effect,' Goldman said, adding that gold demand from China and India is already displaying signs of normalization...The firm has a $2,300/toz gold price target, which represent potential upside of 22% from Friday afternoon levels."

housing bubble Home Prices Are In a Bubble. Full Stop. -Brown/Bloomberg
"Rapidly rising housing prices in the U.S. has led to talk of another housing bubble like the one that helped trigger the financial crisis a little more than a decade ago. Consider that the Case-Shiller National Home Price index has gained in excess of 6% per year on average since January 2012, while net rental income has barely kept up with inflation, increasing just less than 2% per year. The result is that home prices seem as overvalued as they were in the spring of 2005, nine months before the peak....The chart below shows CAPE for U.S. home prices and the S&P 500 Index since 1996. Stock valuations soared in the late 1990s, only to crash from 2000 - 2002, tread water for six years, then tumble again in 2008. Home valuations ignored the 2000 equity crash, but shared the 2008 crash. Since then the two have increased roughly in line, but with home prices starting from a higher level. As a result, equity valuations are still well below peak values, but home prices are approaching the historic highs. Much of the focus on the housing market lately has centered on the short-term environment, with the low inventory of homes cited for rising prices and a jump in rental vacancy rates driving rents lower. But if the concern is the possibility of major economic disruption - rather than just whether houses are good investments at current prices - the focus should be on long-term macroeconomics...A bubble in housing requires widespread overvaluation over years, which is what we have witnessed....Today's high valuations can be explained by low interest rates, as has been the usual pattern in the past. That might lead one to expect a typical correction, where housing prices deflate over a few years with differences among regions. Many homeowners are hurt in places where prices were especially high, and also in places with especially bad economic problems....The bad news is all previous history came at higher mortgage rates. The average 30-year fixed mortgage rate fell below 3% for the first time in August 2020, and rates are close to the lowest possible levels given the credit risk and costs of writing mortgages. It's one thing to be a peak valuation, it's another to be at peak valuation with no discernable upside. It's implausible that housing prices can go up from here without large increases in rents, which require increases in demand for housing. That's an unlikely outcome in a recession. If the recession continues, where will new demand come from? If it ends, interest rates go up, pushing housing prices down....The bad news is there's a lot more downside than upside for average homebuyers, and some of them are very likely to suffer in 2021."

America's unending spending frenzy -Benko/Washington Times
"Uncle Sam has grown so massive that, Democrat or Republican, Washington Insider or citizen, we humans, officials like the president or congresspersons, card-carrying members of the Columnist Party like me, normal people, like you, have become as relevant to the scope of the government as barnacles on a derelict ship of state....Is our federal government really 40,000x bigger than the federal government President Washington ran? Nominally, yes. The mind boggles....Welcome to a congressperson's, and lobbyist's, paradise. From 1789-1849, altogether, Uncle Sam spent $1.09B. It took 60 years, cumulatively, to expend what the federal government now spends every 90 minutes or so. From 1850 to 1900 (including the Union's bill for the Civil War), it spent $14.46B. That's less than a day's federal spending, now. 2010, when I first noted this? Annual spending of $3.55 trillion. 2020? $6.3 trillion. Truly, spending of epic proportions....The classical gold standard on which America was, in practice, founded made the U.S. dollar retain its value for well over a century. A dollar was worth about the same in 1900 as at our founding in 1789. Thanks to Lyndon Johnson's killing and Richard Nixon's burying the gold standard, now it takes about $30 in 2020 dollars to buy an original dollar's worth of goods....Profligate federal spending, whoever gets elected, has become the constant. Not a variable. We're all just barnacles on a derelict Ship of State. Welcome, President-elect Biden. Care to exit the federal deficit orgy? Try a capital gains tax-rate cut and a 3% spending cap."

FEC Chairman Says He Believes "˜There Is Voter Fraud' in Key States -Epoch Times
"The chairman of the Federal Elections Commission (FEC) stated that he believes there is evidence of voter fraud and other alleged irregularities. In a recent interview, FEC Chairman Trey Trainor said reports of fraud in some battleground states are credible 'otherwise they would allow the [poll] observers to go in,' referring to reports of some polling areas refusing to allow GOP observers to check on the process on Election Day and the days after....In the interview, he agreed with Trump's campaign lawsuits, while saying that questionable actions by elections officials in several states could make the election illegitimate. Trainor, an appointee of President Donald Trump, noted that state laws allow those observers to be there, and 'if they're not,' then it's an 'illegitimate election.' 'Our whole political system is based upon transparency to avoid the appearance of corruption,' he said the interview while alleging that Pennsylvania and other states have not been transparent. 'I do believe that there is voter fraud taking place in these places,' he added....The Department of Homeland Security (DHS)'s Cybersecurity and Infrastructure Security Agency on Thursday concluded that the Nov. 3 election 'was the most secure in American history,' saying that 'election officials are reviewing and double checking the entire election process prior to finalizing the result.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 13, 2020


11.13.20 - Covid Vaccine Can't Kill Silver And Gold

Gold last traded at $1,888 an ounce. Silver at $24.68 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on safe-haven buying and dollar weakness. U.S. stocks rose as investors hoped for an effective vaccine and economic recovery next year.

A Covid Vaccine Can't Kill Silver And Gold -Krauth/Seeking Alpha
"Precious metals were dented by Pfizer's positive vaccine news, but I expect that will only last a short time, having scared some weak hands out of the sector. If anything, the selloff may be the catalyst many have been waiting for to help gold and silver establish a bottom, or at least an end to their consolidation. Odds are smart money is going to start buying the dips and accumulate gold and silver, as it gears up for the next, inevitable rally....Although highly positive and very reassuring, the truth is we're not going to be lining up tomorrow to get our first of two doses of Pfizer's vaccine. The road to normalcy, whatever that will mean, is still a long one....Realistically, Covid-19 is a long way from being a distant memory. Restricted movement, quiet cities, empty restaurants, cinemas and gyms, and mostly local tourism. Daily life will continue to trudge forward. Unfortunately, that also includes the world's ongoing geopolitical tensions....Debts and deficits are going to continue to soar. Even with a Republican-led Senate, Biden's still likely to get a $500 billion to $1 trillion 'skinny stimulus' bill passed early next year....Naturally, some gold and silver enthusiasts are asking themselves if a vaccine is enough to kill the Covid-19 virus, as well as the precious metals bull market...The big risk here is being short-sighted. After all, it's going to take a lot more than a Covid-19 vaccine to kill silver and gold."

social Distancing Everything You Don't Want to Know About Covid Vaccines -Smith/Of Two Minds
"Now that we've had the happy-talk about Pfizer's messenger-RNA (mRNA) vaccine (and noted that Pfizer's CEO sold the majority of his shares in the company immediately after the happy-talk), let's dig into messenger-RNA (mRNA) vaccines which are fast approaching regulatory approval. Some people have concluded vaccines are not safe, regardless of their source or mechanisms. These people will never take any Covid vaccine. Others will also decline a vaccine because they've concluded Covid is overblown. Fair enough. But many other people conclude Covid is dangerous, partly because so little is known about its long-term effects. Authorities desperate to restart the economy and reassure the populace are poised to approve novel vaccines using a new mechanism to generate an immune response: messenger RNA (mRNA) vaccines....Many in the field see the potential for mRNA to deliver superior vaccines because they can generate T-Cell responses as well as the conventional immune responses to viral particles. They are also easier and cheaper to manufacture, and may be stable at room temperature for a week, unlike the Pfizer vaccine which must be refrigerated at extremely cold temperatures (-100F). But these are the first mRNA vaccines ever seeking approval for human use, and so there are no long-term studies of what might go wrong down the road....Why would anyone trust that Big Pharma corporations will act in the public good rather than in pursuit of maximizing profits? The mad rush of profiteering Big Pharma corporations to own the first vaccine approved will create needless and potentially dangerous confusion about which vaccine actually works best over the longer term....The danger here in my view is the poorly-informed, politically polarized general public will assume a Covid vaccine is essentially 100% effective like a measles vaccine, when the real-world efficacy might be considerably less certain...No one knows how long the immunity generated by these vaccines will last....In a system that rewards self-serving statistical analysis and 'first to market,' a system where Big Pharma insiders reap millions of dollars selling their stock on the PR of happy-talk, is it even possible to have truly objective studies of a vaccine's efficacy and long-term effects? It seems doubtful."

Biden's COVID-19 Task Force Plan"¦ Pay People to Not Work -Regan/American Consequences
"The votes are still being tallied, recounted, and disputed in some key states, but that hasn't stopped Joe Biden from planning his next moves...If Biden's team is successful, our nation could ultimately usher in an era of big government unlike anything seen since the Works Projects Administration ('WPA') of the 1930s. Of course, back then, FDR initiated a government program that actually entailed work. The suggestion currently being floated by Biden's associates is literally the antithesis of work...Indeed, according to the newly minted member of Joe Biden's coronavirus task force, Dr. Michael Osterholm, We could pay people to lose their jobs....According to Osterholm, a director of the Center for Infectious Disease Research and Policy at the University of Minnesota, the only way to control the coronavirus infection is via a full-fledge lockdown"¦ 'We need to lockdown to drive the infection levels lower.'....The economic recovery will be much slower, with far more business failures and high unemployment for the next year or two. The path of the virus will determine the path of the economy. There won't be a robust economic recovery until we get control of the virus. Hey guys! Did you see the third-quarter GDP report with the most growth ever recorded?! 33.1% annualized - and unemployment has fallen to below 7%, a level most economists assumed couldn't happen until next year at best! In other words, Americans are making this work"¦ on their own. Without the help of a massive 'lose your job' program....The worst thing that could happen to our economy right now is for there to be another shutdown"¦ which is exactly what Biden's COVID-19 task team is advising....The solution? Borrow more money, according to Osterholm...Lockdown and borrow. All I can say is I sincerely hope not. Because if that's the doctor's prescription"¦ then get ready"¦ Socialism, here we come."

Joe Biden, the New York Times, 'Dark' Winters, and 'Terrifying Surges' -Tamny/Real Clear Markets
"'We have found that students are responding well to our voluntary, convenient, and free walk-up testing sites.' This is from a press release produced at Penn State University, and that was released this week to the New York Times. It seems Penn State, much like U.S. universities in all 50 states, has an aggressive coronavirus testing program as a way of keeping close track of the virus's spread on campus. Please think about the fact that testing for the coronavirus in what is the world's richest country is increasingly very convenient, and free....From there, let's travel to Indonesia on the other side of the world. This country can claim 270 million citizens versus roughly 330 million in the United States. Where it gets interesting is that according to a recent report in the Wall Street Journal, Indonesia has reported 11,000 deaths related to the coronavirus versus nearly 240,000 in the U.S....According to president-elect Joe Biden, what's bad now is about to be really bad as the winter months force people inside only for the virus to be given new life. As Biden has put it, Americans face 'a dark winter.' Biden's likely newspaper of choice, the New York Times, similarly engages in hyperbole. While it routinely reports that nearly half of all U.S. coronavirus deaths have been associated with nursing homes, it leads with splashy front-page headlines that give a rather different impression to readers....Bringing this all back to Indonesia, it would be fascinating to witness the perpetually alarmed explain the low number of 'coronavirus deaths' there. Are Indonesians genetically immune to infection from the virus, do they religiously wear N-95 masks while studiously avoiding touching their faces, do they have their own 'genius' Dr. Fauci equivalent whose gameplan has been brilliantly embraced by President Joko Widodo, or is it possible that Indonesia has a low death count precisely because it has a low testing rate? You see, according to the Journal, testing in Indonesia has been very rare. 8 per 1,000 inhabitants kind of rare....The more a country tests, the more infections that country will unearth. Doctors and other experts can decide for themselves whether relentless testing is good, bad, or not terribly relevant, but it presumably explains a lot when it comes to virus spread in the U.S....Cast a skeptical eye on dire predictions of 'a dark winte' ahead by politicians, along with nail-biting headlines about 'terrifying surges.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 12, 2020


11.12.20 - How High Gold Will Go -Wells Fargo

Gold last traded at $1,874 an ounce. Silver at $24.31 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a weaker dollar. U.S. stocks traded mostly lower as the virus surge worries Wall Street and the vaccine rally pauses.

There is no telling how high gold will go -Wells Fargo/Kitco
"The gold market has been stuck in a fairly narrow range for nearly two months...However, one market analyst says that gold's destination is less important than the journey that it is currently on. In a recent interview with Kitco News, John LaForge, head of real asset strategy at Wells Fargo, said that he is maintaining his updated year-end target at $2,100 an ounce...Rather than looking at year-end targets, he said that investors should pay attention to the long-term uptrend...LaForge noted that since hitting an all-time high above $2,000 an ounce, gold has managed to hold critical support around $1,850 an ounce. He added that this is an indication of underlying strength in the marketplace. 'The fact that we pull back to $1,900 and then don't really get below that for long, I think we're on a new technical chart now,' he said. 'Direction really does matter more than price targets because when it breaks out when you get a new chart like this, you just don't know how high.'....Although LaForge said he is skeptical that gold prices can push back above $2,000 an ounce before the end of the year, he is a lot more confident that prices will hit his 2021 target of $2,300. LaForge said that he remains bullish on gold as nations continue to print money and devalue their currencies. He added that the U.S. hadn't felt the major effects of devaluation because it continues to hold the coveted reserve currency status. However, he added that it's only a matter of time before the U.S. joins in the race to the bottom. 'If we're looking at massive currency devaluation, you got to go into alternative assets, and gold continues to look good,' he said. 'You need to be in something that is going to holds its value.'"

vaccine A COVID-19 Vaccine Is on the Horizon -Bonner/Rogue Economics
"Hooray! A vaccine! The relief column is finally in sight. And soon, it will run off the fiendish COVID-19"¦ releasing the entire world from months of fear, loathing, death, and siege. But the economy has been largely sequestered"¦ locked up and locked down"¦ if not by edict, then by dread. Millions still cower in their homes. Millions are still unemployed. Restaurants in many areas remain closed or only half full....The virus focused its most lethal attacks on the weakest part of the population - those in nursing homes. And from them, it stole little of their lives, simply because they had little left to steal. And yet, the coronavirus, like a strange, black sun, cast a long shadow over the entire world....The threat of the virus - at least, after it was pumped up by health authorities and the sensationalist press - was in a class by itself....But while the new miracle drug from Pfizer may or may not prove effective against COVID-19, there is no elixir so powerful that it can revive a dying empire. It was probably a desire to get back to normal - more, even, than the alleged votes from dead people - that gave Joe Biden a slim margin of victory in the U.S. presidential election....The trouble with the liberals is that they really do think they can all live at each other's expense. And they see each passing fad as God's Eternal Truth....A headline from The Washington Post probably tells us all we need to know about how government will work over the next four years: Long-standing ties between Biden and McConnell could shape early agenda Trump was an outsider in Washington. A 'disrupter.' Biden is very much an insider. Senate majority leader Mitch McConnell and president-elect Joe Biden have worked together - shifting power and wealth to themselves and their fellow insiders - for a combined total of 84 years. Both are go-along, get-along Swamp-dwellers - the most elite of America's late, degenerate, imperial class of connivers and flimflammers. What this means to us is that the Biden team will face little opposition to its big spending/big printing plans....It's back to 'normal,' in other words"¦ or at least to the ersatz 'normal' that you get when a nation is in a steep decline."

Is social media ready for a Covid-19 vaccine? -Vox
"On Monday, Pfizer and BioNTech announced in a press release that their vaccine candidate was more than 90 percent effective at preventing Covid-19 infection, based on initial results from their ongoing phase 3 clinical trial. The company expects to have applied for emergency use authorization with the Food and Drug Administration (FDA) by the end of November and could have as many as 50 million doses produced by the end of 2020. This is tremendous news - and misinformation about it is already circulating on social media. According to research from VineSight, a slew of Twitter accounts...are already questioning the timing of the results' release just days after the presidential election....The dream of bringing a speedy end to the pandemic is a complicated one. Even when a vaccine does win initial FDA authorization in the United States, we should expect a lengthy period of 'chaos and confusion,' one expert recently told the New York Times. Much of that disarray could play out on social media. From the possibility of multiple vaccines to regionally distinct distribution plans to still-evolving research, the process of vaccine implementation is already stoking anxiety and misinformation...They must act sooner rather than later to grapple with the task of communicating and moderating this next period of the pandemic, according to Jennifer Reich, a sociology professor at the University of Colorado Denver who has studied vaccine hesitance. 'This is not going to be magic,' Reich told Recode. 'I think that the way the vaccine has been messaged has been like, 'Just wait till we have a vaccine and then we can all go back to life as normal.' That's probably not a realistic expectation.'"

Biden's economic agenda and its effects -Mulligan/The Hill
"In an effort to advance equality, environmental protection and other social goals, President-elect Joe Biden has proposed an ambitious and historic agenda, particularly in four areas: taxation, health insurance, regulation and energy policy. His full agenda would significantly reduce productivity, discourage work and discourage investment. Coauthors Hassett, Fitzgerald, Kallen and I estimate that following this path would reduce median ('middle class') annual family income about $6,500 by the year 2030. Employment would drop by about five million jobs. Most of Biden's agenda requires congressional action, but the Senate will have more than 50 members (Republicans plus moderate Democrats) who do not favor such radical changes. That will make it difficult to raise taxes, fund a health insurance public option and other expansions of ObamaCare, resurrect the costly and politically unpopular individual mandate or get Congress to appropriate enough subsidy dollars to allow renewable energy to overtake fossil fuels. That leaves federal agency regulation as the primary tool Biden would have left. As President Trump is apt to explain, regulations are 'stealth taxation, especially on the poor.'....Consumers will likely be squeezed the hardest as a Biden administration regulates the business of health. President Trump removed Obama's prohibitions against the most affordable health insurance plans (maligned as 'junk plans') that consumers strongly prefer to ObamaCare. Biden will likely prohibit them again in the name of 'making ObamaCare better.'....Biden's Department of Transportation could require that vehicle manufacturers produce primarily electric vehicles, which is one of Biden's ambitious climate goals. We estimate that this policy by itself would increase the quality-adjusted price of new cars and pickups by more than $12,000."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 11, 2020


11.11.20 - Stocks Wobble, Investors Grow Cautious

Gold last traded at $1,877 an ounce. Silver at $24.33 an ounce.

NEWS SUMMARY: Precious metal prices stepped back Wednesday on profit-taking and a firmer dollar. U.S. stocks traded mixed as investors bought tech shares after upbeat CV-19 vaccine news.

Gold climbs as focus returns to loose monetary policy -CNBC
"Gold prices rose 1% on Tuesday, following a sharp slide in the last session, as focus returned to the likelihood of more monetary stimulus to revive a global economy still reeling from the Covid-19 pandemic....Central banks are unlikely to change their accommodative stance in the near to medium term as it will take time for a vaccine deployment and a pick-up in growth, inflation and labor market, said Lachlan Shaw, head of commodity research at National Australia Bank. 'If inflation expectations pick up as a result of increased economic activity from the vaccine, that should keep a lid on long U.S. real yields and be a supporting driver for gold.' Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement. While vaccine optimism boosted risk appetite, uncertainties continued to loom over the impact of surging Covid-19 cases in the United States and Europe. 'I still think we've got more stimulus coming and the Fed will keep rates low, while a vaccine is going to provide that reflationary impulse...That's why the markets are still holding onto gold,' said Stephen Innes, chief global market strategist at financial services firm Axi."

declaration A Sensible and Compassionate Anti-COVID Strategy -Dr. Bhattacharya/Imprimis
"In discussing the deadliness of COVID, we need to distinguish COVID cases from COVID infections. A lot of fear and confusion has resulted from failing to understand the difference....1. The COVID-19 Fatality Rate....When the World Health Organization said back in early March that three percent of people who get COVID die from it, they were wrong by at least one order of magnitude. The COVID fatality rate is much closer to 0.2 or 0.3 percent. The reason for the highly inaccurate early estimates is simple: in early March, we were not identifying most of the people who had been infected by COVID....2. Who Is at Risk?....A common perception that COVID is equally dangerous to everybody, but this couldn't be further from the truth. There is a thousand-fold difference between the mortality rate in older people, 70 and up, and the mortality rate in children....3. Deadliness of the Lockdowns....The widespread lockdowns that have been adopted in response to COVID are unprecedented - lockdowns have never before been tried as a method of disease control...the U.N. has estimated that 130 million additional people will starve this year as a result of the economic damage resulting from the lockdowns....Large numbers of Americans, even though they had cancer and needed chemotherapy, didn't come in for treatment because they were more afraid of COVID than cancer....Mental health problems are in a way the most shocking thing. In June of this year, a CDC survey found that one in four young adults between 18 and 24 had seriously considered suicide....4. Where to Go from Here.... In October 2020 I met with two other epidemiologists - Dr. Sunetra Gupta of Oxford University and Dr. Martin Kulldorff of Harvard University - in Great Barrington, Massachusetts. The three of us come from very different disciplinary backgrounds and from very different parts of the political spectrum. Yet we had arrived at the same view - the view that the widespread lockdown policy has been a devastating public health mistake. In response, we wrote and issued the Great Barrington Declaration, which can be viewed - along with explanatory videos, answers to frequently asked questions, a list of co-signers, etc. - online at www.gbdeclaration.org....Herd immunity is not a strategy - it is a biological fact that applies to most infectious diseases...The vaccine will help, but herd immunity is what will bring it to an end. Our strategy is not to let people die, but to protect the vulnerable. We know the people who are vulnerable, and we know the people who are not vulnerable....When scientists have spoken up against the lockdown policy, there has been enormous pushback: 'You're endangering lives.' ...Science can't do its job in an environment where anyone who challenges the status quo gets shut down or cancelled....To date, the Great Barrington Declaration has been signed by over 43,000 medical and public health scientists and medical practitioners. The Declaration thus does not represent a fringe view within the scientific community....Together, I think we can get on the other side of this pandemic. But we have to fight back...We should respond to the COVID virus rationally: protect the vulnerable, treat the people who get infected compassionately, develop a vaccine. And while doing these things we should bring back the civilization that we had so that the cure does not end up being worse than the disease."

Fauci Admitted The Truth About COVID-19 Tests In July And Has Misled The Public Since -PJ Media
"One of the most frustrating aspects of COVID-19 coverage has been the emphasis on 'cases,' reinforced by Dr. Anthony Fauci. In fact, he was wringing his hands about rising 'case' numbers on CNN in early October. These numbers are actually positive tests. The New York Times and several experts admitted in late August that up to 90% of positive PCR tests were not indicative of the active illness that could be transmitted to others. As it turns out, Fauci expressed a similar opinion in July: 'What is now sort of evolving into a bit of a standard,' Fauci said, is that 'if you get a cycle threshold of 35 or more "¦ the chances of it being replication-confident are minuscule.'....He also noted that the Ct count is not provided to patients and physicians automatically. The tests are simply returned as positive or negative. The entire idea of 'asymptomatic' cases dissolves once you understand this....Dr. Fauci and other 'experts' like former FDA Director Dr. Scott Gottlieb are constantly pushing positive tests and lamenting a rise in their numbers. They erroneously refer to these numbers as cases, which they are not under any previous definition. It is also clear there is likely some significant number of false positives. So what gives? COVID-19 was obviously used as a rhetorical weapon to club President Trump. It became clear late in the election that Dr. Fauci was more political than he portrayed when he essentially endorsed Joe Biden. Further, some segment of the public health establishment wants widespread vaccination and other policies like mask mandates and rolling lockdowns. High 'case' numbers allow them to push these policies....Perhaps most deceptive, the Ct is a simple lever to pull to keep you in line and make Joe Biden look like a hero. His new COVID panel will develop and implement a plan. Then positive cases will magically drop, not because these policies were effective but simply because they will dial down the Ct with clear guidelines. However, this will cement the supremacy of 'experts' in the minds of many Americans who have not seen the dishonest little man behind the curtain. Don't be one of those people."

Stocks Wobble as Investors Grow Cautious -Wall Street Journal
"U.S. stocks wobbled Tuesday, with elevated Covid-19 infection levels, muted stimulus expectations and caution about the timing of vaccines tempering the exuberance that left major indexes hovering near record highs one day earlier....The Dow and S&P indexes set intraday records Monday after a coronavirus vaccine developed by Pfizer and partner BioNTech showed in an early analysis to be more than 90% effective in protecting people from Covid-19. The Nasdaq Composite fell 1.3%, pulling back for a second consecutive day. The stock market rally was likely overdone, investors said. The pandemic is far from over, and questions remain about how quickly any vaccines may become available....'The pandemic still has a ways to go, unfortunately,' said Nick Brooks, head of economic and investment research at Intermediate Capital Group. 'The Pfizer development is a great development, but I don't think it's the game-changer that markets seem to perceive.' There are still many questions about how quickly vaccines can be rolled out once they are approved by regulators, and how long the immunity would last, he added. Expectations that a Covid-19 vaccine could accelerate the global economic recovery led to a reordering of winners and losers Monday. Stocks of travel companies, retailers and banks were among the main beneficiaries. Tech companies, which have fueled most of this year's market rally, are looking like laggards this week. 'It's far too early for investors to be making a structural shift from growth to value,' Mr. Brooks said. 'There's been pretty substantial damage to economies and that's going to take some time to repair.' He cautioned that markets are likely to remain volatile."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 10, 2020


11.10.20 - Evidence of PPP Fraud Mounts -WSJ

Gold last traded at $1,877 an ounce. Silver at $24.33 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Tuesday on bargain-hunting and a weaker dollar. U.S. stocks fell, led by tech, as investors moved out of stocks which thrived during the pandemic and into stocks linked to an economic recovery.

More Accommodative Fed Key to Next Gold Price Surge -FX Empire
"Bullish gold investors received a couple of gifts last week - Democrat Joe Biden was elected president of the United States and the U.S. Federal Reserve reiterated their support for the economy. The gift wasn't perfect, however, as the Democrats lost a few House votes and it looks as if the Republicans will retain control of the Senate....A Democratic president and House, and a Republican Senate is ideal for the gold market. Since neither party controls the Congress, both trade wars and higher taxes are largely off the table. Furthermore, the prospect of more gridlock also means that expectations for a massive U.S. fiscal stimulus package have been lowered. Removing massive coronavirus stimulus from the agenda sent bond yields sharply lower in anticipation of less borrowing and more quantitative easing from the U.S. Federal Reserve....The short-term outlook is clouded by doubts where fiscal policy may be headed in coming weeks, or how smooth the transition between an incoming Democratic administration led by Joe Biden and lame-duck administration led by Republican President Donald Trump will be. We are certain that a combination of fiscal stimulus, no matter what size, and a continuation of the Fed's emergency programs will be bearish for the U.S. Dollar and bullish for gold prices."

bacon Why the Biden Economy Could Be the Same Long Slog as the Obama Economy -Irwin/New York Times
"The Biden economy appears likely to show uncanny similarities to the 2011-to-2016 Obama economy...The Senate will probably be in the hands of Republicans - an opposition party perhaps willing to do enough to try to prevent steep damage to the economy and markets, but unwilling to embrace the kind of multi-trillion dollar spending agenda that could generate a Biden boom. This combination would mean that the Federal Reserve would be left playing the dominant role in trying to propel an economic recovery, with the downsides that would entail....The reaction to the election in financial markets in recent days suggests that something like the Obama recovery is more likely: in short, a long slog back to health. The stock market soared ...as investors priced in both easier money from the Fed and a Biden administration that will be constrained in its ability to raise taxes and expand regulation on businesses....'The whole blue wave idea that would have come with not only very generous stimulus in the near term but structural reforms and big infrastructure investment, that seems to be off the table,' said Julia Coronado, president of MacroPolicy Perspectives....The experience of the final six years of the Obama presidency looms large. In that span, Republicans controlled at least one chamber of Congress and blocked any large-scale fiscal policy - and insisted on spending cuts in response to high deficits. Legislative deal-making took place at the margins, if at all....So the biggest question may turn out to be this one: Has the pandemic fundamentally broken anything about the economy? If not, a speedy recovery may be possible even without a politically aligned Congress. If yes, it might feel like the early 2010s all over again."

Evidence of PPP Fraud Mounts, Officials Say -Wall Street Journal
"The federal government is swamped with reports of potential fraud in the Paycheck Protection Program, according to government officials and public data, casting a shadow on one of Washington's signature responses to the coronavirus pandemic. Congress and the Trump administration designed the PPP to give small businesses fast and easy access to taxpayer funds, and it worked: About $525 billion in loans were distributed to 5.2 million companies between April 3 and Aug. 8. Many business owners say it was a lifeline in turbulent times. But evidence is growing that many others took advantage of the program's open-door design. Banks and the government allowed companies to self-certify that they needed the funds, with little vetting. The Small Business Administration's inspector general, an arm of the agency that administers the PPP, said last month there were 'strong indicators of widespread potential abuse and fraud in the PPP.' The watchdog counted tens of thousands of companies that received PPP loans for which they appear to have been ineligible, such as corporations created after the pandemic began, businesses that exceeded workforce size limits (generally 500 employees or fewer) or those listed in a federal 'Do Not Pay' database because they already owe money to taxpayers....One type of suspicious activity banks reported were multiple government payments from coronavirus-relief programs to a single account, suggesting potential abuse, according to Kenneth Blanco, director of the Treasury Department's Financial Crimes Enforcement Network. Several hundred PPP-related investigations have been opened, involving nearly 500 suspects and hundreds of millions of dollars of loans, according to the Federal Bureau of Investigation....'It seems that a lot of that cash went to businesses that would have otherwise maintained relatively similar employment levels,' said David Autor, an MIT economics professor and one of the study's authors."

Biden Will Need to Get Creative to Save the Economy -Smith/Yahoo Finance
"When the President-elect takes office, he'll confront the country's two most acute challenges: an ongoing Covid-19 pandemic and the economic damage it's wrought. But he'll have an uphill battle to enact the sort of bold policy agenda that many supporters were hoping for. Barring a January surprise in Georgia's runoff election, Republicans are likely to retain control of the Senate, denying Biden the unified control of government that his predecessors enjoyed when they came into office. With traditional relief and stimulus measures limited by opposition party intransigence, Biden might still be able to pass policies designed to resuscitate the stricken service sector directly....The economy is being afflicted by two simultaneous maladies. The first is continued fear of the virus, now in the middle of a devastating third wave. Fear, more than lockdowns, has kept Americans shut inside their homes, reluctant to take the risk of going out to shop or eat. That in turn gives rise to the second problem of decreased demand, which filters through the entire economy. Fear of the virus will eventually be reduced by vaccines, which may become available in early 2021....Restaurants, shops, and other establishments that cater in person to customers have gone bust in large numbers. After the threat of the virus has passed, the U.S. government might try to resuscitate local economies by subsidizing new shops to fill the empty storefronts that now dot America's urban landscape....Strict free-market adherents might worry that this plan would delay or prevent needed transformation in the U.S.'s industrial mix. The pandemic has shifted demand from local services to e-commerce; people are watching Netflix instead of going to movie theaters, and ordering things off of Amazon instead of buying them in stores. Some will question whether reversing that shift should be an economic priority."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 9, 2020


11.9.20 - Partisanship Masking As Ignorance

Gold last traded at $1,856 an ounce. Silver at $23.66 an ounce.

NEWS SUMMARY: Precious metal prices fell Monday on profit-taking amid encouraging Covid-19 vaccine news. U.S. stocks soared to record levels as investors cheered trial data from drugmakers Pfizer and BioNTech indicating their Covid-19 vaccine is more than 90% effective.

Gold Investors Might Soon See A Price Of $2,500 Per Ounce -Seeking Alpha
"$10,000 invested in physical gold at the beginning of 2018 would have been worth about $15,000 now....Now, we are in a very favorable situation for the yellow shiny metal since the low interest rates are near zero. What is more, the Fed is planning to hold them near zero through 2022 to help the economy recover from the pandemic. Also, the Fed will still keep buying bonds, thus flooding the financial system with cheap money. This alone is bullish for gold....The US stimulus bill looks like a major hurdle for gold prices. But, in my opinion, it will eventually get passed...The size of this package is still unclear but could probably be over $2 trillion. This money will not come out of nowhere. The Fed will have to do more bond-buying, thus devaluing the dollar. This environment is highly bullish for the yellow metal. What is more, there is election uncertainty, which is also an extremely bullish factor for safe havens....E.B. Tucker, who correctly predicted gold would hit an all-time high this year, expects gold price to hit $2,500 per ounce by year-end."

chart Stock market's post-Election Day rally shows that gridlock in Washington is good for Wall Street -Hulbert/Marketwatch
"One reason the stock market soared in its post-Election Day trading session may be that it prefers political gridlock to a so-called blue wave. To be sure, the outcomes of the presidential race and many congressional races are not yet known. But it increasingly is looking as though gridlock is a winner. Prior to the election, in contrast, some oddsmakers had said there was a three-in-four chance that the Democrats would emerge with control of not only the presidency but both houses of Congress....The likely reason that Wall Street likes gridlock is that it reduces the possibility that any major policy changes will take effect. Sam Stovall, chief investment strategist at CFRA, noted in an email to clients that the increasingly likely gridlock 'lessens the prospects for an increase in regulations and taxes.' In addition, he added, the gridlock reduces the likelihood of 'additional fiscal stimulus' - and that reduced likelihood in turn eases potential inflationary pressures down the road....We need to be careful not to ascribe meaning to what may be random fluctuations in the market. We should never forget that many, if not most, of the stock market's daily gyrations are statistical noise. Still, a greater-than-2% rally in the S&P 500, along with a nearly 4% rally in the Nasdaq, seems large enough to demand explanation. Gridlock is the obvious reason."

Partisanship Masking As Ignorance: The Story of U.S. Pollsters -Rice/Real Clear Markets
"Dr. Evil from the Austin Powers movies frequently lamented: Why must I be surrounded by idiots? But there is something worse: Partisanship masquerading as incompetence. Pollsters - and their amen corner in the mainstream press - have proved beyond the shadow of any doubt they are practitioners of that low art - before, during and after the presidential election. Which still hangs in the balance. For months prior to Tuesday, the pollsters had Joe Biden not only up in practically every state but up by double digits in several of them. They projected a Biden blowout. This was duly reported - if you can call it that - by the same media that reported nothing - literally,nothing - about the Biden family's unsavory business dealings with Chinese communists....The same media reported as gospel the pollsters' double-digit pre-election predictions, which have proved to be off by orders of magnitude. Days after the election, Biden still hasn't won - despite the best efforts of the media to portray him as the winner....So much for the Biden landslide - not so much predicted incompetently but desired ardently. Which is the key to understanding what went 'wrong.'....Regarding the media's relentless reporting of every worst-case hypothetical scenario about the Coronavirus. We hear endlessly about 'the cases! the cases'! - almost never about the 99.6 percent recovery rate. Nothing about the 0.0-something mortality rate for children and young, healthy adults. No retraction about the '2-3 million' dead that never appeared. It's as if they want us to believe the bad news - even if it's fake news - as opposed to reporting the news."

America Chooses Divided Government -Noonan/Wall Street Journal
"Divided nation, divided outcome. Votes are still being counted, nothing is certain, but it looks as if Joe Biden will win the presidency, closely. The Republicans will hold the Senate, closely, and pick up some seats in the House. A moderate outcome: divided government. Or so it seems. It's all so close. The aftermath could get rocky. It is right and reasonable to request recounts in close races where the legal requirement is met, and it looks as if there may be several of them. This will take time. Fine, get it right, protect the integrity of the system. There's nothing wrong with court challenges in the face of evidence of serious and broad malfeasance. But the emphasis must be on real evidence, not drummed-up drama and trying to throw a spanner into the works because you don't like where things are going. It looks to be a long slog. Will some mess and incompetence be uncovered on state levels? Probably. Will we see some mischief appear to have been done in this city or that county? Probably. As in every election....Democrats were to the left of their own base. Joe Biden was the base's man, and he won. But the party had already been tagged. America in 2020 was not in a progressive mood. From a state-level political professional: 'The fear of the left, packing the court, big tax increases, AOC as the face of the party and the group Biden had to answer to. He didn't have a Sister Souljah moment. Bill Clinton would have.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 6, 2020


11.6.20 - Democratic Left Has Lost America

Gold last traded at $1,951 an ounce. Silver at $25.55 an ounce.

NEWS SUMMARY: Precious metal prices rose to six-week highs Friday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed despite upbeat jobs data as investors looked for clarity on the presidential and congressional election results.

Gold Markets Rally On Weak US Dollar -FX Empire
"Gold markets have rallied significantly during the trading session on Thursday, reaching towards the $1950 level rather early. The FOMC Meeting of course will have a significant influence on what goes on with the US dollar, but quite frankly the Federal Reserve has been telegraphing for a while that it does not have too much left that it can do without fiscal stimulus. Senate leader Mitch McConnell has suggested that perhaps stimulus would be the first priority when Congress got back to work, but the reality is that the stimulus will be much smaller than originally anticipated. Because of this, you may actually make more money buying gold and other currencies than the US dollar. After all, the ECB is likely the flood the markets with liquidity, the Bank of England just increase stimulus, as did the Reserve Bank of Australia...Pullbacks should continue to be thought of as buying opportunities, and eventually I do anticipate that we break through the $2000 handle."

lawyers flock Contested Election: The 2020 Election Has Proven A Target-Rich-Environment For Challenges -Zero Hedge
"It is not surprising that both sides have raised tens of millions of dollars and enlisted hundreds of lawyers for the election challenges based on a 'saturation bombing' legal strategy. The litigation started weeks before the election, and thousands of ballots are being set aside in anticipation for court reviews....It is inevitable with tens of millions of voters across thousands of polls that isolated or systemic problems arise. But this election is different by a high order of magnitude. Mail voting is always a magnet for challenges. In past elections, some mail ballots were not even counted since they would not affect the outcome. Now officials have to process tens of millions of mail ballots in areas that have not dealt with such numbers before. Watch the developments in three basic categories as the election unfolds. The first category of challenges is deadlines. This will constitute the most extensive form of challenges. The 'clocking' of ballots is an effective basis for challenges as the deadlines are set by state law. The results have been mixed thus far...The Supreme Court split evenly on the Pennsylvania extension of the deadline for absentee voting, which left the court orders standing....Another category of challenges is conditions. This rises significantly in the election and includes allegations of voter suppression due to long lines or malfunctioned equipment. This year has seen novel challenges and mixed results in this category....The most worrisome category of challenges is certification. This comes when the votes must be certified by the states for eventual submission to Congress. Many states do not start counting votes until after polls close. That could leave the outcome hanging by both tabulation and litigation, which could be serious in Pennsylvania."

Record $1 billion worth of bitcoin linked to the Silk Road seized by U.S. government -CNBC
"The U.S. government seized an unprecedented $1 billion worth of bitcoin linked to criminal marketplace, the Silk Road. Thousands of bitcoins were taken by law enforcement this week, in what the Justice Department said was the largest seizure of cryptocurrency in the history of the agency. 'Silk Road was the most notorious online criminal marketplace of its day,' U.S. Attorney David Anderson of the Northern District of California said in a civil complaint Thursday. 'The successful prosecution of Silk Road's founder in 2015 left open a billion-dollar question. Where did the money go?' Silk Road allowed people to buy and sell drugs and other illegal goods, and use bitcoin to anonymously fund those transactions. The dark web marketplace was shut down by U.S. federal authorities in 2013 and its founder, Ross Ulbricht, was sentenced to life in prison two years later. Bitcoin prices climbed above $15,000 on Thursday, hitting the highest level since January 2018."

A Pelosi-Schumer Defeat -Editors/Wall Street Journal
"Besides media pollsters, the biggest immediate election losers on Tuesday were Democratic Congressional leaders Nancy Pelosi and Chuck Schumer. Americans diminished Speaker Pelosi's House majority and appear to have kept Republicans in control of the Senate as a brake on the left's agenda. The biggest news is that Mitch McConnell is likely to return as Senate Majority Leader to torment Democratic dreams for two more years. The GOP lost seats in Colorado and Arizona but gained one in Alabama. Republican Senators Joni Ernst in Iowa, Susan Collins in Maine and Steve Daines in Montana prevailed, and Thom Tillis is leading in North Carolina....A GOP Senate would mean the end of the Biden-Bernie Sanders 'unity' agenda. No death to the legislative filibuster, no new U.S. states, no Supreme Court packing, no confiscatory tax increases, no Green New Deal. If Mr. Biden wins and he wants to get something done, he would have to go through Mitch the Knife. Mrs. Pelosi will keep her majority, but much reduced from 232-197. The GOP flipped two seats in South Florida amid a surge of Hispanic turnout and toppled 15-year Rep. Collin Peterson in western Minnesota. Republicans had picked up a net five seats by Wednesday afternoon and could gain as many as 12 or 13....One of Tuesday night's big stories was how Republicans gained ground among minorities. One reason is they made more of an effort at outreach, especially at their August convention. The GOP message of economic opportunity resonated with minority entrepreneurs and workers as Democrats stood for government lockdowns and handouts. And who would have thought that immigrants who fled socialism in Venezuela and violence in Central America would oppose those scourges here? Democrats have refashioned themselves into a party of coastal elites and government unions with a progressive agenda that many middle-class Americans dislike. This includes banishing fossil fuels, abolishing state right-to-work laws and a pointless partisan impeachment....Regardless of whether Joe Biden wins the White House, the Democratic left lost America."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 5, 2020


11.5.20 - This Is Your Brain on Uncertainty

Gold last traded at $1,946 an ounce. Silver at $25.12 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Thursday on safe-haven buying, election uncertainty and a weaker dollar. U.S. stocks jumped higher on hopes the winner of the U.S. presidential election would soon be determined.

How Will Gold Prices React To The Elections? -Sieron/OilPrice
"The election results might not be known right away, and there are indications that they might be contested. Who knows what could happen if that's the case? According to some analysts, contested elections should increase the geopolitical uncertainty and boost the safe-haven demand for gold....It is true that recently, gold has been moving in tandem with the stock prices, responding to the stimulus expectations. But, in times of stress and reduced faith in the American institutional system, gold could decouple from equities and behave more like a safe haven asset. No matter whether red or blue, the new government is likely to pump more liquidity into the economy. So, gold could thrive under either Trump or Biden, although we could see increased volatility in the short-term precious metals market. What does all the above mean for the gold market? Well, investors should look past the elections already. They matter less than many people believe....Gold's responses to geopolitical events are relatively short-lived. In the long run, what drives gold prices are the fundamental factors. And the fundamental outlook remains positive for the yellow metal. Both the monetary policy and the fiscal policy are extremely dovish. The public debt is ballooning, while the US dollar is weakening. The real yields remain negative."

gridlock What's to Come After the 2020 Presidential Election -Bonner/Rogue Economics
"Spending fake money on things we shouldn't be doing anyway"¦ including wars, bailouts, boosting stock prices, paying people not to work, and filling The Swamp - will continue"¦ unabated. And the U.S. dollar - the weak link in the whole kinky system - will break. Yes, Dear Reader, it's time to look beyond the election. It's time to think about what will happen to the economy"¦ and to our money. And since our money is mostly in dollars, we depend on the greenback as a panda depends on bamboo shoots. Our savings"¦ our assets"¦ our retirements - all depend on the integrity of the post-1971, faith-based (fake) U.S. dollar....If the pollsters are right this time. Trump will lose. Then, the Biden Team - taking over a country that is already racing towards a calamitous crisis - will step on the gas! That will mean more spending"¦ more money-printing"¦ more dollars"¦ and, inevitably, a fall in the dollar's value. But it hardly matters. We need to look on the bright side"¦ the glass half full"¦ the opportunity in the middle of the crisis....On the 'sell' side, the choice is fairly obvious - we want to 'sell' the U.S. dollar. It is the cornerstone of the whole fantasy finance system"¦ the world's most overrated asset"¦ and the most likely to lose value over the next decade. It has already lost 96% of its value (measured in gold) since it was introduced 49 years ago. Most likely, it will lose the rest of it in the years ahead."

The US dollar will remain weak no matter who wins the presidency -LaMonica/CNN Business
"Tax cuts, a bigger deficit and several interest rate cuts from the Federal Reserve have pushed the greenback lower. But even if Trump loses to Joe Biden, the dollar may not dramatically rebound anytime soon. A Biden administration would likely push for even more stimulus for consumers and small businesses because of the Covid-19 pandemic - especially if Democrats control of the Senate. This spending would likely weaken the dollar a bit further or, at a bare minimum, keep it relatively flat....'A 'blue wave' outcome may be negative for the greenback due to an even bigger stimulus package by Democrats lifting inflationary pressures,' said Lukman Otunuga, senior research analyst at FXTM, in a report Tuesday....But the reality is that more government spending is likely to keep the dollar in the doldrums - no matter what happens with America's foreign policy. Strategists from the BlackRock Investment Institute wrote in a report Monday that they expect 'positive spillovers to global growth from increased fiscal stimulus, more predictable US trade and foreign policy and the prospect of a weaker dollar' if Biden wins....The US Dollar Index, which tracks the dollar versus the euro, British pound, Japanese yen and several other major global currencies, has dropped more than 7% since Trump took office in 2017."

This Is Your Brain on Uncertainty -Newcomb/Morningstar
"I know you want an answer. We all do. It's been a long slog to get this far in 2020, and to sit in ambiguity even a moment longer feels like an impossible task to many of us. We all want some sort of resolution in this year of unrelenting upheaval and unease, but now is not the time to rush to a conclusion or bet the farm on a particular outcome. It is precisely when emotions are running hot that we need to keep our cool....Uncertainty is stressful. In fact, humans have been shown to prefer even physical pain to the stress of uncertainty, but we have to be careful right now to avoid making rash investment decisions that we might soon regret....With doomsday headlines everywhere, whichever way the race comes out, roughly half of the voting population will worry that life as they know it is over. I'm personally concerned about this because, though fear is a powerful political motivator, it doesn't help us manage money well. The real existential threat to your finances is short-term thinking. Decades of research show us that short-term thinking is linked to increased impatience and discounting of future rewards[1], impulsive decisions[2], higher debt[3], lower savings [4], excessive risk-taking [5], and poor health decisions [6]. Fear and uncertainty can make short-term thinkers of the best of us...To maintain your cool as a long-term investor, you simply must find ways to see past the immediate crises. We can do this by turning our attention away from the uncertainty of things we can't control and toward things that are certain and things we can control....If the market does have an extreme reaction to the election, you can turn either outcome into an opportunity. In the case of a market crash, you'll have the chance to buy some great companies when they are at a discount. If there is a large upswing, you can sell some winners that have become overpriced....If your portfolio is undiversified, you're at risk for losses, but not because of politics....Be present with your loved ones. Speak kindly to your neighbors. Take your anxiety out for a walk or a run in nature. Sing. Meditate. Dance. Sleep. Do what it takes to stay balanced in your thinking so that you will be mentally ready to take advantage of the coming opportunities when they make themselves clear. This time of uncertainty and delay will pass. Others will follow."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 4, 2020


11.4.20 - Gold Price to Race Towards $2300

Gold last traded at $1,895 an ounce. Silver at $23.86 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday amid election uncertainty and a firmer dollar. U.S. stocks rose led by tech shares as investors cheered the growing probability of political gridlock.

Gold to race higher towards $2300 -Credit Suisse/FX Street
"Strategists at Credit Suisse remain long-term gold bulls and a potential bullish 'wedge' continuation pattern looks to be forming to add weight to this view. 'Gold extends its consolidation from our $2075 target hit in August and we maintain our core view this is a temporary and corrective pause in the broader uptrend. Indeed, price action is beginning to increasingly look like a bullish 'wedge' continuation pattern, adding weight to our view.'....'Above $1933 would now suggest the 'wedge' has been completed for strength back to $2016, then the $2075 high. Big picture, we continue to look for $2300.'"

biden harris commercial Harris, in Video, Starts Showing Marxist Streak -Stoll/New York Post
"Vice presidential candidates, like doctors in the Hippocratic Oath, are supposed to "do no harm." Joe Biden's running mate, Kamala Harris, risks violating that traditional rule with an animated video narrated in her voice that she posted Sunday on social media. 'There's a big difference between equality and equity,' she says in the video. Equality, she suggests, is problematic. 'Equality suggests, oh, everyone should get the same amount. The problem with that, not everybody's starting out from the same place. So if we're all getting the same amount, but you started out back there and I started out over here, we could get the same amount, but you're still going to be that far back behind me,' she says. A better alternative, she suggests, is equity. 'It's about giving people the resources and the support they need, so that everyone can be on equal footing and then compete on equal footing. Equitable treatment means we all end up at the same place.' The video was met with vehement reactions. 'Sounds just like Karl Marx. A century of history has shown where that path leads. We all embrace equal opportunity, but government-enforced equality of outcomes is Marxism,' replied a Republican member of Congress from Wyoming, Liz Cheney....The opinion editor of the Daily Telegraph, James Morrow, quipped: 'Equitable treatment means we all end up at the same place,' says Kamala Harris, not understanding that that same place always winds up being a gulag or a bread line.' The animated video could be a calculated move by the Biden campaign to try to whip up enthusiasm from Bernie Sanders-supporting or Elizabeth Warren-supporting far-left voters who are at risk of staying home and costing the Biden-Harris ticket the election....For voters, the Harris video provides a reminder that the election is a contest about not only the particulars of Covid-response policies or international relations but philosophies. The Harris cartoon view of the world doesn't allow for people ending up in different places because some people work harder or have more natural ability or better or worse luck or make different choices. It suggests that all different outcomes are the result of inequalities of resources, which should be eradicated, so that we can all end up in the same place. We do have plenty further to go in America to improve equality of opportunity. Clumsily depicting a vision in which 'we all end up in the same place,' as the Harris-narrated video does, is counterproductive. It will only slow progress."

Donald Trump wins on the economy -Moore/The Hill
"Is this the single greatest and fastest comeback from a recession in our history? A strong case could be made that it is with the recent news that national economic output soared to the highest rate in more than seven decades. The 33 percent increase in gross domestic product was twice the last record set back in 1950 when Harry Truman was president and economic growth was almost 17 percent at the time. No one expected anything like this. The Federal Reserve had predicted growth of about half of this rate. Most Wall Street economic forecasters predicted less than 20 percent growth. The same occurred with jobs as we have now lowered unemployment to below 8 percent in September....Overshadowed by such blockbuster economic growth was the report on unemployment claims, as we have moved more than 15 million Americans off of such benefits in just six months. That has never happened before in our history....One reason the recovery is so strong is the health of the economy before the pandemic at the start of 2020. We had the lowest unemployment rate in 50 years, over 6 million unfilled jobs, and the highest income levels with median households in our history, while poverty for all races, genders, and ethnicities fell to record lows....Biden argued that the United States has dealt more ineffectively with the coronavirus under Trump than any other country. I will not defend the actions Trump has taken to contain the pandemic, but European death rates are climbing again. Moreover, our recovery is ahead of most European and Asian countries...I cannot imagine changing horses now. I believe in the end the voters will agree."

Stagflation will challenge the president in 2021 -Morici/Marketwatch
"Whoever wins in November, the White House and Federal Reserve will face another tough year in 2021...After contracting at an annual pace of 31.4% in the second quarter, GDP increased 33.1% in the third quarter. However, the stimulus has mostly run its course, and the pace of recovery is slowing. Record numbers of small businesses, temporarily shuttered, are now permanently closing, and many bricks-and-mortar retailers are in chapter 11 bankruptcy. Venerable corporate names are permanently cutting staff in petroleum, media, airlines, banking, insurance, automobiles and elsewhere. This winter, even with a vaccine rolling out, the economy will be smaller than it would have been without the pandemic, and 4 million or 5 million Americans will be added to the rolls of the permanently unemployed....The Fed is not only out of bullets but, like Dr. Jekyll, has created its own Mr. Hyde. We face stagflation - the paradox of high unemployment and inflation. During June, July and August, the CPI rose at a 6.3% annual pace as compared with the prices the prior three months....We will soon have run the string on lower oil and gas prices and productivity gains and imports keeping down costs for most durable goods, save autos, and consumer items such as apparel. Many durable goods are in short supply. Inflation for goods, less food and energy, continued brisk in September and has been running 8.6% since June. Shortages will persist into and through 2021. This winter, as vaccines become widely available, in some sectors - such as airlines - and places - such as restaurants in large cities - workers that have been displaced will remain unemployed, but elsewhere demand will surge, creating continuing shortages of capacity and inflation."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 3, 2020


11.3.20 - Trump or Biden: Gold Wins Either Way

Gold last traded at $1,905 an ounce. Silver at $24.10 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a sharply weaker dollar. U.S. stocks rallied as investors hoped a clear winner would emerge from the U.S. presidential election.

Gold Price Predictions If Biden Or Trump Wins Presidency -Akhtar/Yahoo Finance
"The U.S. presidential election will play a huge role in shaping the global economy and gold prices are expected to react in the run up to the election day. So how important is it for the safe haven asset gold if Biden or Trump makes it to the White House? 'There is no doubt that we are likely to see increased volatility in stock markets in the run up to the election day and investors seeking traditional safe havens such as gold, particularly if the race between the two candidates gets very close and there is a growing risk of a contested outcome,' writes Saida Litosh, manager of precious metals analysis at Refinitiv....'Historically gold price movements in the aftermath of previous U.S. presidential elections suggests little evidence of a clear relationship between the gold price and the election outcome based on party affiliation,' says Litosh. Fosterville South Exploration CEO Bryan Slusarchuk says, for thousands of years, gold has acted as a hedge against uncertainty, a currency and a store of wealth. Both Trump and Biden have promised huge amounts of stimulus and huge amounts of easing.'Both [Trump and Biden] have been vocally supportive of various policies that amount to quantitative easing and therefore gold ought to react well no matter who is elected,' says Slusarchuk. Stepping beyond financial conditions, which will serve to propel gold higher, we need to consider gold's function as a hedge against uncertainty, says Slusarchuk....'I believe gold has explosive upside in the coming months and this is predicated on economic and financial conditions, but the uncertainty of the election outcome will only serve to accelerate its upward trajectory,' adds Slusarchuk."

vote today Don't trust banking behemoths' 2020 election predictions -Gasparino/New York Post
"With Joe Biden up in the polls, pre-election positions should be easy. Load up the truck on shares of any company that can benefit from his embrace of the Green New Deal, like solar-panel companies. Sell Treasuries because Biden's spending plan looks like President Trump's - only on steroids....And yet look closely, and solar-company stocks have risen over the past year but they aren't shooting to the moon. Yields on Treasury bonds aren't spiking wildly. And the stock market appears to be in a panic. There are a couple of reasons for this. Some traders say investors are finally pricing in all those new taxes Biden is planning, or that Biden's poll numbers in battleground states are shakier than the consensus indicates. Or maybe Trump will come close enough to contest the election, sending stocks into a tizzy of uncertainty for weeks after Election Day. The confusion of the smart-money crowd tells us something about Wall Street. The geniuses who run the big banks and financial firms and too often dominate economic commentary have never been that smart, and probably shouldn't be trusted to either predict the election or how good (or bad) things will get whoever is elected....The other reason to always suspect Wall Street wisdom is its lousy track record. Moody's Corp. recently made some news predicting that a Biden victory would be great for the economy...When was the last time Moody's gave investors fair warning to any major financial event? The 2008 banking crisis? Nope. The dot-com bubble bursting in 2000? Nope....The point is when you see left-leaning TV pundits praising Moody's for its Biden analysis, remember it's mostly devoid of context."

JPMorgan Says Economic Disaster And More Lockdowns Will Be Great For Stocks -Zero Hedge
"According to One River's Eric Peters...ever since the arrival of MMT in March, the simple reality is that for stocks it no longer matters who is president, to wit: 'When stocks bottomed on March 23rd, Trump narrowly led Biden in betting markets. But pandemics have consequences and this catastrophe hit a nation that had spent decades optimizing its economy to spur asset price appreciation. America's financial system was as overleveraged as it was unstable. A depression was inevitable in the absence of something utterly unprecedented. On March 27th Trump signed the $2.2trln CARES Act, and this, combined with a breathtaking array of asset purchase programs marked the effective start of MMT (Modern Monetary Theory) - with the Fed and Treasury coordinating policy. And ever since, it has mattered less who wins this election. Because you see, once the link is broken between what the government must collect and what it can spend, who leads the nation is less consequential - at least to stock markets in the near-term.'....The more dysfunctional the presidency, and Congress, the more the Fed has to take matters into its own hands. In fact, it is this very logic that has allowed stocks to soar to all time highs even as the economy barely grew for the past decade and then cratered into the steepest contraction on record. And for once, we had an honest, objective assessment from none other than JPMorgan, which in its latest Flows and Liquidity note published on Friday cuts to the chase and without any of the now ridiculous 'narratives' writes that 'The equity bull market should resume post US election.' Why? For two simple reasons: i) a surge in debt which will boost stocks as it has for the past century, and ii) if it's bad the Fed will step in. In fact, the worse it gets the better it will be for stocks, and in a moment of brutal honesty from the largest US commercial bank, JPMorgan's Nick Panigirtzoglo...'the reemergence of lockdowns and resultant growth weakness could bolster the above equity upside over the medium to longer term via inducing more QE and thus more liquidity creation.'"

Trump Has Torn the Mask Off the Liberal Media -Pavone/Wall Street Journal
"Why does the media hate Donald Trump so much? There are all kinds of theories, but only one really makes sense: We are a country at odds over the most fundamental principles of ideology, economics, religion, race, culture, morality - even our own history. The media is on one side of that metaphorical war, and President Trump calls it out. In this dispute the two sides have always been known to the participants, but the media doesn't identify them publicly.....The media is supposed to be a neutral participant. So, to a lesser extent, are Hollywood and academia. Hollywood's job is to entertain us. The universities' job is to educate us. The media's job is to report the news to us. If people knew for a fact that the media were taking sides, the jig would be up. The media would lose much of its ability to influence the outcome. This is what lies behind the media's fear and loathing of the president. It wants desperately to advance an agenda, but knows that to do so effectively it needs to be perceived as impartial. In other words, the media cares nothing about reality - only the perception of reality....In a real sense, the president has defeated the media. No matter what the outcome of this election, the media will never again be able to convince the public that it is objective. Everyone-not only conservatives-now knows where it stands. That is the real reason the media hates Trump with a blazing, white-hot intensity."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Nov 2, 2020


11.2.20 - Pollster Predicts Trump Will Win

Gold last traded at $1,893 an ounce. Silver at $23.98 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying ahead of U.S. elections. U.S. stocks attempted to rebound from the worst month since March amid rising election and pandemic uncertainty.

Gold rises as dollar rally stalls, virus cases mount -CNBC
"Gold jumped more than 1% on Friday as the dollar slipped from a one-month peak, while worries over rising COVID-19 cases and uncertainty surrounding next week's U.S. presidential election offered support to the safe-haven metal....'Gold rebounded as the dollar partially reversed its surprising two-day rally,' said Tai Wong, head of base and precious metals derivatives trading at BMO. 'Investors are finding the bottom of the recent range a good level at which to add to gold holdings ahead of the hotly contested election next week, which seems likely to return a one-party government that means much bigger and faster stimulus.'....'There's a lot of structural pieces in place for gold to continue to rise after the election, regardless of the outcome,' said Kevin Rich, Global Gold Market Advisor for The Perth Mint. 'Based on the amount of fiscal stimulus that is gone in from here in the United States and globally ... (and) the enormous amount of government debt taken on ... that's going to put a lot of currencies under pressure, including the U.S. dollar.' Gold, which has risen 24% so far this year, tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement. Concerns about a surge in coronavirus cases in the United States and in Europe dented investors' appetite for riskier assets."

the fed Does Anyone Trust the Fed? -Hogan/AIER
"In August, the Federal Reserve introduced its new monetary policy strategy of Average Inflation Targeting. This measure was expected to increase price inflation in the short run by raising the public's expectations of higher prices in the future. Based on evidence from financial markets and even from the Fed's own forecasts, it does not appear to have done so. The reason the new policy has failed is that no one seems to trust the Fed to achieve its policy goals....One problem with this strategy is that it will only be effective if the Fed is credible in its commitment to the new policy and, hence, to future inflation. Here the Fed faces a paradox of trust. The policy of Average Inflation Targeting only matters if inflation has been persistently above or below the target rate. But if inflation has persistently missed the target rate in the past, the public might not trust the Fed to achieve its new target rate in the future. If the Fed has consistently undershot its old target, why would anyone trust it to hit the new one?....If the Fed's new policy of Average Inflation Targeting were effective, we should see an increase in inflation expectations around the time of its announcement in late August. But inflation expectations have not increased since the announcement. If anything, they have fallen. This evidence indicates that investors do not trust the Fed to achieve above-target rates of inflation in the future....Powell's comment that the Fed is not 'out of ammo' was intended to reassure the public that the Fed will do whatever it takes to achieve its monetary policy goals. Unfortunately, the Fed's actions do not support that sentiment. Until the Fed acts to build trust and credibility with the public, its policy of Average Inflation Targeting will have little effect on inflation or economic activity."

The Dollar Disease Well Predates the Coronavirus -Snyder/Real Clear Markets
"A shocking disease about which we know very little even though it has been running rampant for seemingly a long time already. Not COVID. As sad as it may be, there's more documented about SARS-cov-2 than the timid investigations into how the global monetary system really functions. In less than a year, we've come to know quite a lot about how the coronavirus gets transmitted, yet know shockingly little about how dollars are transmitted globally. Or that they aren't really dollars at all. First, however, gigantic GDP positive during Q3 for the United States. So far as real GDP might be concerned, this thing's over - hooray!! - back to even again after just two quarters when most models from the start showed it would take until the end of next year at the earliest. Reaction to this, however, has been muted. For one, it's been expected for several months; estimates were continuously raised throughout Q3 so that we knew what the number was going to look like well before this week. It's the one for Q4, and then those for 2021, which contain all the mystery and gravity....The real danger, therefore, is that businesses use their 'stimulus' receipts to have done and keep doing other things than hire back, or pay more to, their workers. That's just what they're not doing right now. Without a natural rebound in the private economy, there's no point in hiring back workers since there's no work for them to do....The domestic financial system operates in huge part by its relationship with a global dollar system no one knows much about. That seems kind of important, don't you think? For one thing, it raises questions about why US banks would be so heavily financed by this offshore eurodollar (the word 'eurodollar' only appears three times in this 81-page report; as if it is to be carefully avoided)....Why does the US financial sector lean so heavily on the offshore market? Because that's where the dollars are! The offshore dollar system is far, far larger, more complex, and more aligned with how a bank-centered system would evolve....For a time, Jay's flood fairy tale was fun while it seemed like there was a genuine rebound, but even in the aftermath of a plus-thirty GDP it leaves us with too many unknowns in all the wrong places....No need to figure that out when COVID's around to easily blame (like subprime mortgages). The real disease is the same something else."

The Pollster Who Thinks Trump Will Win -Swaim/Wall Street Journal
"Joe Biden leads Donald Trump by an average of 7 or 8 points in national surveys, more narrowly in battleground states. Everybody remembers the shock of 2016, but can the polls be wrong again? Ask the question in a different way: Are poll respondents telling the truth? Robert Cahaly, head of the Trafalgar Group, thinks a lot of people aren't. Trafalgar polls accurately foresaw the outcome in 2016, calling Florida, Pennsylvania and Michigan for Mr. Trump. In 2020 the Atlanta-based consulting firm has generally shown Mr. Trump to be in a stronger position than the conventional wisdom would suggest....Do people lie to pollsters? 'Yes,' Mr. Cahaly says, 'but they're not necessarily doing anything wrong. If a grandmother says, 'This is my grandson, isn't he a handsome boy?' and you can see he's anything but handsome - he's sickly and weird-looking - you don't say, 'No, he's sickly and weird-looking.' You just say, 'He sure is.' Social desirability bias is more pronounced among some demographics, Mr. Cahaly thinks, and he claims only that Trafalgar polls minimize it. 'You can't get rid of it,' he admits. To oversimplify his approach: If a poll respondent tells you he's voting for Candidate A, but that same person answers every other question in a way that suggests he's voting for Candidate B, the pollster may wish to account for that oddity in the overall tally....'For me it's not a left-right thing,' he says. 'I run a business. It's not in my interest to pump up a Republican candidate just for the sake of it. I need to get it right.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 30, 2020


10.30.20 - Will the "Silent Majority" Stop The Left?

Gold last traded at $1,878 an ounce. Silver at $23.62 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying and a weaker dollar. U.S. stocks fell as major indexes headed for the worst week since March; amid downbeat earnings, failed stimulus talks and rising CV-19 worries.

The Real Reasons Gold Dropped On Wednesday And Why You Shouldn't Worry -Constable/Forbes
"Gold prices took a significant tumble Wednesday. But that doesn't mean that long-term gold investors should turn bearish...But here's what's really happening, and it is nothing to do with investors souring on gold as a long-term strategic asset. First, stocks dived Wednesday on the back of the news that infections of the COVID-19 virus have ballooned...At the same time as investors were dumping stocks they were fleeing to the perceived safety of U.S. Treasury bonds. But here's the key - the value of the dollar and the price of gold tend to move inversely. In other words, when the dollar rallies, gold tends to fall. A simultaneous stronger dollar and weaker gold prices shouldn't surprise anyone. There's a further reason for gold to have dropped to precipitously. Many investors buy stocks using borrowed money known as margin. When the stock price declines by a significant percentage, then the investors often need to provide their stockbrokers with more cash as collateral on the borrowing. So what do some of these cash-strapped investors do? They sell some of their gold to get the cash needed to send to the stockbroker....So in many ways, investors should expect gold prices to take a tumble when the stock market dips...this drop could be a buying opportunity."

Trump2020 Will A Non-Political "Silent Majority" Stop The Left? -Bishop/Zero Hedge
"The 2020 campaign is down to its final week, with each party and pundit preparing the ammo they need to either take a victory lap or explain away their defeat. In the age of covid, the Democratic Party has pushed heavily a vote-by-mail campaign that places their successes in the hands of the ability of voters to successfully negotiate the postal system, while Trump's team is relying on MAGA rallies to motivate in-person early voting. The combination of the two has the race projected to be the largest projected voter turnout in over a century. According to conventional wisdom, this is a major win for Joe Biden's team...But is conventional wisdom correct? If we do in fact see a major surge of voter behavior, it's useful to consider the sort of voter who may be turning out to cast a vote for the first time. Both sides have their own preferred narrative here: Democrats see a nation of politically oppressed groups that can be activated by tapping into their sense of injustice, while Republicans see a 'silent majority' that wants 'LAW AND ORDER!' Historically, the demonstrated preference of American voters has firmly been political apathy....If polling trends are accurate, we've already seen President Trump greatly enhance his position with minority voters, whose communities tend to be the most hostile to the Left's fetish for political correctness....Perhaps real populism in America is simply letting people raise a family and grill in peace? If so, maybe Murray Rothbard was right about the potential for a uniquely libertarian brand of populism in America. One thing is for sure if this theory holds: political pundits in New York and Washington, DC will find themselves looking foolish in 2020. Again."

If You're Invested in the Stock Market, You Need to See This Chart -Dyson/Rogue Economics
"The Dow-to-Gold ratio shows us the relationship between the stock market and gold. The first thing the ratio tells us - looking back 120 years - is there is a clear cycle in this relationship. At times, stocks get cheap compared to gold. You can buy the Dow with only a few ounces of gold. This was the case in 1896, 1932, and 1980. Other times, gold gets very cheap relative to stocks. It takes many ounces of gold to buy the Dow. 1929, 1966, and 1999 are examples of this. The ratio seems to cycle between these extremes every decade or two. Take a look at this chart... The second thing to notice is that extremes in the Dow-to-Gold ratio tend to mark important tops and bottoms in the stock market. At important bull market tops - like 1999 - it takes many ounces of gold to buy the Dow. At important bear market bottoms - like 1980 - it takes only a few ounces of gold to buy the Dow. This makes sense. In bull markets, people don't want the safety and protection of gold. In bear markets, people flee from stocks and treat gold as a safe haven. We can say, therefore, that the Dow-to-Gold ratio is a good indicator of the primary trend in the stock market. Based on my reading of this chart, the stock market entered a bear market in 1999"¦ And it will remain in a bear market until the Dow can be bought with only a few ounces of gold. My guess is that will occur at some point in the next 10 years. Today, one share of the Dow will buy only 14.5 ounces of gold. That's down from 42 ounces back in August 1999. In other words, since 1999, the Dow has lost 65% of its value in terms of real money - gold. Talk about a silent and insidious bear market....The Dow-to-Gold ratio will return to low single digits (below 5) anyway"¦ And the government policy of 'do whatever it takes to avoid recessions and bear markets' will have been completely discredited."

More Evidence Joe Biden Has Spent His Entire Working Career In Government -Puzder/Real Clear Markets
"In the presidential debate last Thursday, moderator Kristen Welker asked former Vice-President Joe Biden if it was the 'right time' to ask 'struggling small businesses' to raise the minimum wage to $15 an hour. It was a good question and each of the candidates' responses said a lot about how they view government's role in our economy...Biden told Welker that he was in favor of increasing the federal minimum wage to $15 but that 'the government is going to have help small businesses by bailing them out.' So, Biden would add to the problems small businesses are facing during the pandemic by increasing their labor costs and then provide government dollars to solve that problem, assuming he could reach agreement on a bailout package with a dysfunctional Congress. It apparently didn't occur to Biden that the government could simply avoid the problem by not creating it in first place. Perhaps that was understandable given that Biden has spent his entire professional career in government. As someone who spent his entire career in business, President Trump understandably seemed surprised by Biden's response. He asked Biden 'how are you helping your small businesses when you're forcing wages? What's going to happen and what's been proven to happen is when you do that these small businesses fire many of their employees.' Well, of course they do. In 2019, even before small businesses were closing due to the pandemic's economic shutdowns, the nonpartisan Congressional Budget Office estimated that a $15 minimum wage would result in 1.3 million fewer workers being employed. The CBO also forecast that a $15 minimum wage would reduce business income, increase consumer prices, and slow the economy....Biden has spent his entire working life in government which, unlike private sector businesses, does not have make a profit to survive. It can simply use taxpayer dollars to cover overspending and errors in judgment....In that respect, the minimum wage debate highlighted the fact that only one person on the debate stage had ever run a business, created a job or signed the front side of a paycheck, and it clearly was not the former vice-president."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 29, 2020


10.29.20 - 11 Trillion Reasons To Fear Biden

Gold last traded at $1,869 an ounce. Silver at $23.32 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday as upbeat GDP data boosted the dollar. U.S. stocks attempted to recover from a massive sell-off ahead of major tech quarterly earnings reports.

Inflation is coming, preserve your wealth with gold -Polleit/Kitco
"Consumer prices may be showing muted inflation pressures as the world continues to feels the effects of the COVID-19 pandemic but a major inflation threat is looming on the horizon according to one chief economist. In a telephone interview with Kitco News, Thorsten Polleit, chief economist at Degussa, said that instead of focusing on consumer inflation, investors need to pay more attention to the growing money supply as this is what is going to general higher inflation for years to come. Polleit's comments come as governments and central banks around the world continue to flood capital into financial markets to support the beleaguer global economy....'People continue to ask: 'Where is the inflation,' he said. 'But you just have to look at equity markets, real estate and bond prices. At the moment inflation is impacting asset markets. But the increase in the quantity of money that has been printed in the U.S. as well in the Euro area inflation will sooner or later also push up consumer prices.'....Polleit said that there are two major issues the global economy has to deal with when it comes to all the money that has been printed by governments and central bank. The first issues is currency debasement and the loss of purchasing power....The second significant issues being created is the growing disparity between the rich and the poor. Investors with diverse portfolios are seeing their wealth grow as inflation drives financial markets higher; meanwhile consumers who don't have investment accounts see more hardships as their dollars by fewer and fewer goods. 'Inflation benefits some at the expense of others,' he said. 'As the quantity of money rises, it has various effects, but eventually it will make the great majority of people poorer.'....Polleit added that when it comes to creating a currency that preserve's its purchasing power, gold is the best asset. He noted that it has a 1000 years of history as a store of value."

bear market Stock market has put in a top and an 'enormous' bubble has already burst -Einhorn/MarketWatch
"The top is in for the U.S. stock market after an 'enormous' bubble in technology stocks popped last month, Greenlight Capital founder David Einhorn warned in a letter dated Oct. 27 to investors. Bubbles tend to topple under their own weight as all investors finally hop in, short sellers cover, and the 'last buyer has bought (or bought massive amounts of weekly calls),' he wrote. 'The decline starts and the psychology shifts from greed to complacency to worry to panic,' Einhorn said. Einhorn pointed to 10 signs that backed up his bubble call. These include...1) An IPO mania; 2) Extraordinary valuations and new metrics for valuations; 3) Huge market concentration in a single sector and a few stocks; 4) A second tier of stocks that most people haven't heard of at S&P 500-type market capitalizations; 5) The more fanciful and distant the narrative, it seems the better the stock performs; 6) Outperformance of companies suspected of fraud based on the consensus belief that there is no enforcement risk, without which crime pays; 7) Outsized reaction to economically irrelevant stock splits; 8) Increased participation of retail investors, who appear focused on the best-performing names; 9) Incredible trading volumes in speculative instruments like weekly call options and worthless common stock; and 10) A parabolic ascent toward a top. Einhorn said that if the call is correct, investor sentiment is shifting from greed to complacency."

Coping With the Covid Winter -Editors/Wall Street Journal
"Virus cases are increasing, but this is inevitable as cooler weather arrives and Americans go indoors. Cases have also been climbing across Europe, in some countries more than in the U.S. But the good news is that America is better prepared to handle another virus surge, and progress toward a vaccine continues....The increase has been most acute in upper Midwest states that weren't hit as hard earlier. Some of the increase is due to more testing, which is detecting more asymptomatic cases. Most concerning are hospitalizations, which are up by about 40% since mid-September though are still 30% or so below spring and summer peaks. Most hospitals have ample capacity to treat virus patients while continuing elective procedures, which were stopped during the spring....Death rates have also fallen tremendously as treatments have improved. This includes therapeutics like Gilead's antiviral remdesivir and Regeneron's antibody cocktail, but also medical protocols such as prone positioning, low-flow oxygenation in lieu of invasive ventilation, and anticoagulants to treat blood clots. A new study by the NYU Langone hospital system reports its mortality rate declined by 70% from March to August after accounting for age, health risks, admission vital signs and other factors. Deaths have also trended lower because the public is doing a better job of shielding the elderly and those at high-risk....This is why the epidemiologists who wrote the Great Barrington Declaration, which has been signed by tens of thousands of doctors and scientists, advise a focus on protecting the elderly. They also warn that government lockdowns lead to worsening heart-disease outcomes, fewer cancer screenings and more mental illness. Nearly a third of the so-called excess deaths in the U.S. this year have been attributed to causes other than Covid, including cardiovascular disease and uncontrolled diabetes....If Mr. Biden is elected, he'll benefit from vaccines developed thanks to drug-company innovation and the Trump Administration effort to streamline the bureaucracy. Expect his winter to become less dark soon after Jan. 20."

11 Trillion Reasons To Fear Joe Biden's Presidency -Gillespie/Reason
"The former vice president's vision of an all-powerful government goes far beyond massive spending and tax hikes. By my calculation, there are at the very least 11 trillion reasons to worry about Democratic presidential contender Joe Biden...Not only is the former vice president likely to win, but FiveThirtyEight predicts Democrats have a 74-in-100 chance of taking the Senate while holding the House of Representatives, meaning that he will have a great opportunity to deliver on all of his campaign promises, which add up to a mind-blowing total of $11 trillion in new federal spending over the coming decade. His 'platform is more liberal than that of every past Democratic nominee,' writes The Washington Post. That's bad news not just for the economy but for a wide range of libertarian concerns about things such as individual autonomy, free speech, school choice, and gun rights. In last week's debate with Trump, Biden warned that we are entering a 'dark winter.' He was talking about rising COVID-19 cases, but his own platform is likely to keep us at home, out of work, and in a bad place for a long time to come. Biden's expansive vision is about more than vastly increasing spending, but let's start there because the numbers are simply staggering. He's proposing $11 trillion in brand new spending over the next decade, according to the Manhattan Institute's Brian Riedl. Big-ticket new items include $1.4 trillion to expand Obamacare; $2 trillion on his version of a Green New Deal; jacking Social Security and Supplemental Security Income by $1 trillion; and goosing spending on preschool, K-12, and higher education by $1.5 trillion. Biden has also signed on to a $3.3 trillion stimulus spending plan pushed by House and Senate Democrats. All of this new spending would be layered on top of an existing annual federal budget that has swelled to nearly $7 trillion in fiscal year 2020....Joe Biden has been in national politics for some 47 years, almost 10 years more than most of us are old. Because of various scandals (he dropped out of the 1988 presidential race after it came out that he'd plagiarized details of his own biography from a British politician!) and gaffes (in 2008, he asked a wheelchair-bound supporter to 'stand up"¦and let 'em see you'), he was a late-night punchline for much of his half-century in the public eye."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 28, 2020


10.28.20 - Are the Political Polls Wrong Again?

Gold last traded at $1,879 an ounce. Silver at $23.39 an ounce.

NEWS SUMMARY: Precious metal prices fell Wednesday as worried investors, scrambling for liquidity, boosted the dollar. U.S. stocks cratered as investors worried that rising coronavirus infections might impact the U.S. and global economic recovery.

Gold: Ready To Rumble -Seeking Alpha
"Gold represents today a major economic indicator in several ways: as a commodity, as a safe haven, and since March as a currency...In March, the Fed announced that there were no limits to quantitative easing or to the stimulus, which then led to the stock market rallying to record levels....The Fed appears willing to use 10% of GDP or $20 trillion in the form of stimulus, of which they have only used a small portion of that percentage as yet. A key question is who is going to pay for all of this printing of money that is going on. Basically, our children's future is being jeopardized by printing so much money and taking on such high debt levels for the future. Whoever wins the election next week, they will have to deal with this increasing level of debt, which is reaching crisis levels. The debt levels will cause tremendous volatility, especially for the US dollar. It will further erode the US dollar as the world's reserve currency, which has been in decline for decades. Infections continue to rise rapidly. The end of the pandemic appears to be ever farther in the future...Many people and families are in dire straits. Hyperinflation may occur and the US has never experienced such a thing. The key is to understand that the economic system is under severe stress and you have to find ways to survive. One way is to use a trading system to protect and build wealth in gold....You can use this volatile time to make tremendous returns trading precious metals, which are the other side of the US dollar. As the US declines, gold should rise. It is a golden opportunity."

bidentrump Are the polls wrong again? -Detrick/LPL Research
"The race for the White House is down to the homestretch, and although presidential candidate Joe Biden is comfortably ahead in the election polls, various market and economic-based indicators suggest the election may be much closer than many are expecting. The majority of Washington insiders we track think Biden has at least a 60% chance of winning this election, with many thinking the odds are much higher. However, there's a good chance things could be much closer, and here's why. (1) Gross domestic product (GDP) is set for a huge surge in the third quarter, with the Atlanta Federal Reserve GDPNow estimating a jump of 35.3% when the number is released October 29. That would be the largest quarter-over-quarter increase ever and would bring the average for the previous two quarters to a respectable 2.1%....(2) Stocks are strong. Historically, the stock market is a great predictor of who will be in the White House. In fact, in 20 of the past 23 elections (87%), the S&P 500 Index has accurately predicted who would win....(3) Incomes are rising. It also turns out that if people are making more money, they tend to reelect presidents....(4) The US dollar is weak. A weaker US dollar before the election historically has signaled an incumbent party victory....Ultimately, we the people determine which signals are right this time around, so get out there and vote!"

Stocks Can No Longer Pretend 2020 Will Be A One-Off -Zero Hedge
"Monday's global equity losses were a preview of the coming months rather than just a case of pre-election jitters. Investors are finally realizing that the coronavirus is a 2021 story too. After the initial weeks of fear, it was easy for many wealthy people to dismiss the pandemic as an overblown threat. There have been fewer than two Covid-19 fatalities for every 10,000 people on the planet, meaning it's unlikely any random individual knows someone personally who has died from the disease. The majority of those who contract the virus experience relatively mild symptoms or even none at all. On top of that, the financial elite saw their savings and investments bolstered by extraordinary stimulus packages and were most likely to be be able to easily transition to a remote-working lifestyle, supported by their employer. And then there's been the constant promises of a vaccine being ready by year end. All this combined to mean that unless they experienced the trauma of personal loss, the most accessible narrative was that the pandemic was a one-off shock to earnings that would soon be recovered as life normalized again. But the world isn't going to 'normalize' any time soon. Quite the opposite. As of Sunday, the seven-day average daily case count was 432,475 - up from 356,343 a week earlier....There will be winners and losers from the rotation to a new type of economy but the transition will overall result in a massive real net cost on society and for many individuals. Many established businesses will go bankrupt and millions of jobs will be lost, destroying the consumer base. But there's a bigger problem for optimistically priced stocks. Everyone has been hyping up the arrival of the vaccine on the assumption that it will be a game-changer. But vaccinating a sufficiently large part of the global population to resume 'normal' activities will be a long, drawn-out process - spanning many months or even years - rather than an event. Especially as many people appear reluctant to be early in the vaccine queue. The K-shaped recovery has helped the fortunate remain relatively insulated from the pandemic but the financial bubble is set to burst. And none of this even hinges on the complacent pricing around the U.S. election risks."

Saving Private Biden -McGurn/Wall Street Journal
"In the thick of the 2016 presidential campaign, the front page of the New York Times handed down the word from on high: In the era of Donald Trump, press objectivity was a luxury America could not afford. It turned out that biased press coverage wasn't enough to keep Mr. Trump from winning. So for 2020 the press introduced a new corollary: Joe Biden must never be asked a tough question. In the past the media's competitive juices, plus a presidential candidate's interactions with the American people along the campaign trail, would have rendered this impossible. But Covid-19 gave Mr. Biden the excuse to stay in his basement, and the press corps has run interference for Mr. Biden rather than tackle the story. At the moment, the hard questions Mr. Biden is avoiding are about the lucrative deals his son made with politically connected Chinese and Ukrainian businesses, sometimes while riding alongside his father in Air Force 2....The rationale appears to be that Mr. Biden can't handle the questions and the American people can't be trusted to handle the answers. This see-no-evil, hear-no-evil, speak-no-evil approach to Mr. Biden started with Tara Reade, a former Senate staffer who accused the candidate of having sexually harassed her in 1993, when she'd worked for him....It's the job of the press to ask the hard questions and insist on answers, even at the risk of looking obnoxious. It isn't biased, for example, to ask President Trump why, with polls showing more than half of the American people saying they are better off today than before he was elected, so many will still vote against him because they don't like his personality and temperament....The best summary of the new standard in election coverage was given by Mark Hemingway of RealClearInvestigations. After a particularly fawning news conference, he relayed the assessment of a friend: Watching the press handle Joe Biden is 'like watching someone make sure a 3-year old wins Candyland.'"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 27, 2020


10.27.20 - Raising taxes will hurt the economy

Gold last traded at $1,908 an ounce. Silver at $24.45 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday amid falling consumer confidence and a weaker dollar. U.S. stocks fell for a second day on rising Covid-19 cases and lawmakers' inability to agree on a new fiscal stimulus plan.

Gold is a risk-on commodity -Coghlan/Forex Live
"This post is to point out a relationship with gold and the dollar that a number of people have contacted me about over the last few months. It sometimes pays to spell out the obvious as the obvious is well, not always as obvious as we might think. Gold is an anti-dollar commodity....A rising dollar weakens gold and a falling dollar strengthens gold. Now during the COVID-19 crisis the USD has been operating like a safe haven currency and gaining strength during risk off sessions....Gold is a risk on asset right now. Stimulus, reflation, vaccine optimism all will help gold to the upside. So, consider gold as a 'risk-on commodity'. In expectations of good times expect gold gains."

taxes Raising taxes will hurt the economy -York/The Hill
"The idea that the agenda of Joe Biden would be positive for the economy is taken to mean that his plan to increase taxes would also be positive for the economy. However, it is a mistake to think the corporate or individual income taxes can be raised without negative effects. His campaign recently told the New York Times, 'Tax increases now would accelerate growth by funding a stream of spending proposals that would help the economy.' So the argument seems to go that because higher tax rates could fund new programs, higher tax rates would help the economy. But as noted by Douglas Holtz Eakin, 'The taxes are bad but all the better news for growth, if there is any, is in the spending proposals.' That means tax increases on business and higher earners would inflict damage on the economy no matter how the revenue would be spent. In fact, all major analyses of the tax plan of Biden find negative effects on the economy. Estimates from the Tax Foundation model show that his tax plan would reduce productivity output by nearly 1.5 percent over the long term. The magnitude varies across estimates due to different factors, like how open the economy is, but the direction does not....While his advisers are encouraging Biden not to wait to increase taxes because the associated spending will bolster the economy, others are doubting the wisdom of tax increases when our growth is the goal....The notion that tax increases are positive for the economy is false. Hiking the marginal tax rates on labor or capital will reduce the incentive to work or save even if the higher revenue will be used well. There are other ways to raise a dollar of revenue for any given purpose."

JPM Says Trump Victory Is "Most Favorable Outcome", Would Push S&P To 3,900 -Zero Hedge
"Over the past month, Wall Street's strategists have engaged in a comprehensive campaign to 'ease' client fears that a Biden administration and/or a 'Blue Sweep' would be bad for risk assets, shifting the narrative to where such an outcome would be just as good for stocks if not better than a continuation of the status quo, thus avoiding a selloff should Nov 3 prove to be a rout for Republicans, to wit: Higher corporate taxes under Biden? No worries, it will be offset by up to $7 trillion in fiscal stimulus under a joint Democratic congress. A doubling of capital gains taxes? No worries, it only will affect the super-rich and while it may hit stocks in late 2021, the dip will be quickly bought as, after all, stocks always go up, with Goldman predicting that 'regardless of the election outcome, we expect roughly 10% upside to the S&P 500 by the middle of next year.' Higher bond yields under a Democratic sweep? No worries, after all we need higher yields to telegraph that the economy is improving and reflation is returning. A recent Bank of America analysis laid out the 4 possible election outcomes, which were more dependent on the composition of the Senate than who is president (the worst scenarios for markets were those where 'president Biden' faced a Republican Senate and vice versa for Trump)....Judging by the latest report from JPMorgan head of global equity strategy, Dubravko Lakos-Bujas - published over the weekend, Wall Street is about to pull a U-turn and begin pre-emptive damage control should Trump win. Indeed, in a dramatic reversal from the recent narrative which present a 'Blue Sweep' as the most beneficial outcome from the election, the JPMorgan strategist writes that he maintains a probability weighted S&P 500 price target of 3,600 for year-end, and sees 'an orderly Trump victory as the most favorable outcome for equities (upside to ~3,900).'"

The Only 5 Things You Can Invest In -Carlson/A Wealth of Common Sense
"There are only two basic things I care about in terms of how my children turn out someday: (1) I want them to be healthy and happy. (2) I want them to be good people....In the investment world so much time and energy is spent thinking through various market scenarios, investment strategies, economic datapoints, asset class combinations and financial minutiae. But your capital is just one thing you can invest in...With this idea in mind, here are the five main factors in life you can invest in: 1. Your Time. Time is the one asset where there's no inequality on a daily basis....2. Your Money. Investing your money is certainly important if you ever hope to gain more independence over your time but this is not solely about the markets. What do you spend your money on? Who do you spend your money on?...Mr. Carson on Downton Abbey once remarked, 'The business of life is the acquisition of memories. In the end, that's all there is.'....3. Your Energy...Between careers, friends, family, working out, Netflix and hobbies it's not always easy to get everything in that you need to for a balanced life....4. Yourself...You'll never have enough energy if you don't invest in your health. You'll never advance in your career if you don't invest in your education and learning....5. Your Contentment. Happiness is a valid goal but I've come to the conclusion that simply being content is a worthwhile pursuit....Whatever it is, figuring out how to keep your sanity, maybe now more than ever, is a worthwhile investment."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 26, 2020


10.26.20 - Big Drop In COVID-19 Death Rates

Gold last traded at $1,902 an ounce. Silver at $24.30 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday on safe-haven buying despite a firmer dollar. U.S. stocks fell sharply amid record daily coronavirus cases and stalled stimulus talks.

How Gold Gets To $3,000 -Seeking Alpha
"It's monetary inflation (i.e., money supply growth) that determines gold's value, not price inflation. Gold would need to increase to $2,400 to get back in line with M2. The U.S. will continue to fund these deficits with more debt and debt monetization. This will result in the rate of M2 growth remaining far higher than historical norms. Physical gold and gold mining stocks remain one of the best options for investors that want portfolio protection from the monetary inflation that is occurring now and that will occur in the future. When gold hit $2,000 per ounce this past summer, many investors were likely showing curiosity but weren't able to judge whether there was a lot more gas left in the tank or if gold was on empty....Since the 2000s, negative real interest rates have been prevalent, and gold has seen a resurgence since the turn of the century....Everything is in place for gold to reach $3,000 per ounce. I'm not predicting that will occur within the next few months...I believe, over the next 2-3 years, gold will hit that $3,000 target."

Fed money Central Banks Trying to Create Inflation Is An Old Laugh Line -Snyder/Real Clear Markets
"Money is very easy, they all say, central bankers most of all. Just create some digital bank reserves out of thin air, stand back and watch the inflationary magic set off an accelerating recovery of sustained, badly-needed economic growth. Except, no inflation. No magic....March 2020 was downright unnecessary. Not just in the Federal Reserve's absolutely disastrous decision to swap bank reserves for badly needed T-bills. (I mean, if they were trying to crash the system like so many wrongly claim, what would they have done differently?)....What you're left with is the distinct impression this isn't a serious effort by the Fed....But these are not serious people. These are not serious efforts. They are moved forward, grudgingly, only by continued failure and only enough to keep the metaphorical torches and pitchforks from coming for central bankers and bank regulatory officials. Doing just enough to sound like they're doing something...It's late 2020 heading toward 2021, and central banks like regulatory authorities still haven't caught up to the last half of the 20th century. But inflation therefore real economic recovery is just over the horizon because this time, unlike all those other times, they figured out the right QE? Some jokes just aren't funny."

Studies Point To Big Drop In COVID-19 Death Rates -NPR
"Two new peer-reviewed studies are showing a sharp drop in mortality among hospitalized COVID-19 patients. The drop is seen in all groups, including older patients and those with underlying conditions, suggesting that physicians are getting better at helping patients survive their illness. 'We find that the death rate has gone down substantially,' says Leora Horwitz, a doctor who studies population health at New York University's Grossman School of Medicine and an author on one of the studies, which looked at thousands of patients from March to August. The study, which was of a single health system, finds that mortality has dropped among hospitalized patients by 18 percentage points since the pandemic began. Patients in the study had a 25.6% chance of dying at the start of the pandemic; they now have a 7.6% chance. That's a big improvement, but 7.6% is still a high risk compared with other diseases, and Horwitz and other researchers caution that COVID-19 remains dangerous....'I would classify this as a silver lining to what has been quite a hard time for many people,' says Bilal Mateen, a data science fellow at the Alan Turing Institute in the United Kingdom. He has conducted his own research of 21,000 hospitalized cases in England, which also found a similarly sharp drop in the death rate. The work, which will soon appear in the journal Critical Care Medicine and was released earlier in preprint, shows an unadjusted drop in death rates among hospitalized patients of around 20 percentage points since the worst days of the pandemic...'Clearly, there's been something [that's] gone on that's improved the risk of individuals who go into these settings with COVID-19,' he says. Horwitz and others believe many things have led to the drop in the death rate...Doctors around the country say that they're doing a lot of things differently in the fight against COVID-19 and that treatment is improving....A recent estimate by the Institute for Health Metrics and Evaluation suggests the total death count could reach well over 300,000 Americans by February."

Sorry NYT, the Only "Closed U.S. Economy" Is the U.S. Economy -Tamny/Real Clear Markets
"Imagine 100 people on a wholly deserted island. Life would be pretty dreadful, right? With only 100 people producing, work would be endless in return for very few of life's comforts. At which point imagine if suddenly a shipwreck deposited 100 more, able-bodied people on the same deserted, desperate island. Would the first 100 lose their jobs as a consequence of the arrival of the second batch of humans? The obvious answer is no. In truth, 200 extra 'hands' arriving onshore would signal boom times in a relative sense for everyone on the island. The more hands at work, the more that there would be work specialization. And when workers are specialized, they're logically quite a bit more productive....As Nobel Laureate Robert Mundell has long made plain, the only 'closed economy' is the world economy. So much U.S. prosperity is a function of Chinese workers freeing U.S. workers from what they used to do, plus so much of it is a consequence of demand from Chinese workers for U.S. plenty....Which brings us to Iowa. It was one of the states that didn't lock down in response to the coronavirus. New York Times reporters Ben Casselman and Jim Tankersley have alerted their flock to a growth slowdown in the state despite. Supposedly Iowa's economic struggles are a sign that lockdown opponents have overstated the impact of the latter on economic growth. No, they haven't....The better way to address Iowa's slow growth is to consider the unseen. How much more shrunken would the state's economy be if the state had locked down in the way that California or New York had. That's the more important measure...Naturally Iowa's economy has contracted when it's remembered that by April, a quarter of the U.S. economy was locked down, along with parts of the global economy. Slower growth was a given. One state or one country's impoverishment doesn't lift other states or countries; rather it impoverishes them in a relative sense. That's is so because wealth isn't a fixed pie. Instead, wealth is created. And the more that labor is divided, the more economic growth overall...The lockdowns crushed the U.S. economy. Period. That they also infected the part of the U.S. and world not locked down was and is a statement of the obvious. The only 'closed U.S. economy' is the U.S. economy."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 23, 2020


10.23.20 - Why Gold Wins No Matter Who is Elected

Gold last traded at $1,904 an ounce. Silver at $24.60 an ounce.

NEWS SUMMARY: Precious metal prices steadied on Friday on upbeat manufacturing data and a flat dollar. U.S. stocks traded mixed as a decline in Intel pressured the broader tech sector. Investors also weighed the potential for additional fiscal stimulus as well as news on the coronavirus treatment front.

Election scenarios: Why gold price wins either way -Golubova/Kitco
"Markets fear uncertainty and there is plenty of it on the table with the U.S. election less than two weeks away. What does it all mean for gold? Analysts say that even in the worst-case scenario, gold will see higher prices by year-end....'The Democrats on average plan to spend $5.6 trillion over the next couple of years and that ultimately means that much of that will be funded by central bank printing,' TD Securities head of global strategy Bart Melek said....A full Democratic sweep could still shock the markets....Important to highlight that a Donald Trump win is also good for gold, with analysts saying that gold will run higher under either of the candidates. 'Regardless of which presidential candidate gets in, gold will ultimately be going higher. Both candidates will be spending money, and that is bullish for gold,' said Phoenix Futures and Options LLC president Kevin Grady....'Regardless of who wins, inflation expectations are ticking up. We could see $2,000 an ounce gold by the end of this year...More generally, gold prices will stay high for an extended period of time,' said Capital Economics commodities economist James O'Rourke....The worst-case scenario would be a contested election, according to analysts, who don't rule out this possibility amid a very polarized landscape in the U.S."

social Media USA Today Refused To Publish Hunter Biden Scandal Op-Ed, So Here It Is -Reynolds/Zero Hedge
"In my 2019 book, The Social Media Upheaval, I warned that the Big Tech companies - especially social media giants like Facebook and Twitter - had grown into powerful monopolists, who were using their power over the national conversation to not only sell ads, but also to promote a political agenda. That was pretty obvious last year, but it was even more obvious last week, when Facebook and Twitter tried to black out the New York Post's blockbuster report about emails found on a laptop abandoned by Democratic presidential candidate Joe Biden's son Hunter. The emails, some of which have been confirmed as genuine with their recipients, show substantial evidence that Hunter Biden used his position as Vice President Joe Biden's son to extract substantial payments from 'clients' in other countries. There are also photos of Hunter with a crack pipe, and engaging in various other unsavory activities. And they demolished the elder Biden's claim that he never discussed business with his son. That's a big election-year news story. Some people doubted its genuineness, and of course it's always fair to question a big election-year news story, especially one that comes out shortly before the election...Big Tech could have tried an approach that fostered such a debate. But instead of debate, they went for a blackout: Both services actually blocked links to the New York Post story. That's right: They blocked readers from discussing a major news story by a major paper, one so old that it was founded by none other than Alexander Hamilton....Now even people who didn't care so much about Hunter Biden's racket nonetheless became angry, and started talking about the story....Regardless of who wins in November, it's likely that there will be substantial efforts to rein in Big Tech....As I wrote in The Social Media Upheaval, the best solution is probably to apply antitrust law to break up these monopolies: Competing companies would police each other, and if they colluded could be prosecuted under antitrust law....Had Facebook and Twitter approached this story neutrally, as they would have a decade ago, it would probably already be old news...Their heavy handed action has brought home just how much power they wield, and how crudely they're willing to wield it. They shouldn't be surprised at the consequences."

Capitalism Always Buries Its Undertakers -Law & Liberty
"In 2017, the Museum of Capitalism opened its doors in Oakland, California...This might seem like an absurd endeavor, but the Museum of Capitalism is deadly serious, and part of the return of prognostications about capitalism's future - on the page, on the screen, and in the street - in the decade since the financial crisis....People have been talking about capitalism - and predicting its downfall - ever since the word was coined in the 19th century. And yet here we still are, toiling under so-called capitalist oppression more than 150 years later. As Francesco Boldizzoni details in Foretelling the End Of Capitalism: Intellectual Misadventures Since Karl Marx, reports of capitalism's demise have, time and again, been greatly exaggerated....According to Boldizzoni, these misadventures fall into four categories: theories of implosion, exhaustion, convergence, and cultural involution. Implosion theories are the most conventionally Marxist...A falling rate of profit would mean the capitalists must work the proletariat harder and harder, the accumulation of capital would bring with it the 'accumulation of misery.'...When Marx's prediction of a class consciousness and rebellion failed to materialize, Marxism splintered....Advocates of more benign exhaustion theories posit that capitalism will 'die of natural causes.'....Convergence theories were in vogue in the 1930s, when 'the idea that fascism, the New Deal, and Soviet interventionism were driven by some obscure force of progress to increasingly resemble one another swirled around in the heads of many, whatever their political orientation.'....According to the cultural involution camp, capitalism's weakness lies not in its internal economic tensions, as Marx argued, but in its political and cultural contradictions....Boldizzoni sees predicting capitalism's downfall as 'more often a distraction from the difficulties of the present than an activity useful in improving the human condition.'....Uncertainty over capitalism's fate undermines the historical determinism that inflects most of Foretelling the End of Capitalism. Boldizzoni's argument would be more engaging if he entertained the possibility that, rather than capitalism's future being baked in, it will be decided by a series of pivotal political decisions in the coming decades."

Printed Money and Central Planning Won't Revive a Corona-Wrecked Economy -Rep. Davidson/Real Clear Markets
"When the history of 2020 is written, COVID 19 will loom large - as a public health crisis, but especially for its effects on economic and civic life....As Americans cope with pandemic fatigue and economic uncertainty, much of the economy remains in a state of limbo. More and more Americans feel a disconnect between themselves and the policymakers they elect to represent them. Likewise, the disconnect between marketable securities on Wall Street and Main Street is growing....It is essential that we end policies that keep businesses closed and consumers fearful. However, two other factors are also prolonging economic stagnation. Flat unemployment benefits created by the CARES Act have kept many hourly workers at home instead of returning to work. Similarly, the Federal Reserve has incentivized banks to hoard cash, rather than lend it. Put plainly, Congress and the Fed are paying people and banks to maintain the broken status quo that has shackled both the labor and lending markets....This flawed structure sends a federal payment of $15 an hour (assuming a 40-hour workweek) to workers who may not have even made $15 per hour when working. Those workers also collect traditional state unemployment, pushing the total compensation over $25 per hour for not working. While cash is hitting the macro-economy, the effect on the labor market has proven disastrous....Now, House Democrats want to restart these unemployment benefits, just as we are seeing an increase in job growth. This gross distortion to the labor market can be avoided by refusing to reauthorize a program that pays people more for not working than they were making while working. An alternative approach could pay workers 67-80% of their wages earned while working, with a floor and a ceiling....It's time to rebuild the robust economy Americans enjoyed until the coronavirus brought everything to a halt. Printed money and central planning are poor substitutes for America's strong and growing market economy. Persistent attempts to substitute are dangerously growing government, distorting markets, and unduly accelerating the risk of national bankruptcy."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 22, 2020


10.22.20 - Digital Dollars Soon To Replace Paper Money

Gold last traded at $1,903 an ounce. Silver at $24.67 an ounce.

NEWS SUMMARY: Precious metal prices pulled back Thursday on profit-taking and a firmer dollar. U.S. stocks retreated as traders weighed the latest fiscal stimulus news along with corporate earnings and economic data.

Greenback's pain is gold and silver's gain -Wyckoff/Kitco
"Gold and silver prices are firmly up in U.S. trading Wednesday. Support at mid-week comes from a weakening U.S. dollar index that hit a six-week low today. Weaker U.S. stock indexes at midday are also aiding the precious metals markets, which are a competing asset class with equities...Gold and silver also got some buying support today when Federal Reserve Governor Brainard make some downbeat remarks on the U.S. economy, including saying the rate of jobs growth is decelerating. It appears questionable if the U.S. Congress and the Trump administration can come to agreement on a new Covid-19 stimulus package before the U.S. elections in less than two weeks. All sides are still in communication regarding getting some kind of a stimulus package for Americans, however. The U.S. Senate Republicans could stymie any deal that is agreed upon by the House and the Trump administration....Technically, December gold futures bulls have the overall near-term technical advantage and they are working on restarting a price uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,939.40....December silver futures bulls have the overall near-term technical advantage and are working on a price uptrend on the daily chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce."

currency Banks And The Digital Dollar -Zero Hedge
"Paper money is going away in the very near future. Sooner than you realize, paper money will be replaced by a 'digital-USD'. Money is already digital. Your bank and brokerage accounts are book entries in a digital database. These book entries are claims that can be exchanged for paper money or paper stock certificates. Governments, including the US government, will be mandating the exchange of all paper money for its digital 'upgrade.' Why and when will this happen?....Within 7 or 10 years, paper money will be history and not legal tender anymore. China is already testing a digital RMB, so our leading nation is well behind its competitor, and once China rolls out its digital RMB in 2023, our government will spearhead the rollout of our USD version....Americans say 'that can't happen here, we value our privacy.' That's ridiculous. If you buy with a debit or credit card, your grocery store knows when you buy broccoli and they know your brand of ice cream. If you have a smartphone, your phone company knows where you are at all times, and, yes, they sell that location data to hundreds of companies who pay for it...Try taking away free gmail, smartphones and credit cards and see the voters scream - people don't want privacy. Later this decade, once the digital dollar is in place, the government can finally implement policy more effectively....The Fed is on record saying they want inflation, and the politicians and public are addicted to the stimulus, so its print print print until we finally get sustained inflation....The next round of inflation, late in the decade or in the early 2030s, will basically wipe out all the banks. I predict the end of fractional reserve banking in its current form."

Only two other times since George Washington was president has the U.S. stock market been as far above trend as it is now -Hulbert/Marketwatch
"Here's some disturbing news for those of you who think you're basing your investment strategy on history: The U.S. stock market must fall 43% in order to be in line with the longest-possible trend in its history. This trend to which I refer traces the U.S. stock market back to 1793...The source is Edward McQuarrie, a professor emeritus at the Leavey School of Business at Santa Clara [Calif.] University who has spent years reconstructing U.S. stock market history....There have been only two other occasions when the U.S. stock market was as far above trend as it is now: the late 1960s/early 1970s and at the top of the internet bubble. We all know what happened after those two periods. The internet bubble burst, taking stocks with it, and the stock market from the bear-market of 1973-74 went nowhere on a dividend-adjusted and inflation-adjusted basis through 1985....There are many judgment calls to be made when reading the historical tea leaves. So when you hear a conclusion about stocks over the long-term based on anything less than the full 227-year timeline of the U.S. stock market, ask what the result would be if that entire history was counted."

The Elephant in the Room at Tonight's Debate -Regan/American Consequences
"Tonight, President Donald Trump and Joe Biden will go head-to-head in the final debate before the 2020 election. Microphones will be muted and flies kept at bay"¦ But the discussion topics are clearly absent of some crucial points, including the economy and foreign policy. Instead, tonight's agenda will stick to the following: fighting COVID-19, race in America, climate change, American families, national security, and leadership. As you can imagine, the Trump camp is not thrilled about the topic selection"¦ The president's campaign manager accused the commission of pro-Biden 'antics,' as Trump supporters argue that the REAL reason for the foreign-policy omission is an orchestrated effort to avoid the topic of foreign conflicts of interest"¦ specifically the recent New York Post bombshell report....One thing is certain"¦ Americans are being done a massive disservice since they will not hear from the candidates themselves on policies concerning the Middle East, China, or North Korea tonight....But most alarming for everyday Americans is the fact that Big Tech is playing favorites by censoring the recent Biden scandal"¦ It is systematically shutting down the story itself, censoring what we can and cannot read....Why is the media shutting this down? Why are they protecting Biden? If the tables were turned, you know they'd be all over Trump."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 21, 2020


10.21.20 - Gold Prices Will Surge, Just Not Yet

Gold last traded at $1,924 an ounce. Silver at $25.05 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Wednesday on bullish sentiment and an eroding dollar. U.S. stocks traded mixed as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue their negotiations on a new fiscal stimulus package.

Gold will surge, just not yet -Krauth/Kitco
"Yes, gold is in a bull market. Yes, the all fundamental reasons for it to keep rising are still in place. Yes, gold's going to the moon. It's just not going there overnight...I'll show you why, and when it might....The US election is just two weeks away, and there's still no stimulus package. The White House is proposing $1.8 trillion, while the Democrats want $2.2 trillion. At the risk of alienating some voters, the Democrats are reticent towards doing a deal that could help Trump get re-elected. Even if a deal were to get done before the election, I don't think another round of stimulus checks would be part of it. If that comes, it will likely only come later. But more money will flow, and that's why gold will rally....The Fed's balance sheet is now seven times the size it was before the 2008 financial crisis. In the last year alone, it has gone from $3.75 trillion to $7 trillion. That's a great reason to own gold....Gold's $1,900 peak in 2011 is hardly a blip compared to gold's $800 peak in 1980. That's why I believe gold still has much, much, much higher to go before topping....Right now my sense is that gold's likely to start moving only after the election. I think the two most likely catalysts are some sort of election chaos/extended uncertainty, or the next major stimulus package. That's something we can expect no matter who's sitting in the oval office. Stay long gold, and buy the dips. Don't worry"¦gold's going up."

political division Understanding the Left -Cochrane/The Grumpy Economist
"A new wave of government expansion is cresting. It poses a threat not just to our economic well being, but to our freedom - social, political and economic. Consider the economic agenda proposed by the Democratic presidential candidates: A government takeover of health care. Taxpayer bailout of student loans. Necessarily, after that, government funded and administered college. An immense industrial-planning and regulation effort in the name of climate. Government jobs for all. 'Basic income' transfers on top of social programs.Confiscatory wealth, income, estate and corporate taxation. Government and 'stakeholder' control of corporate boards. Rent controls and subsidies. Expanded, politically-allocated 'affordable' housing. Expanded regulation of wages, hiring and firing. Extensive speech and content regulation on the internet. And this is the center of the movement, not its fringe that talks of banning air travel. Though the fringe becomes the center quickly here....All these measures gives great power those who control the government....The ideological side of this movement marshals the social, cultural, psychological, and political force of religious fanaticism....Western civilization is just a stew of systemic racism, sexism, colonialism, homophobia, and genocide. Our economy and political system are dominated by huge monopolies and billionaires, enriching themselves by squeezing the little people dry. Swarms of unemployed roam the land. Armageddon is coming, in exactly 11 years. Climate is the world's 'greatest problem,' never mind war, pandemic, civilizational collapse or the mundane smoke and bacteria that kill thousands....To gain and signal virtue, you must master an ever-changing menagerie of nonsense words, repeated until they gain meaning. Say no longer global warming, not even climate change, now say 'climate catastrophe.' Say not poor, say 'marginalized' and 'underresourced' 'community.' Say not homeless, say 'unhoused.' Say not 'minority,' you must now say 'minoritized.' Nouns are now passive verbs, with mysterious hidden subjects. 'Violence,' 'trauma' and 'racism' are thrown out like candies, trivializing centuries of suffering....What to do? To get out of this we must reverse the winner-take-all rules of our political game....Bottom line: This isn''t your grumpy uncle's socialism, singing Pete Seeger union songs from the 1930s. It's new and different. What is the question to which its goals are an answer? Only one makes sense, a political will to grab, expand, and keep the power of the federal government. That political program is married to a new secular cult. That movement has already taken over most of the 'elite' institutions of our country, and disarmed the rest, who now feel guilt rather than pride of and hope for the American project. Politicians have chosen partisanship, and chosen to ally with this jihadist cult, because the expansion of government power has made our system much more winner-take-all and shove-it-down-throats of electoral minorities. Fix that, I think, and we survive. Leave it in place, and they just might win and take all. This isn't about 2020. It will be with us for decades."

Justice Department Files Google Antitrust Lawsuit -Wall Street Journal
"The Justice Department filed an antitrust lawsuit Tuesday alleging that Google engaged in anticompetitive conduct to preserve monopolies in search and search advertising that form the cornerstones of its vast conglomerate. The long-anticipated case, filed in a Washington, D.C., federal court, marks the most aggressive U.S. legal challenge to a company's dominance in the tech sector in more than two decades, with the potential to shake up Silicon Valley and beyond. Once a public darling, Google attracted considerable scrutiny over the past decade as it gained power but has avoided a true showdown with the government until now. The department alleged that Google, a unit of Alphabet Inc., is maintaining its status as gatekeeper to the internet through an unlawful web of exclusionary and interlocking business agreements that shut out competitors. The government alleged that Google uses billions of dollars collected from advertisements on its platform to pay mobile-phone manufacturers, carriers and browsers, like Apple Inc.'s Safari, to maintain Google as their preset, default search engine. The upshot is that Google has pole position in search on hundreds of millions of American devices, with little opportunity for any competitor to make inroads, the government alleged....Google owns or controls search distribution channels accounting for about 80% of search queries in the U.S., the lawsuit said. That means Google's competitors can't get a meaningful number of search queries and build a scale needed to compete, leaving consumers with less choice and less innovation, and advertisers with less competitive prices, the lawsuit alleged....A loss for Google could mean court-ordered changes to how it operates parts of its business, potentially creating new openings for rival companies....The tech sector has been a particular challenge for antitrust enforcers and the courts because the industry evolves rapidly and many products and services are offered free to consumers, who in a sense pay with the valuable personal data companies such as Google collect."

When retirement arrives sooner than expected: What to do, what to know -Wiles/AZ Republic
"Millions of Americans spend decades preparing for retirement, yet it sometimes sneaks up suddenly, when you're least expecting it....Although Americans typically assume they will retire when they want, and on their own terms, many are in for a surprise. Half of the retired respondents to an Allianz Life Insurance survey said they left work earlier than expected....Most retirees said they quit working for reasons outside their control, such as a surprise job loss or health issues. The survey of 1,000 mostly middle-class Americans was conducted in January, just before the COVID-19 pandemic led to broad layoffs. 'Many Americans are in need of a wake-up call about the very real possibility that their retirement start date might not be when they want it to be,' said Kelly LaVigne, an Allianz vice president, in a prepared statement. Here are some aspects to ponder if you suddenly are given the option, or are forced, to stop working prematurely: 1) Planning how to spend that time - While you might like the vision of unfettered free time, it can be a problem, too. Many people derive satisfaction from their jobs, along with social interaction. That could disappear with an earlier than expected departure....2) Evaluating health costs - It's easier to accept an early retirement package if you can retain some subsidized health insurance coverage from your employer, at least until Medicare kicks in at age 65....3) Fitting in part-time employment - It can be advantageous, emotionally as well as financially, to work part time after you end your official career. You will generate extra income and possibly nurture social interactions and stay sharp mentally....4) Juggling Social Security, part-time work - Part-time work also can be an issue if you have started to receive Social Security retirement benefits... $1 in Social Security benefits will be withheld for every $2 earned above $18,240....5) Getting ready to cut costs - One key consideration in mulling an early retirement decision is whether you can afford it...Cut your expenses by downsizing your home or reducing other outlays....In the Allianz survey, 6 in 10 workers voiced concern about running out of money before they die, yet most indicated they haven't been doing much about it...Early retirement can sound plenty appealing, until the realities set in."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 20, 2020


10.20.20 - The next economic crisis: Empty retail space

Gold last traded at $1,911 an ounce. Silver at $24.84 an ounce.

NEWS SUMMARY: Precious metal prices were higher Tuesday on safe-haven buying and a weaker dollar. U.S. stocks rose as a deadline for a new fiscal stimulus deal from Washington approached.

Gold rises on dollar dip, hopes for U.S. relief package -CNBC
"Gold rose about 1% on Monday as the dollar retreated and as expectations of a U.S. stimulus deal being reached ahead of the presidential elections in November bolstered bullion's appeal as an inflation hedge. Gold is strengthening on the dollar's downtrend and 'the belief that some kind of stimulus package is going to come through in the next 48 hours,' said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. 'People believe that we're going to go into an inflationary period into the next quarter. So they're starting up front on that.'...Gold has gained about 26% so far this year as investors sought refuge from a worsening coronavirus pandemic and also risks of inflation and currency debasement as global central banks slashed interest rates while pumping out unprecedented stimulus to contain the economic blow. Further underpinning safe-haven demand for bullion were concerns surrounding fresh coronavirus-led restrictions in Europe and elsewhere as worldwide infections crossed over 40 million, as well as uncertainty over the U.S. elections. Elsewhere, silver climbed 2.2% to $24.70, having hit a near one-week peak. Citi said in a note it expects silver to rally to $40 over the next 12 months, on sustained investor demand and a recovery in industrial consumption in 2021."

white house The Democratic demolition of America -Ponte/WND
"Most Americans think of 2020 as a presidential election year. But radical leftists - especially those who have hijacked and now control the Democratic Party - see this as a year of revolution for overthrowing the United States that they have been plotting for more than 100 years....The radical leftist goal in 2020 is to bring down America through a 'controlled demolition,' using precisely placed explosives to destroy key parts of our society that have kept America standing tall....Target No. 1 in this demolition will be the Senate filibuster, a 60-vote supermajority that preserves Thomas Jefferson's belief that 'great issues should never be forced on slender majorities.'....Target No. 2 will be the creation of six new seats on the Supreme Court, to be 'packed' by appointed-for-life young leftists as unelected lawmakers imposing radical ideology, not justice....Target No. 3 for demolition will be the U.S. Senate, packed with four perpetual Democrats from the new states of Puerto Rico and the District of Columbia....Target No. 4 will be all future election safeguards. A Democrat-dominated Congress will impose California-like ballot harvesting and mass mail-in ballots nationwide....Target No. 5 will be the electorate, soon to include millions of additional illegal aliens immediately given the vote. A huge class of people dependent on government checks will guarantee future Democratic election dominance. Nothing could prevent free speech or gun ownership being redefined as 'collective rights' denied to individuals; or outlawing private property; or lowering the voting age to 15 while banning senior citizen voting. An ever-poorer, weaker United States will dissolve into a Chinese Communist Party-controlled global government, which is fine with violent infantilized Biden-supporting Brownshirt mobs that chant: 'No Trump! No Wall! No USA at all!'"

The next economic crisis: Empty retail space -Politico
"Commercial real estate is in trouble, and turbulence in the $15 trillion market is threatening to bleed over into the broader financial system just as the U.S. struggles to emerge from a recession. The longer the pandemic paralyzes hotels, retailers and office buildings, the more difficult it is for property owners to meet their mortgage payments - raising the specter of widespread downgrades, defaults and eventual foreclosures....'Sometimes people forget the depth and breadth of what commercial real estate is,' said Mike Flood, senior vice president of commercial and multifamily policy at the Mortgage Bankers Association. 'What's at risk here is both the ability for people to stay in their apartments and the ability for people to go to their jobs.' A major problem is no one knows how long the drop in commercial real estate will last. Business travel isn't expected to pick back up for at least a year, so hotels are being hammered...The loss of paying tenants could touch off a wave of property write-downs and eventual foreclosures on everything from shopping centers to apartment buildings. But it's not just a pocket of wealthy investors who will get hurt by widespread write-downs. Eighty-seven percent of public pension funds and 73 percent of private pension funds hold real estate investments....One in 5 loans bundled into commercial mortgage-backed securities are on special servicing watchlists...like a major tenant moving out."

Coronavirus Pandemic Putting Damper on Holiday Shopping Season -Wall Street Journal
"The coronavirus pandemic is creating novel hurdles for Americans' spending this holiday season, posing potential challenges for an economy that leans heavily on their willingness to consume. Households face the prospect of Halloween without trick or treaters, Thanksgiving without family travels, Black Friday without crowds, and a December without parties and in-person gift-giving. Congressional deadlock over fresh fiscal aid for the millions unemployed and a contentious presidential election campaign are also potential dampers on this year's cheer....Sucharita Kodali, a retail-industry analyst at Forrester Research Inc., expects retail spending this holiday season to be flat compared with 2019. Though she predicts online sales will grow 20% to 25%, the sharp decrease in foot traffic at bricks-and-mortar stores is expected to keep overall spending in check this November and December. Given coronavirus constraints, 'there's not going to be as much Halloween spending this year,' either, she said. This year's outlook is so unpredictable that some forecasters aren't even making predictions....Retailers are pushing an earlier start to the holiday season, both to limit crowds at stores and to ease pressure on supply chains by avoiding preholiday-order bottlenecks....In the long term, economists say, consumers can only keep spending if they are earning. This means the postholiday outlook will depend on job growth, which slowed sharply in recent months as more layoffs turned permanent. This year's muted retail expectations are being reflected in weak holiday hiring. Seasonal job postings this year are 11% below last year, job site Indeed said this month."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 19, 2020


10.19.20 - Gold Is Still A Great Opportunity

Gold last traded at $1,906 an ounce. Silver at $24.50 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying and a weaker dollar. U.S. stocks fell on dimming hopes for a pre-election stimulus deal as a rising number of Covid-19 cases dampened sentiment.

Gold Is Still A Great Opportunity -Hirst/Seeking Alpha
"U.S. equity markets have been in a holding pattern since early September, Europe has been holding since June, and most other global markets are in bear market formations where the rallies have held and are going nowhere, Roger Hirst told Real Vision during today's Daily Briefing. Hirst said it's common for markets to go sideways before an election and then have a relief rally no matter which side wins because there is finally more certainty. He thinks we'll likely see this in the U.S., especially because both sides will do more fiscal going forward....He believes the safety valve for the inflation play will be precious metals and he remains bullish on gold. Hirst concluded the interview with his thoughts about the U.S. and Europe's differing approaches to stimulus. He said the U.S. will probably see higher levels of bankruptcy sooner than Europe, but because Europe is supporting jobs that are never coming back, they're in a position of having to support them ad infinitum, which is contributing to the zombification of the European system."

market chart Trump, Biden and the secret lesson of free markets -Forbes/Fox Business
"Wednesday, October 14, could serve as a lesson for President Trump, candidate Biden and current and future policymakers everywhere about the positive power of free markets and the perils of overregulation. The date marks 40 years since President Jimmy Carter signed the little-known Staggers Rail Act into law, removing government shackles on pricing and other operations dating back to the late nineteenth century. The act was a stunning success. The legislation largely removed government from the business of railroading and quickly blunted a stream of bankruptcies in the sector...Excessive government regulation came close to destroying the rail system; economic deregulation in the early 1980s saved it. From being a basket case, our railroads transformed themselves into models of efficiency, service improvement and profit production....Federal regulators do not always know what is 'best.' Data-driven markets and the free individual decisions of citizens - not lobbyists or ideologies - have proven to be the best at rewarding companies who benefit society....Whoever controls the White House and Congress in 2021 should look at the Staggers Act as a powerful lesson in the positive power of markets. We must not repeat history and erode core economic strengths for the sake of regulation. Regulatory humility should instead guide decisions aimed at the welfare of the consumer."

The November 3rd Elections -Hoffmeister/Camelot Advisors
"With Election Day less than a month away, we look at which party will likely control the White House, Senate and House in 2020"¦ and what to watch for on Election Night. Currently, the major polls give former Vice President Biden more than a 9-point lead nationally against President Trump - according to RealClearPolitics National Average...But, of course, the major polls were generally wrong in 2016; notably about the presidential race. In the following Election Review, we look at what some of the polling firms that called 2016 correctly are seeing today. Their polling suggests that President Trump will be re-elected, either narrowly or by a large margin. Therefore, capital allocators today cannot easily assume next month's results. It's very possible that Trump will win Florida, North Carolina and Arizona. If so, a win in Pennsylvania or Michigan will likely put him over the top in the electoral college. As for the Senate and House, it appears that Republicans will keep control of the Senate, especially if Trump has a strong night. But the House is highly likely to remain in Democratic control. Democracy Institute's Latest Poll for September only asks likely voters, and asks about so-called 'shy votes'. Trump leads Biden 46%-45%, nationally. Trump leads in swing states (FL, IA, MI, MN, PA, WI) 47% to 43%. Trump's swing state leads would give him 320 electoral votes, and Biden 218. 77% of Trump voters would not admit to friends and family. Amy Coney Barrett nomination has little impact on approximately 8 in 10 voters. Law and order is top issue (32%). Economy is second (30%). Voters trust Trump more on economy than Biden: 60% to 40%, respectively."

This Spring, We All Drove Much Less. Yet Traffic Deaths Went Up. Why? -New York Mag
"New data released by the National Highway Traffic Safety Administration for the first half of 2020 - when much of the U.S. population was under stay-at-home orders - show that the rate of traffic deaths per mile driven went up, not down. How is that possible? Americans drove less - a lot less - in the first six months of 2020. The number of vehicle miles traveled by drivers fell by 16.6 percent....Because overall traffic volume decreased so much compared to the previous year, the traffic fatality rate - calculated as the number of fatalities per 100 million vehicle miles driven - increased from 1.06 in the first half of 2019 to 1.25 in the first half of 2020. That rate - fatal crashes per mile driven - hasn't been that high for more than a decade. So what was happening?...The combination of risky drivers plus near-empty streets also resulted in faster driving, which, in turn, made streets more deadly. 'Faster travel, whether or not actually exceeding the speed limit, increases the chance of fatalities in a crash,' the report says. And drivers were more likely to engage in other risky behaviors as well. Data collected from trauma centers show an increase in drug and alcohol use by drivers and a decrease in seat-belt use for all vehicle occupants, determined by the number of people who were ejected from crashes."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 16, 2020


10.16.20 - At $1,900 Gold Price is Still Cheap

Gold last traded at $1,902 an ounce. Silver at $24.26 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Friday on a weaker dollar despite upbeat economic data. U.S. stocks tried to snap a three-day losing streak after better-than-expected September retail sales.

At $1,900 gold is still cheap -Kitco
"As gold prices hover around $1,900, one market strategist continues to see upside potential as the market remains undervalued compared to other assets. In a commentary posted Wednesday, Jesse Felder, publisher of the Felder Report investment newsletter, reiterated his bullish stance on the precious metal. He said that although gold has nearly doubled in price in the last five years, it remains cheap compared to equities. 'The gold price relative to the Dow Jones Industrial Average would seem to suggest it is not expensive at all. In fact, to match the valuation peak it reached about a decade ago, gold would need to double again from its current price,' he said in his latest commentary. 'So gold's upside potential over the long run looks far from exhausted even after its terrific run over the past few years,' he added. Although gold prices have dropped from their all-time highs reached in August, the market is still seeing gains of around 25% since the start of the year. Many analysts expect gold prices to end the year back above $2,000 an ounce as central banks look to maintain the extraordinarily loose monetary policies for the foreseeable future. The Federal Reserve is expected to keep interest rates at the zero-bound level through 2023....Along with low interest rates, commodity analysts and economists expect to see inflation pressures rise, which could push real interest rates into negative territory, creating the perfect environment for gold."

layoffs "Temporary" Layoffs Turning Into Permanent Job Losses -Zero Hedge
"When governments across the US forced businesses to close down in response to the coronavirus pandemic, everybody assumed the layoffs would be temporary. Despite the huge surge in unemployment, the expectation was people would quickly return to work once the crisis passed and the economy opened up again. But as the pandemic stretches into its eighth month, millions of Americans remain out of work and economists say many of those 'temporary' job losses have become permanent...The unemployment rate has nearly halved to 7.9% since April. But nearly 13 million Americans remain out of work. That's about 7 million more than pre-pandemic levels. According to the Bureau of Labor Statistics, the number of job losses categorized as permanent grew by 345,000 to 3.8 million people in September. In other words, nearly 4 million unemployed Americans have no prospects of returning to work. The number of long-term unemployed - people out of work for a period exceeding six months - has ballooned. Around 2.4 million Americans were unemployed for 27 weeks or more in September, up 781,000 from the previous month. The last time we saw this kind of jump in long-term unemployment was during the Great Recession. To make matters worse, companies have begun initiating layoffs on a trajectory similar to a traditional recession, according to CNBC. And tens of thousands of people will get pink slips in the coming weeks as the long-term economic damage caused by government lockdowns in response to the coronavirus pandemic begin to ripple through the economy....There is also the looming prospect of more corporate bankruptcies and business closures, putting more pressure on the jobs market. Large company bankruptcies have already surged to a level not seen since 2010 and more than 420,000 small businesses have closed their doors permanently since the beginning of the pandemic....The lockdowns may have permanently scarred the labor market and there are signs of deep wounds that won't quickly heal. In a nutshell, a lot of people will likely never return to work."

Joe Biden Keeps Everyone Guessing on Wall Street Regulation -Wall Street Journal
"Fifteen years ago, Joe Biden defended credit-card companies during a testy Senate exchange with Elizabeth Warren over legislation curtailing consumers' ability to shed their debts in bankruptcy. This March, he adopted her argument entirely. Mr. Biden spent 36 years as a senator from the credit-card and corporate mecca of Delaware, where he built relationships and a voting record that provided ammunition for his opponents during a bruising Democratic presidential primary. Now, he is edging left on a range of issues from student debt to stock buybacks, leaving both progressives and Wall Street Democrats guessing whose side of the financial-regulation fight he is on. Mr. Biden's allies say he has always favored Main Street over Wall Street. Critics, including Vermont Senator and primary rival Bernie Sanders, often have portrayed him as favoring lenders over the little guy....With polls showing Mr. Biden ahead nationally and in many swing states, progressives and Wall Street Democrats are jockeying to influence his potential administration, advising the campaign on policies and suggesting Cabinet and top regulatory officials. 'If Biden wins, it's likely one of the wings will be very unhappy by Inauguration, as Biden's early personnel decisions will indicate which grouping is ascendant,' said Jeff Hauser, who analyzes corporate influence on government for the liberal Center for Economic and Policy Research. Both Democratic factions say they expect that a Biden administration would approach financial regulation much as President Obama did. While Mr. Obama signed the Dodd-Frank financial-reform act in 2010, the new law left out high-priority progressive proposals such as breaking up big banks. Broadly, the Biden campaign's proposals for the financial sector are being written with an eye to meeting the expectations of the Democratic progressive base without spooking moderates who worry about expanding regulatory powers."

Bitcoin's Legacy Will Be Short-Lived -Dyson/Rogue Economics
"My working hypothesis is that the bitcoin price peaked in December 2017 amidst a furious speculative fever and it is now slowly returning to obscurity....All this week, we've been making the case that bitcoin is going to $0....Unlike nails (or gold), bitcoin has no primary use as a physical material. So how can anyone confidently accept it in barter when no one uses it in industry? They can't. Accepting bitcoin is the same thing as taking a leap of faith. So in my opinion, bitcoin is just a speculative vehicle"¦ like a gambling game"¦ and the most perfect experiment in Greater Fool Theory mankind has ever devised. (The Greater Fool Theory is an explanation for the rising price of an asset beyond its intrinsic value. It suggests people will sometimes pay irrationally high prices for assets for the simple reason they imagine there's an even greater fool coming behind them to pay an even higher price.) We might call bitcoin 'a digital token' or 'digital paper,' which is why governments around the world are all embracing its concept. (Unbacked digital tokens are the perfect companion to their unbacked paper currencies.) But it's not money. The question is: Can the bitcoin price rise from here? Sure. But if you study investment manias throughout history, you'll know that once a speculative fever breaks, the price of the asset doesn't recover its all-time high again for many years"¦ if at all....Because governments use their control of money to extract wealth from the marketplace (via inflation). There's no way they'll willingly give up this power, especially now. Expecting bitcoin to gain wide acceptance is the same as expecting governments to freely surrender their powers. Not going to happen. So in sum, bitcoin has neither the industrial value of gold, nor the value for the ruling class of state-issued paper currency. It'll never work."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 15, 2020


10.15.20 - Stock Market Disagrees With Polls

Gold last traded at $1,905 an ounce. Silver at $24.20 an ounce.

NEWS SUMMARY: Precious metal prices consolidated Thursday as dimming pre-election stimulus hopes boosted the dollar. U.S. stocks fell for a third day following worse-than-expected jobless claims and stimulus deal uncertainty.

Sell U.S. Dollar, Buy Silver -Goldman/Kitco
"Investors should look into selling the U.S. dollar and buying silver into the election, according to two new reports published by Goldman Sachs Group Inc. There is a growing risk that the U.S. dollar will plunge to its 2018 lows as Democratic candidate Joe Biden continues to extend his lead in the polls prior to the election on November 3. 'The risks are skewed toward dollar weakness, and we see relatively low odds of the most dollar-positive outcome - a win by Mr. Trump combined with a meaningful vaccine delay,' Goldman strategists said in a note on Friday. 'A blue wave U.S. election and favorable news on the vaccine timeline could return the trade-weighted dollar and DXY index to their 2018 lows'....In another report, Goldman analyst Mikhail Sprogis highlighted silver as a buy due to the precious metal being an 'obvious beneficiary' from a global move toward solar energy. 'Now, with silver at $24/oz. and a few potential upward solar surprises in the coming months, we reopen the trade,' Sprogis said....Sprogis reminded investors that solar investment represents about 18% of silver's industrial demand. The base case scenario is that global solar installations rise by 50% between 2019 and 2023, according to Goldman."

trump card The Stock Market Disagrees With the Presidential Polls -Brandus/MarketWatch
"With three weeks to go, President Trump's re-election bid is in trouble. At least that's what the polls show. But it's not what the stock market is signaling. Based on nearly a century's worth of election-year data, Trump may yet win...Since 1928, whenever the S&P 500 Index of the largest U.S. stocks has risen in the three months prior to a presidential election, the party that controlled the White House won 90% of the time. 'If you think about it intuitively, it makes sense,' says Julian Emanuel, chief equity and derivative strategist for the investment firm BTIG who compiled the data. 'Because a rising stock market tends to be a ratification of the present policies being satisfying to the investing public.'....In fact, there have been six presidential years since 1928 when the S&P 500 fell in the three months before election day. All six times, the party in the White House lost....That's the history. What about now? Three months prior to election day (Nov. 3), the S&P 500 was at 3,271 points. It's over 3,500 today, a gain of 7%. Based on Emanuel's study of history, Trump is better positioned to win a second term than pollsters or the media seem to think. Both, Emanuel says, may be 'underestimating the probability of President Trump getting re-elected.' He's unswayed by Biden's recent surge. The former vice president's lead in national polls has risen from about 6.5 percentage points at the beginning of October to about 10.5 points now. Emanuel's answer to this: The race perhaps isn't being handicapped correctly....Ronald Reagan crushed President Jimmy Carter in a landslide in 1980, but people forget that the former California governor trailed by as much as 8 points in mid-October."

Who's Afraid of Amy Coney Barrett? -Editors/Wall Street Journal
"The Senate confirmation hearings for Amy Coney Barrett may lack for political drama, but they are still instructive. They are revealing the deep fault lines over the Supreme Court, and how Democrats view it as a mini-legislature to achieve policy goals, rather than a real judicial body. Democrats are asking very little about the actual law or Judge Barrett's jurisprudential thinking. Instead, one after another, Democrats have used their time to focus on a parade of policy horribles if she is confirmed. And for emotional effect, they brought along photo displays of children and women who would supposedly be her victims on health care, abortion, gun violence and more. All of this distorts the role of a judge, who has to rule based on what the law is, not on what she would want it to be. 'Judges can't just wake up one day and say 'I have an agenda. I like guns. I hate guns. I like abortion, I hate abortion' and walk in like a royal queen and impose their will on the world,' Judge Barrett said Tuesday. But that is lost on Democrats, who are treating the hearings like a campaign rally. Start with their focus on Judge Barrett as a threat to health insurance....Democrats also flogged Judge Barrett for criticizing the Chief Justice's creative interpretation of the individual mandate as a tax....Democrats also distorted the risks that the Court will overturn Obergefell v. Hodges that divined a right to same-sex marriage in the Constitution....The current 'conservative' Court has already shown it is more heterodox than one dominated by liberals. That's because originalists seek to interpret laws based on the text and the Constitution rather than merely find a way to arrive at a foregone policy result. Everything we know suggests Judge Barrett will rule in the same originalist way, and this should reassure the public that the Court will be properly modest in interpreting the law as it is."

Why Doubt Is Essential to Science -Scientific American
"The confidence people place in science is frequently based not on what it really is, but on what people would like it to be...For example, a majority of Americans trust science as long as it does not challenge their existing beliefs. But doubt in science is a feature, not a bug. Indeed, the paradox is that science, when properly functioning, questions accepted facts and yields both new knowledge and new questions - not certainty....As a historian of science, I would argue that it's the responsibility of scientists and historians of science to show that the real power of science lies precisely in what is often perceived as its weakness: its drive to question and challenge a hypothesis....Examples of relativism about issues including climate change and, most recently, the COVID-19 pandemic have significantly contributed to the proliferation of fake news and conspiracy theories....In an effort to combat misinformation, scientists may overcompensate by accelerating their research, or publicizing their findings prematurely. This can spur dialogue about science but, with serious side effects. Some scientists have yielded to public pressure by rushing to provide theories about and potential cures for COVID-19....So how to regain public trust in science when the public is looking for certainties and when those who are supposed to impersonate doubt seem to be fickle or dogmatic? A more realistic understanding of how science works can contribute to a better comprehension of the decisive role of doubt and skepticism in the scientific process. Indeed, science is not a linear path leading from one success to another, but rather a constant reevaluation of hypotheses. Failures are part of the scientific process and should be taught along with successes....What must be reaffirmed is that in science, doubt is not a vulnerability but a strength."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 14, 2020


10.14.20 - Trump: "I Was Right About Damaging Lockdowns"

Gold last traded at $1,900 an ounce. Silver at $24.19 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting, rising inflation and a falling dollar. U.S. stocks struggled as traders pored through another batch of corporate earnings and looked for clues on further coronavirus aid.

Some Are Betting On Red, Some On Blue. I'm Betting On Gold -Holmes/Forbes
"The Wall Street Journal reported on Friday that the White House is preparing a coronavirus stimulus offer valued at $1.8 trillion, despite President Trump's earlier comment on ending negotiations....With the national debt now topping $27 trillion, such a package isn't good for the government's balance sheet, but it's good for gold. Indeed, the yellow metal traded up as much as 1.8 percent on the news. And I believe there's additional upside potential - no matter who wins the election. In 22 days, millions of Americans will be betting on 'red,' millions of others on 'blue.' I'll be betting on gold. I'm far from the only one. Leon Cooperman became just the latest billionaire investor to buy gold. In a recent interview, the Omega Advisors chairman and CEO said: 'I bought gold for the first time in my life a week ago. I understand the case for gold. We're on the way to some banana republic situation. Nobody's worrying about the debt that's being created.' Meanwhile, ETFs backed by physical gold climbed to a record amount last Monday, touching 111.05 million ounces. According to the World Gold Council's (WGC) September report, global gold ETFs saw their 10th straight month of inflows last month. For the first time ever, such funds added more than 1,000 tonnes of gold so far this year, the equivalent of $55.7 billion....It's not too late to participate!"

lockdown Trump: "I Was Right About Damaging Lockdowns" -Zero Hedge
"During his first rally since swiftly defeating coronavirus, President Trump again slammed lockdown policies, and declared that he was right about resisting them all along, after the World Health Organization admitted that countries should not be using lockdowns as a way of controlling the virus. 'The World Health Organization came out a little while ago and admitted the lockdowns are doing tremendous damage to these Democrat-run states where they are in lockdown,' Trump told the huge crowd in Florida Monday night. 'They corrected themselves today and said I was right,' the President reiterated: Trump was referring to WHO envoy Dr. David Nabarro telling The Spectator that 'We really do appeal to all world leaders: stop using lockdown as your primary control method.' Nabarro added that 'The only time we believe a lockdown is justified is to buy you time to reorganize, regroup, rebalance your resources, protect your health workers who are exhausted, but by and large, we'd rather not do it.' 'I took us out of the WHO because they were wrong about everything. Although, they corrected themselves - they say I was right about the lockdowns. (I asked) Why are we paying $500 million a year and China which has 1.4 billion people is paying $39 million per year - they couldn't explain so I took us out,' Trump urged. The President also painted a grim picture of what will happen if Joe Biden is elected. 'Biden would terminate our recovery, delay the vaccine, prolong the pandemic and annihilate Florida's economy with a draconian, unscientific lockdown - that's what he wants to do, lock it down, lock it down everybody,' Trump told the crowd. 'And you know what? If you don't feel good about going out, stay, relax, stay. You know the risk groups, you know the older people,' the President added."

Where is compassion for the millions who have suffered harm from lockdowns? -Rice/American Thinker
"I'm sure many Americans are growing tired of being labeled 'insensitive' or 'uncaring' or lacking compassion because we are perceived as not caring about 'at-risk' people who might contract the coronavirus. Let's talk about 'compassion for our fellow man.' Where's the compassion for the single mom who is increasingly struggling to purchase diapers or baby formula for her children? Where's the compassion for the victims of child abuse, which is no doubt spiking due to the economic slowdown? Where's the compassion for those who have committed suicide or attempted suicide or will do either in coming months and years? Where's the compassion for the tens of thousands of business-owners who have permanently closed their businesses, or for the tens of millions of unemployed former employees? Where's the compassion for those who have been forced to declare bankruptcy, or are agonizing over doing this?....I'm not even mentioning the terrifying disappearance of fundamental rights and liberties that are being forfeited at a mind-boggling pace, or the growth of authoritarian governments. Or our 'new normal,' which now censors and bullies those who happen to hold opposing views. Do most Americans now believe that less freedom and more government control will benefit mankind? Has anyone else noticed the surge in violent crimes occurring in practically every city in this country?....The argument that we should essentially lock down the world - and everyone should live in constant fear even if his own risks are minuscule - has transformed our country into a grim, unrecognizable place. COVID has claimed and will continue to claim lives, but 99.9 percent of the country's population will not die from this virus. By now, practically every family in the country has already experienced negative consequences or obvious harm...not from the virus, but from the policy responses to the virus."

Three Simple Habits to Create Lasting Wealth -Tiwari/Rogue Economics
"I was raised with a poverty mindset. I was taught that money was evil"¦ that rich people were mean and underhanded"¦ and that you must accept you will never be rich. Maybe you can identify with that type of upbringing? I knew I had to break out of that mindset. But the thing is, money is completely devoid of consciousness. Money is simply a by-product of three main habits. Habit No. 1: Live on less than you earn. If you consistently keep more than what goes out, you'll have a surplus of money. Simple, right? Habit No. 2: Maximize your ability to earn from your current job. Your single-biggest source of income is your current job. Most jobs will pay you more money as your skill rises. So the quickest way to make more money is to improve your skills. Put yourself on a skill development track that will have you becoming world-class at your job....If your current firm doesn't recognize your improved performance, that's okay"¦ Go find another employer that will. Be sure to negotiate for more money. And never leave a job without having another one lined up first. Habit No. 3: Create multiple streams of income. If you've nailed the first two habits, No. 3 is how you turbocharge your wealth. This is where you invest in low-risk, income-producing stocks, real estate, or private businesses. Additionally, this is where you can incorporate a 'side hustle' for extra income....Wealth creation isn't complicated. But it is difficult. It's difficult because we're bombarded with ads to buy stuff every minute of every day. That makes habit No. 1 - live on less than you earn - the toughest to acquire. But without that habit, you can never create lasting wealth."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 13, 2020


10.13.20 - Key Driver May 'Propel' Gold to New Highs

Gold last traded at $1,894 an ounce. Silver at $24.16 an ounce.

NEWS SUMMARY: Precious metal prices retreated Tuesday on profit-taking and a stronger dollar. U.S. stocks slipped as investors digested the first batch of corporate earnings and as hopes for a stimulus deal before the election dimmed.

This driver could 'propel' gold price back to its new all-time highs -Bloomberg Intelligence/Kitco
"There is one driver that could really re-ignite the gold price rally during this turbulent fourth quarter, according to Bloomberg Intelligence senior commodity strategist Mike McGlone....'Gold is likely to remain atop our macro-performance scoreboard in 4Q,' McGlone said. 'The greenback entering a bear market would propel gold, if history is a guide.' The yellow metal is currently in a bull market with strong established above $1,800 an ounce after a sharp rise to a new record high of $2,075 an ounce this summer....Another sign of the current bull market is that gold hasn't wrapped up a quarter since Q1 2019, less than 8% above its 50-week moving average, McGlone pointed out. Bloomberg Intelligence sees gold eventually climbing back up to its new record highs, especially in light of the increasing debt-to-GDP ratio and massive global quantitative easing. 'History dictates that the gold-price rally should accelerate toward $2,000 if the dollar is peaking,' McGlone said....When it comes to silver, McGlone projects a re-take of $30 an ounce."

fortunes The K-Shaped Recovery: A 'V' For Some, Not For Most -Zero Hedge
"What is a 'K'-shaped recovery? It's a 'V' on the top, and an inverted 'V' on the bottom....Following the economic shutdown, much of the data shows strong signs of improvement....In the bottom half of the 'K' shaped recovery lies the majority of the economy. Its recovery is questionable the longer the pandemic goes on....A 'V' For The Top 10%, as noted by the WSJ...'Households in the bottom 20% of incomes had seen their financial assets, such as money in the bank, stock and bond investments or retirement funds, fall by 34% since the end of the 2007-09 recession, according to Fed data adjusted for inflation. Those in the middle of the income distribution have seen just 4% growth.' Indeed, one of the simplest ways to envision the current 'K' shaped recovery is by looking at the surge of the stock market since late March. However, as we have noted previously, the 'stock market' is no longer representative of the underlying economy. Such is due to massive interventions by the Federal Reserve, which pushed speculation in 'risk' assets to historic levels...It also exacerbated financial inequality when the top 1% of earners owns 52% of the stocks and mutual funds. The differential in ownership in financial assets between the top 10% of the economy, which owns fully 88% of the stock market, and everyone else isn't even close. While the 'rich get richer,' the poor continue to suffer. Unfortunately, the fiscal stimulus will only worsen the divide....In the current recovery, it is clear that those at the top of the 'K' are indeed experiencing a 'V'-shaped recovery. For the rest, not so much....History is replete with examples of the 'endgame' of socialistic experiments of running unbridled debts and deficits. Maybe we should try something different, and allow recessions to reset economic imbalances."

COVID lockdown debate: Dems want science, they should look at the Great Barrington Declaration - Pudzer/Fox News
"If Democrats truly want to follow the science - rather than the politics - in the fight against COVID-19, they might want to take a closer look at 'The Great Barrington Declaration.' Organized by infectious-disease experts Dr. Martin Kulldorff of Harvard University, Dr. Sunetra Gupta of Oxford University and Dr. Jay Bhattacharya of Stanford University, it recommends allowing people to live normally despite the virus while protecting the most vulnerable elements of the population so as to avoid the lockdowns' devastating physical, mental, economic, and educational impacts. The mainstream media has essentially ignored the Declaration, but to date over 5,500 medical and public health scientists and 11,000 medical practitioners have signed it. That numbers continue to grow. The Declaration expresses 'grave concerns about the damaging physical and mental health impacts of the prevailing COVID-19 policies,' pointing out that the 'heaviest burden' is falling on 'working-class and younger members of society.' According to the Declaration, '[c]urrent lockdown policies are producing devastating effects on short and long-term public health.' It concludes that '[k]eeping these measures in place until a vaccine is available will cause irreparable damage, with the underprivileged disproportionately harmed.'....It is essentially the approach followed in Sweden (the country that has most successfully dealt with the virus), which is increasingly supported by the World Health Organization. It is also the very policy approach that President Trump has been recommending, to great criticism and disdain from Democrats and their leftist media allies. The Declaration's conclusion is also consistent with the CDC's September 10th age-specific update to COVID-19's estimated Infection Fatality Rate. The CDC's 'Current Best Estimate' for survival rates: 0-19 years old, 99.997 percent; 20-49 years old, 99.98 percent; 50-69 years, 99.5 percent; and 70 years old or older, 94.6 percent....The greatest economic threat facing American workers right now is the prospect that in just a few months, Biden could actually have the power to sacrifice their jobs on the altar of his politics, as he's repeatedly indicated he would be willing to do by imposing a national shutdown."

Joe Biden on What Voters 'Deserve' -Editors/Wall Street Journal
"H.L. Mencken's famous line about democracy is that voters know what they want and deserve to get it - good and hard. Joe Biden's apparent view is that voters shouldn't know what they're getting until after the election. For a change, the press corps is asking Mr. Biden why he won't answer a straightforward question on whether he agrees with the demands of his party's left to add Justices to the nine-member Supreme Court. Mr. Biden and Kamala Harris have been ducking it, and on Thursday Mr. Biden said voters will 'know my opinion on Court-packing when the election is over.' He added: 'Now, look, I know it's a great question, and y'all - and I don't blame you for asking it. But you know the moment I answer that question, the headline in every one of your papers will be about that.' Yes, it's called news. On Friday Mr. Biden compounded this political gaffe when a reporter in Las Vegas asked 'Don't the voters deserve to know where you stand on' court packing? 'No, they don't deserve' Mr. Biden snapped....The question is central to American self-government. Democrats on the resurgent left believe the Supreme Court is a de facto second legislature to achieve policies they can't pass in Congress. And now that judicial conservatives may have a majority on the Court for the first time in decades, Democrats want to add Justices and turn the Court into a de jure House of Lords. Would Mr. Biden sign that legislation or not? If he won't tell voters now, they can assume he'll roll over for Nancy Pelosi and Chuck Schumer on that and so much more."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 12, 2020


10.12.20 - Is Gold Cheap at $2000 an Ounce?

Gold last traded at $1,923 an ounce. Silver at $25.08 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on bullish technical signals and a flat dollar. U.S. stocks rose as investors monitored stimulus negotiations and prepared for a busy week of corporate earnings.

Is Gold Cheap at $2000 an ounce? -Doug Casey's International Man
"What lies ahead for the US economy is not a V- or a W- or an L-shaped recovery but a long, downward-inclined staircase which could lead to an abyss. With our current trajectory, that is not only a possibility but the most probable outcome. Barring dramatic changes to monetary and fiscal policies - the US dollar would not only lose its status as the world's reserve currency but would more than likely meet the fate of the Continental....Is Gold Cheaper at $2000 an ounce in 2020 than it was at $35 in 1971? Fundamental to this comparison is the recognition that gold is money and that the Fed's notes that circulate today have value only because they represent a claim against money....If we compare the money supply ratios M1-2020 / M1-1971 or M2-2020 / M2-1971, we can see that these are up about 30 times. Gold prices, on the other hand, are up about 60 times, so it looks relatively fairly valued. But what this comparison ignores are some critical differences between then and now...Between 1971 and 1981, the money supply in the US doubled...M1 has grown by about 35% in the last few weeks. When Paul Volcker set short-term interest rates at 20%...Reagan unequivocally backed him. Compare that to today, in which Trump threatened to remove Powell for attempting to maintain interest rates at only 2%. The US economy today is floating on a number of asset bubbles - equities, housing, and bonds. All these bubbles not only need ultra-low interest rates, but they also need continuous infusions of capital to prevent them from bursting. If we account for these factors, one could make a rational claim that gold at $2,000 an ounce in 2020 is cheaper than $35 an ounce in 1971....M1 today is about $5 trillion. If this were to be backed 100% by gold, then the 261.5M oz. of gold held by the US government would have to be valued at about $20,000/ounce or about 10x the current price. Depending on the various combinations of percentage backing and M1/M2 for our calculations, we could get a multiple of anywhere between 4 and 30x....Gold prices today mean a whole lot more than just a number. They indicate a tumultuous future of monetary breakdown with tremendous social and economic upheavals...The recent breakout in the price of gold is just the beginning. Gold is set to skyrocket in the months ahead."

chart

Majority Say They Are Better Off Under Trump Than Obama/Biden -Gallup/Zero Hedge
"Pollster Gallup has found that a majority of 56% of Americans feel that they are better off now under Donald Trump's presidency than they were four years ago under Barack Obama and Joe Biden. The survey recorded the highest number of Americans in history saying that they feel in a better position 4 years into an incumbent's presidency....While the majority is a good sign for Trump, the figure was even higher back in February, before the coronavirus pandemic. Back then, 61% expressed more satisfaction than they had four years previously. Given the current circumstances, it is rather startling to find that more Americans think they are better off now, and betrays how effective Trump's presidency has been thus far....The idea for the survey originates in a question Ronald Reagan asked Americans during his presidential campaign in 1980, 'Are you better off today than you were four years ago?'"

No more stimulus needed: Time to get on with the new economy -Worstall/Washington Examiner
"President Trump has announced that he won't be approving any more economic stimulus or relief legislation until after the election. This may or may not be a wise move - it depends upon your views of what sort of recession we're in right now. A rational view would be that it's good news, for the bad news is that we have two different recessionary events to deal with. The first recessionary event is obvious: close down large chunks of the economy, and we lose 30% or so of the GDP we had. Open it up again, and we get 30% growth (that being the current best estimate for the third quarter....We've had a lot of economic recovery, but not quite enough. At which point, we could just say let's blow some more of the deficit and get more stimulus! Which is to miss the second recessionary problem we've got. There are some things we have to do differently now. We cannot just go back to where we were because we're in a different world now...Social distancing means that concerts, plays, and the live arts just cannot be done as they were. There's also been an acceleration in already extant trends. More people working from home is going to kill city-center coffee shops and sandwich takeouts. More online shopping will affect bricks-and-mortar retail. These things just aren't going to bounce back. This is what the economist Arnold Kling calls a recalculation recession....At some point, the stimulus has to stop so that we can get on with the task of building the new economy we need instead of continuing to prop up all the last bits of the old one we'll never return to. We've done enough cash-splashing to get the economy as a whole to self-sustaining lift off. So, we should stop and now allow people to get on with the difficult bit: working out how we do things in our new world. No more stimulus is probably the right answer."

7 Things That Matter For Markets Going Forward -Carlson/A Wealth of Common Sense
"Here are 7 things I can't stop thinking about in terms of their impact on the markets going forward: 1. Interest rates. - The problem is rates have NEVER been this low before. No one knows what the unintended consequences will be....2. Fiscal stimulus. - The debt-to-GDP for the United States is the highest in history...Politicians found the lever to pull that can conjure growth out of thin air - government spending. 3. Inflation. - The biggest risk to all of this spending is inflation....4. The Fed. - The Fed met the pandemic with bazookas blazing. It's going to be difficult for the Fed to retract its alien tentacles from the markets....5. Automated investing. - The markets have never been more systematized as they are now...People panic and run out of the store when stocks go on sale....6. Demographics. - There have never been this many old people who have to take care of themselves financially for so long....7. Inequality. - The top 10% owns 70% of the wealth in the United States...Wealth inequality could have a much bigger impact on society at large if the rich continue to get richer while the poorer classes get knocked down a peg every time there's a recession."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 9, 2020


10.9.20 - Mike Pence's Re-Election Case -WSJ

Gold last traded at $1,926 an ounce. Silver at $25.06 an ounce

NEWS SUMMARY: Precious metal prices zoomed higher Friday on stimulus hopes and a sharply weaker dollar. U.S. stocks were lifted as Wall Street continued to search for clarity on a new potential stimulus bill.

Trump or Biden? Both to 'provide substantial tailwinds for the long gold trade' -TD Securities/Kitco
"According to TD Securities, whether U.S. President Donald Trump or Democratic candidate Joe Biden wins the election, gold will be all set to rise higher. 'With the Trump and Biden agendas estimated to cost between nearly $5.0 trillion and $5.6 trillion over the next decade, both would provide substantial tailwinds for the long gold trade,' TD Securities commodity strategists write. 'Barring a split government outcome, both administrations are likely to push through a large-scale fiscal deal in no time that would help de-bottleneck the real rate suppression, lifting precious metals in the process.' The end of this week is seeing risk assets firming amid some hope around stimulus talks. 'House Speaker Pelosi signaled a willingness to provide airline relief as a piecemeal deal, rather than a comprehensive fiscal stimulus package. While tailwinds of the last fiscal deal are fading, raising concerns that the U.S. may lose economic momentum before a new fiscal deal is agreed upon, gold bugs may not need to look too far on the horizon to expect a large-scale deal.'"

elephant Why Is the Recovering Economy the Elephant In the Room? -Ingram/Real Clear Markets
"America's economy is coming in hot, and it is vital that Congress not ruin this rebound with legislation that could leave millions of Americans permanently unemployed. Some Democrats in Washington are working to do just that. As new original research by the Foundation for Government Accountability highlights, the signs are all there: Unemployment claims are plummeting, jobs are coming back, and entrepreneurs are creating more new businesses than ever before. More than 1.7 million new businesses have formed since June alone. These markers for a recovering economy should be welcome news to us all, but you won't find them among the mainstream media's top talking points. Instead, they're playing fast and loose with the 'news' about our economy and are hoping voters don't realize a full economic recovery is already underway....Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, individuals were no longer required to search for work as a condition of receiving benefits, and an additional $600 weekly bonus was added to UI checks....More than 75 percent of UI recipients collected more in unemployment benefits than they did through work. But once the $600 weekly UI bonus expired, the economy began picking up speed. More than 4.4 million Americans have moved off of unemployment since late July, when the UI bonus expired. Nearly 3.8 million Americans returned to work in August alone. The unemployment rate is on the decline and job creation is on the rise....Last week, House Democrats jammed through legislation that would create another $600 weekly UI bonus that would last at least into spring of 2021. Though it's unlikely that this package will become law in its current form, we should question this continued push for extended UI benefits despite research showing the bonus both hurts the American economy and isn't necessary, given multiple economic markers proving we're on the road to recovery. The recovering American economy is rapidly becoming the proverbial elephant in a room full of Democrats. They may not want to admit it, but under President Trump's continued leadership, we're headed back to a roaring economy, and the media should share this good news far and wide."

Mike Pence's Re-Election Case -Editors/Wall Street Journal
"Mike Pence and Kamala Harris did a public service by offering a contrast on issues and values that voters aren't getting from the media or the presidential candidates. The Vice President did as well as he could playing defense on the pandemic, especially with his accurate gibe that Joe Biden's policy sounds like policy plagiarism. Senator Harris's main critique on the virus, as on most other issues, was less about substance than about Mr. Trump's rhetoric and personal behavior....Mr. Pence was most effective in pointing out how far left the Biden-Harris Democrats have moved...Voters haven't heard much about Mr. Biden's $2 trillion in spending over four years on the Green New Deal; the $4 trillion of tax increases that will reach into the working class through higher business and corporate rates. Mr. Pence also exposed Senator Harris for refusing to answer, as Mr. Biden also did last week, whether they support packing the Supreme Court if Judge Amy Coney Barrett is confirmed. Their response that the election is the issue now and everyone should vote is embarrassing even by the standards of political evasion. Ms. Harris scored points when she focused on the Administration's support for the case before the Supreme Court that would repeal ObamaCare. She claimed this would strip millions of their health insurance, which is false....VP debates rarely change the course of the election, and the GOP ticket remains far behind. But this clash did show that Mr. Pence is much more than merely a loyal deputy, and that Ms. Harris's views are much further to the left than Democrats want Americans to know. Mr. Trump has to make the election about the policy contrasts to have any chance of victory, and Mr. Pence showed how to do it."

The Pandora's Box of Central Bank Digital Currencies -Campbell/Doubleline
"With QE, central banks have printed excess reserves that have benefited only the very wealthy and large institutions. The innovation of a digital currency system as described by Mastercard could deliver stimulus directly to consumers. Such a mechanism could open veritable floodgates of liquidity into the consumer economy and accelerate the rate of inflation. While central banks have been trying without success to increase inflation for the past decade, the temptation to put Central Bank Digital Currencies (CBDCs) into effect might be very strong among policymakers. However, CBDCs would not only inject liquidity into the economy but also could accelerate the velocity of money. That one-two punch could bring about far more inflation than central bankers bargain for. When first implementing QE, central banks promised that this measure would be temporary and would be unwound after the crisis ended, a pledge that I have doubted for a while. Central banks as we know have perpetuated QE as part of their updated toolbox of monetary policies. The first use of digital currencies in monetary policy might start small as policymakers, out of caution, seek to calibrate this experiment in quasi-fiscal stimulus. However, such initial restraint could give way to growing complacency and greater use of the tool - just as we saw with QE....CBDCs also appear to be an effective mechanism for bypassing the taxation, debt issuance and spending prerogatives of government to implement a quasi-fiscal policy. Imagine, for example, the ease of enacting Modern Monetary Theory via CBDCs. With CBDCs, the central banks would possess the necessary plumbing to directly deliver a digital currency to individuals' bank accounts, ready to be spent via debit cards....With a flick of the digital switch, CBDCs can enable policymakers to ignite an inflation conflagration, abandoning what little still survives of sovereign fiscal discipline and who knows what else. I hope the leaders of the world's central banks will approach this new financial technology with extreme caution, guarding against its overuse or outright abuse. It's hard to be optimistic. Soon our monetary Pandoras will possess their own box full of new powers, perhaps too enticing to resist"

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 8, 2020


10.8.20 - Get Ready For Chaos

Gold last traded at $1,890 an ounce. Silver at $23.83 an ounce

NEWS SUMMARY: Precious metal prices rose Thursday on bargain hunting and a flat dollar. U.S. stocks struggled after comments from House Speaker Nancy Pelosi dampened sentiment around potential for a smaller coronavirus aid package.

Market volatility, U.S. election 'don't deter $2,000 gold price, $30 silver price' near year-end -RBC/Kitco
"Gold and silver are still expected to rise into year-end despite current market volatility and election turbulence, says RBC Wealth Management managing director George Gero. 'More gold volatility now and debates don't deter expectations of $2,000 gold and $30.00 silver near year-end,' Gero writes. Expectations of low inflationary pressures without new stimulus are keeping downward pressure on gold for now. 'Today FED notes and speakers. Recovery expected to take longer without stimulus and pandemics headlines adding to volatility keeping inflationary numbers low,' Gero adds. 'Election also factor in gold prices and traders also looking at Brexit, U.S.-China tensions, Venezuela and BOE litigation on gold ownership.'"

liberty Get Ready For Chaos -Rickards/Zero Hedge
"There's less than a month until Election Day. Once the votes are in, the die will be cast for the next four years, perhaps longer. Trump or Biden? The difference could not be more clear, and the stakes could not be higher for you and your investments. If Trump wins, he may actually be able to finish his task of cleaning out Deep State actors, reducing regulation and taxes, securing U.S. energy independence, facilitating peace in the Middle East and finally bringing U.S. troops home from multi-decade wars in Iraq and Afghanistan. If Biden wins, brace yourself for higher taxes, the end of fracking, the Green New Deal, free tuition, free healthcare and free child care. In a Trump administration, the decoupling from China will continue, and China's ability to spy on the U.S. and steal our best ideas will be curtailed. If Biden wins, it will be back to business as usual with China stealing U.S. jobs, stealing U.S. intellectual property and cheating on their obligations to the World Trade Organization and the IMF....The main difference is that the country will set out on two entirely different paths depending on the outcome. In that sense, this will be the most consequential election since 1860, when a vote for Lincoln pointed toward a possible Civil War because the South had already made its intentions clear if Lincoln won. Today, the Rebels are not Southern secessionists. They are home-grown neo-Marxists, anarchists, thugs and goon squads who are rioting and looting daily in scores of U.S. cities. If Trump wins, you can expect to find U.S. cities in flames within 24 hours of the election results. If Biden wins, the neo-Marxists will have a seat at the table in the form of Bernie Sanders and Alexandria Ocasio-Cortez as they insist on full implementation of their agenda....Markets are not fully priced for any of this. They're not priced for anti-Trump chaos, and they're not priced for the Bernie Bros' hidden agenda that will be foisted on Biden. Although markets may not be prepared, you should be. A reduced exposure to equities, an increased allocation to Treasury notes and cash, and a 10% portfolio allocation to gold will offer true diversification."

Trump's Economic Dream Come True -Wall Street Journal
"Remember the economy of seven months ago? Until March it was growing at an impressive pace, but the Covid crisis makes it seem distant. With the election approaching, America should refresh its memory of the policies - namely, tax cuts and deregulation - that helped drive growth before the pandemic. When President Trump took office in 2017, the recovery from the 2008-09 recession was in its seventh year. After years of slow but sustained growth, many analysts expected another downturn....Free-market economists rejected that pessimistic view about the economy's potential, arguing instead that reducing tax and regulatory burdens would increase productivity and make capital and labor markets more efficient. By the end of 2017 the White House and a Republican Congress lowered the corporate tax rate from 35% to 21%, allowed businesses to expense capital costs upfront, and reduced tax rates on small businesses and individuals. They also repealed the regulatory burdens on several industries...These policies were based on the simple idea that economic improvement comes from creating greater opportunities for individual self-improvement. Policies that interfere with free markets destroy opportunities....Wages increased across all education levels, with the largest increase, 12%, occurring among workers with less than a high school education. Similarly, inflation-adjusted median family income increased in all quartiles of the income distribution. The largest increase occurred among the poorest fourth of U.S. households and the second largest in the second-poorest fourth...reaching a record low for a roughly three-year period....The coronavirus and lockdowns have had a devastating impact on workers and businesses, and have made prosperity feel distant. But we shouldn't forget the widespread gains that came from sound economic policies as recently as this spring...Countless issues are at stake in November. But economic policy deserves to be foremost in voters' minds. It may be the most important issue of all."

68% of people are significantly stressed by the election - 4 ways to cope -CNBC
"A recent survey from the American Psychological Association and Harris Poll found that 68% of American adults say that the upcoming U.S. presidential election is a significant source of stress in their life. To put that in context, ahead of the 2016 election, only 52% of Americans said the election was a 'somewhat significant source of stress.' If you are also feeling overwhelmed in the run up to the election, here are some research-backed strategies that the APA says can help you cope with election stress: 1) Avoid dwelling on worst case scenarios - Research has shown that ruminating, or thinking involving excessive, repetitive thoughts or themes, can impair thinking and problem-solving....2) Have a voting plan - Research suggests that volunteering can combat stress and even help you live longer. 3) Have an Election Day plan, too - 'Research shows that people who have at least one or two friends or family members to turn to for emotional support during stressful times tend to cope better than people who don't have such support,' according to the APA....4) Control your media consumption - Studies have shown that just watching news coverage of a traumatic event can trigger acute stress symptoms."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 7, 2020


10.7.20 - Gold: The Best Disaster Insurance

Gold last traded at $1,886 an ounce. Silver at $23.74 an ounce

NEWS SUMMARY: Precious metal prices rebounded Wednesday on bargain hunting and a weaker dollar. U.S. stocks rose after President Trump tweeted support for aid to airlines and other stimulus measures.

The One Question That Should Be Asked Tonight -Regan/American Consequences
"Welcome to the vice-presidential debate, during the era of coronavirus, coming to you live from Salt Lake City, Utah! Tonight, the stakes are high. With the election less than a month away, the Trump campaign is trying to pull another surprise win, just as it did in 2016. Poll numbers are down, and the odds certainly seem stacked against the president"¦But, as we all learned in '16, polls and odds are not always the best predictors of elections....Both candidates are skilled debaters...Pence proved his chops debating Tim Kaine...Harris has spent a career as a debater - both as a lawyer and as a politician....The question for tonight, however, is will Harris deploy that same devastating skill going after Pence? And if she does, will it backfire? Pence will be more adept at defending himself. He's polished and knows how to stick to a script without getting flustered....Personalities aside, the problem with Kamala and the liberal economic agenda is that ultimately it would destroy our American economy and way of life....Pence is well known for his belief in supply-side economics. His economic policy is the antithesis of Harris, who has demonstrated favoritism for socialism....Why should we trade prosperity, capitalism, and freedom"¦ for high taxes, slow growth, and economic instability? That's REALLY the question that should be asked tonight. Though, judging what we've seen from the media and debate moderators thus far, I don't suspect we'll hear it."

gold Gold Is Still the Best Disaster Insurance You Can Buy -Rogue Economics
"Regular readers know that Bill Bonner is a longtime goldbug. He and Dan Denning, his colleague over at The Bonner-Denning Letter, recommend allocating a sizable portion of your portfolio to the yellow metal....Some readers may be wondering if they've missed the opportunity to get into gold. But guest editor, David Forest from Casey Research, is here to tell us why he believes this gold bull market is just getting started. In August, gold took out its all-time high of around $1,914 an ounce and quickly shot past $2,000. But I believe we're just in the early innings of a historic gold bull market. There are a number of reasons why I think the precious metal will soar to new highs. Firstly, in an attempt to paper over the market's insanity, the feds continue to unleash a wave of money-printing unlike any we've seen before....Historically, October is a 'witching season' for market crashes. It's almost a self-fulfilling prophecy. Everyone worries and selling can quickly accelerate into a runaway collapse. Typically, when this happens, people rush out of stocks"¦ and into gold. But it likely won't be a straight shot higher for gold. There will be surges and dips along the way, as we've seen these last few weeks....If we do get another major crash, physical gold likely will offer protection. Historically, gold prices fall less than other assets during financial panics....Over the past 15 months, gold prices have already risen 37%...It's not too late to get in. The first step is owning physical gold."

The Stock-Market Disconnect -Rogoff/Project Syndicate
"The best explanation for why stock markets remain so bullish despite a massive recession is that major publicly traded companies have not borne the brunt of the pandemic's economic fallout. But having been spared by the virus, they could soon find themselves squarely in the sights of a populist backlash. Why are stock-market valuations soaring when the real economy remains so fragile? One factor has become increasingly clear: The crisis has disproportionately affected small businesses and low-income service workers. For example, because stock markets are forward-looking, current stock prices may reflect optimism about the imminent arrival of effective COVID-19 vaccines...This outlook may be justified, or it may be that markets are underestimating the likelihood of a severe second wave this winter, and overestimating the efficacy and impact of the first-generation vaccines. A second, and perhaps more convincing, explanation for today's stock market performance is that central banks have pushed interest rates down to near zero. But, again, it is not clear that markets are correct in anticipating a never-ending continuation of low interest rates. A third explanation is that in addition to providing ultra-low interest rates, central banks have directly backed private bond markets - representing an unprecedented intervention in the case of the US Federal Reserve....A big piece of the puzzle: the economic pain inflicted by COVID-19 is not being borne by publicly traded companies. It is falling on small businesses and individual service proprietors....Today's elevated stock markets face risks that are not only economic, including but not limited to the significant possibility of an unprecedented political crisis following the US presidential election this November...Wall Street will again be vilified, but populist wrath also will be directed toward Silicon Valley."

No Joe, You Didn't Hand Trump A Booming Economy -IssuesInsights
"'We left a booming economy,' Biden said during the first presidential debate, 'and he caused the recession.' Debate moderator Chris Wallace jumped in to help Biden, adding that job growth was faster in the last three years of Obama's term than the first three of Trump's. One is a flat out lie, the other a clever deception. After presiding over the worst economic recovery since the Great Depression, Obama and Biden left office with the economy stalling out, leading experts to warn that the nation was facing 'secular stagnation.' Look at the numbers. GDP growth sharply decelerated in 2016, falling from 3.1% the year before down 1.7% in 2016...Real median family income didn't budge from August 2015 to November 2016, according to Sentier Research. The stock market had been flat for more than a year...Does any of this sound anything like a booming economy? But what about the oft-repeated claim - repeated by Chris Wallace during the debate - that 'in Obama's final three years as president more jobs were created. A million and a half more jobs than in the first three years of your presidency.'....Under Obama, job growth in the recovery was unusually slow - slower in fact than every major recession before it...The only thing that grew fast under Obama was the number of people who'd dropped out of the labor force. That number climbed by almost 15 million....The economy under Trump created 4 million more jobs than would have been the case if Obama's policies had remained in effect."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 6, 2020


10.6.20 - False Reopening Hope Killing Small Business

Gold last traded at $1,905 an ounce. Silver at $23.90 an ounce

NEWS SUMMARY: Gold held its ground Tuesday after Powell's speech reaffirms uncertainty. Stocks were mixed on continued stimulus negotiations.

What Will Happen To Gold Under The Fed's New Monetary Framework? -OilPrice.org
"In August 2020, Federal Reserve Chair Jerome Powell delivered his Jackson Hole speech, unveiling a new monetary framework in the process. He announced a flexible average inflation targeting strategy (FAIT). The new regime implies that when the inflation undershoots its target in one period, the US central bank will try to push inflation above the target in the next period to compensate for the previous shortfalls....But shouldn't the central bank rather try to achieve the price stability and protect the society against high inflation? Of course, it should. However, the recent years of low inflation persistently below the Fed's target of 2 percent (...asset price inflation is significantly higher). The shift to the FAIT is a big move that should be positive in the long run for gold, which is considered an inflation hedge. But, perhaps even more important is the change within the employment side of the Fed's mandate...Under the new regime, the Fed will not hike interest rates preemptively and unless there are visible signs of accelerating inflation. It means that the FOMC will prioritize employment and economic growth over inflation. Hence, both major revisions - in the inflation and employment objectives - are fundamentally positive for the gold prices....The Fed's new framework implies lower real interest rates - is good news for the precious metals investors. And the risk of inflation getting out of control should also support the gold prices."

taxes Stock Market's Leaders Appear Most Vulnerable to Biden's Tax Plan -Wall Street Journal
"A corporate tax increase stemming from a Democratic victory in November could undermine one of the strongest drivers of this year's market recovery, market analysts say. Democratic presidential nominee Joe Biden has proposed raising the corporate tax rate to 28% from 21%, imposing a new minimum tax on U.S. companies and increasing taxes on foreign income of many U.S.-based multinationals, among other plans. Together, the tax proposals would reduce expected earnings among companies in the S&P 500 by 9.2%, according to estimates from BofA Global Research. The effects would especially hit technology companies. Mr. Biden's plan would produce estimated double-digit percentage declines in profits in the information-technology, communication-services and consumer-discretionary sectors, BofA's analysis found....Such a hit could challenge the leadership of those stocks - which have helped insulate the market during the pandemic - and test the durability of the 2020 rally....Mr. Biden's proposal for higher taxes on foreign income is expected to hit tech stocks particularly hard. The tech sector derives just 43.5% of its revenue from the U.S., compared with 60.3% for the S&P 500 as a whole, according to FactSet estimates. Another wild card for big tech companies is the possibility of a crackdown by regulators."

The false hope of reopening is killing small businesses -Vox
"During the pandemic, much of the conversation around small businesses has focused on lockdowns and reopening - just let things open back up again, the line of thinking goes, and everything will be okay. But the reality of the situation is that for many businesses, that's just not the case. According to Yelp, more than 160,000 US businesses on its platform have closed since March 1, nearly 100,000 of them permanently. 'People are not comfortable going to public places yet. We've tried to put so many safety measures in place, but all of that, essentially, is not going to matter if people will not come,' said Payal Patel, Chicago's Navy Pier communications director. You can't force business as usual when life is not. Many businesses already operating with low margins pre-pandemic can't survive under health-related restrictions that, while incredibly important, make staying afloat extremely difficult. Beyond the restrictions, there are also broader issues afoot. With a deadly virus still spreading, many Americans simply aren't falling over themselves to go out and consume. Millions of people have lost their jobs or are afraid they might, so they're not as eager to spend their money on things they don't perceive as necessary. That leaves small businesses fighting for their lives....According to data from OpenTable, which tracks restaurant reservations and traffic, seated dining in the US is still down more than 50 percent year-over-year...The colder months will present new challenges for restaurants, especially considering the majority of diners view outdoor dining as safer....Instead of going to the restaurant, they're going to the grocery store. Instead of buying a dress at the local boutique, they're ordering sweatpants on Amazon. Spending so much time at home has made people more interested in home-improvement projects, meaning trips to Home Depot....The belief that reopening would be a panacea for small business was wrong. That belief is also part of what is making it so hard for them to make it through. Policies to support small businesses were designed for short-term dips, not the long, deep economic slog we're in for."

How to Have a Disagreement Like an Adult -Chopra/New York Times
"Deepak Chopra, 73, has been looking out at the anxious and angry state of the world and he's not surprised. Some people may think this moment in time is the height of political and social division - with people baiting each other on social media, walking away from friendships, even splitting up with lovers over political polarization - but Mr. Chopra said our behavior is nothing new. 'It's been going on since the Stone Age,' he said....Mr. Chopra, celebrity and author of 91 books, has some tips for disagreeing better....STEP 1: Choose if you even want to engage - There are simply some confrontations that are not worth it. STEP 2: OK, you've decided to engage...So first, listen. - If you don't start with an open ear, you've lost your opponent. STEP 3: Learn about the other person's values. - The simplest way to learn about someone else is to ask about what is meaningful to them. STEP 4: Try awareness and a pause. - Tackle a disagreement with 'insight, intuition, inspiration, creativity, vision, higher purpose or authenticity integrity.' STEP 5: Don't engage in black-and-white thinking - 'Having a grievance or resentment is like drinking poison and hoping it will kill the enemy.' STEP 6: When confronted, stop, take a deep breath, smile and then make a choice. - 'Ask yourself, Am I going to be nasty? Am I going to be reactive? Or is there a creative solution to this?' STEP 7: Don't try to prove them wrong - The point of disagreeing is not to 'win' but to start negotiating. STEP 8: Be prepared to forgive - You might not feel the other person in a disagreement deserves forgiveness, but consider it for the sake of your own peace. STEP 9: Make a (gentle) joke - It's OK to bring humor into a tense conversation, as long as it isn't cruel or demeaning."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 5, 2020


10.5.20 - Gold Prices Reclaim $1,900/oz.

Gold last traded at $1,916 an ounce. Silver at $24.44 an ounce

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting and a weaker dollar. U.S. stocks higher as investors grew more hopeful that lawmakers would reach a compromise on a new stimulus deal in light of President Donald Trump's Covid-19 diagnosis and signs of a slowdown in economic recovery.

Gold prices reclaim $1,900 -Marketwatch
"Gold prices reclaimed the $1,900 mark last week to post their highest finish in nearly two weeks, with analysts attributing the advance for the yellow metal to less than stellar economic data and traders hedging bets...'Gold prices are soaring as traders are concerned about the fragile economic data,' said Naeem Aslam, chief market analyst at AvaTrade. Consumer spending rose 1% in August, but the increase was the smallest since the U.S. reopened, and the Institute for Supply Management said its manufacturing index slipped to 54.6% in September from 56% in the prior month....The economic data 'confirmed that the economic recovery is running out of momentum and if there is no further stimulus, the recovery will stall,' he told MarketWatch. 'This uncertainty is pushing the gold price higher.'....Bullion bulls have viewed gold during the coronavirus pandemic as one of the easiest ways to hedge against a host of uncertainty fostered by the public-health disaster that has forced central banks around the world to adopt low-interest-rate policies to limit the harm to businesses....'The odds are stacked in favor of higher gold price in the coming days, especially because the U.S. elections are just around the corner, and investors want to protect themselves from this major risk event,' Aslam said."

Bidenomics Bidenomics: the good the bad and the unknown -The Economist
"When Mr Trump took power in 2017 he hoped to unleash the animal spirits of business by offering bosses a hotline to the Oval Office and slashing red tape and taxes....Mr Biden's economic priority would be to pass a huge 'recovery' bill, worth perhaps $2trn-3trn...This would include short-term money, boosting unemployment insurance and help for state and local governments, which face a budget hole. Mr Biden would also extend grants or loans to small businesses which have not received as much aid as big firms....The recovery bill would also aim to 'build back better' by focusing on some long-term problems for America that have also been Biden priorities for many years. He is keen on a giant, climate-friendly infrastructure boom...He would scrap Mr Trump's restrictions on immigration...And he wants to raise middle-class living standards and social mobility. That means more spending on education, health care and housing and a $15 minimum wage....The real risk of Bidenomics is that his pragmatism will lead him to be insufficiently bold. Sometimes he fails to resolve competing objectives. For example, he rightly supports ladders for social mobility as well as a better safety-net for workers who lose their jobs; his plans range from more affordable housing to free public universities....This lack of boldness also reflects the lack of a fully developed strategy. Mr Biden has a record as a free trader, but he will not remove tariffs quickly and his plan indulges in petty protectionism by, say, insisting that goods are shipped on American vessels....If he wants to renew America's economy and ensure it leads the rich world for decades to come, he will have to be bolder than that. On the threshold of power, he must be more ruthless about his priorities and far-reaching in his vision."

There Have Long Been Too Many 'Have Nots' In the U.S. -Snider/Real Clear Markets
"Yesterday, a guy by the name of Dick Costolo tweeted out the following: 'Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution.'...Mr. Costolo has 1.5 million followers many of whom follow his every tweet with religious-like fervor. The guy was CEO of Twitter between 2010 and 2015. This ain't fringe stuff. The only surprising piece of his deviant twit was that Dick forgot to capitalize its final word: to each good standing Marxist of all varieties, it's the Revolution. This is what we, and Costolo, are really talking about - socialism in some variant form....Why do the mainstream media, multitudes of school districts, nearly every single university, and so many lawyers and politicians sound like exactly the same cultural Marxist? Because later generations of socialists realized Marx was wrong about a fundamental precept....Society gets better and better, the human condition improves beyond anyone's wildest dreams, but that's all the more reprehensible to the hardcore Revolutionary....How dare capitalism solve, and keep solving, the most basic wants and needs which have plagued human existence from time immemorial!....The post-modern Marx which now admits it can keep making things good but, dang it, it just leaves you all empty - and envious - inside, some people rich while others not. It's the proliferation of 'nots' which has made this time different. Without anyone else to offer a scientific explanation for so many, emotion sure can substitute. As really stupid as it all sounds, without enough legitimate growth in primary, secondary, or tertiary industries since August 2007, too many 'nots' for any system, and the constant, absurd, and floundering interference from the state because of this, more and more people are listening to it anyway. Just how many, that's the question."

My assignment for Trump in the next 2 debates -Buchanan/WND
"What happened on that stage in Cleveland? The insults, the interruptions, the name-calling and the yelling became the story of the debate...in which Trump, Biden and moderator Chris Wallace were all complicit....Trump has two debates left to achieve the goals he failed to achieve in Cleveland. He and his campaign need to tie Biden to the repellent elements of the Democratic Party and their radical agenda on remaking an America that the extreme left visibly detests, or to force Biden to repudiate those elements. For Trump to rise into competitive range, Biden must fall, and Trump must appear the necessary and only alternative, even to folks who are not that fond of him. Trump's assignment in the next two debates: Link Biden to the people - and their agenda - in his coalition whom the national majority detests. Make Joe repudiate both. And let Biden's performance expose his own inadequacies. The presidency hinges upon whether Trump can succeed in this. And the next two presidential debates will likely give us the answer."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 2, 2020


10.2.20 - Gold Gains Amid Stimulus Hopes

Gold last traded at $1,908 an ounce. Silver at $23.90 an ounce

NEWS SUMMARY: Precious metal prices steadied Friday amid rising political and economic uncertainty. U.S. stocks fell after news that President Donald Trump and First Lady Melania Trump tested positive for coronavirus.

Gold gains on hopes for U.S. stimulus -CNBC
"Gold prices jumped over 1% on Thursday to surpass the key $1,900 level on renewed hopes for a U.S. stimulus package that could help ease the economic pain from the coronavirus, while a easing dollar further boosted the safe-haven metal....Investors were eyeing talks between U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin to reach a deal on the long-awaited COVID-19 relief bill. 'If there's a deal, chances are stimulus will reignite the idea that inflation will move towards the Federal Reserve's target,' which along with the interest rate suppression policy by the Fed are very good catalyst for gold, said Bart Melek, head of commodity strategies at TD Securities. He added, the breakthrough in the psychological barrier of the $1,900 level can further drive the market technically a little higher. The dollar fell to a more than one week low versus rivals, making gold cheaper for holders of other currencies. Meanwhile, U.S. manufacturing activity unexpectedly slowed in September as new orders retreated, while U.S. weekly jobless claims remained at recession levels, further bolstering the metal's safe haven appeal."

government debt Federal Government Concludes Fiscal 2020 With Record Spending -Nextgov
"The federal government's fiscal 2020 year ended September 30th at midnight and federal spending has eclipsed $6 trillion for the first time ever - and that's without data from September, the final month federal officials can obligate annual Congressionally-appropriated funds before they expire....The 2020 budget deficit now stands at $3 trillion through August - also a first, meaning the government has spent $3 trillion more than it has taken in this year. Fiscal 2020 spending has been dominated by health care, entitlements and the military, with the Health and Human Services Department ($1.3 trillion), Social Security Administration ($1.2 trillion) and Defense Department ($690 billion) the top-three spending agencies. While the Treasury has not tabulated the government's COVID-19 spending, the nonprofit, nonpartisan Committee for a Responsible Federal Budget estimates the government has committed or disbursed $2.2 trillion in economic relief....The government's traditional September spending surge will push these totals higher, as civilian and defense agencies obligate the rest of the fiscal 2020 money appropriated by Congress through contracts for various goods and services."

Is Biden's Economic Plan Much Different Than Trump's? -FEE
"If you read presidential candidate Joe Biden's economic plans ('Build Back Better' and 'Made in America'), you get a feeling of deja vu, of having heard it all before: 'America, good. China, bad.' If it was not sprinkled with obligatory 'Trump, bad' quips you might think it was lifted from Trump's program. The leitmotif is: 'I am going to do the same things as Trump, but better.'....In these divided times, it is reassuring that, regardless of their differences, both Trump and Biden, at least on paper, want to improve the economy. But will Biden's Trump-ish plan actually do that? One of Biden's proposals is to Make 'Buy American' Real. Basically, if the federal government is paying for a bridge, the contractor must get its steel, cement, and other materials from American companies. This, according to the plan, should help US companies compete with foreign rivals....Biden talks a lot about public procurement of steel and other construction materials. Yet, steel imports make up less than one percent of what Americans import....Is the Democratic Party ready to make the US a good place for mining, smelting and making steel? Perhaps. But it will be interesting to see how this is received by the left wing of the Democratic Party with their Green New Deals....The whole plan suffers from the arrogant premise that if the government is buying something, it can pressure private companies to support certain political objectives....Can you be for business, mining, and manufacturing in one paragraph, and for big-government labor and environmental policies in another?"

In Joe Biden, the Democrats picked the worst candidate to debate Donald Trump -Prince/Telegraph
"'Will you shut up, man,' Joe Biden whined minutes into the first debate of the US 2020 presidential campaign. It was a lament which highlighted how poorly equipped the Democratic candidate was to take on the force of nature that is President Donald Trump on the debate stage. Having watched the tapes of Mr Trump stalking and menacing Hillary Clinton in the same arena four years ago, the former vice president's campaign team had clearly decided their man's best tactic was to refuse to engage and instead talk directly to voters down the TV lens. His diffidence meant it was left to Chris Wallace, the Fox News host and moderator of the event to provide what little opposition there was to the President....Unable or unwilling to cross swords, a frustrated Mr Biden was reduced to shaking his head sometimes accompanied by an exasperated chuckle. Gone was the twinkly figure who provided some levity in the Obama administration, replaced by a scared, tired man appalled at the dawning realization he was being bested by a man he described twice as a 'clown'. This was not the only insult Mr Biden deployed against President Trump: 'racist,' 'ridiculous' and 'the worst president America has ever had' were just a few of the attack lines he had teed up. But so feeble was the delivery, so anemic the tone, that the punches barely smudged the orange make-up of his foe. In contrast, Mr Trump did not hold back; hardly a surprise; he doesn't have it in him to hold back....Mr Trump debated as he has governed: with an unshakeable confidence which brooks no opposition....the Democratic candidate floundered where almost any of his former rivals for the nomination would have flourished...Unfortunately for the Democrats, they have lumbered themselves with Sleepy Joe Biden."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Oct 1, 2020


10.1.20 - Do NYT Writers Believe Their Headlines?

Gold last traded at $1,908 an ounce. Silver at $23.90 an ounce

NEWS SUMMARY: Precious metal prices rose sharply Thursday on bargain hunting and a weaker dollar. U.S. stocks climbed as investors monitored lawmakers' negotiations on further fiscal stimulus.

The Real Cost of Government Protection -Bonner/Rogue Economics
"Look around you. Have you ever seen so many fearful people? People who have lost courage"¦ lost faith"¦ and lost their minds. They are willing to be frisked every time they get on an airplane"¦ as protection against the almost negligible chance that someone will want to blow it up. Even young, healthy people are willing to submit to house arrest"¦ rather than face the risk of getting sick. They are afraid that the 'planet is angry' and that it will be consumed by the fires of Hell unless we stop using fossil fuels. Do civilized adults need the government to tell them how to protect themselves from a virus? The New York Times reluctantly admits that they don''t: 'Vilified Early Over Lax Virus Strategy, Sweden Seems to Have Scourge Controlled'. Sweden let people decide for themselves. Those who were afraid of the virus could stay at home. Those who were not could go about their business. The U.S., meanwhile, panicked, shutting down large parts of the economy (U.S. second-quarter GDP fell 31%!). But the death rate for both countries was about the same. And now, Sweden appears to be way ahead of the game, with very few new cases. Aging Americans see a future full of bogeymen. And they want the government to protect them. But the protection comes at a cost...Their heavy-handed attempts to hold off the virus crippled the economy"¦ and resulted in collateral damage - depression, suicide, stunted careers, etc. - which will be tallied later. But what concerns us here at the Diary is the cost of protecting against the financial future. That is where the real risk lies. Having bent and distorted the economy for its own benefit, the Baby Boomer elite now faces a reckoning. In an effort to protect itself from the risks of old age, it has promised itself health and pension benefits, unfunded, worth over $200 trillion. It would be impossible to keep up with those obligations, even with a healthy economy."

gold chart Gold's Record High Gives New Life to Dollar Doomsayers -Wallace/Wall Street Journal
"Can gold keep going? This year ranks as one of the best on record for investors in the precious metal, with futures prices up almost 24% for 2020 after hitting an all-time high in August...The events of this year are giving new life to those who insist the arc of financial history points toward the inevitable debasement of currencies like the dollar. Bullish investors contend that trend means new highs for gold are in store. Gold has been a prime beneficiary of the Federal Reserve's determination to leave borrowing costs at historically low levels to spur the economy after the shock of Covid-19. Chairman Jerome Powell formalized that stance in August, saying the central bank had dropped its longstanding practice of pre-emptively raising rates to head off higher inflation....In such an environment, money managers say the precious metal has lived up to its status as a haven, shielding investors in a year when stocks have been racked by volatility. '[Gold] has thousands of years of a track record of offering some form of protection against the unexpected,' said George Milling-Stanley, chief gold strategist at State Street Global Advisors. 'That's worth having.'....The price would have to climb another 43% from its late-August level, crossing $2,800 an ounce, to top its peak from early 1980, after adjusting for rising consumer prices in the four decades since then...Gold prices crested at $850 in the London market on Jan. 21, 1980. That remains their all-time high in inflation-adjusted terms....The greenback's role as the world's reserve currency is being called into question by some gold bulls, including analysts at Goldman Sachs Group. Gold is the currency of last resort, especially when governments are debasing fiat currencies and pushing real interest rates to record lows, the analysts wrote in July....Investors like Michael Kelly, global head of multiasset at PineBridge Investments, are on the hunt for other assets that zig when stocks zag. 'This is crystal clear: Financial repression is coming even to the U.S. and the U.K. and there will be negative real rates as far as the eye can see,' Mr. Kelly said. 'That supercharges gold.' Gold has done a good job at smoothing out returns in recent decades, according to Hilary Till, principal at Premia Research LLC, who thinks money managers should consider investing in bullion as a counterweight to stocks."

Do New York Times Headline Writers Believe Their Headlines? -Tamny/AIER
"Until March of 2020, Cafe Phillip in Washington, D.C. was booming...Then came the political panic related to the coronavirus. Even though there were no indications from the virus's origin, or Asia more broadly, that it was terribly lethal, U.S. politicians panicked. In their panic they quite literally chose to fight the virus with strict lockdowns that resulted in soaring unemployment, bankruptcy, and economic desperation. It would be hard to imagine a more wrongheaded approach to a health threat. Think about it. Economic growth has historically produced the resources for scientists and doctors that have made victories over viruses possible. Yet in their panic, politicians on the local, state and national levels forced the very contraction that would logically shrink economic resources, only to follow up with the extraction of trillions from the private economy in order to throw money at the horrendous problems they created....Panicked politicians who will never miss a meal or a paycheck decided we the people couldn't be trusted to go to work. We might spread the virus. Lockdowns were instituted, supposedly for our own good. Sorry, but economic growth is what's for our own good. It doesn't just produce resources for those eager to find cures for viruses that make us ill or kill us, economic growth also frees us to quarantine or shelter-in-place if we feel some kind of virus threatens us....Back to Cafe Phillip, to walk in nowadays is to see formerly energized employees with forlorn looks on their faces, mostly immobile as they wait for customers. It's a far cry from what it used to be...It's all a sickening reminder of how quickly politicians can wreck things. How they can thoughtlessly break things. They're way too powerful on all levels....The same New York Times reporting that over 40% of U.S. virus deaths have happened in nursing homes has also projected that over 285 million of the world's inhabitants are rushing toward starvation. Yes, you read that right. The Times won't say it directly, but the panicked political reaction to the virus that revealed itself in contraction-inducing lockdowns and other limits on activity has parts of the world's economy collapsing, and as a consequence hundreds of millions rushing back into poverty, starvation and death. Poverty is easily the biggest killer man has ever known. Nothing else comes close. This would ideally get more attention from the Times. Consider the newspaper's above-the-fold headline from last Monday: 'A Nation's Anguish As Deaths Near 200,000.' Really? One senses the headline writers don't even believe this. When old people die it's sad, and sometimes very sad. But it's rarely - if ever- a tragedy. Figure that death from old age is a very modern concept born of healthcare advances made possible by the very economic growth that politicians mindlessly snuffed out in their panic....It's sad when we lose our grandparents and old people more broadly, but it's tragic to read of people starving, and heart-wrenching to contemplate formerly productive workers sitting, waiting for customers; increasingly aware that what puts a roof over their heads will no longer. Proportion New York Times, proportion."

Millennials Are Trying To Shake The Stigma Of Moving Back In With Their Parents -BuzzFeed
"An analysis of monthly US Census data by the Pew Research Center reveals that a majority of young adults (ages 18 to 29) are now living with their parents - surpassing a record set during the Great Depression. These numbers have only increased as lockdown has ground on: The Pew poll says that 47% of young adults were living with at least one parent in February; that number climbed to 52% in July....I moved back in with my parents in April. As the pandemic spread, my world shrank. I saw the industries that sustained me start to erode, and I worried for my long-term financial standing. The coziness and solitude of my apartment curdled into a stale-aired echo chamber that only boomed with bad news. Then there was the fear for my parents, well into their seventies....At 38 years old, I was too old for that; wouldn't it seem sad? Moving home was for kids just out of college, who needed help as they launched into their own lives. I had my own life. Then, one afternoon, as I prepared yet another solitary meal, the news in the background announcing another milestone in deaths, my heart started jackhammering...The air cinched out of my throat. A panic attack. A clear sign I couldn't keep on keeping on alone. I called my mother. I asked if I could come home....Christie Kederian, a psychologist and licensed marriage and family therapist, said that, as older millennials have been moving back with their families, 'the previous notion of aiming to own a home by 30 and be independent has been replaced with survival mode.' Though 'survival mode' casts a grim image, Kederian suggests that there's a valuable opportunity: 'Our westernized society puts independence on a pedestal "¦ this new trend [can] teach millennials that it's OK to ask for help, to let go of the pressure to have your life look better on Instagram than it feels in real life, and to rid themselves of the microwave mentality that everything you want to happen in your life, all the dreams you want to achieve, have to happen before you're 40.'....I'm learning to let go of the expectations I had for myself before I showed up on my mother's front porch with a suitcase and a hope that this would all be temporary...My desires are smaller now: that I can keep everyone close to me safe and well; that I will not take my dinners alone, night after night. They may not be grand, but they must be enough."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 30, 2020


9.30.20 - Startling News About Trump's Economy

Gold last traded at $1,892 an ounce. Silver at $23.55 an ounce

NEWS SUMMARY: Precious metal prices steadied Wednesday amid rising uncertainty and a falling dollar. U.S. stocks rose as investors cheered growing hopes that politicians might reach a new $2 trillion coronavirus bailout agreement.

UBS says you should buy gold now -CNBC
"Investors should be putting their money in gold now, as it represents a 'very good hedge' ahead of risk events such as the U.S. election, UBS Global Wealth Management told CNBC. 'We like gold, because we think that gold is likely to actually hit about $2,000 per ounce by the end of the year,' according to Kelvin Tay, the firm's regional chief investment officer, on Tuesday. 'And gold has certain hedges to it,' Tay said. 'In (the) event of uncertainty over the U.S. election and the Covid-19 pandemic, gold is a very, very good hedge. And its recent weakness represents a great entry point for investors,' he added, speaking to CNBC's 'Squawk Box.'....The precious metal is also attractive due to the low interest rate environment, Tay pointed out. If interest rates stay low as the Fed has indicated, the opportunity cost of holding gold - a non-yielding asset - will be 'quite low,' he added. That's because investors are not forgoing interest that would be otherwise earned in yielding assets."

business U.S. Retail Bankruptcies, Store Closures Hit Record in First Half -Wall Street Journal
"Retail bankruptcies, liquidations and store closings in the U.S. reached records in the first half of 2020 as the Covid-19 pandemic accelerated industry changes, particularly the shift to online shopping, according to a report. In the first six months, 18 retailers filed for chapter 11 protection, mostly concentrated in apparel and footwear, home furnishings, grocery and department stores...They include department-store operators Neiman Marcus Group Ltd., J.C. Penney Co. and Stage Stores Inc., home-goods retailers Pier 1 Imports Inc. and Tuesday Morning Corp. and vitamin seller GNC Holdings Inc. From July through mid-August, 11 more retailers filed, including apparel retailers Lucky Brand Dungarees LLC, Brooks Brothers Inc., Ann Taylor parent Ascena Retail Group Inc., Stein Mart Inc., and Men's Wearhouse and Jos. A. Bank parent Tailored Brands Inc. This year is on pace to rival 2010, when 48 retailers filed for bankruptcy in the wake of the 2007-09 recession. Retail bankruptcies in 2020 have already surpassed the 22 such filings recorded last year. 'This is almost certainly the worst year in recent history for retail,' said Kyle Sturgeon, a managing partner at Atlanta-based turnaround advisory firm Meru LLC. Government-mandated store closures and social-distancing measures have intensified challenges that were facing bricks-and-mortar retailers before the pandemic....'I don't think it's going to stop anytime soon,' said Andy Graiser, co-president of commercial real-estate advisory firm A&G Real Estate Partners, who advises Tailored Brands, Ascena, Neiman Marcus and Stein Mart, among others....Shaky companies that make it through the holiday season might survive only to encounter landlords that had agreed to rent deferrals but now want payment in full. 'That's a huge bubble that is going to burst,' Mr. Graiser said."

The startling news about Trump's economy that mainstream media ignored -Puzder/Fox Business
"Released two weeks ago, the Census Bureau's report on 'Income and Poverty in the United States' for 2019 clearly shows that, pre-pandemic, President Trump's economic success blew past that of any other presidency. First, the Census Bureau reported that real median household income grew to $68,703 in 2019, an impressive 6.8% increase over 2018. It was the largest one-year increase in median income on record going back to 1967. It was also 45 percent more growth in a single year ($4,379) than Obama/Biden produced in their entire 8 years in office ($3,021). As was the case throughout Trump's first three years, the economic benefits were widespread. While the overall growth rate was 6.8%, real median income grew by an even greater 7.9% for Black Americans, 7.1% for Hispanic Americans, and 10.6% for Asian Americans. All record highs as were the new income levels for each of these groups....As incomes grew in 2019, the poverty rate plummeted 1.3 percentage points to a 60 year low of 10.5%. This was the largest reduction in poverty in over 50 years. It lifted over 4.1 million people out of poverty, the largest yearly decrease since 1966. Just for comparison purposes, over the Obama/Biden era, the number of people living in poverty increased by 787,000....The Census Bureau's Income and Poverty report for 2019 has set a new standard by which to measure economic success once the pandemic ends. President Trump has promised that the economy will exceed even the impressive results we saw in 2019 should he be re-elected. Given those results, we have every reason to believe him."

Why Nobody Cares Much about Trump's Taxes -National Review
"At Fox News, Howard Kurtz argues that the New York Times report on Donald Trump's taxes will affect the election 'barely at all.' 'These are eye-popping revelations, but most people won't wade through the details, which are complicated as hell. And even the Times doesn't claim that Trump broke any laws. He took advantage of a labrynth [sic] of legal deductions that are available to people who traffic in real estate and investments - unfairly, in my view, but that's the system approved by Congress.'....Americans are really quite tolerant of petty personal corruption in tax matters. Our tax code is complex and filled with giveaways to various political constituencies, and none of us is shocked to learn that a bartender or a waitress does not report 100 percent of cash tips for tax purposes. Is that tax fraud? Of course it is. Is it a crime? Yes. Does anybody care? No. But, for comparison, the tax avoidance attributed to Trump is, as far as I can tell, entirely legal. And let's not pretend that the Democrats are against tax giveaways to rich people...The stimulus measure that Trump exploited was in no small part a Joe Biden production. There are all sorts of ways around this stuff. The truth is that almost no one in either party wants to simplify the tax code or - here is the perverse part - to make it more effective."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 29, 2020


9.29.20 - Is It Insane to Start a Business During Coronavirus?

Gold last traded at $1,895 an ounce. Silver at $24.24 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks fell on downbeat airline news and an uptick in new U.S. coronavirus cases.

Could Gold Be Gearing Up For A Major Rally? -OilPrice.com
"Just before the COVID-19 collapse in the markets hit near February 25, 2020, Gold started a double-dip move after reaching $1,692 on February 24. First, Gold dipped from $1,692 to $1,564, then recovered to new highs ($1,704.50) on March 10, 2020. Then, as the deeper COVID-19 selling continued, Gold prices dipped again - this time targeting a low level of $1,450.90. What we found interesting is how quickly Gold prices recovered and broke to even higher price levels after this deep selling. Our belief is that when a crisis event first hits, which we sometimes call the 'shock-wave', all assets take a beating - including Gold and Silver. This is the event where traders and investors pull everything to CASH (closing positions). Then, as the shock-wave ends, traders re-evaluate the price levels of assets to determine how they want to deploy their capital. Our belief that this DIP or double-dip pattern in Gold because of crisis events presents a very solid opportunity for skilled traders to add-to existing positions or strategically target shorter-term upside price swings in precious metals....The question for gold traders right now is 'does the $1,885 level hold as support or will gold break lower trying to fund support?'. My researchers and I believe the current bottom in Gold is set up and the $1,885 price will hold as support. We also believe the next move higher will prompt a rally targeting levels near $2,250. Watch for the momentum base to continue to form near $1,885 before the breakout rally trend in Gold starts. Once it breaks the $2,035 level, it should start to rally upward very quickly."

debate Tonight's Debate Has "All The Makings Of A Classic To Rival The Rumble In The Jungle" -Zero Hedge
"First and foremost today, markets will be focusing on the first presidential election debate between Donald Trump and Joe Biden (at 9p EDT). This has all the makings of a classic to rival The Rumble in the Jungle between Foreman and Ali. Except in this case, almost everyone will be watching what they believe might be The Bungle in the (media) Jungle. Indeed, supporters of both candidates will be transformed into nervous parents at an expensive Ivy League prep school on the evening of their very young child's first-ever school play: rictus smiles and silent prayers as the curtain rises that their special one makes them proud rather than having a tantrum, forgetting their lines, falling asleep, or generally humiliating themselves. After all, neither man has a reputation for eloquence, remaining calm at all times, clearly getting their point across to neutrals, or remaining gaffe free. The expectations for Biden have been set extremely low - but he has been doing debates for 50 years, so there is bound to be some deep muscle memory there along with the 'I am the guy who"¦' and 'C'mon man!' and 'Malarkey' shtick. Trump has only had a few rounds of real debate in his life: against Clinton in 2016 and against his Republican rivals prior to that, and the shock jock routine is hardly new at this point. We already know what the debate topics will be...Yet that does not mean we won't be hearing about whatever each candidate feels will floor his opponent best, for example: Ukraine; Russia; China; problematic children; things said to or about soldiers; things said or done about the coronavirus; the Supreme Court; tax - and who wrote the tax code; a failure to provide decent healthcare options to millions of Americans; election fraud. Who said the country was divided, eh? Anyway world, sit yourself down, get your popcorn in, and let the spectacle unfold."

America on edge as unrest rises -Axios
"Rarely have national security officials, governors, tech CEOs and activists agreed as broadly and fervently as they do about the possibility of historic civil unrest in America. The ingredients are clear for all to see - epic fights over racism, abortion, elections, the virus and policing, stirred by misinformation and calls to action on social media, at a time of stress over the pandemic. Look across America this week: Portland, Oregon - already suffering from fires and protests - is bracing for a showdown today between right and left wing activists...President Trump was booed - with chants of 'Vote him out!' ' as he paid respects to Justice Ruth Bader Ginsburg on the Supreme Court steps....For the third night in a row, a revived racial-justice movement took to streets across the country to protest the lack of charges against police in the death of Breonna Taylor in Louisville. CNN showed demonstrations from L.A. to Sacramento to Philadelphia to Boston. The bottom line: Everyone from Facebook to YouTube to the U.S. military is taking precautions for post-election civil unrest exploding."

Is It Insane to Start a Business During Coronavirus? Millions of Americans Don't Think So. -Wall Street Journal
"The pandemic forced hundreds of thousands of small businesses to close. For Madison Schneider, it was a good time to start a new one. The 22-year-old in Haviland, Kan., opened Lela's Bakery and Coffeehouse on Sept. 12, naming it after her grandmother...Americans are starting new businesses at the fastest rate in more than a decade...Applications for the employer identification numbers that entrepreneurs need to start a business have passed 3.2 million so far this year, compared with 2.7 million at the same point in 2019, according to the U.S. Census Bureau. That group includes gig-economy workers and other independent contractors who may have struck out on their own after being laid off....'This pandemic is actually inducing a surge in employer business startups that takes us back to the days before the decline in the Great Recession,' said John Haltiwanger, an economist at the University of Maryland who studies the data. Many of these won't pan out. More than half of new employer businesses fail within five years, he said....The pace of new launches comes amid a wave of business closures, which created an unusually large void for new entrants to fill. The U.S. lost more businesses during the first three months of the crisis than it normally does in an entire year, said Steven Hamilton, an economist at George Washington University."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 25, 2020


9.25.20 - Fake Money Will Be the Cause of Dollar's Death

Gold last traded at $1,868 an ounce. Silver at $23.18 an ounce.

NEWS SUMMARY: Gold prices see pullback Friday on a stronger U.S. dollar. Stocks wavered as worries grow over the economic outlook, S&P and Dow on track for four-week losing streak.

Gold, silver bulls working to stabilize prices -Kitco
"Gold prices prices are trading near their session highs at midday, suggesting the bulls are working hard to stabilize their markets. A rallying U.S. dollar index recently that hit a two-month high overnight....Not quite half-way through the 'rough waters' period (September and October) for the stock market, it seems odds do not favor a strong recovery to new record highs in the U.S. stock indexes. It's also a period when North Americans and Europeans will be staying inside more as colder weather approaches, with the potential for new Covid restrictions on businesses crimping their revenues. And there is no new financial stimulus package for Americans in sight. Throw in the element of the high potential for a disputed and even protracted U.S. presidential election result (President Trump said Wednesday the presidential election in November will likely be decided by the Supreme Court), and all of the above should favor trader/investor demand safe-haven assets like gold, silver, the U.S. dollar and U.S. Treasuries."

powell Fake Money Will Be the Cause of Death for the U.S. Dollar -Bonner/Rogue Economics
"No pure-paper money has ever lasted for an entire credit cycle. The dollar will not be the first to rest among the shades. In the meantime, we will watch its inevitable decline and fall - probably the biggest financial story of the next 10 years. Because down with the dollar comes the whole U.S. capital structure - stocks, bonds, debt, credit, pensions, insurance payouts, Social Security, Medicare, the empire"¦ the whole shebang. But we are not at the end of this story. We are only at the beginning of the end. Between the coronavirus pandemic, the debt, the Federal Reserve's falsification of interest rates, the fake dollar, and the giveaways, the U.S. economy may already be in a perpetual recession. And the feds are determined to fight it with printing-press money....The feds only have one quack medicine - printing-press money. And they're going to stick with it, whether it works or not. At first, the extra money has little effect. Fearful of layoffs and bankruptcies, people hoard cash. That is what is happening now. People are not spending their money, they're hoarding it....This is what happens in the first stage of the last stage....For the first 189 years of the Republic, the economy grew strongly, with not even a hint of the magic elixir (setting aside the War Between the States, when both sides did print money"¦ and subsequently fell into recession). It wasn't until 1999 - more than 200 years after the dollar was introduced - that the Fed began administering large doses of fake money. And then, it added $6.4 trillion to its balance sheet"¦ as growth rates fell. Fake money is the poison that will eventually put the dollar in its grave."

Are Your Retirement Savings in the Government's Crosshairs? -American Consequences
"America's national debt has soared more than $4 trillion this year alone. It now totals $26.7 trillion. That's $81,000 for every man, woman, and child. It's an astronomically large figure. And it could be paid off tomorrow if the U.S. government raided one of the biggest pools of capital on earth...Right now, Uncle Sam can get all the money he requires with a few keystrokes at the Federal Reserve....The U.S. dollar is in the last inning or two of its dominance of the global financial system...There may come a time - sooner than you think - that the dollar falters....America's total unfunded liabilities stand at $154 trillion. Faced with a still-escalating debt burden, the U.S. government might then go 'where the money is' - to paraphrase 1930s bank robber Willie Sutton, when asked why he robbed banks. One very obvious destination: the $28.7 trillion in Americans' retirement assets, including around $8.3 trillion in individual retirement account ('IRAs') and in employer-sponsored 401(k) plans, according to the Investment Company Institute. It wouldn't be difficult for the U.S. government to gets its hands on your retirement assets. We can hope that this never happens. But it's far better to be prepared....What can you do to protect yourself? ....One way to keep your retirement assets away from Uncle Sam is to buy silver, gold, and other precious metals."

It's Time to Celebrate Historic Middle East Peace Agreement -Wicker/Vicksburg Post
"It is always an important day when the Israeli Prime Minister visits our nation's capital, but his arrival at the White House on September 15 was something truly momentous. Hosted by President Trump, the Prime Minister signed a historic peace deal with leaders from two Arab nations - the United Arab Emirates (UAE) and Bahrain. This agreement, known as the Abraham Accords, is the first Arab-Israeli peace deal to be signed in more than 25 years. It is especially significant given that only two Arab countries had previously recognized the Jewish state. This agreement strengthens Israel's standing among Arab nations and gives Israel new economic partners in the region. This landmark achievement makes possible a new era of Arab-Israeli cooperation. It paves the way for other countries, like Saudi Arabia and Oman, to follow suit and recognize Israel. Such a development would have been impossible to imagine a generation ago, when memories of the Six-Day War and Yom Kippur War were still fresh. In both conflicts, Israel was surrounded by enemies but emerged victorious....President Trump deserves praise for bucking the conventional wisdom and brokering this deal. For decades, many analysts argued that Israel would have to strike a deal with Palestinian leaders before peace could be achieved in the region....President Trump brought a fresh approach to the situation. Instead of undermining Israel, he boosted Israel by moving the American Embassy to Jerusalem and recognizing the Golan Heights as Israeli territory. These actions strengthened Israel's position and sent a message that the Jewish state was not going anywhere. This signal encouraged the UAE and Bahrain to come to the table and negotiate a durable peace."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 24, 2020


9.24.20 - JPMorgan to pay almost $1 billion fine

Gold last traded at $1,865 an ounce. Silver at $23.05 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Thursday despite a firmer dollar. U.S. stocks gyrated as traders weighed the latest batch of economic data and tech tried to recover from its recent losses.

JPMorgan to pay almost $1 billion fine for manipulation of metal and Treasuries markets -CNBC
"JPMorgan Chase is close to paying almost $1 billion to resolve government investigations into the alleged manipulation of metal and Treasurys markets, according to a person with knowledge of the matter. A settlement between New York-based JPMorgan and several U.S. agencies could come as soon as this week, according to Bloomberg...A penalty of that size would be a record for spoofing, which is when sophisticated traders flood markets with orders that they have no intention of actually executing. The practice was banned after the 2008 financial crisis and regulators have made it a priority to stamp out. While JPMorgan may be forced to admit wrongdoing in the settlement, the deal isn't expected to result in business restrictions on other areas of the firm. The case was revealed in September 2019 when a 14-count criminal indictment against three current or former JPMorgan employees, including the global head of base and precious metals trading, was unsealed. The indictment alleges the traders, along with eight unnamed co-conspirators who worked at JPMorgan offices in New York, London and Singapore, participated in a racketeering conspiracy in connection with a multiyear scheme to manipulate the precious metals markets and defraud customers....They each were charged with one count of conspiracy under the RICO Act, which historically has been used in mafia prosecutions, as well as other federal crimes in connection with manipulating precious metals futures markets."

liberty Liberty or Lockdown -Tucker/AIER
"For most Americans, the Covid-19 lockdown was our first experience in a full denial of freedom. Businesses forced closed. Schools, padlocked. Church, same. Theaters, dead. We were told to stay home, risking fines if we leave and jail if we don't pay. We couldn't travel. Separated from loved ones. This job is essential, this one is not. This surgery is cancelled, this one is not. You want a visitor from abroad? Forget it. The neighboring state? Only with a two-week quarantine....We were forced to spend day after day under effective house arrest, spinning aimlessly in this small and unwelcome world of captivity, wondering about big things previously unconsidered: why has this happened to me, what has gone wrong, why am I here, when will it end, what are my goals, what is the purpose of my life?....I've been writing about pandemics and liberty for 15 years. I knew from 2005 that there were plans in place for mass quarantines. I knew from 2006 that there were fanatics out there who imagined that they could use the power of the state to suppress a virus by suppressing our freedoms. The plans were on the shelf and I wrote to warn that it was conceptually possible. Even so, I really never imagined that such would be tried. Why and how did it happen?....The politicians panicked. They feared being blamed for any and all deaths from this one virus while forgetting other ailments. The Covid-19 fear drove out every other consideration. It was madness but it was only supposed to last a couple of weeks until it turned out to last six months and longer. Why didn't we revolt? Part of the reason was that most of us were in shock. We had to believe that there was some good reason, some rationale, for these policies. But as the weeks and months rolled on, the terrible truth began to dawn on more people. This was all for naught. We destroyed the country, and much of the world, and everything people had worked hard for centuries to build, to try out something that had never been tried before. It didn't work. The virus took its own path. And today we are left with this wreckage. As I type today (September 1, 2020), I'm feeling ever vindicated by the research, and ever more optimistic that we are going to get through this, the world will open up again, and we can begin the rebuilding. The work that is before us is not only national, institutional, and economic. It is also psychological. Our lives have been shattered in incredible ways....How do we come back from this? By reflecting, learning, and acting on the promise of renewal. It can happen, but only once we fully come to terms with the stark choice between liberty and lockdown. Liberty is right and it works. Lockdown is wrong and it does not. It's not complex but it takes courage and determination to live out that principle. The United States was founded on the principle of liberty as a right. We must reclaim that. We must work to take away lockdown discretionary power from our leaders. And we must reclaim confidence and hope in the future."

Fed Preparing To Deposit "Digital Dollars" Directly To "Each American" -Zero Hedge
"Over the past decade, the one common theme despite the political upheaval and growing social and geopolitical instability, was that the market would keep marching higher and the Fed would continue injecting liquidity into the system. The second common theme is that despite sparking unprecedented asset price inflation, prices as measured across the broader economy - using the flawed CPI metric and certainly stagnant worker wages - would remain subdued. The Fed's failure to reach its inflation target - which prompted the US central bank to radically overhaul its monetary dogma last month and unveil Flexible Average Inflation Targeting (or FAIT) whereby the Fed will allow inflation to run hot without hiking rates....In short, ever since the Fed launched QE and NIRP, it has been making the situation it has been trying to 'fix' even worse while blowing the biggest asset price bubble in history....And yet, the lament is that even as the economy was desperately in need of a massive liquidity tsunami, the funds created by the Fed and Treasury did not make their way to those who need them the most: end consumers....Two former Fed officials: Simon Potter, who led the Federal Reserve Bank of New York's markets group i.e., he was the head of the Fed's Plunge Protection Team for years, and Julia Coronado, who spent eight years as an economist for the Fed's Board of Governors...propose creating a monetary tool that they call recession insurance bonds, which draw on some of the advances in digital payments, which will be wired instantly to Americans. As Coronado explained the details, Congress would grant the Fed an additional tool for providing support - say, a percent of GDP to households in a recession...The Fed would then activate the securities and deposit the funds digitally in households' apps....This morning, as if to confirm our speculation of what comes next, Cleveland Fed president Loretta Mester delivered a speech to the Chicago Payment Symposium titled 'Payments and the Pandemic'...And in the shocking punchline reveals that legislation has proposed that each American have an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.'...The Fed would then be able to scrap 'anonymous' physical currency entirely, and track every single banknote from its 'creation' all though the various transactions that take place during its lifetime....Absent a massive burst of inflation in the coming years which inflates away the hundreds of trillions in federal debt, the unprecedented debt tsunami that is coming would mean the end to the American way of life as we know it."

Stock market 'great speculation,' save cash -Diller/CNBC
"Billionaire media mogul Barry Diller on Tuesday urged investors to maintain sizable cash positions following the stock market's robust rally from coronavirus-induced lows in late March. 'Personally, and professionally, every nickel you can, keep it ... wherever it's banked,' the chairman of both Expedia and digital media group IAC said on CNBC's 'Squawk Box.'....'I think the market right now is a great speculation, I would stay home.' Diller is far from the first to express skepticism about the stock market's pandemic recovery....Some, such as billionaire investor Michael Novogratz, have suggested the pullback represents the end of a 'speculative frenzy.'....Should the former vice president defeat Trump, Diller said he expects there to be an initial 'downdraft' in the stock market as Wall Street braces for potentially higher taxes both on corporations and capital gains in a Biden administration."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 23, 2020


9.23.20 - Gold May Hit Record Before Year-End

Gold last traded at $1,858 an ounce. Silver at $22.69 an ounce.

NEWS SUMMARY: Precious metal prices fell to 2-month lows Wednesday on profit-taking and a firmer dollar; offering a excellent buy-the-dip opportunity. U.S. stocks extended losses, led by big tech stocks, with the major indexes down between 4% - 6.9% so far in September.

Gold May Hit Record Before Year-End on U.S. Election Risk -Citi/Bloomberg
"Gold could hit a record before the year-end, aided in part by the risks surrounding the U.S. presidential election, according to Citigroup Inc. Uncertainty over the contest and delays about the outcome may 'be under-appreciated by precious metals markets,' analysts including Aakash Doshi said in a quarterly commodities outlook. The bank's forecast implies a surge of more than $200 for bullion futures from current levels. Gold rallied to an all-time high last month as investors sought havens amid the coronavirus pandemic, but prices have slipped back since then. Citi's outlook reflects rising investor concern about the battle for the White House that pits incumbent Donald Trump against challenger Joe Biden. The already complex race has acquired added tension with Trump's plan to speedily replace the late Justice Ruth Bader Ginsburg on the U.S. Supreme Court. The election 'could be an extraordinary catalyst for gold prices and volatility skew late in the fourth quarter, even though historically there is no clear pattern for gold trading or price volatility into and after U.S. elections,' Citi said,. 'That is one reason why we expect gold prices to hit fresh records before year-end.'"

stimulus After the Stimulus Binge, Brace for a Crash -Tuccille/Reason
"As anybody who has ever snorted a few lines of white powder to enhance an evening knows, there is a price to be paid for that artificial energy. The short-term boost is followed by a crash of longer duration. Well, America, get ready for a hell of a hangover. According to the Congressional Budget Office (CBO), the federal government's recent stimulus spending - intended to offset the economic distress caused by voluntary social distancing and, especially, by mandatory lockdowns - is bound to be followed by an epic crash. In a report published September 18, the CBO looks at the impact of four federal laws that are supposed to reduce the pain of social distancing as well as forced business closures and resulting job losses....By increasing debt as a percentage of GDP, the legislation is expected to raise borrowing costs, lower economic output, and reduce national income in the longer term....'The increases in federal expenditures and the reduction in government revenue are being financed almost exclusively by borrowing and will push the federal debt to $30 trillion sometime during 2021,' warned James D. Gwartney, a professor of economics and policy sciences at Florida State University. 'Interest rates will inevitably rise at some point, and the additional interest cost will have to be covered by either higher taxes or money creation. The former will slow future economic growth, while the latter will be inflationary.'....The latest spending binge was irresistible for elected officials who need slight excuse for their compulsive behavior...America got its short-term boost from stimulus checks. We'll have plenty of opportunity to decide in the years to come whether it was worth the inevitable comedown."

Covid-19 vaccine resistance grows -Axios-Ipsos Poll
"The share of Americans eager to try a first-generation coronavirus vaccine dropped significantly in the latest installment of the Axios-Ipsos Coronavirus Index...As the U.S. reaches a milestone of 200,000 deaths, this underscores the risks of politicizing the virus and its treatments. The trend is taking place among Republicans as well as Democrats. It's another warning of the potential difficulties health authorities will face in convincing enough Americans that a vaccine is safe and effective....Americans don't see the vaccine as a silver bullet right now....Only 9% now say they're 'very likely' to take the first-generation vaccine, down from 17% in August; 33% say they're 'not at all likely' to take it, up from 26%....13% would try to get it immediately; 16% would get it after a few weeks, 18% said they'd likely wait a year or more and 23% said they wouldn't get it at all."

Older people have become younger -UofJ Research
"The functional ability of older people is nowadays better when it is compared to that of people at the same age three decades ago. This was observed in a study conducted at the Faculty of Sport and Health Sciences at the University of Jyvaskyla, Finland. The study compared the physical and cognitive performance of people nowadays between the ages of 75 and 80 with that of the same-aged people in the 1990s. 'Performance-based measurements describe how older people manage in their daily life, and at the same time, the measurements reflect one's functional age,' says the principal investigator of the study, Professor Taina Rantanen. Among men and women between the ages of 75 and 80, muscle strength, walking speed, reaction speed, verbal fluency, reasoning and working memory are nowadays significantly better than they were in people at the same age born earlier. In lung function tests, however, differences between cohorts were not observed. 'Higher physical activity and increased body size explained the better walking speed and muscle strength among the later-born cohort,' says doctoral student Kaisa Koivunen, 'whereas the most important underlying factor behind the cohort differences in cognitive performance was longer education.'....The results suggest that increased life expectancy is accompanied by an increased number of years lived with good functional ability in later life. The observation can be explained by slower rate-of-change with increasing age, a higher lifetime maximum in physical performance, or a combination of the two....'The results suggest that our understanding of older age is old-fashioned. From an aging researcher's point of view, more years are added to midlife, and not so much to the utmost end of life."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 22, 2020


9.22.20 - Covid Upends Middle-Class Families

Gold last traded at $1,906 an ounce. Silver at $24.47 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday following short-term profit-taking and a firmer dollar. U.S. stocks traded mostly lower despite upbeat tech news and ongoing support statements from the Fed.

Generational buying opportunity in gold and silver? -FX Street
"We at Elliott Wave Forecast recently hosted a Free Seminar. The topic of the seminar was 'Generational Buying Opportunity in Gold and Silver?'. We analyze and talk about the outlook of Gold, Silver, and Miners. In the seminar, we explain why the break to all time high in precious metal against US Dollar is likely not a terminal move and much more upside can be expected in years to come. We also explain why Silver has potential of even more upside due to Gold to Silver Ratio pulling back from all-time high. The monthly chart of the precious metal above suggests more upside expected to reach at least $2970 - $3428 area in coming years. This target is based on the 100% extension from all-time low. It's also the most conservative target assuming a zigzag structure from the all-time low. The rally can see a lot more than this target area if it becomes an impulse."

stocks Investors fasten your seat belt for push to year end -Briefing
"Will it be November or December? That's the question many have on their mind as it relates to the announcement of a COVID vaccine. It's also the question many have on their mind as it relates to knowing the outcome of the presidential election. There is no telling right now what the final answers will be for these huge issues, so investors should probably fasten their seat belts. The remainder of the year could be quite a thrill ride....The S&P 500 is up 3.4% for the year as of this writing. The Nasdaq, however, is up 20.6%. The kicker is that both were up by much larger amounts only a few weeks ago (S&P up 11.1% and Nasdaq up 34.6%) and trading at record highs....The path to a strong earnings rebound has also been paved with the expectation that the arrival of a COVID vaccine will restore economic order. One can't help but wonder, though, if a market trading at 21.7x forward twelve-month earnings hasn't already accounted for this outlook. The rest of this year, which we would all like to forget, has a lot to offer still in terms of potential volatility events. The timing of a COVID vaccine is one such event, which is not to be confused with the possibility of a second wave of the coronavirus before any such vaccine arrives. Other potential volatility events include diplomatic wranglings with China, the loss of upward momentum in the mega-cap stocks, the standoff in Congress regarding another coronavirus relief bill, and what is shaping up to be a divisive presidential election along political, social, and economic lines....In brief, we see a trader's market unfolding over the next several months, as volatility should be elevated."

The 2020 Housing Boom Is A Perilous Economic Signal -Tamny/Forbes
"A recent column by CNN markets reporter, Paul La Monica. He wrote of housing as an 'undeniable bright spot' that's 'holding up' the U.S. economy. La Monica gets it backwards. Housing is consumption...Nothing against putting a roof over one's head, but the simple truth is that housing is not investment. While the act of saving expands the capital base for entrepreneurs eager to change how we do things, the purchase of housing logically shrinks it....So what's driving the economy-sapping rush into consumption over investment? An obvious clue would be the dollar. The dollar is weak. When it's in decline there's a natural rush into the consumption of hard assets least vulnerable to the dollar's decline....We're scarily seeing a repeat of the 1970s and 2000s when a falling dollar made housing the top asset class. Worse is that top realty executives are starting to exhibit hubris. Recently one exulted that housing supply at present is like the supply of 'toilet paper' back when the lockdowns began. Oh dear"¦.Those in the realty business mistakenly believe that housing consumption drives the economy. So does La Monica. Both are incorrect....Housing's exuberance is a perilous sign, not a positive one."

No Job, Loads of Debt: Covid Upends Middle-Class Family Finances -Wall Street Journal
"Millions of Americans have lost jobs during a pandemic that kept restaurants, shops and public institutions closed for months and hit the travel industry hard. While lower-wage workers have borne much of the brunt, the crisis is wreaking a particular kind of havoc on the debt-laden middle class....The coronavirus has spared few industries and expanded unemployment benefits designed to replace the average American income didn't cover all the lost pay of higher-earning workers, especially in or near expensive cities. The extra $600 weekly payments expired in July, putting them even further behind. 'What I see happening here is a core assault on successful college-educated families, which are the new breed of middle-class American families,' said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. 'There's a professional workforce that's getting slammed.' Roughly six months into the pandemic, many lenders that let borrowers skip monthly payments now expect to get paid again. They have set aside billions of dollars to cover potential losses on soured consumer loans - an acknowledgment that America's decadelong debt binge has come to an end....'The pain so far in the economy has largely been at the lower end of the pay scale,' said Discover Financial Services Chief Executive Roger Hochschild, adding that many of 'the white-collar layoffs are still to come.'....Postings for jobs with salaries over $100,000 were down 19% in August from April, while postings for all other salary categories increased, according to job-search site ZipRecruiter Inc....America's biggest banks have indicated they are preparing for a protracted downturn to hurt businesses in industries that weren't immediately affected by shutdowns....Many people who have jobs are struggling with pay cuts. As of August, 17 million workers were getting paid less due to the pandemic, said Mark Zandi, chief economist at Moody's Analytics. Some 9.5 million took pay cuts; the remaining 7.5 million are working fewer hours, he said."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 21, 2020


9.21.20 - Capitalism's Ten Commandments

Gold last traded at $1,909 an ounce. Silver at $24.42 an ounce.

NEWS SUMMARY: Precious metal prices traded sharply lower Monday as investors scrambled for liquidity to cover stock market margin calls. The September sell-off continues with U.S. stocks plunging another 2-3% on fears about the worsening coronavirus as well as uncertainty on further fiscal stimulus.

A lot of capital waiting to jump into the gold market -Incrementum/Kitco
"Gold's current consolidation period is helping to remove some froth from the market, letting sentiment catch from the strong momentum seen this past summer that push prices to $2,000 an ounce, according to one fund manager. Although gold is caught in a trading range between $1,900 and $2,000, Ronald-Peter Stoeferle, managing partner of Incrementum and an author of the annual In Gold We Trust report, said that it is only a matter of time before prices push higher because there is so much capital on the sidelines just waiting to jump into the gold market. According to Mr. Stoeferle, 'Gold is in a stealth bull market with prices rising in every currency. The gold-to-silver ratio falling is another bullish sign for gold.'"

snake Expect Persistent High Market Volatility -Merkel/Aleph Blog
"When valuations are high, volatility is typically high as well. When interest rates are low, volatility also is high. Why? A situation has been set up by the functional equivalent of the 'Wizard of Oz' where small changes to interest rates or economic activity will have big impact on stock prices. And so I am telling you, be ready for whippy markets. The sorcerer's apprentices at the Fed, gamely trying to cover for their bosses (Congress) who have no coherent idea of what to do, will keep short-term, high-quality interest rates low. And that's fine, not, as even the slightest variation in wording will make economic agents jumpy. When markets are priced to perfection, even the slightest breeze makes the branches at the top of the tree move hard. My advice to you is simple. Run a balanced portfolio, and resist the trends. Buy low, sell high. Sell to the greedy, and buy from those who panic....The purple party controls DC, and all they do is run huge deficits and ask the Fed to monetize them via expanding bank credit. Would that we could vote them all out of office, balance the budget on an accrual basis, and link the dollar to gold. We are going to have some significant disaster out of the current policy, but I can't tell what kind of disaster will come."

The Ten Commandments of Capitalism -Sass/The Economic Standard
"Those of us who are committed to a better world for all know that capitalism (i.e., a system of free enterprise based on private property and rule of law) is the only path forward. In The Ten Commandments of Capitalism: The Secret Recipe for Equitable Prosperity, Ralph Benko provides a concrete set of guidelines to preserve and enhance capitalism for the sake of equitable prosperity....Benko rightly argues that whether or not we choose to provide citizens with generous public services, we must first be committed to the ongoing benefits of wealth creation...Both the Nordic and Singaporean models of capitalism have been demonstrated, repeatedly, in practice to support the general welfare. Socialism, in the dozens of instances it has been tried, has degraded the general welfare. The rise of 'socialism' as a political identity is rightly horrifying to anyone who knows anything about the 20th century....If we follow Benko's advice, we can look forward to a U.S. in which our entire society is incredibly prosperous for all....In combination with entrepreneurial initiative in education and healthcare, Benko's Ten Commandments of Capitalism will allow all Americans to lead meaningful, productive lives. It will also allow the United States to remain the most important moral influence in the world....The two primary concerns of those who traditionally identify as 'left,' generous social benefits and environmental protections, are both fully supported by Benko's 'Ten Commandments.' Benko is focused on ensuring that we continue to have the prosperity needed to provide a generous social safety net and pristine environment....We are in the midst of a historical moment in which 'socialism' as a rallying cry is more prevalent than it has been since the fall of the Soviet Union. We should be focused on how to create equitable prosperity through free enterprise."

Get Ready for an Election Crisis -Noonan/Wall Street Journal
"Between bitter division and massive mail-in balloting, a normal vote would be a miracle. Let's talk about the terrible time America might be in for in the days and weeks, maybe months, after the election. It starts with what is known: On election night we probably won't know who won the presidency. The event we've been hoping would resolve things instead may leave them more mysterious....In 2016 about 25% of voters voted by mail. This year it may be more than twice that. Meaning more than half of all ballots. It may be days or weeks before we know the mail-in results....Another wrinkle. Republicans seem to prefer voting in person, and Democrats by mail...Because of this it's possible that on election night there could be what looks like a solid margin in favor of President Trump, especially in the states that will decide the election....The waiting will require patience and trust. That's not, as we know, the prevailing political mood. We are riven and polarized. 'It is my greatest concern,' Joe Biden has said. 'This president is going to try to steal this election.' Mr. Trump: 'They're trying to steal the election from the Republicans.'....'Postelection through to the inauguration, we have a real danger zone,' says Larry Sabato, the great veteran director of the University of Virginia's Center for Politics. There will be charges and countercharges, rumors, legal challenges. There will be stories - 'My cousin saw with her own eyes bags of votes being thrown in the Ohio River.' Most dangerously there will be conspiracy theories, fed by a frenzied internet....The Electoral College meets Dec. 14. There, Mr. Sabato notes, it's possible there could be a 269-269 tie. There is also the issue of so-called faithless electors, who could deny the winning candidate a majority....What a crisis - including a constitutional crisis - may be coming down the pike."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 18, 2020


9.18.20 - Gold Set to Soar on Dovish Fed

Gold last traded at $1,961 an ounce. Silver at $27.08 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday amid growing stock market volatility and a weaker dollar. U.S. stocks traded mostly lower led by weakness in tech shares and investor option-contract expirations.

Gold prices set to soar as Fed signals years of low interest rates -Fox Business
"Gold prices are set to spring higher after more than a month of moving sideways, according to one analyst. Drivers include a positive technical backdrop and the likelihood of sustained low interest rates in the world's largest economies that may prompt investors to seek better returns in other 'safe haven' investments. Gold has 'worked off the momentum, sentiment and positioning extremes seen at the peak and looks set to resume its uptrend' wrote Laurence Balanco of Hong Kong-based capital markets and investment group CLSA Ltd....'Price action is now pricing the apex of this pattern, and something has to give,' Balanco wrote. He thinks a close above $1,966.60 would confirm a breakout to the upside that targets $2,185 to $2,200, up as much as 12% from the $1,960.20 where the precious metal settled on Wednesday....'We would look at adding new long gold positions,' Balanco said."

2021 Yes, 2021 Could Be Worse -Wright/AIER
"I notice lots of folks on social media pining for 2021. Don't kill the messenger, but 2021 could be much worse than 2020. But how? Covid-19 came close to causing a legitimate crisis only in the New York City area and there only with 'help' from Governor Cuomo's kill people in nursing homes policy...Moreover, death counts have been confusing, with documented instances of people dying in motorcycle accidents and from terminal cancer being counted as Covid-19 fatalities....In short, although the virus is less deadly than at first, and treatments have improved (for example by not putting people on those ventilators we so desperately thought we needed back in March with such alacrity), and the disease appears to have run its course in much of the country, politicians and the media continue to stir up uncertainty, which they use to stoke fear in the public, and continued compliance with government dictates, school closings, and such....America has a long history of riots that make even looted retail stores, torched buildings, and occupied police precincts appear like a walk in the park by comparison. With so much at stake in the Presidential election due to our inability and unwillingness to curb the federal government's power, both sides have incentives to rile up their bases when one or the other side loses this November. Where it ends, nobody knows, but the historical precedents are frightening....Imagine 2020's murder hornets, Covid-19 lockdowns, urban riotish uprisings, and such but with enemy aircraft overhead and missiles inbound because we are also at war with Iran. Or China. Or Russia. Or North Korea. Or all of them....Normally, countries do not want to throw down against the United States, which has proven its willingness and ability to invade, occupy, and generally ruin countries no matter how many trillions of dollars it takes. But it isn't clear that Uncle Sam has trillions to spare anymore...Moreover, America's rulers might be interested in fomenting a war about now to distract from domestic difficulties. They are likely under the silly misapprehension that war is 'good for the economy.'"

Dollar Weakness Or Dollar Crash? -Zero Hedge
"The Dollar has shown weakness during the second and third quarters, with the trade-weighted Dollar Index falling from a high of almost 103 in March to a low of 92 at the end of August...These moves correspond roughly to a 10% depreciation of the Dollar. With trade tensions looming in the background, any move in currency markets can quickly have political repercussions: the Treasury Department monitors exchange rates for evidence of manipulation by foreign governments. In 2019, it designated China a currency manipulator. As a direct result of the Dollar's weakness, the next report in October is likely to have to mute its criticism of foreign countries' policies designed to keep their own currencies weak. At the same time, the weak Dollar helps to boost U.S. exports and create jobs, just in time for the election. Effectively, the weak Dollar is a form of monetary stimulus. This is precisely the effect President Trump has repeatedly mentioned since taking office. No matter the outcome of the November election, the next administration will have no incentive to talk up the Dollar while the economy is still suffering from the Covid slump....Since the dollar started weakening, the Bank of China has allowed the Yuan to strengthen against the dollar, thereby reversing some of the tariff-offsetting exchange rate moves. This may be an early indication that degloblization is in full swing and that exports to the Dollar block are no longer a priority for China's central planners."

The Real Cost of Biden's Plans -Mulligan/Wall Street Journal
"Presidential candidate Joe Biden has pledged that his administration will impose no new taxes on Americans making $400,000 or less and that there will be 'no raising taxes . . . on mom and pop businesses.' Both his policy platform and his record belie that promise. During their first campaign for the White House, the Obama-Biden ticket 'firmly' pledged that 'no family making less than $250,000 a year would see any form of a tax increase.' They soon pushed through the Affordable Care Act, which included a tax penalty for failing to purchase health insurance, paid primarily by people earning less than $50,000 annually....Today Mr. Biden takes a similarly veiled approach to advancing the 'clean energy revolution and environmental justice' outlined in his platform. Instead of using a carbon tax, which would use market forces to reduce the economic damage but also obviously violate his tax pledge, he would apply the force of regulation. He aims, for example, to eliminate emissions for passenger vehicles, which would make buying a new car thousands of dollars more expensive. As President Trump is apt to explain, regulations are 'stealth taxation, especially on the poor.' The poor would suffer most under Mr. Biden's platform...The biggest bite would come in diminished purchasing power due to higher prices for energy, cars and other consumer....Not only has Mr. Trump removed hundreds of regulations that Mr. Biden is inclined to resurrect; the president has also slowed the pace of new rules compared with prior administrations....None of this should be a surprise. An active regulatory state is a playground for the privileged class to indulge its own preferences at the expense of ordinary Americans."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 17, 2020


9.17.20- The Federal Reserve is "Dr. Evil"

Gold last traded at $1,944 an ounce. Silver at $26.92 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on mild profit-taking and a firmer dollar. U.S. stocks dropped as the technology sector declined amid conflicting reports of a coronavirus vaccine timeline.

Gold rises as investors bet on dovish U.S. Fed stance -Reuters/Yahoo Finance
"Gold prices rose on Wednesday, helped by a subdued dollar as investors bet on dovish monetary cues from the U.S Federal Reserve when it announces its policy decision later today. 'What we're probably seeing building in gold here is the expectation that the Fed is going to be more dovish than in the past, and the realization that we're seeing slightly more inflationary pressure than anticipated,' said OANDA analyst Craig Erlam. While the Fed does not need to announce stimulus measures now, it will have to lay the groundwork for potential stimulus later, he added. Making bullion more attractive for those buying the metal in other currencies, the dollar index fell in the run-up to the Fed decision....Lower U.S. interest rates tend to weigh on bond yields and the dollar, bolstering the appeal of non-yielding gold, which is also seen as hedge against inflation and currency debasement."

the fed The Fed is Dr. Evil -Grossman/Trish Intel
"The Fed has two primary jobs, a dual mandate, full employment, and price stability. The first they take really seriously. No one really wants to see people unemployed and, at least until Covid-19 and PPP, not too many people really wanted to be unemployed. Inflation, on the other hand, has been more of an annoyance, a whipping boy that has been used to justify any and all monetary policies designed to foster growth and employment....The Fed has favored excess monetary accommodation for over twenty-five years. It has been a progressive march to lower and lower interest rates and asset purchase policies that flood the banking system, the capital markets and the economy at-large with staggering amounts of liquidity....I have long argued with central banks and economists that their theory breaks down as rates drop towards zero and massive asset purchase programs are implemented....First, central banks bought government securities, then mortgages, then high-grade corporate bonds, and now even low investment-grade securities and equities are considered fair game. Our central banks, rather than being the lenders and liquidity providers of last resort, are now subprime lenders and hedge funds. They are now the casino telling the gamblers to throw caution to the wind and go all-in....The real beneficiary of this deluge of monetary accommodation has been to push asset prices to extraordinary levels. While this may feel good if you own a lot of stock, it comes with a lot of attendant baggage. As noted, it distorts virtually all aspects of financial and economic decision-making. It distorts and destabilizes....The Fed has used equities as a measure and tool of monetary policy, although they won't acknowledge it, believing that higher asset prices stimulate consumption and other economic variables...It is probably too late, but central banking needs to go back to its more traditional roots. Provide a framework that encourages the best long-term economic outcomes, tying return to risk, and staying out of the private sector."

Ray Dalio Warns of Threat to Dollar as Reserve Currency -Bloomberg
"The dollar's decades-long position as the global reserve currency is in jeopardy because of steps the U.S. has taken to support its economy during the Covid-19 pandemic, according to Ray Dalio, founder of hedge fund giant Bridgewater Associates. While equities and gold benefited from the trillions of dollars in fiscal spending and monetary injections, those efforts are debasing the currency and have raised the possibility that the U.S. will go too far in testing the limits of government stimulus, Dalio said Tuesday in an interview with Bloomberg Television. 'There is so much debt production and debt monetization,' Dalio said. The Bloomberg Dollar Spot Index has dropped 10% from its peak in late March as investors responded to the pandemic and efforts by central bank and government officials to contain the economic fallout. All of the world's major developed currencies have gained against the dollar as have precious metals such as gold, silver and platinum. Dalio said in July that investors should favor stocks and gold over bonds and cash because the latter offer a negative rate of return and central banks will print more money. Bridgewater has been moving into gold and inflation-linked bonds in its All Weather portfolio, diversifying the countries it invests in and finding more stocks with stable cash flow."

America's Wealth Gap Grows in the Post-COVID-19, K-Shaped Economic Recovery -Bonner/Rogue Economics
"Readers hoping for a V-shaped recovery, with a quick return to 'normal,' are already searching the alphabet for alternatives. 'K' is probably the best bet, with some doing better than ever, but the rest on a downward track. Which direction you go depends mostly on which economy you are in - the new one"¦ or the one being left behind....For 'knowledge workers' - no matter how ignorant - the COVID lockdown posed little trouble. Lawyers, architects, accountants, analysts, bureaucrats, clerks, marketers, designers - millions of office rats were able to simply move their offices to their nests. There, with no need to commute, no gasoline to buy"¦ no donuts and coffee to pick up on the way to work, and no lunches out"¦ they found themselves better off. Savings rates tripled. Meanwhile, those whose work involved no internet terminal suddenly found themselves cut off from their work. And much of that work will never return....It's not the same world. The water is already under the bridge; there's no way to get it back. Between the fear of getting sick (stoked by the media and the feds) and the unappealing public 'health' measures to prevent it, people change their plans and their attitudes. They may even become conspicuous savers - flaunting their old cars and worn out sweaters as status symbols. Already, fewer want to take cruises"¦ or dine out"¦ or go to the theater. Or go to Europe for a summer vacation. Hotel occupancy rates in Paris are down 86% from last year. They are expected to come back - but probably never to where they once were. So, what about the hotel workers? The restaurant owners? The taxi drivers? The shopkeepers?....Millions of people are being left behind. What will they do? Live on welfare, like the people of West Baltimore or West Philadelphia? And what will happen to the economy itself? This new normal could cut GDP growth down to zero"¦ and leave it there. Then what? Stay tuned."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 16, 2020


9.16.20 - Sound the Alarm Bells on Inflation

Gold last traded at $1,962 an ounce. Silver at $27.29 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on a weaker dollar and expected dovish comments from the Fed meeting. U.S. stocks rose on investor expectations that the Fed will keep rates unchanged far into the future.

Gold to outperform silver into year-end, $4K gold price not ruled out by 2023 -Bloomberg Intelligence/Kitco
"Gold is looking to outperform silver into year-end, according to Bloomberg Intelligence, which is not ruling out $4,000 gold by 2023, noting that the gold bull rally is just beginning. After breaking $2,000 an ounce level, gold has been stuck in a trading range between $1,930 and $1,980 an ounce. But despite the several-week hiatus from major price action, gold will still do better than silver in the second half of the year, said Bloomberg Intelligence senior commodity strategist Mike McGlone. 'The done-deal nature of continued central bank easing is a solid foundation for gold, but less so for silver and copper prices. Industrial metals are dependent on more fiscal stimulus and a global economic rebound, yet increasingly vulnerable to normal stock-market mean reversion,' wrote McGlone in the latest monthly commodity update. For silver to outperform gold on a continuous basis for the rest of the year, the market will have to see a combination of rising bond yields, a peak dollar, declining stock-market volatility and continued global economic expansion. In Bloomberg Intelligence's view, this scenario is unlikely....The gold's bull rally is just beginning, noted the report. 'Gold bottomed at about $700 in 2008 and peaked near $1,900 in 2011. A similar-velocity 2.7x advance from this year's low-close near $1,470 points toward $4,000 by 2023,' McGlone explained. The stock market will play a big role in gold's performance going forward, with fortunes turning towards the yellow metal."

inflation Sound the alarm bells on inflation -Mack/The Hill
"America is at a crucial crossroads. Our government is spending money like never before. We now have debt that is larger than gross domestic product for the first time since World War Two. There are warning signs the bill collector will be knocking at some point in the near future. As a real estate developer and investor, I have lived with several kinds of economic eras. I know that excessive spending could lead to dangerous inflation. How did our country get into this situation? It started in the last administration with $1 trillion stimulus plans to lift us out from the Great Recession, but it has continued under the current administration, and is now badly exacerbated by the world pandemic of the coronavirus. Republicans and Democrats in Congress have tried to outdo themselves with costly relief bills, and they are not done yet for the current crisis....Believe it or not, there are economists who believe that a government can spend its way out of debt. What is the wisdom of that? The reality may be that more inflation means paying back in dollars that would be worth less tomorrow, but countries continue to pursue the same strategy, as the world is awash with money. Gold is almost $2,000 an ounce, the price of silver has doubled from its low, the value of the dollar is falling, and housing prices are rising....My advice is 'gather your rosebuds while you may' and prepare for an inflation repeat. I believe it is inevitable that interest rates have to move much higher. The massive federal spending will inevitably lead to inflation. In fact, there are already signs it is coming close. With artificially low interest rates, people are creating a housing bubble, with few homes and many buyers....Meanwhile, just as we may be entering a period of higher prices, we are entering a period of changing work environments. Store sales have been declining and online sales are rocketing thanks to the lockdowns. There was once a salesman on television named Crazy Eddie who told us, 'Our prices are insane!' Those words are true today, but we have time to bring sanity back to our federal spending and our way of life."

The Four D's That Define the Future -Smith/Of Two Minds
"Four D's will define 2020-2025: derealization, denormalization, decomplexification and decoherence. That's a lot of D's. Let's take them one at a time. I use the word derealization to describe the inner disconnect between what we experience and what the propaganda / marketing complex we live in tells us we should be experiencing....The current state of the economy is a good example. We see the real-world economy declining yet the officially approved narrative is that there's a V-shaped recovery underway because Big Tech stocks are hitting new highs....Denormalization is an extinction event for much of our high-cost, high-complexity, heavily regulated economy. Subsidizing high costs doesn't stop the dominoes from falling, as subsidies are not a substitute for the virtuous cycle of re-investment. The Fed's project of lowering the cost of capital to zero doesn't generate this virtuous cycle; all it does is encourage socially useless speculative predation. Collapse isn't "impossible," it's unavoidable.....Decomplexification is a mouthful, and everyone inside the machine knows the impossibility of paring organizational complexity....When the money runs out or loses its purchasing power, all sorts of complexity that were previously viewed as essential crumble to dust....Decoherence refers to the loss of systemic coherence between narratives, values, processes and systems. Simply put, stuff no longer works right and it no longer makes sense....The four D's help us understand why the status quo is incapable of adapting / evolving fast enough and effectively enough to manage a controlled collapse to a much lower level of cost and complexity. The status quo can't even admit the need for a controlled collapse, much less manage it. We can add a fifth D: denial. The four D's are already in motion and denial is only accelerating systemic decoherence."

Pelosi Holds House Democrats Hostage As Party Revolts Over Stimulus Impasse -Zero Hedge
"After rejecting a $1.5 trillion bipartisan stimulus compromise supported by 50 House lawmakers, Speaker Nancy Pelosi (D-CA) vowed to hold the chamber hostage - announcing that the House will remain in session until the parties reach an agreement on the next round of coronavirus relief. During a conference call with the House Democratic Caucus, Pelosi said she wouldn't accept a 'skinny' deal - and would instead extend the chamber's calendar until a deal she approves of is struck, according to The Hill. 'We have to stay here until we have a bill,' she told lawmakers. Pelosi's intransigence has ruffled feathers within her own party, as Politico reports that her hardline approach to negotiations - demanding $2.2 trillion at latest count, has frustrated rank-and-file Democrats. 'Every member of the leadership team, Democrats and Republicans, have messed up. Everyone is accountable,' said Rep. Max Rose (D-NY). 'Get something done. Get something done'."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 15, 2020


9.15.20 - This is Why Millennials Adore Socialism

Gold last traded at $1,957 an ounce. Silver at $27.24 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday on mild profit-taking and a firmer dollar. U.S. stocks rose on upbeat investor sentiment after tech stocks rebounded from a brutal sell-off last week.

Gold price "coiling" suggests bigger move coming soon -Kitco
"Gains in the metals are occurring despite better risk appetite in the marketplace to start the trading week. Importantly, recent sideways and choppy price action in gold has produced a bullish coiling pattern on the daily bar chart, suggesting the market is storing up energy for a bigger price move coming soon...and odds favor that price move being on the upside....Major central bank meetings are in the spotlight this week. The Federal Reserve, Bank of England and Bank of Japan all have monetary policy meetings this week. The Fed's FOMC meeting will be closely scrutinized following its shift to an easing of its inflation constricts. The question remains how the FOMC puts its new policy into action....From what we know now, the Fed is set up to keep interest rates near zero for a long time, possibly for several years. Given the new framework, any spike in inflation won't translate into immediate rate hikes as the Fed wants to compensate for the lost years when they have failed to hit the target."

far middle This is why millennials adore socialism -O'Rourke/New York Post
"America's young people have veered to the left. Opinion pollsters tell us so. According to a November 2019 Gallup poll, 'Since 2010, young adults' positive ratings of socialism have hovered near 50 percent.' A March 2019 Axios poll concurs, saying that 49 percent of millennials would 'Prefer living in a socialist country.' And The Hill puts it more strongly, citing an October 2019 YouGov Internet survey in a story headed, '7 in 10 Millennials Say They'd Vote for a Socialist.' What's the matter with kids today? Nothing new....As soon as children discover that the world isn't nice, they want to make it nicer. And wouldn't a world where everybody shares everything be nice? Aw "¦ kids are so tender-hearted. But kids are broke - so they want to make the world nicer with your money. And kids don't have much control over things - so they want to make the world nicer through your effort. And kids are very busy being young - so it's your time that has to be spent making the world nicer. Kids were thinking these exact same sweet-young-thing thoughts back in the 1960s, during my salad days. Young people probably have been thinking these same thoughts since the concept of being a 'young person' was invented. That would have been in the 19th century - during America's first 'Progressive Era' - when mechanization liberated kids from onerous farm chores and child labor laws let them escape from child labor. This gave young people the leisure to sit around noticing that the world isn't nice and daydreaming about how it could be made nicer with the time, effort and money of grown-ups....'From each according to his ability, to each according to his need' is deeply stupid and completely impractical. And yet there's a place where it works. This place is my house. And your house. And anywhere else there's a family....From each according to Mom's and Dad's ability, not to mention the ability of Mom's and Dad's Visa card credit line and the bank loans we took out to pay for school tuition."

The Work From Home Backlash is Upon Us -Carlson/A Wealth of Common Sense
"It was bound to happen. You just knew some of these big corporations have been gritting their teeth and smiling through the pandemic with the work from home shift. I've been waiting for the inevitable backlash and it appears to be here. The Wall Street Journal reported this week JP Morgan told senior employees of the bank's giant sales and trading operation that they and their teams must return to the office by Sept. 21...This is an exchange with Joe Flint of the WSJ and Netflix CEO Reed Hastings on the matter: WSJ: It's been anticipated that many companies will shift to a work-from-home approach for many employees even after the Covid-19 crisis. What do you think? Mr. Hastings: If I had to guess, the five-day workweek will become four days in the office while one day is virtual from home. I'd bet that's where a lot of companies end up. WSJ: Do you have a date in mind for when your workforce returns to the office? Mr. Hastings: Twelve hours after a vaccine is approved...Netflix is notorious for being a hard place to work. They are far from the only corporation that thinks like this. There is inequality everywhere you look during the pandemic and the ability to work remotely illustrates this perfectly...Bloomberg reports 'Americans with higher incomes were more likely to telework in August.'....The pandemic has hit people differently not just depending on their income level or ability to work from home but also their stage in life....There are bound to be growing pains in the months and years ahead as companies decide how to integrate what they've learned over the past 6 months. This transition is not going to be as smooth as many people think."

What the Pandemic Has Revealed About the Role of Schools -Aspen Institute
"It's back-to-school time and, in 2020, this season is a time of anxiety in the face of a global pandemic. None of us - parents, educators, administrators, doctors, policymakers - know if sending our children back to school this fall is a good idea...But perhaps those of us who are directly or indirectly addressing the societal, economic, and pedagogical aspects of the US education system can give weight to the importance of schools in America. If we can make a real assessment of the place that they hold in our society, we can have a more constructive conversation about what schools need to be doing now, whether face-to-face or virtually. And perhaps we can make smarter decisions about the role of schools when the pandemic is under control. 1) Educators and school staff are society's biggest caregivers outside the home - The school week doesn't echo the workweek by mere coincidence. Schools give parents a safe and low-cost option for childcare and thus are a pillar of our economy....2) Schools provide a place for kids to learn - A school building is where learning usually takes place...from kid-focused teachers to kid-sized desks, that make it work....3) Schools provide emotional support and routine - Relationships with engaged educators improve student outcomes....4) Schools offer shelter from insecurity - Schools also fight poverty directly. More than half of all the students in public education rely on schools for free or subsidized meals....5) Schools are community centers - A school is a village unto itself, and parents and children gather for all sorts of non-academic reasons - for sports and clubs and extended care and ice cream socials....The importance of schools in society cannot be overstated, and yet schools remain chronically undervalued and underfunded. In the midst of a debate about whether or not schools should be open, perhaps we are finally recognizing all that we are asking schools to do."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 14, 2020


9.14.20 - Oil & Gold Offer More Opportunity Than Risk

Gold last traded at $1,964 an ounce. Silver at $27.46 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday on bargain-hunting and a weaker dollar. U.S. stocks rose amid corporate dealmaking as the market tried to recover from back-to-back weekly declines.

Volatility in oil and gold may offer more opportunity than risk -Marketwatch
"Many of the biggest movers in commodities this year, including oil and precious metals, will continue to take the spotlight as the year draws on. Traders are trying to assess the effects of the pandemic on demand and are looking for signs of a global economic recovery....'Many commodities are trading well below their long-term incentive prices,' says Alissa Corcoran, director of research at Kopernik Global Investors....Oil prices have been 'driven down by reduced demand,' said Corcoran. Oil below its long-term incentive price, which she estimates at $75 a barrel, is unlikely to stay at that level. On Sept. 8, U.S. and global benchmark oil futures settled below $40 a barrel, the lowest since June....Commodity investors, however, will continue to eye moves in precious metals, which got a boost as the pandemic raised demand for gold and silver as a haven. Signs of some recovery in global economies led silver, which is also an industrial metal, to far outpace gold's rise. As of Sept. 8, silver futures traded around 50% higher year to date, while gold rose 27%....'The factors that have underpinned gold's move higher are still with us,' said Ross Norman, chief executive officer of Metals Daily....Metals Daily expects gold to potentially climb as high as $2,200 before year-end, 'which would give gold a 45% gain on the year,' while silver may challenge the $35 level at year-end, which would represent a 'massive' 95% gain on the year, says Norman. Overall, commodities can be 'very volatile' in the short term, which 'we view not as risk but as opportunity,' says Corcoran."

gambling Are You an Investor or a Gambler? The Stock Market Knows. -Wall Street Journal
"You should learn whether you're an investor or a gambler before the market teaches you the difference. Stock gamblers are on the rise. But, sooner or later, they will lose most - if not all - of their recent gains.Just look at options trading, which has been surging. Many traders use options as a cheap way to try hitting the jackpot: stock-market Powerball. In late August, a record 62% of premiums paid for options initiating bets on rising stock prices came from people buying no more than 10 contracts. (The long-term average is 34%.)....Small traders shelled out $11.5 billion this way - an all-time high and nine times last year's average. To put that week's bets in perspective, in all of fiscal 2019 Americans spent $91 billion on lottery tickets....Although stock trades are free at most brokerages, you can't trade options - win or lose - without paying the premium. Guess wrong a few times, and you'll be out thousands of dollars with nothing to show for it but a churning stomach....If this sounds like you, confess to your friends or family and get help before the market cures you the hard way: with massive losses that can wreck your life."

Just 10 Stocks Accounting For Half The August Gains Has Led To "Record Market Fragility" -Zero Hedge
"The S&P500 is rapidly becoming the S&P5, with just the 5 FAAMG names now accounting for a record 23% of the S&P's market cap, well above the concentration observed during the peak of the dot com bubble when a similar figure only hit 18% (for MSFT, CSCO, GE, INTC and WMT). Which is why it won't come as much of a surprise that according to Bank of America, just 10 S&P stocks, accounted for more than half of the market's 7.2% return in August. What may come as a surprise however, is BofA's breakdown of who the buyers were since the March lows. In analyzing the positioning of investors via sentiment & flows Z-scores, the bank found that equity buyers in March were mostly 'old retail' (high net worth), in April it was the long onlies & hedge funds, while the period of June through August was dominated by 'new retail' investors, i.e. Robinhood-type daytraders, although August was a truly history month combining a 'vortex of concentration' + new retail + optionality in a historic blow-off top. This buying frenzy hit a brick wall in September, when the record market fragility in August, represented by a record high call/put ratio, came crashing down in the fastest ever correction in the Nasdaq."

Global COVID-19 Deaths Top 900,000; Europe Daily Tally Tops US For First Time In Months -Zero Hedge
"The number of new COVID-19 cases reported in Europe over the last 24 hours has surpassed the US for the first time in months. The 27 countries in the European Union plus the U.K., Norway, Iceland and Liechtenstein recorded 27,233 new cases on Wednesday, compared with 26,015 for the US, according to the latest tallies from JHU. It comes as Spain, France and - to a lesser degree, Italy and the UK - lead a resurgence as more businesses and schools reopen. Yet another case of COVID-19 reinfection has been confirmed last Thursday after a man who traveled from the US to the eastern Chinese city of Nanjing reportedly tested positive for the coronavirus, after two negative tests in less than a month, the local government said....China reported seven new cases for the past 24 hours, up from just two a day earlier. All of the new cases were described as imported, including the case mentioned above, since they all allegedly involved travelers from overseas. China has gone 25 consecutive days with no local transmissions. Though South Korea raised important questions about China's numbers earlier this week....India reported a record single-day spike in cases and fatalities, with 95,735 infections and 1,172 deaths in the last 24 hours, bringing its COVID-19 total to more than 4.46 million and extending its lead over Brazil....While the global death toll topped 901,050, the latest in a series of grim milestones. Forecasts from IHME, an organization affiliated with the University of Washington, has the world on track for 2.8 million deaths by January. Though many critics have scoffed at these numbers, since a surge of new cases in Europe has seen far fewer deaths than the first wave."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 11, 2020


9.11.20 - Trump Inherited a Meek Economy, and Made It Roar

Gold last traded at $1,941 an ounce. Silver at $26.75 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying and a weaker dollar. U.S. stocks traded mixed in another volatile session as tech once again attempted to rebound from its recent slump.

Investing in Gold vs. Silver: 3 Key Differences to Know -Hartill/Motley Fool
"When the economy is tanking and inflation is high, investors often rush to gold. Silver is also viewed as a safe-haven investment, though it gets a lot less hype. Both precious metals have been sought after throughout history, so they're appealing when stocks and currencies are losing value....While gold and silver have similar boom-and-bust cycles, there are a few key differences to consider when you're deciding whether investing in gold vs. investing in silver is a better move. 1. Gold is more expensive due to its smaller supply....Gold is more expensive because it's by far the rarer metal. Worldwide, just 3,300 tons of gold were mined in 2019, compared to 27,000 tons of silver, according to the U.S. Geological Survey....2. Silver's industrial uses make gold the hedge of choice. Gold and silver prices tend to move in the same direction, but gold is a better recession hedge. More than half of the demand for silver is driven by its countless industrial uses. It's widely used in electronics, automobiles, solar panels, medicine and manufacturing, to name a few....3. Silver is more volatile than gold. While short-term fluctuations in gold prices get a lot of attention, gold is relatively stable as a long-term investment. The silver market's small size relative to the gold market makes it susceptible to wild price swings....Because of silver's volatility, it may be more appealing than gold if you're seeking to speculate on short-term fluctuations. But as a long-term hedge, gold is clearly more attractive."

germany We Will See A "Coup" In The U.S. As America Approaches Its "Weimar Moment" -Price/King World News
"I cannot regard events in the US as spontaneous expressions of anger and dissatisfaction regarding present social conditions. Disorderly events of this duration and magnitude cannot possibly be - in my opinion - spontaneous expressions of popular discontent, says Multi-billionaire Hugo Salinas Price. Revolutions always have interested parties at work, and I regard what is going on in the US as the beginning of a Revolution, aided and abetted by a foreign power and its representatives within the US....The American Democratic System, reliant upon the government of the nation by one of two approved political parties, is coming to an end. Each of those Parties relied on handing out money and contracts for money, to pacify the population, until reaching the point where that policy cannot work to preserve social peace, because the country is bankrupt. When President Nixon 'closed the gold window' on August 15, 1971, he did not realize the final consequences of his action: The US proceeded to de-industrialize and closed down its industrial base - in those days, this was called 'The Greening of America'. The US had no further use for its industries, since it could purchase absolutely everything it needed, by tendering Dollars, universally accepted by foreign producers. The abandonment of gold, really meant the de-industrialization of the US. But nobody noticed! The US is approaching its 'Weimar moment' - the moment when printing more and more Dollars, by the trillions, is the only recourse left to keep the 'US airplane flying' when practically all its motors have been turned off....Inevitably, the fundamental financial and social problems of the US cannot possibly be resolved without the re-industrialization of the US, on the basis of gold as money....The only reason that the world has not already 'gone back to gold as money' has been the objection to this measure, on the part of the US, which has insisted on maintaining the irredeemable Dollar as the world's leading currency. The US Government has been oblivious regarding the fact that the mighty, but irredeemable, Dollar had to result in the de-industrialization of the US, which has reduced a large sector of the US population to serfdom, occupying the lowest stratas of income in the nation, along with chronic unemployment of masses of people - all the while massively enriching a very small sector of the population."

The stock market is detached from economic reality. A reckoning is coming. -The Hour
"The wealthy are heavily invested in big companies. And it's not just that indexes such as the S&P 500 - representing 500 of the largest - are skewed toward bigness. It's also that a subset of truly giant corporations are driving market gains. The S&P 500 gains have been driven by five companies: Apple, Amazon, Microsoft, Facebook and Google's parent company, Alphabet. But even big companies need customers. When overall demand sinks, why wouldn't that be reflected in share prices? In part, the answer is that fiscal policies enacted by Congress, and monetary policies put in place by the Federal Reserve this spring have disproportionately benefited corporations. The Federal Reserve announced in March that it would pump several trillion dollars into the financial markets by continuing its so called quantitative easing - purchasing assets directly in the financial markets to support asset prices, while also buying about $1 trillion worth of bonds from big companies either directly or indirectly in secondary markets. As a temporary solution, it's working. Trillions of dollars spread around by the Fed now support not just stock prices and corporate bonds but even junk bonds, real estate investment trusts, and private equity firms that continue to borrow at rock-bottom rates, taking advantage of the downturn and sustaining their own debt-laden portfolio companies. These financial-market stimulus efforts continued apace even as enhanced federal unemployment insurance benefits expired at the end of July. Near-boundless support for U.S. financial markets, however, won't save the real economy from a continuing recession. While it's true that propping up asset values can stave off a financial crisis (for a while), it can't deliver the broad economic stimulus needed to bring unemployment figures down - let alone protect Main Street's businesses and workers. Jerome Powell, chair of the Fed, has repeatedly said that his institution can't keep equity and debt assets propped up if the economy continues to deteriorate. Businesses are still going bankrupt. Low- and moderate-income renters who are unemployed are preparing to fight evictions in the coming months, as moratoriums end. And workers in industries hardest-hit by the pandemic - think airlines and big hotel chains, among others - who initially kept their jobs are now joining the ranks of the unemployed. Amid all this, one thing remains clear: For Wall Street, too, there will be a reckoning."

Trump Inherited a Meek Economy, and Made It Roar -Puzder/Real Clear Markets
"Once again, Democrats are trying to attribute President Trump's economic success to President Obama - and their claims are no truer than they've ever been. Joe Biden's running mate, Kamala Harris, claimed last month that Trump 'inherited the longest economic expansion in history from Barack Obama and Joe Biden' and 'ran it straight into the ground.' The media parrot these claims. NBC ran an article in support of Harris's claim entitled 'Data show Trump didn't build a great economy. He inherited it.'....When Obama left office in January 2017, there were 1.9 million more people unemployed than there were job openings. That's a lot of people actively available to fill open positions. By March 2018, under Trump, job openings exceeded the number of people unemployed for the first time since the government began reporting such data in 2000. That remained the case for the next 24 months - until the Covid-19 pandemic and shutdowns - with job openings exceeding people unemployed by more than 1 million for 17 of those months....Under Trump, with abundant job openings and fewer people unemployed, employers began competing for workers - and wages rose. In August 2018, year-over-year wage growth exceeded 3 percent for the first time in nearly a decade. Wage growth stayed at or above 3 percent for the next 20 months, until the pandemic....Democratic claims notwithstanding, Donald Trump's economic record pre-pandemic was one of formidable success. Trump inherited the weakest economic recovery since World War II - one with anemic job opportunities, stagnant wages, and large numbers of workers dropping out of the labor force. Implementing pro-growth policies that included cutting taxes and regulations, he produced the strongest labor market of modern times. Saying otherwise won't change that reality."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 10, 2020


9.10.20 - Pandemic Uncertainty Remains Pervasive

Gold last traded at $1,941 an ounce. Silver at $26.75 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on rising inflation and a falling dollar. U.S. stocks rebounded led by the tech sector following a brutal three-day sell-off.

Gold Prices Rebound as Hedge funds Add to Long Positions -FX Empire
"Gold prices edged higher on Tuesday following a long weekend in the US. Prices were buoyed as riskier assets were hammered as stocks sold off and yields moved lower. The dollar was buoyed despite lower US yields as it benefited from safe-haven flows capping the rise in the yellow metal. Hedge funds increased long positions in futures and options according to the latest commitment of traders report. Gold prices rebounded from support after testing lower levels. Prices bounced off of support is seen near the 50-day moving average at 1,909. Resistance is seen near the 10-day 1,945 and then the August highs at 2,075...Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index is moving sideways which is a sign of consolidation. According to the most recent commitment of the trader's report released for the date ending September 1, 2020, managed money increased their long position in futures and options by 11K contracts, while reducing short positions in futures and options by 1K contracts. Open interest that is long futures and options outnumbers open interest that is short in the managed money space by a robust 150K contracts."

uncertain The Uncertainty Pandemic -Rogoff, Project Syndicate
"Policymakers' most important task is to try to reduce the massive lingering uncertainty regarding COVID-19 while continuing to provide emergency relief to the hardest-hit individuals and economic sectors. But the insecurity fueled by the pandemic is likely to weigh on the global economy long after the worst is in the past. The next few months will tell us a lot about the shape of the coming global recovery. Despite ebullient stock markets, uncertainty about COVID-19 remains pervasive. Let's start with the possible good news. In an optimistic scenario, regulators will have approved at least two leading first-generation COVID-19 vaccines by the end of this year...Assuming they are effective, biotech firms will already have some 200 million doses on hand by the end of 2020, but the public will need to be convinced that a fast-tracked vaccine is safe....Even in that case, improved testing protocols, the development of more effective anti-viral treatments, and better adherence by the public and (one hopes) politicians to behavioral guidelines would lead to gradual normalization of economic conditions....In a more pessimistic scenario, other crises - a sharp uptick in US-China trade frictions, a cyberterrorist attack or cyberwar, a climate-related natural catastrophe, or a massive earthquake - could occur before this one ends. Moreover, even the optimistic scenario does not necessarily imply a rapid return to end-2019 income levels. The post-pandemic expansion - if there is one - may take years to meet the modern definition of recovery in the aftermath of a deep recession....Although there may be an initial 'catch-up' surge of consumer spending in advanced economies, in the longer run, consumers are likely to save more...the pandemic's cumulative long-term costs for the US economy are likely to be an order of magnitude greater than the short-term effects, partly because of a long-lasting heightened sense of unease among the public."

More Oddities In This Oddest of Stock Markets -Calhoun/Alhambra Investments
"In January of this year, when stocks were surging to new highs, I wrote that stocks had entered the 'silly season'....I've heard a lot of comparisons to the dot-com mania that gripped America in the late 90s and there are some similarities in behavior. But at least today's absurdly valued tech stocks largely have earnings and some real growth. And while they are expensive, the spread to the rest of the market isn't nearly as extreme as it was back then. Of the 11 economic sectors of the S&P 500, only three have P/Es less than 20....Yes, there are a few stocks, like Tesla, that just defy fundamental logic. But the more important observation is that almost all stocks are expensive today, not just technology. Procter & Gamble, just to cite one example, is a fine company, but 28x earnings is hard to justify for a company growing at less than 5% annually. Walmart is also a great company, but 30x earnings for single-digit growth? These are not cheap stocks. The only sector exceptions are financial services and energy, at 12 and 10 times earnings respectively. If you want a bargain today, you have to buy the villain sectors, one seen as the poster child for crony capitalism and inequality and the other so evil it threatens all mankind. I don't know when the fever will break....We have reached such extremes between growth and value, international and domestic, that merely pulling back to the long-established trend lines would involve a rather violent move."

A Trump Comeback? -Editors/Wall Street Journal
"With eight weeks before Election Day, the state of the 2020 campaign is clear: President Trump is trailing Joe Biden, who has succeeded so far in making the race a referendum on the incumbent. If Mr. Trump is going to stage a comeback, and not become only the fourth incumbent in a century to be denied a second term, he will have to make the race about policy differences and Mr. Biden's indulgence to the Democratic left....Mr. Trump has reinforced the intensity of his core support. But in doing so he has shed support in the suburbs, especially among college-educated voters and women...The Trump GOP is a smaller but more intensely loyal coalition. The GOP hope has been that this would change with Mr. Trump again on the ballot, and that millions of 'shy' Trump supporters who refuse to talk to pollsters will vote like a new silent majority...Mr. Trump has narrowed his deficit somewhat since the GOP convention, but he trails Mr. Biden in the polling averages in every battleground state. It seems unlikely Mr. Trump can win the nationwide popular vote, so he will have to eke out another victory in the Electoral College. After the surprises of 2016, only a fool would say this can't be done. But if Mr. Trump is going to do it, he will have to make the election about more than himself, or even his first-term record. He has to make the election a choice about two futures, rather than two men....One campaign question is whether there are enough undecided voters who are still listening. The country deserves a debate over policy because Mr. Biden is proposing the most left-wing agenda of any major party candidate in our lifetime. The Democratic strategy is to keep Mr. Trump talking about Donald J. Trump."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 8, 2020


9.8.20 - Economy will get even better if Trump is reelected

Gold last traded at $1,942 an ounce. Silver at $26.85 an ounce.

NEWS SUMMARY: Precious metal prices eased Tuesday on mild profit-taking and a firmer dollar. U.S. stocks plunged led by technology shares following their worst sell-off in more than five months.

Does gold still have plenty of potential? -Kitco
"According to the World Gold Council, the latest leg of gold's 2020 bull run has come too fast, but gold has still potential for further upside. According to the WGC, the combination of high uncertainty, easy monetary policy, very low interest rates, positive price momentum, the depreciation of the U.S. dollar, and fears of higher inflation fueled record flows of 734 tons into gold-backed ETFs in the first half of the year and the gold's price appreciation: 'Central banks have aggressively cut interest rates, often in combination with quantitative easing and other non-traditional policy measures. Governments have also approved massive rescue packages to support their local economies. And much more may be needed. These initiatives have increased concerns that easy money, rather than fundamentals, is fueling the stock market rally and that all the extra money being pumped into the system may result in very high inflation or, at the very least, currency debasements.' The price of gold more than doubled amid the Great Recession, while it has increased by just under 30 percent since the Covid-19 pandemic....Purchasing gold today is not only a great way of maintaining purchasing power over time, but 'there is the potential both to preserve wealth and deliver outperformance by investing in gold.'"

masks Murphy's Law Is Fed's Law, and Everything Is Wrong -Snider/Real Clear Markets
"As it turns out, there actually was a Murphy. His now ubiquitous American idiom, Murphy's Law, is well-known to everyone: whatever can go wrong, will go wrong....'If that guy has any way of making a mistake, he will,' Murphy snapped... the legend was born....The original Murphy's Law was a hope-filled expression of harsh reality being surmounted by retail-level human genius....Money printing always leads to inflation, yet the reckless money printing the Federal Reserve and other modern central banks are alleged to have conducted never leads to any. Have the most basic and fundamental of economic properties and relationships so drastically changed, and that drastic change just coincidentally timed to a global monetary crisis twelve years ago, or are central bankers and Economists bending over backwards bending curves, openly trying too hard to evade recognition of the most logical and straightforward explanation? The answer is obvious....The original failure, the Fed's modern original sin it must forever cover up, is money itself. When central bankers and Economists realized they could no longer define it, and this was more than a half century ago, they came up with what they believed was progress....Nowadays, detached entirely from any accountability whatsoever, we are supposed to call Ben Bernanke, Janet Yellen, and Jay Powell heroes. For what? From the very start, these are all acts of intellectual cowardice, a bankrupt foundation so perverse it is an embarrassment to science itself; becoming ever more so with each additional stab at everything but the truth. Anything other than that. They've perverted Murphy's Law into a third version, a specific version. Fed's Law is now this: monetary policy will never go wrong, so everything else will. As it has. And it is."

Tech stocks finally tumble - a 'bumpy road' may be ahead -CNN/TechWire
"After weeks of cautioning that the spectacular run-up in stocks was likely to hit a snag, a dramatic sell-off shook Wall Street last week. The tech-heavy Nasdaq Composite plunged 5%, its worst day since June. The Dow dropped 2.8% and the S&P 500 fell 3.5%. Shares of Apple and Tesla, which had been on a tear since they announced stock splits that made shares more affordable, plummeted 8% and 9%, respectively. The action came after a summer of hand-wringing as stocks continued to reach new records, driven by massive central bank stimulus and unbridled enthusiasm for tech companies. As Apple's valuation topped $2 trillion, more than the entire Russell 2000, strategists had been telling clients that a correction was inevitable. Bespoke Investment Group noted that some of the worst-hit stocks had been 'the most aggressively valued and the biggest gainers' so far this year. And with tech looking like a very crowded trade, a rotation into other sectors is likely a good thing....Closely-watched measures of volatility indicate that the turbulence could continue. The CBOE Market Volatility Index, or VIX, which tracks volatility in the S&P 500, fell back slightly Friday but remains elevated, which is unusual when stocks are near all-time highs. Meanwhile, the CBOE Nasdaq Volatility Index - which follows the Nasdaq 100 - continued to climb. It's now at its highest level since April. 'There might be a bit of a bumpy road ahead.'"

The recovering economy will get even better if Trump is reelected -Stehle/Washington Examiner
"Our economy is roaring back to life. Over 1.7 million business applications have been filed, and some 1 million seek to open a business that will hire workers....It's a good feeling, and one we've grown accustomed to during President Trump's first term. It's a feeling people need to experience for the next four years. Thanks to Trump's pro-growth, pro-worker reforms, the economy was firing on all cylinders before the COVID-19 pandemic. We had low unemployment, the stock market reaching new heights, and wages were growing. The Trump economy was one worthy of pride. For more than a year, we had more jobs than available workers to fill them, a good problem to have. This economic boom was temporarily blocked by the pandemic, and a large part of that was due to financial disincentives to work. After Congress passed the CARES Act and implemented a boost in unemployment insurance, some 70% of workers were receiving more money on unemployment than they could have received from their jobs. The result, predictably, was workers refusing to return to work in order to continue receiving unemployment....We're already seeing improvement since the $600 unemployment boost expired. Between July 25 and August 15, new unemployment claims dropped by nearly a third and in some states by nearly 70%. Nearly 2 million people left the unemployment program during this time, as well. If this trend continues, new unemployment claims could reach pre-COVID-19 levels by the end of September."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 4, 2020


9.4.20 - Gold: Most Stable Long-Term Currency

Gold last traded at $1,927 an ounce. Silver at $26.57 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Friday on a firmer dollar after jobs data. U.S. stocks resumed their sharpest decline since last March, led by the ongoing tech sell-off.

Gold Is the Most Stable Currency in the Long-Term -FX Empire/Yahoo Finance
"If gold didn't retain its purchasing power, why would long-term investors and central banks store it in their vaults for decades?...The truth is that gold retains its value, and the stability of gold's purchasing power in the long-term is the main reason to own it....On the classic gold standard, which lasted until 1914, gold was officially money and thus the unit of account. In such a monetary system gold's stability was self-regulated....After the gold standard, gold has become more volatile, but the legacy of its stability is still with us. Because gold is the only international currency that can't be debased, people around the world keep holding on to it as a store of value. This makes gold the most stable currency in the long-term. Since the 1930s, when the U.S. dollar has been slowly decoupled from gold, the dollar lost 99% of its value against gold. This is the fate of 'paper' currencies."

national debt Allow Us to Present the Pandemic Bill -Editors/Wall Street Journal
"We interrupt this regularly scheduled presidential campaign for a word from your bill collector. The spoilsports at the Congressional Budget Office reported Wednesday that the U.S. government will soon have a debt burden equal to America's entire gross domestic product...One way or another, we'll be paying this off for the rest of our lives. CBO reports that the lockdown recession and the explosion of spending this year will increase the budget deficit for fiscal 2020, which ends Sept. 30, to $3.3 trillion. At 16% of GDP, this will be the largest annual deficit since 1945, when there was merely a world war. The pandemic has become the fiscal equivalent of a war thanks to the economic lockdowns and the competition by both parties to ease voter anxieties with cash in an election year. The political class seems to agree this is a price worth paying since neither party wants to talk about it in the election campaign. The fight over the next phase of coronavirus relief has been whether to spend another $3 trillion (House Democrats) or merely $1 trillion or so (the White House). Either of those numbers would send the deficit higher than the 8.6% of GDP that CBO projects for fiscal 2021....Debt held by the public is important because it is the amount America has to pay back with interest. CBO's public debt estimates don't include entitlements like Social Security and Medicare, which are political promises rather than binding contracts. They also exclude the liabilities of Fannie Mae and Freddie Mac, the housing giants guaranteed by taxpayers. And they don't include the $1.5 trillion or so in student-loan debt that may end up in Uncle Sam's lap if Joe Biden wins....Sorry to spoil the spending fun, but there's no such thing as free borrowing. Even the U.S., with all its economic power, can't keep piling up debt forever."

How 14 Policy Scenarios Might Change After the U.S. Election -Bloomberg Quint
"1. China - Biden wins: Biden teams with Europe to restrain China. 'The Democrats are more likely to link economic, strategic, and human-rights concerns, taking relations into an even more difficult period.' Trump wins: Trump keeps the heat on China, though having won reelection he could revert to 'my buddy Xi.' 2. Budget - Democratic Senate: Still lacking 60 votes, Dems use reconciliation procedure to pass tax- and spending-related legislation with a simple majority that's exempt from filibuster. Trump wins: Lame-duck status could set in quickly. 'Generally second-term presidents who don't have a strong base in Congress tend to not get a whole lot done.' 3. Health Care - Trump wins: He pursues a lawsuit to have the Affordable Care Act declared unconstitutional. 4. Social Justice Biden wins: Dems push a policing bill that conditions federal aid on more training and accountability for officers. Congress shores up the social safety net with more Covid-19 aid, food stamps, extended jobless benefits. 5. Regulation Trump wins: A 'bonfire' for rulebooks as Trump continues deregulation. 6. Finance - Biden wins: Fed Chair Jerome Powell, FDIC Chair Jelena McWilliams, and other Trump appointees could stymie re-regulation attempts. 7. Taxes - Democratic Senate: The top individual rate, now 37%, returns to 39.6%. Payroll tax is levied on incomes over $400,000. Capital gains are taxed as ordinary income for high earners. Step-up in cost basis for estate tax is eliminated. Corporate income tax rate rises to 28%, from 21%."

Mortality worldwide: Be generous, live longer -Max Planck Institute
"Sharing is caring: the more resources people share within a society, the better for health and longevity. Fanny Kluge and Tobias Vogt analyzed data for 34 countries on all continents and found a strong association between the amount of money shared between generations and longevity. The act of giving and receiving increases well-being: the recipient benefits directly from the gift, and the giver benefits indirectly through emotional satisfaction. A new study published in the journal PNAS now suggests that those who share more also live longer....The researchers at the Max Planck Institute for Demographic Research in Rostock, Germany, conclude that people are living longer in societies whose members support each other with resources. 'What is new about our study is that for the first time we have combined transfer payments from state and family and evaluated the effect', says Fanny Kluge....Sub-Saharan African countries such as Senegal share the lowest percentage of their lifetime income and have the highest mortality rate of all the countries studied. Those who share little die earlier....Societies in Western European countries and Japan transfer a lot to the youngest and oldest and mortality rates are low. The countries studied in South America also have high transfer payments. There, people share more than 60 percent of their average life income with others."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 3, 2020


9.3.20 - S&P 500 Surpasses Dot Com Bubble

Gold last traded at $1,933 an ounce. Silver at $26.74 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday on bargain-hunting despite a firmer dollar. U.S. stocks paused near lofty highs as investors digested better-than-expected unemployment data.

The Fed is out of control and the gold price will be above $2,000 by year end -Day/Kitco
"Gold and silver prices are going to go higher and end the year above $2,000 an ounce and investors shouldn't worry or quibble over some short-term profit taking and consolidation, according to one fund manager. In an interview with Kitco News, Adrian Day, CEO of Adrian Day Asset Management, said that he remains bullish on gold as the U.S. dollar enters a new long-term down trend because of extremely loose Federal Reserve monetary policy. Day added that it will be impossible for the U.S. central bank to unwind the trillions of dollars it has pumped into financial markets to support the economy that has been devastated by the COVID-19 pandemic. 'Remember the end of 2018, seems so quaint right now, the Fed started to raise rates,' he said. 'They started to increase rates and the stock market had a hissy fit and they immediately reversed. There's that expression when you're a hammer, everything looks like a nail. And that's the way it is with the Fed.' Not only will the Fed be able to unwind its balance sheet, but Day noted that markets are now addicted to monetary policy stimulus and more will be needed to continue to support equity markets. 'The fed is out of control. Jerome Powell himself has said there are no limits. There are no red lines,' he said."

Powell The Fed's Dangerous New Strategy -Buiter/Project Syndicate
"The US Federal Reserve's recent changes to its monetary policy framework are ill-advised and potentially harmful....The real trouble starts with the FOMC's reinterpretation of 'maximum employment.' The press release states that the committee's policy decision will be informed by its 'assessments of the shortfalls of employment from its maximum level.' The FOMC's original strategy statement, adopted in 2012, referred to 'deviations from its maximum level.' This new asymmetric interpretation is extremely worrying. It suggests either that maximum employment is achieved only when every working-age person has a full-time job plus any desired overtime....According to the press release, the Fed now 'seeks to achieve inflation that averages 2% over time.' Therefore, 'following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.' This means that past inflation will influence the Fed's current and future monetary policy. But past inflation is a bygone issue and should be irrelevant for formulating policy - unlike current and expected inflation, which have normative content and can be influenced by policy....Then there are the Fed's major errors of omission. For starters, the FOMC does not mention enhancing its monetary-policy arsenal by removing the effective lower bound (ELB) on policy rates....The FOMC's second major error of omission is the absence of any discussion of the Fed's failure, since the outbreak of the COVID-19 pandemic, to enlarge and change the composition of its balance sheet to the fullest possible extent to support economic activity....The Fed should scrap this new approach, and instead make full and effective use of the policy instruments it has - or could have - at its disposal."

The S&P 500's Valuation Just Surpassed The Dot Com Bubble -Zero Hedge
"It's official: a few weeks after the S&P hit an all time high price erasing all the losses from the covid crisis, which just so happened was the best thing to ever happen to large corporations and the ultra wealthy, moments ago the S&P500's forward P/E multiple also hit an all time high, surpassing the dot com peak of 27x, printing at 27.02x last. So with the S&P now trading at an all time absolute price and a record high forward P/E multiple, it also means that the S&P500 is now the most disconnected - to the upside - from both the median and average Wall Street target on record, which are 3,200 and 3,198, respectively. And the cherry on top: with the S&P at 3,550 currently, it is above all but two of the sellside strategist forecasts tracked by Bloomberg, which would be Cantor Fitzgerald, and Goldman, which hiked its price target from 3,000 to 3,600 two weeks ago (the S&P is even above the perpetually cheerful permabull Tom Lee's target of 3,525). This means that either the S&P will reverse and soon, or we will see a cascade of price target revisions higher - similar to what we have observed with both AAPL and TSLA amid a panicked scramble to upgrade the runaway stocks."

Americans are saving more than just money by not commuting -CNN Business
"The pandemic lockdown has killed the work commute. And as the number of miles people travel every day has collapsed, commuters have saved themselves billions of dollars. In June, Americans traveled nearly 37 billion - yes, billion - fewer miles than in the same month last year, according to the Federal Highway Administration. Usually, the number of miles traveled peaks in the summer when people go on vacation, but of course this summer is quite different. That's translating to a lot of cost savings: Workers who once commuted by car but now work from home are saving a total of $758 million per day, according to research from freelancing platform Upwork. Over the months since the pandemic hit the US, that figure amounts to a cumulative $90 billion. The savings comprise gas, car maintenance and repairs, as well as the costs that driving imposes on society, such as congestion and polluting, said Adam Ozimek, chief economist at Upwork. But the biggest factor in this calculation is time. It's hard to put a number on the literal value of your time, but the Department of Transportation provides an estimate, Ozimek noted: Every hour of commuting by car costs Americans $12.50. That adds up, given Americans' long commutes. Americans spent an average of 54.2 minutes commuting daily in 2018, according to Ozimek....'I definitely think we'll see a migration from higher cost of living to lower cost of living,' Ozimek said."

RealMoneyBlog - Free daily/weekly email


Real Money Podcast

Sept 2, 2020


9.2.20 - Race for CV-19 Vaccine Gets Dirty

Gold last traded at $1,940 an ounce. Silver at $27.36 an ounce.

NEWS SUMMARY: Precious metal prices fell Wednesday pressured by rising global stock markets and a firmer dollar. U.S. stocks traded mostly higher as traders took profits out of the high-flying tech sector and bought shares in more beaten-down parts of the market.

The Perfect Economic Storm To Stack Up On Gold -Seeking Alpha
"Recently, gold has seen a lot of movements and volatility. With its price is about to return to the level of $2,000, could it be the right time to take profit now, or is it better to wait until it records a new high? If I were you, I would simply buy-and-hold and completely ignore the negligible fluctuations, because I am telling you that gold could hit $14,000 or even more. It is understandable that it may sound a little bit speculative, but consider the rise of value will not be linear but exponential. We are entering a financial crisis that is the greatest the world has ever seen. But on the opposite side of every crisis, there always is an opportunity. The important thing is: Are you well-prepared and have the resources to play around when the moment comes?...I have always preached to hold at least a small proportion of gold in the portfolio not simply for hedging against inflation, but for a monetary catastrophe such as the collapse of the currency system....History has taught us the fiat system would often end up disastrously, and it is just a matter of time before people will wake up from the American dream to realize they are living in the world of excessive debt, thus creating a panic that will ever change the tide of the currency system. In fact, the fiat system is so fragile that once the Fed loses its credibility, people would immediately dump their money and rush to something like gold that has intrinsic value....Currently, there is an increasing trend that countries are becoming less reliant on the dollar...which could pose a challenge to it as being the world's leading currency should the trend continue....It is always worth knowing that the world is playing with fire, sooner or later it will hurt. Hence, why would anyone ever trade their gold, the real money, for fiat, the fake money? Ultimately, the intelligent investor is to diversify his asset classes and always include at least a small proportion of gold in his portfolio for wealth preservation in an unexpected disaster."

vaccine How the race for a Covid-19 vaccine is getting dirty -The Guardian
"Scientists worldwide are working against the clock to find a viable coronavirus vaccine - but are corners being cut for the sake of political gain and profit? Researchers around the world set to work building vaccines against Covid-19, as the disease became known, and the first candidate entered human trials on 16 March; it was joined, as the months passed, by dozens of others. Scientists were jubilant, and they had every right to be. They'd broken all vaccinology records to get to that point. But then tensions began to surface among the team members, and lately even the most distracted spectator will have noticed that they appear to be trying to nobble each other openly on the track. With accusations that the Russians and Chinese hacked research groups in other countries, biotech executives criticized for cashing in on their own, as yet unapproved vaccines, and Russia approving a vaccine that is still in clinical trials, the quest for a vaccine seems to have turned sour. Political pressure has been mounting for scientists to deliver an economy-saving result, and reports of corner-cutting emerge daily....On 2 August, Steven Salzberg, a computational biologist at Johns Hopkins University in Baltimore, Maryland, suggested in Forbes magazine that a promising vaccine be rolled out to a wider pool of volunteers before clinical trials had been completed, triggering an outcry (and some sympathy) that prompted him to recant the next day....The accumulation of such incidents has left many scientists feeling deeply uneasy....One potential risk with some kinds of vaccine, for example, is that they can cause the recipient to experience a worse bout of the disease if that person becomes infected naturally later on....If current forecasts are correct, a Covid-19 vaccine will be available in 2021 - smashing all records for vaccine development - and there will be many more reasons to trust it than not to."

Protectionism and "Weak Dollar" Trade Policy -Mises.org
"'Too many dollars chasing too few goods'...was the catchphrase used to describe the inflationary times, and it would be the last time monetary issues/policy would make sense to me for many, many years....Technically, we don't need money to survive. We simply need to be able to produce a good or service of some value to others. Since trying to translate that into terms of what another person produces (bartering) tends to gum up the gears of commerce, we have money. At various points in time, salt has been used as currency, as has tobacco. George Washington wrote about using wampum. Whatever is in steady supply at the time, and holds an agreed-upon value can be used as money. For much of our history, it was gold....But politicians aren't content unless they're manipulating the value of money to political ends....The theory goes that a devalued dollar increases exports by making them cheaper than foreign goods in international markets. There is truth to that, but there are also drawbacks. First, workers will be paid in dollars that are worth less, offsetting gains possibly realized by exporting industries. Second, other countries could very well view this as currency manipulation with the aim of gaining such a trade advantage and therefore move to weaken their own currencies in response....This demonstrates a lack of faith in the capacity of people in existing American industries to compete, in the ability of displaced workers to adjust, and an obliviousness to the fact that we're kneecapping the ability of American innovators to access capital to push forward into new frontiers. This tendency toward protectionism has shades of countries that go full-bore into state control....Politicians see an opportunity to ride to the 'rescue' when inflation-induced bubbles burst, and that opportunity is too valuable to give up. And it's only going to get worse the more power easy money advocates, like modern monetary theorists (MMT), gain. The printing press will go into overdrive and the dollar will further fall in value."

Trump vs. Biden: Which will restore jobs lost in the pandemic faster? -USA Today
"At their political conventions this month, President Donald Trump and former Vice President Joe Biden laid out starkly divergent visions of how to dig the U.S. economy out of the deepest downturn since the Great Depression amid the COVID-19 pandemic. Trump promised more cuts to taxes and regulations, and he dangled the prospect of additional tariffs against China....'We will continue to reduce taxes and regulations at levels not seen before.' Biden vowed to raise taxes on the wealthy and corporations and use the money to spend trillions to upgrade the nation's infrastructure and shift to a clean-energy future, make housing and child care more affordable and improve education, among other proposals. Some top economists say Biden's plan is better-suited to recovering the remaining 13 million jobs lost in the pandemic-induced recession. 'The goal of the next president will be to get back to full employment as fast as possible,' says Mark Zandi, chief economist of Moody's Analytics....But some economists argue Trump's free-enterprise approach will more effectively unleash business owners' animal spirits. 'Overall, I think Trump will be better for the U.S. economy,' says economist Chris Edwards of the libertarian Cato Institute. 'Trump will be better from a free-market perspective.'"

RealMoneyBlog - Free daily/weekly email


9.1.20 - The Fed vs. Judy Shelton And Gold

Gold last traded at $1,966 an ounce. Silver at $27.92 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks rose slightly as traders hoped momentum would continue following a strong advance in August.

The Federal Reserve vs. Judy Shelton And Gold -Williams/FX Empire
"Those in favor of Judy Shelton's approval by Congress, pursuant to her nomination to the Federal Reserve Board Of Governors, should not be surprised by the torrent of criticism directed at her. A letter published and signed by former Federal Reserve officials and staffers called on the Senate to reject her nomination, stating that 'Ms. Shelton's views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand"¦' Her 'extreme' views were referred to in a general statement of condemnation...'She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all.' Would these specific views have been considered extreme a century ago? No. Are they extreme now? No. Then why all the fuss? The statement by former Fed officials has been published openly and is prompted out of fear. Fear of discovery and exposure; and fear of a possible end to the biggest Ponzi scheme of all time....Probably the most blatant condemnation of Judy Shelton comes in an article by Steven Rattner, titled 'God Help Us If Judy Shelton Joins The Fed'. For some people, it might make more sense to say 'God Help Us If Judy Shelton's Nomination Is Not Confirmed'....The truth is that the Federal Reserve has been mismanaging the economy for over one hundred years. The effects of their infinite money creation have destroyed the value of the US dollar which is now worth only $.01 cent compared to $1.00 when the Fed assumed command....Under a gold standard, accompanied by convertibility, gold acts as a restraint on a free-spending government. As it appears now, Judy Shelton brings a refreshingly different perspective to central banking; and offers the potential for positive change - from the inside."

chart Ultra-Rich Investor Group Panic Hoards Cash -Zero Hedge
"In an upside-down world of activist central banks jawboning main equity indexes to record highs with terrible market breadth...There's one group of savvy investors, spooked by the continuing virus-induced downturn, panic hoarding an 'unprecedented' amount of cash, reported Bloomberg. Tiger 21, an investor club of 800 high net worth investors founded in 1999 by Michael Sonnenfeldt, raised cash holdings to 19% of their total assets, which is up from 12% at the start of the pandemic. The investor group believes market turbulence could persist until June 2021....The record cash hoarding by this group of centimillionaires comes as market breadth is horrible, and a growth scare could rear its ugly head in the near term and trigger a stock market correction....FAAMG stocks are up on the year, accounting for about 35% year-to-date gains for the S&P500; while the 495 other stocks in the main equity index have slumped by 5%."

A Paycheck For Everyone Whether You Work Or Not? -Forbes/Forbes
"It's called universal basic income, and the idea is gaining ground here and in Europe, especially with Covid-19 hitting economies so hard. The government would pay every adult a certain amount of money every month, whether you work or not. Democratic party activists love the idea. So do some Republicans. The Pope came out in favor of the notion. A candidate for the Democratic presidential nomination, Andrew Yang, advocated paying every adult $1,000 a month. He didn't win, but his idea is catching on. Italy has a minimum-income measure that tops up one's income if it falls below a certain level. Spain is mulling over something similar. While Yang's proposal sounds enticing - who wouldn't want an extra $12,000 a year? - it would do real harm. Let's make clear that we are not talking about such safety-net programs as food stamps, unemployment benefits or Medicaid. A guaranteed income would be corrosive to people's work ethic, especially as politicians raised the benefits whenever elections rolled around. It would eat away at the crucial link between effort and reward and would lure many people away from pursuing more productive lives. This is wrong, morally and economically. Work is critical to making our lives meaningful. It gives us purpose. It provides structure and encourages discipline, helping us to look beyond the immediate moment and think about the future. It encourages the can-do spirit that is unique to the American culture. Work produces the resources that we consume and the innovations that improve our standard of living. Then there are the major practical problems of implementing such a program. It would be hideously expensive. It's estimated that Yang's scheme would cost $3 trillion a year....A more constructive approach would be to reform and expand the Earned Income Tax Credit, which is, in effect, a rebate of the payroll tax. This would give lower-income individuals higher take-home pay, tax-free."

For a Few Destinations, Tourism Is Doing Better Than Ever -Wall Street Journal
"The big vacation is out. America is going camping (and boating and hiking and fishing) instead. The pandemic pummeled tourist hubs across the country this summer as families shunned the usual vacation hot spots, canceling flights and scrapping plans for beach getaways. But for some rustic destinations within a day's drive of big U.S. cities, the coronavirus crisis unleashed a boom....Stories are coming from parklands and lesser-known vacation spots as families steer clear of airports, hotels and big beach resorts. On a national level, these shifts have led consumers to cut travel spending to just half what they spent last summer, according to the U.S. Travel Association....Camping is revving up at national parks around the country, despite limits on campsite operations. After 83 days of shutdown, Yosemite reopened on June 11 with capacity limits and all but two of its campsites closed. Nationally, spending on air travel during the week ending August 19 was down around 73% from the same week in 2019, according to Earnest Research....One big reason for that increased demand is that with many workplaces and schools operating on a remote basis, families have much more flexible schedules. 'Day of the week does not matter - we're getting Sunday to Wednesday, which normally wouldn't happen,' said Ms. Refosco, who co-owns Taylor-Made with her husband and brother."

RealMoneyBlog - Free daily/weekly email


8.31.20 - Fed's Inflation Policy Boosts Gold -CNBC

Gold last traded at $1,967 an ounce. Silver at $28.20 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe haven buying and a continued weakening of the U.S. dollar. U.S. stocks traded mixed with the major stock indexes ending the month with strong gains supported by ongoing accommodative Fed policies.

How the Fed's inflation policy shift impacts the gold rally -CNBC
"Gold is looking even better after the Federal Reserve decided to tolerate higher inflation. The precious metal rallied more than 2% on Friday morning in the aftermath of the historic announcement Thursday by Fed Chair Jerome Powell that the central bank's inflation target could exceed 2% to offset stretches of weaker inflation. The previous target has been an average of 2% over time. The change implies the central bank could keep interest rates lower for longer. Delano Saporu, founder of New Street Advisors, says support for money markets from the Fed should keep investors interested in gold. 'You still have money supply increasing,' Saporu told CNBC's 'Trading Nation' on Thursday. 'Safe haven investors are looking for another way to unlock value. With rates being as low as they are, you're going to see some of them turn to gold to put that money to work.'"

groceries Could bartering become the new buying in a changed world? -BBC
"Amid economic uncertainty - and a desire to connect as we distance - bartering is experiencing an unprecedented rise. Could it stick around? London-based nurse Marjorie Dunne joined Barter United Kingdom after spending five days in hospital with coronavirus in April. The group, which she originally joined to get rid of a few unwanted items unearthed during spring cleaning, ended up helping Dunne through one of the toughest times of her life...Members of Barter United Kingdom, which started on 23 April and had 1,300 members as of early August, swapped curries, roti and cakes for Dunne's dresses and DVDs. Around the world, people have been turning to swapping, trading and bartering during the coronavirus pandemic, whether to do their bit for the local community, save money or simply source hard-to-find baking ingredients. With economic uncertainty looming and anxiety levels soaring, barter is becoming an emerging alternative solution to getting by - and staying busy - amid Covid-19....'I asked myself what happens when there's no more money? Barter was a natural solution to that,' says Marlene Dutta, who started the Barter for a Better Fiji group on 21 April. Its membership is just under 190,000 - more than 20% of Fiji's population. Items changing hands have run the gamut - pigs for kayaks, a violin for a leather satchel and doughnuts for building bricks - but the most commonly requested items have been groceries and food....'The economic hardships people are coping with are driving the rediscovery of bartering,' says Shera Dalin, co-author of The Art of Barter. 'The same thing happened during the Great Recession. When times get harder, people turn to barter.' Similarly, more than 300 barter organizations cropped up during the early years of the Great Depression in the United States, says Dalin....Along with goods, some people have been trading another precious commodity that they may have had more of recently - time. 'Time banking', which started in Japan in the 1970s, and in the US in 1992, is seeing a jump in popularity. Members of a time bank spend one hour helping another member, and can receive one hour of help in return. People offer and receive things such as piano lessons, painting services or language teaching...'We're not going to change the world - we're not even going to change the whole city - but, actually, that one hour you give to help somebody else will make a difference to them.'"

Subprime Mortgages Fall Massively Delinquent Leaving Taxpayers On Hook As Housing Market Splits In Two -Zero Hedge
"On one side: land rush by a few hundred thousand home buyers. On the other: millions of homeowners with delinquent mortgages. The Federal Housing Administration (FHA) prides itself in insuring subprime mortgages with, as it says, 'low down payments, low closing costs,' and 'easy credit qualifying' - all true. Of its active portfolio of 8 million mortgages that it insures, 17% were delinquent in July, the highest rate in FHA history. In many metros, the delinquency rates of FHA mortgages are above 20%; and in two metros, the delinquency rates exceed 27%....During the term of forbearance - six months, under the CARES Act, extendable by another six months- the borrower isn't making payments, but the missed interest and principal payments are added to the mortgage balance and will need to be paid somehow. A FICO credit score below 620 is considered 'subprime.' The FHA insures mortgages of borrowers with credit scores well below that. If the borrower has a credit score of at least 580, the FHA will accept down payments of only 3.5%. If the FICO score is below 580, no problem, but then down payment is 10%. Many of the people whose mortgages the FHA insures have lost their jobs or had had their hours or work reduced....The widespread home price declines that occurred during the subprime crisis of Housing Bust have not happened yet. And that's why at the moment no one is panicking about these sky-high delinquency rates. But when millions of homeowners cannot make the mortgage payments and have to put these millions of homes on the market - forced sellers - they trigger a sudden surge of supply of homes for sale, and the entire supply-and-demand equation, and thereby the pricing environment, are going to change....There is a boom on one side of the housing market, and there is already a bust forming on the other side of the housing market."

The Trump Disruption -Editors/Wall Street Journal
"When Donald Trump won the Presidency four years ago, half of America gnashed its teeth or cried and even supporters who cheered weren't sure what to expect. Four years later our verdict is that he has been better on policy than we feared but worse on personal behavior than we hoped. Whether Americans re-elect him depends on how they assess that political balance sheet....Americans who heard him ask for a second term Thursday night were trying to make sense of what has been a raucous and disruptive Presidency. Last week's virtual GOP convention spent hours educating voters about Trump Administration successes, and many are real, starting with the pre-Covid-19 economy...This success was due to Mr. Trump's adoption of conventional GOP economics, not his trade or immigration agenda. The President contracted out tax reform to Congress, especially Paul Ryan in the House and Pat Toomey in the Senate, and they delivered. Mr. Trump also hired a cast of deregulators who liberated the economy from burdens on energy and more. The economy kicked into higher gear, and the resulting tight labor market produced strong wage gains for lower-skilled workers left behind by the Obama-Biden years. Note that this happened without the income redistribution schemes favored on the left and increasingly the right....Mr. Trump is also the first President since Ronald Reagan to try to rein in the administrative state...These policies are more likely to be sustained by the more than 200 conservative judges Mr. Trump has appointed....It's impossible to assess Mr. Trump's behavior outside the context of the often unhinged opposition. We will never know how his Presidency might have gone without the Russia collusion accusations. But we do know the FBI, and the Obama Administration, knew early on that there was no evidence for the claims. They nonetheless fed the media stories to cripple him....He has a chance to win another four years if voters conclude that his disruption is less risky than the Biden-Sanders Democratic agenda."

RealMoneyBlog - Free daily/weekly email


8.28.20 - Why $5000 Gold May Become A Reality

Gold last traded at $1,972 an ounce. Silver at $27.77 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Friday on dollar weakness after the Fed promised to keep interest rates low despite rising inflation. U.S stocks rose as investors cheered the Fed's dovish comments and additional monetary stimulus, which is likely on the way.

Why $5000 Gold Could Soon Become A Reality -Yahoo Finance
"The post-COVID 'new normal' and a flood of stimulus packages from the Federal Reserve have crushed the dollar and pushed gold to record heights. And with the real economy in a precarious situation, gold prices could soon hit $3000, $4000 or even $5,000 dollars per ounce. Investors of all types are piling into safe haven assets in unprecedented numbers, and when even the most gold skeptic investors are starting to bet big on bullion, one may conclude that things have fundamentally changed....Goldman Sachs has revised its 12-month forecast to $2300 per ounce - or a 20% gain. UBS has a $2,000 price target on gold for the end of September, while Deutsche Bank is targeting $2,000-$2,100. JPMorgan has a $2,000 price target, and Bank of America says gold prices could hit $3,000-an-ounce over the next 18 months."

the fed Fed's Easy Money Pumps Up Winners Like Apple and Housing -Wall Street Journal
"Winning investments this year include technology stocks, gold and, umm, lumber. Yes, lumber: pieces of wood may not be as glitzy as Apple or bullion. But like them, lumber and other assets linked to home construction have been big beneficiaries of the Federal Reserve. Helping home-building is one obvious way to help the economy...The Fed's new way of thinking laid out by Chairman Jerome Powell on Thursday suggests easy money is here for the long run. The link from low rates to housing is obvious. Easy money from the Fed dragged the standard 30-year mortgage rate below 3% last month for the first time...Add in lockdown home improvement projects, renewed trade frictions with Canada and low inventories, and it is understandable that lumber prices have more than doubled....So the Fed's easy money pumps up the stock prices of the winners, but does little for the companies that investors can see are suffering, such as airlines, clothing stores and anything connected to tourism...The stock market's divisions are huge. The performance of cheap and expensive stocks has widened more this year than ever before....Housing, home builders and lumber have joined the pandemic winners thanks to Fed policy. The rest of the economy will have to wait."

Amid pandemic, freedoms are disappearing -Paul/Washington Examiner
"At the start of the pandemic, we saw businesses across the country forced to close their doors due to city, state, or federal guidelines. This resulted in an unemployment rate that skyrocketed to levels not seen since the Great Depression. The public began finding itself forced into poverty by the very government that was founded on the principles of freedom and self-determination. Thankfully, some did not sit silently by. We saw individuals rightfully demand to be able to go back to work so that they could provide for their families. Unsurprisingly, the far-left media and too many elected officials who were more than happy to gain additional powers over their constituents panned the protesters for fighting for their rights. Then came the mask mandates. Since April 3, the Centers for Disease Control and Prevention has recommended people wear masks in public. A public policy recommendation is one thing, but then we started seeing executive orders across the country mandating people wear face masks or risk a civil penalty....So, we have already given up our right to go to work and have sadly given the government a precedent to decide whether or not our jobs are essential. And we have allowed states to force us to wear facial coverings or risk jail time. What comes next?....Bureaucrats and far-left elected officials are intent on controlling every aspect of our lives and are already in the process of taking our rights away piece by piece. Now more than ever, we must stand up and voice support for our liberties before it is too late."

What Efficient Mentorship Looks Like -Harvard Business Review
"The endless string of demanding tasks at work can leave us running on empty - deadlines, meetings, projects, and ongoing training modules all demanding our effort and limiting our time to refuel. As an energy-saving measure, we may cut corners. One task that commonly falls down on the priority list is mentoring...In the face of a pandemic with no end in sight, we must preserve our fuel supplies while we mentor others. It is possible to be a mentor in an efficient manner that benefits mentees, growing their confidence and their network, but also conserves your energy. We call this an approach we call fuel-efficient mentoring...A good place to start is clarifying the baseline expectations...Consider your expectation of mentees' responsibilities, then draft a document of standards and save it for future use. For example: Mentees should be prompt, create the agenda, organize calendar invitations, and complete action items...Provide context, informing the mentee that these standards will provide organization and leadership skills, and keep you, the mentor, focused on their larger needs....To increase fuel efficiency, consider whether or not the problem can be resolved efficiently over email and consider shortening meetings with mentees from 60 minutes to 40 minutes. Move 30-minute meetings to 20- or 10-minute intervals....Group mentoring sessions do not have to be in-person - as we've learned in the Covid-19 era, they work well virtually, with cameras on and audio unmuted. Mentees from different institutions and different geographic locations can conveniently collaborate under the mentor's guidance....Finally, now that you've realized and set expectations as well as changed the foundation of your meetings, look at how other obligations can double as mentoring opportunities. Consider a work-related or professional development event, such as a virtual webinar or mixer or even a board meeting a chance to invite your mentee. During a pandemic, virtual opportunities are effective and abundant."

RealMoneyBlog - Free daily/weekly email


8.27.20 - Restoration of the American Dream

Gold last traded at $1,939 an ounce. Silver at $27.13 an ounce.

NEWS SUMMARY: Precious metal prices traded lower after the Fed vowed inflation won't lift interest rates. U.S. stocks cheered the central bank's decision to let inflation run 'moderately' above its 2% goal.

Gold Is Still a Buy -Dyson/Rogue Economics
"My core thesis is that the U.S. government is broke. It is $26 trillion in debt and it cannot roll over - or maintain- these debts anymore without the Federal Reserve's money printer...No one says the U.S. government is broke yet. But they will soon (in the next 10 years). Except they'll call it a 'sovereign debt crisis' or something official-sounding like that. The Fed's balance sheet is currently at $7 trillion. The expansion of the Fed's balance sheet has slowed this summer, but it must soon start rising again"¦ or else the Treasury's borrowing will cause interest rates to rise, which neither the Fed nor the Treasury will tolerate. So for now, we're just waiting for the end game to play out.....The trade of the decade - or maybe 'trade of the generation' would be a better term for it - is to sell stocks and buy gold. Even though gold recently made a new all-time high, the U.S. dollar started slipping, and the Fed's money-printing exploded this year, these trends are just beginning. My guess is gold will be far north of $10,000 an ounce - and the Dow-to-Gold ratio below 5 - by the time the U.S. government completes its bankruptcy and debt restructuring. So is gold still a 'buy' with the gold price near $2,000 and the Dow-to-Gold ratio around 14? Yes. Absolutely."

USA Restoration of the American Dream -Regan/American Consequences
"My grandfather only finished the 7th grade. He worked most of his life as the night watchman at the City Yard in Portsmouth, New Hampshire"¦ a former Navy shipping town on the southern coast of the state. One hundred hours a week"¦ at 50 cents an hour. That equated to a weekly paycheck of $50"¦ And, being a typical Irishman, he had eight little mouths at home to feed. Those eight little kids knew what it was like to be really poor. They went without shoes in the summer and wore donated heavy coats in the winter"¦ But their father worked hard and always told them they could be anything they wanted to be. And, you know what? They believed him. I thought about my grandfather as I watched the Republican National Convention this week. Republicans are seeking to remind Americans of the opportunities that make our country so unique. Yet, reading the liberal media's headlines in real time"¦ I was struck by the venom. 'GOP pushes falsehoods and fear at convention,' says the New York Times. Meanwhile, the Washington Post ran breaking headlines that read: 'Republicans abandon promises of an optimistic convention and try to recast accusations of racism.'....I think we can all agree"¦ Every American must be afforded the opportunity to access the American Dream"¦However, the Left, through unfortunate policy choices, has increased the economic challenges in poor, urban communities....Somewhere deep inside us, regardless of party, I think we all believe in American greatness...Only in America, as they say....My grandfather loved this country and all it enabled him and his family to achieve - because, fundamentally, America is good."

Melania Trump, Tiffany and a Pardon: Takeaways From the RNC's Second Night -Wall Street Journal
"You would be forgiven for thinking the Republican National Convention was being hosted at the White House. After trying to hold the convention in Charlotte, N.C., and then in Jacksonville, Fla., before giving up amid rising coronavirus cases, President Trump appears to have settled on the People's House as his backdrop. The convention was partly pretaped and partly filmed live in a Washington auditorium with no in-person audience, but in the last two days has featured several clips from inside the White House as well as appearances by top administration officials such as Secretary of State Mike Pompeo - a sharp break in tradition that has drawn criticism and at least one investigation from Democrats and ethics advocates. On Thursday, the president will accept the nomination on the White House's South Lawn. The second of four nights of the Republican National Convention included speeches from several Trump family members, including first lady Melania Trump, Eric Trump and Tiffany Trump, as well as several business owners from the Midwest, which includes some of the most contested states in the presidential campaign....Some of our top takeaways from night two....Mrs. Trump delivered her address from the Rose Garden on Tuesday evening. Earlier in the night, there was a pretaped video of the president and acting Homeland Security Secretary Chad Wolf holding a formal naturalization ceremony in the White House....The campaign has also sought to use the powers of the presidency to portray the president as a compassionate leader dedicated to criminal-justice reform. In a video early in the program, Mr. Trump announced he was issuing a pardon for a convention speaker, Jon Ponder, who was convicted of bank robbery and became an advocate for felon rehabilitation....Tuesday night's program included several speeches and videos aimed at reaching out to two demographics the campaign has struggled to win over: Black voters and women."

America's Coming Double Dip -Roach/Project Syndicate
"Soaring financial markets are blithely indifferent to lingering vulnerabilities in the US economy. But the impact of consumers' fear of COVID-19 on pandemic-sensitive services are unlikely to subside, undermining the case for the uninterrupted recovery that investors seem to expect. The double dip is not a dance. It is the time-honored tendency of the US economy to relapse into recession after a temporary recovery. Over the years, it has happened far more often than not. Notwithstanding frothy financial markets, which currently are discounting the nirvana of an uninterrupted V-shaped recovery, there is a compelling case for another double dip in the aftermath of America's devastating COVID-19 shock. The daunting history of the US business cycle warns against complacency. Double dips - defined simply as a decline in quarterly real GDP following a temporary rebound - have occurred in eight of the 11 recessions since the end of World War II. As a general rule, the more severe the downturn, the greater the damage, the longer the healing, and the higher the likelihood of a double dip....Financial markets aren't the least bit worried about a relapse, owing largely to unprecedented monetary easing, which has evoked the time-honored maxim: 'don't fight the Fed.'...This could be wishful thinking. The basic problem is the virus, not the need for Fed-induced liquidity injections or the temporary support of a fiscal package. Monetary and fiscal measures can temper financial markets' distress, but they can do little, if anything, to resolve the underlying health security issues weighing on the real economy....Failure to contain the virus underscores the distinct possibility of aftershocks...Yet frothy financial markets are wedded to the narrative of a classic V-shaped recovery. The rhymes of history suggest a very different outcome."

RealMoneyBlog - Free daily/weekly email


8.26.20 - Covid Lockdowns: Overly Blunt and Costly

Gold last traded at $1,949 an ounce. Silver at $27.44 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday as investors stepped in to buy the dip. U.S. stocks traded mixed on upbeat economic data, declining Covid cases and rising vaccine hopes.

Investors jump into gold as tensions between China and U.S. increase -Kitco
"Rising geopolitical tensions between the U.S. and China are giving gold a boost late Wednesday morning as prices have pushed well off their session lows. December gold futures last traded at $1,947 an ounce, up more than 1% on the day. The rally comes as the U.S. dollar also loses momentum, falling to a session low around 93 points. According to media reports, the Chinese military launched two missiles, including an 'aircraft-carrier killer,' into the South China Sea on Wednesday morning. According to sources close to the Chinese military, the missile launched was a clear warning to the United States. The reports said that the Chinese government is retaliating a day after they said that a U.S. U-2 spy plane entered a no-fly zone off the country 's north coast. Phillip Streible, market strategist at Blue Line Futures, said that investors are laser focused on what Federal Reserve Chair Jerome Powell will say on Thursday but the latest geopolitical development shows that gold is playing a much bigger safe-haven role. 'Nobody is talking about this yet but gold is definitely getting a boost from renewed geopolitical uncertainty,' he said. Gold investors have been waiting anxiously for more than a week to hear what Powell has to say about the state the economy and the potential for new stimulus measure."

chart The Great Inflation Debate Is Heating Up With Trillions at Stake -Bloomberg/Yahoo Finance
"There's hardly any question that carries greater weight in economics right now, or divides the financial world more sharply, than whether inflation is on the way back. One camp is convinced that the no-expense-spared fight against Covid-19 has put developed economies on course for rising prices on a scale they haven't seen in decades. The other one says the virus is exacerbating the conditions of the past dozen years or so - when deflation, rather than overheating, has been the big threat. The debate touches every area of policy, from trade rivalries to unemployment benefits, and everyone has an interest in the outcome. Governments and central banks may face pressure to curtail their pandemic relief efforts, already worth some $20 trillion according to Bank of America, if they trigger a spike in prices. Workers and consumers will see the impact in wage packets and household bills. More than $40 trillion of retirement savings is at risk of erosion if inflation returns.... In the bond markets and among consumers, measures of expected inflation have edged higher. But the data that will ultimately settle the question could take years to trickle in....'Today's policy measures are injecting cash flows that will directly raise the broader measures of money,' Goodhart and Manoj Pradhan of Talking Heads Macro wrote in a postscript to their book 'The Great Demographic Reversal,' published this year. The inevitable outcome, as lockdowns ease and recovery ensues, will be 'a surge in inflation.'....One reason why many analysts expect higher inflation is simply because central banks, the guardians of price stability in the low-inflation era, are more willing than ever to let it rise."

The Fed's Only Economic Solution Is to 'Print' Money -Bonner/Rogue Economics
"A note about an important Federal Reserve meeting from CNBC: 'Heading into Jackson Hole we are confident Chair Powell will use his speech Thursday to tee up a profoundly consequential and risk-friendly move to soft inflation averaging at the Fed's upcoming September meeting,' wrote Krishna Guha, head of global policy and central bank strategy at Evercore ISI. Guha and his team expect the Fed to 'seek a moderate inflation overshoot during the recovery phase of this cycle' as a way to avert 'Japanification,' or an extended period [of] low growth marked by weak inflation. Along with the inflation move, the Fed also, as indicated by the minutes from its July meeting, appears likely to reinforce its commitment to full employment. The unemployment rate currently sits at 10.2%, down from the 14.7% peak in April but well above the 3.5% pre-pandemic level in February.' What do these clowns think? That they have an inflation valve somewhere in the Fed's Eccles building? That they can open it up just a teensy weensy bit"¦ and get just a little more consumer price inflation? And if the Federal Reserve really could control the unemployment rate, we wouldn't have one in 10 Americans jobless right now. The only thing the Fed can do is either 'print' more money or 'print' less money. It cannot fine tune the economy with just the right amount of inflation. Instead, it will inflate the money supply"¦ and keep inflating the money supply"¦ until, finally, consumer price increases are out of control. And then, with the economy on the edge of disaster"¦ everyone needing more money"¦ and the whole country on the edge of chaos"¦ we are confident that a desperate Fed will do exactly the wrong thing - print even more money in an attempt to keep a lid on things"¦ until the whole system blows up."

New Thinking on Covid Lockdowns: They're Overly Blunt and Costly -Ip/Wall Street Journal
"In response to the novel and deadly coronavirus, many governments deployed draconian tactics never used in modern times: severe and broad restrictions on daily activity that helped send the world into its deepest peacetime slump since the Great Depression. The equivalent of 400 million jobs have been lost world-wide, 13 million in the U.S. alone. Global output is on track to fall 5% this year, far worse than during the financial crisis. Despite this steep price, few policy makers felt they had a choice, seeing the economic crisis as a side effect of the health crisis....Five months later, the evidence suggests lockdowns were an overly blunt and economically costly tool. They are politically difficult to keep in place for long enough to stamp out the virus. The evidence also points to alternative strategies that could slow the spread of the epidemic at much less cost. As cases flare up throughout the U.S., some experts are urging policy makers to pursue these more targeted restrictions and interventions rather than another crippling round of lockdowns. 'We're on the cusp of an economic catastrophe,' said James Stock, a Harvard University economist who, with Harvard epidemiologist Michael Mina and others, is modeling how to avoid a surge in deaths without a deeply damaging lockdown. 'We can avoid the worst of that catastrophe by being disciplined,' Mr. Stock said....'The virus is going to determine when we can safely reopen,' Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said in April. The Federal Reserve said in late July that 'the path of the economy will depend significantly on the course of the virus.'....If the only acceptable level of infection were zero, lockdowns would have to be severe and potentially repeated, or at least until an effective vaccine or treatment comes along. Most countries have rejected that course....Dr. Mina said the U.S. at the outset could have chosen to prioritize the economy, as Sweden did, and accept the deaths, or it could have chosen to fully prioritize health by staying locked down until new infections were so low that testing and tracing could control new outbreaks, as some northeastern states such as Rhode Island did. Most of the U.S. did neither. The result was 'a complete disaster. We're harming the economy, waffling back and forth between what is right, what is wrong with a slow drift of companies closing their doors for good,' Dr. Mina said....Dr. Mina's and Mr. Stock's team has designed a 'smart' reopening plan based on contact frequency and vulnerability of five demographic groups and 66 economic sectors. It assumes most businesses reopen using industry guidelines on physical distancing, hygiene and working from home; schools reopen; masks are required; and churches, indoor sports venues and bars stay closed."

RealMoneyBlog - Free daily/weekly email


8.25.20 - Drowning in Joblessness, Swimming in Cash

Gold last traded at $1,934 an ounce. Silver at $26.59 an ounce.

NEWS SUMMARY: Precious metal prices slipped as short-term investors took profits despite a weaker dollar. U.S. stocks fell as Apple shares declined and traders assessed the market's recent run to all-time highs.

5 key moments from the RNC's first night -Fox News
"The Republican National Convention opened Monday with a variety of speeches that focused on the promise of America's future, countering what the party saw as a negative outlook put forward during last week's Democratic convention. A number of speakers praised the accomplishments of President Trump's administration before the coronavirus pandemic struck while pushing back against Democrats and radical policy proposals. Here are five key moments from the first night of the convention. Kim Klacik says Democrats 'assume that Black people will vote for them, no matter how much they let us down.'....Klacik accused Democrats who run Baltimore of 'incompetence and corruption' and said 'the same cycle of decay' can be seen in other cities run by Democrats....Rep. Jim Jordan, R-Ohio, delivered a brief address in which he rattled off a list of President Trump's accomplishments while in office, many of which fulfilled promises he made during his 2016 campaign - all while facing dogged opposition from his political opponents during the Russia investigation and impeachment....Former U.S. Ambassador to the UN Nikki Haley touched on a number of issues during her convention speech but spent much of it discussing how the country took a stronger stance against foreign enemies under Trump than during the Obama administration. 'Now, the U.N. is not for the faint of heart. It's a place where dictators, murderers and thieves denounce America... and then put their hands out and demand that we pay their bills.'Haley said. 'Well, President Trump put an end to all that.'....Florida businessman Maximo Alvarez warned against the 'empty promises' of socialism during an impassioned speech during the convention....Sen. Tim Scott, R-S.C., delivered a message of hope Monday night, stating that November's election was about more than just Trump and Biden but about American's future and potential."

gold standard Is A New Gold Standard Coming? -Forbes/Forbes
"The volatile value of the dollar and gold may not be issues this November but will be by the 2024 elections. The Federal Reserve is printing too many greenbacks, which means economic trouble ahead. This will set the stage for a debate on whether the U.S. should adopt a gold standard. The U.S. was on a gold standard from the days of George Washington until the early 1970s and achieved the greatest economic record in history. Growth rates have slowed significantly since we severed the dollar's link to the yellow metal. A great debate is coming."

America Is Drowning in Joblessness - and Swimming in Cash -New York Mag
"America remains mired in the worst crisis of unemployment and mass bankruptcy it has seen since the Great Depression - and the worst pandemic it has confronted since 1918. And yet, taken together, U.S. households are wealthier than they have ever been. The dizzying contradictions of the COVID-era economy have long been visible in the disconnect between the rally on Wall Street and shuttered storefronts on Main. But the stock market isn't the only indicator that seems out of place in this period of historic economic hardship. In recent months, thousands of small businesses have blinked out of existence, the unemployment rate has remained in double digits, more than 28 million Americans have been brought to the threshold of eviction, and the number of U.S. children who don't have enough to eat has shot up well past its Great Recession high. And yet: Retail sales have already rebounded to their pre-pandemic level, the housing market is booming and home prices are at all-time highs. One explanation for this dissonance is that the Federal Reserve's energetic support for capital markets has rescued America's rich, even as the 90 percent of Americans who own little-to-no equities muddle through hard times...Thanks to the CARES Act's historic fiscal relief - which provided America's unemployed with $2,400 in monthly income support, and a majority of Americans with $1,200 checks - personal income growth hit a historic high in April....Meanwhile, for many of the truly desperate, the CARES Act's limited, temporary relief proved insufficient - or else, never arrived, as the needless logistical obstacles we've erected between unemployed people and their benefits kept them from accessing aid. The end result of all of this is that we now simultaneously have a large population of non-rich Americans who (for the moment) have more money in the bank than ever before, even as a large minority of the country is suffering from nightmarish material hardship."

Why our concept of retirement is outdated - and how artificial intelligence can help -The Globe and Mail
"Since the dawn of the industrial revolution, our work lives have largely followed a predictable pattern: We learn, work and then retire. But the introduction of artificial intelligence and other advanced technologies promises to challenge this century-old model. In fact, this could be an opportunity to rethink a post-work component of the model that may no longer fit: retirement. The idea of retirement was invented in 1881 by Otto von Bismarck, then-minister president of Prussia. According to Bismarck, 'those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.' The idea took nearly a decade to implement, but the official age of retirement was eventually set at 70. Other countries followed this model. But in the 1880s, the life expectancy in Prussia was also 70. The benefits were designed to last people a year, at best. In Canada, the average retirement age is 64, but the life expectancy is now 82 (and rising). Moreover, the number of people over the age of 65 is expected to double by 2036. Canadians, in combination with a small supplemented income from the federal government (if you qualify), have to save enough money to last almost 20 years without a salary. Studies suggest that early retirement is not good for our health. In 2019, U.S. researchers concluded that 'pension benefits and retirement actually resulted in reduced cognitive performance,' with the largest indicator being delayed recall, an early sign of dementia....Harvard Business Review concluded that the concept of retirement itself may be flawed. The islands of Okinawa in the East China Sea are home to the people with the longest disability-free life expectancy in the world. Okinawan women are three times more likely to reach the age of 100 than North American women. In the Okinawa Islands, the concept of retirement simply does not exist...The Okinawa people have 'ikigai', 'the reason you wake up in the morning.' In other words, the thing that drives you and is fundamentally critical to your existence....By 2030, the most dominant form of work is forecasted to be independent contracting - self-employed individuals who are contracted for specific projects or services - for both blue-collar and white-collar jobs...For someone over 65, this could mean taking on a project that requires only one day of work a week, for example, or only working in the afternoons...Physically taxing jobs, such as manufacturing lines, that still require human involvement can be accompanied by collaborative robots to help older workers with tasks that are physically complex or require heavy lifting....Rethinking retirement is not about taking away people's opportunity to finally rest, but about empowering people with the choice to live life in a way that works for them. It can be a way that allows all of us to find - or hold onto - our ikigai."

RealMoneyBlog - Free daily/weekly email


8.24.20 - Major Gold Buying Opportunity Ahead

Gold last traded at $1,929 an ounce. Silver at $26.45 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on a weaker dollar as the risk of rising inflation continued to attract investors. U.S. stocks rose as gains in tech shares and developments on coronavirus treatments drove the bullish sentiment.

Gold Forecast - Major Buying Opportunity Arriving in September -FX Empire
"Our gold forecast supporting a spike-high during the first week of August was timely, as gold peaked August 7th at $2089.20...Long-term investors may want to consider buying a pullback that nears the 200-day MA. First, let me start by saying gold is launching a powerful bull market that should extend into 2030. Governments are trapped with negative interest rates and have no choice but to devalue their currencies. With bonds yielding nothing and the potential for wide-spread defaults - the wise investor is turning to precious metals. Later this decade, we believe gold will exceed $8500 and likely challenge $10,000. However, much higher prices are possible if gold enters a secular mania phase, as we suspect. In a nutshell, it is probably a good idea to buy any significant pullback in gold for the foreseeable future. We also like silver and platinum. Physical metals (coins) are preferred as shortages will probably worsen as the bull market progresses. Finding quality bullion could be difficult or even impossible down the road."

post office Wall Street's worst nightmare isn't Trump or Biden. It's no clear winner at all -CNN
"President Donald Trump has already declared the 2020 election the 'most rigged' in American history. His opponent, former Vice President Joe Biden, has warned that Trump might not leave the White House willingly...It's easy to imagine a scenario where no winner is known for days, weeks or longer following the November 3 election. A protracted dispute over the outcome would be a nightmare for investors, who famously loathe uncertainty. And what's more uncertain than a contested election that raises questions about the peaceful transfer of power in the world's largest economy? 'There is a creeping concern,' David Kotok, co-founder and chief investment officer of Cumberland Advisors, told CNN Business. 'If it appears too close to call, we're going to get a market correction as we get closer to the election.' The situation is being muddied further by the pandemic, which has led many states - including key battlegrounds - to embrace mail-in ballots to ensure Americans who don't want to be exposed to coronavirus have a way to have their votes counted. 'Could several state results that are highly reliant on mail-in ballots - and have razor-thin results - prompt Trump to claim fraud?' Greg Valliere, chief US policy strategist at AGF Investments, wrote in a note to clients last week. 'That is the great fear.' Valliere estimates there is 'at least' a 30% chance of a 'disputed' election that could eventually get settled by the Supreme Court....The best-case scenario for Wall Street would likely be a Trump reelection....Yet markets have been largely unfazed by the rise of Biden in the polls....Thomas McLoughlin, head of Americas fixed income at UBS Global Wealth Management, said investors could flock to safe havens such as gold and US government debt in the event of a disputed election. 'Investors should be prepared for volatility in the event of an inconclusive result. Markets abhor uncertainty,'"

America's New Debt Bomb -Buchholz/Project Syndicate
"The United States today not only looks ill, but dead broke. To offset the pandemic-induced 'Great Cessation,' the US Federal Reserve and Congress have marshaled staggering sums of stimulus spending out of fear that the economy would otherwise plunge to 1930s soup-kitchen levels. The 2020 federal budget deficit will be around 18% of GDP, and the US debt-to-GDP ratio will soon hurdle over the 100% mark. Such figures have not been seen since Harry Truman sent B-29s to Japan to end World War II....WWII was financed with a combination of roughly 40% taxes and 60% bond debt...These US bonds, most with a nominal value of $25 or less, were bought predominantly by American citizens out of a sense of patriotic duty....US household savings during WWII were up - and largely in bonds. But Treasury paper bore a paltry yield, a distant maturity, and the stern-looking image of a former president. How, then, was the monumental war debt resolved? Three factors stand out. First, the US economy grew fast. From the late 1940s to the late 1950s, annual US growth averaged around 3.75%....Second, inflation took off after the war as the government rolled back price controls. From March 1946 to March 1947, prices jumped 20%....Third, the US benefited from borrowing rates being locked in for a long time....So, what's the lesson for today? For starters, the US Treasury should give tomorrow's children a break by issuing 50- and 100-year bonds, locking in today's puny rates for a lifetime....A longer duration will not be enough to solve the debt problem; the US also desperately needs to reform its retirement programs....Unlike military campaigns, the war against COVID-19 will not end with a bombing raid, a treaty, or celebrations in Times Square. Rather, the image we should bear in mind is of a ticking time bomb of debt. We can defuse it, but only if we can win the battle against policy inertia and stupidity. This war won't end with a bang, but it very well could end in a bankruptcy."

Do The Dems Want To Win? -Meijer/Zero Hedge
"No matter how much I read and watch, I can't shake the idea that the Democrats don't really, honestly, want to win the 2020 presidential election. Obviously, there are many in the party who do, and voters too, but not the ones pushing the levers and pulling the strings. Those, whoever they may be, that are picking candidates, setting policy, maintaining media contacts, doctoring spins. Because is there anyone among you who has ever seen a worse candidate than Joe Biden?....What you got is a really old man who couldn't get a toddler excited about ice cream, and a token black woman who nobody even in her own party likes....As for the political program, the agenda, there is really only one item on it: Donald Trump. And no matter how many millions of times it may be repeated in speeches and news articles, NOT being something is in the end NOT a positive message. You're supposed to win on your own merit, not someone else's perceived lack of merit. Newsflash: 'MOST BIDEN SUPPORTERS SAY THEIR VOTE IS AGAINST TRUMP RATHER THAN FOR BIDEN - WSJ/NBC News poll'....Why would a bunch of power-hungry folk (as all politicians and their sponsors are) want to screw up their own chance at obtaining power? Well, the lack of good candidates may well be a factor, but there's something much bigger: the US economy, like most if not all western economies, is wobbling precariously on a precipice, and about to fall off....The parties in charge in various countries, including the GOP in America, will be the ones blamed for most of the ensuing problems. If you're a Democrat behind-the-curtain wizard, wouldn't you at least consider saying: I think I'll pass for this round, and let Trump take the heat?"

RealMoneyBlog - Free daily/weekly email


8.21.20 - Facebook Funneling Covid Misinformation

Gold last traded at $1,938 an ounce. Silver at $26.75 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday amid mild profit-taking and a firmer dollar. U.S. stocks traded mixed on upbeat economic data, but were capped by concerns over a new coronavirus stimulus bill.

Gold to Gain on Massive Currency Debasement -SkyBridge/Bloomberg
"Gold will extend its record-setting rally on 'massive currency debasement' and expectations for further stimulus, according to SkyBridge Capital, which recently added exposure to the metal after exiting in 2011. 'When you think of currency debasement the question is, what is the dollar going to weaken against, and when you look around the globe, it's hard to be excited about alternative currencies,' said Troy Gayeski, co-chief investment officer and senior portfolio manager. 'So, gold is obviously a natural alternative currency.' The precious metal surged to a record well above $2,000 an ounce earlier this month - although prices have stumbled since then - as central banks including the Federal Reserve unleashed vast stimulus to support economies hurt by the coronavirus pandemic. That's spurred bets that paper currencies will lose their value as money supply jumps. Goldman Sachs Group Inc. calls gold the currency of last resort and has forecast more gains....Ultimately, the driver for gold is 'you have massive currency debasement, particularly in the U.S.,' Gayeski said."

bidenvstrump The Joe Biden We Know -Editors/Wall Street Journal
"It took three tries and more than 30 years, but Joe Biden finally accepted the Democratic Party nomination for President Thursday evening. The moment was a personal triumph, and a credit to the former Vice President's doggedness and the alliances he has formed over decades. Yet despite all of his many years in public life, it still isn't clear what kind of President Mr. Biden would make...He is by all accounts a nice guy. He cares about people, powerful or not. He can forge alliances across the aisle. He does not kick down at adversaries, at least most of the time. 'Character is on the ballot,' as he put it Thursday night. In other words, he's running as Not Donald J. Trump. In the best case, Mr. Biden is asking Americans to believe that he would take these personal qualities to the White House and mediate policy disputes, calm the culture wars, and work with both parties to break America's partisan fever...Mr. Biden would certainly have the media and the institutions of American culture on his side, so the daily pitched battles of the last four years would be muted, at least for a time. Yet there's cause to doubt this happily-ever-after-Trump scenario - and the reasons include the man and the times. Regarding the man, Mr. Biden has never been a politician of strong political convictions....Can you think of a single policy, or even a phrase, that identifies what he has stood for in this campaign?....How probable would it be that Mr. Biden would be able to control, or want to control, the progressive ambitions of House and Senate Democrats and the institutional left? There is reason for pessimism from the evidence of his long career....As for foreign policy, he supported the invasion of Iraq in 2002 while chairing the Senate Foreign Relations Committee. Then he flipped when most Democrats did and as the fighting became difficult. Then he opposed the 2007 Iraq surge, saying it would fail. Then in 2011 he supported Barack Obama's withdrawal from Iraq that set the stage for the rise of Islamic State. He opposed the raid on Osama bin Laden. Misjudgments on hard questions are inevitable, and every President makes them. But one test of political character is the willingness to stand up to pressure and make hard choices even when they're politically unpopular. Mr. Biden has no record of doing so."

Facebook funneling readers towards Covid misinformation -The Guardian
"Websites spreading misinformation about health attracted nearly half a billion views on Facebook in April alone, as the coronavirus pandemic escalated worldwide, a report has found. Facebook had promised to crack down on conspiracy theories and inaccurate news early in the pandemic. But as its executives promised accountability, its algorithm appears to have fueled traffic to a network of sites sharing dangerous false news, campaign group Avaaz has found. False medical information can be deadly; researchers led by Bangladesh's International Centre for Diarrhoeal Disease Research, writing in The American Journal of Tropical Medicine and Hygiene....A single article, which falsely claimed that the American Medical Association was encouraging doctors and hospitals to over-estimate deaths from Covid-19, was seen 160m times. This vast collective reach suggested that Facebook's own internal systems are not capable of protecting users from misinformation about health, even at a critical time when the company has promised to keep users 'safe and informed'....'The majority of this dangerous content is still on Facebook with no warning or context whatsoever "¦ The time for [Facebook CEO, Mark] Zuckerberg to act is now. He must clean up his platform and help stop this harmful infodemic.'....Some of the false claims were directly harmful: one, suggesting that pure alcohol could kill the virus, has been linked to 800 deaths, as well as 60 people going blind after drinking methanol as a cure....A Facebook spokesperson said: 'We share Avaaz's goal of limiting misinformation, but their findings don't reflect the steps we've taken to keep it from spreading on our services.'"

Joe Biden's 564 pages of empty promises -O'Rourke/American Consequences
"I just read Joe Biden's presidential campaign platform so you don't have to. If you're thinking, 'Thanks anyway, but I'll read it for myself,' think again"¦Joe has 43 exhaustively detailed platform planks. My print-out totaled 564 pages, and that's not counting the pleas for campaign donations and campaign volunteers tacked onto the end of each document or the full text of 'Joe's Leadership During the COVID-19 Pandemic' that sends you down a rabbit hole of links to everything Joe has ever said about the coronavirus....But although Joe has a plan for everything and can't shut up when explaining his plans, he doesn't make it easy to find out exactly what these plans are. (And perhaps that's a wise move for someone trying to attract 'Anybody-But-Trump' moderate voters.)....His 'It's the End of the World - Poor and Minorities Hardest Hit' attitude persists through all 564 pages. So does the pretentious and silly verbiage - 'disproportionately impact,' 'persistent stressors,' 'systemic shocks,' 'environmental justice,' etc. Every one of the 43 platform planks seems to have been written by perfervid freshmen political-science majors in a dorm room bull session after taking methamphetamine....The platform planks are numbingly repetitious, full of grammatical errors, and occasionally just stupid....However, the real problem with Joe's campaign platform is quantitative not qualitative. All presidential candidates make a lot of promises, but there is a point where 'a lot' turns into a multitude, a profusion, a passel, a slew, oodles, scads, heaps, piles, and - frankly - a shitload. And then the promises, by dint of sheer number, become lies....There's nothing senile about Joe"¦ There's nothing wrong with his brain"¦ His thinking is terrifyingly clear"¦ Joe is an all too actively minded idiot."

RealMoneyBlog - Free daily/weekly email


8.20.20 - Stock Market's Comeuppance is Coming

Gold last traded at $1,949 an ounce. Silver at $27.36 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded mostly lower on disappointing unemployment data and a downbeat economic outlook from the Federal Reserve.

A slow price rebound for gold is actually more bullish in the long run -Commerzbank/Kitco
"Gold is taking its time getting back to the highs from two weeks ago with $2,000 an ounce level acting as a strong resistance point, according to Commerzbank, which sees this trend as a very positive one for prices in the long term. 'Investors appear to be taking profits following the steep $80 price rise since the start of the week. Gold is not able to regain its record high from nearly two weeks ago quite so quickly, in other words. The fact that it is taking somewhat longer can only be healthy in terms of its future price performance,' writes Commerzbank analyst Carsten Fritsch. Meanwhile, gold continues to maintain its positive correlation with equities and is seeing additional support coming from weaker U.S. dollar. 'The S&P 500 needed only five months to rebound after its corona-induced slump in March, and yesterday posted a new record high "¦ The reason for this remarkable development - despite the most serious economic collapse in decades - is the same as for the upswing in the gold price in the last few weeks and months, namely the unprecedented expansion of central bank liquidity coupled with a lack of alternative investments,' adds Fritsch. All eyes are now on the Fed minutes from July, which will be published Wednesday afternoon. 'If the minutes reveal that yield curve control or the toleration of inflation above the target rate were discussed at the meeting three weeks ago, this would lend further buoyancy to gold,' notes Fritsch. 'This is because real interest rates would then slide even deeper into negative territory in the event of rising inflation. U.S. real interest rates with maturities of up to ten years are already negative.'"

chart The stock market's comeuppance is coming, as bullishness gets extreme -Hulbert/Marketwatch
"The U.S. stock market's five-month rally is coming to an end. Of course I don't know when....One big reason is that short-term market timers have become extremely bullish, which is not a good sign from a contrarian perspective. This is illustrated in the chart below, which plots the average recommended equity exposure among nearly 100 such timers that my firm monitors on a daily basis. This average currently stands at 65.9% - higher than 95% of all daily readings since 2000, when my firm began calculating this index. The chart also highlights those occasions over the last couple of years in which the HSNSI has risen to be within the top 10% of all past readings - thereby meeting the criterion for excessive bullishness as set by some contrarians. You'll notice that the market has proceeded to struggle on those prior occasions when this criterion was met....The lesson I draw from the data is that we should keep our enthusiasm in check. The stock market was surprisingly strong over the last five months, but - as the famed British economist John Maynard Keynes liked to remind investors - trees don't grow to the sky. Another reason to expect at least some sort of pullback is that there is almost always a market decline over the three months prior to presidential elections....The bottom line? Don't be surprised if the stock market suffers a nasty decline in coming weeks."

COVID 19 - A Hobgoblin -Von Greyerz/Gold Switzerland
"Is Covid the most perfect distraction that could have hit the world? The timing couldn't have been more perfect for the European and American economies. We know that there were major problems in the financial system back in August-September 2019 when both the ECB and the Fed declared that they would do what it takes. And since then we have seen massive injections of liquidity in the form of QE and Repos....Throughout history, initiating a crisis has always been a popular remedy that leaders have applied to divert attention from the real problem whether it be political or financial....The coming likely implosion of the financial system and depression will for decades be blamed on a pandemic which was only a catalyst and never the cause of the fall of the global economy. The real cause is a rotten financial system and an unmanageable debt burden. If we look at the effects of CV on various countries the differences are astounding. Sweden which has had virtually no lockdown saw an 8.6% fall in GDP in Q2. Much of the fall was due to lower exports as other countries bought less Swedish products. Switzerland which only has had a very limited lockdown had a 6.4% GDP fall in Q2. If we then look at the two countries which have totally mismanaged the situation - USA and UK, the outcome is disastrous. US GDP fell 32.9% in Q2 and the UK GDP was down 20.4%....Sadly the US and the UK have both had high numbers of CV cases and deaths. And in spite of major lockdowns, these two countries have seen a catastrophic decline in their economies, a fall which will take many years to recover from....Gold moved from a price of $1,450 in March to a high of $2075 on the Aug 6, a 43% move. For the first time in a long time the media started to talk about gold and also many people who normally never look at the gold price. This is often a sign of a short term top and that was clearly the case. From the high on Friday the 7th of Aug, gold lost $200 in three days. It has since recovered and is at $1,985, well above the 2011 top. This kind of fall is exactly what a short term overbought market needs. It gets rid of the weak hands and speculators. It is possible that the correction will be a bit deeper and last a bit longer, especially if stocks fall....Just think about gold in grams or ounces as the best insurance and wealth preservation asset that you can acquire today. It is a bargain at current levels and will protect investors from the destruction of currencies and the financial system."

Joe Biden United the Democrats - It's Not Likely to Last -Wall Street Journal
"Former Vice President Joe Biden has united disparate factions of the Democratic Party behind a message of defeating President Trump and rebuilding from the coronavirus pandemic. The detente might not last past the Nov. 3 election, no matter who wins. Mr. Biden won the nomination after resisting calls from more liberal candidates to create a Medicare-for-all health-care system, extend free public university tuition to everyone and overhaul the economy to eventually eliminate fossil fuels. Polls showed Mr. Biden benefiting from a primary electorate that cared most about defeating the president. But progressives have seen a resurgence since the onset of the coronavirus pandemic in March, ousting establishment Democrats in congressional primaries in Illinois, New York and Missouri. And they plan to heap pressure on Mr. Biden to implement liberal policies if he wins the presidency....If the former vice president succeeds in his bid for the White House, he will preside over the fight on how the party governs. If he loses, the party is likely to go through an extensive soul-searching process that will test the liberal-moderate divide. Democrats settled on a politician who has spent his nearly five decades in public life focused less on ideology than on developing personal relationships within institutions - the Senate and the vice presidency - to make deals and push for steady progress on the issues he cares about....The Democratic convention highlighted Mr. Biden's appeal to a variety of voters and featured multiple Republicans who had announced they were crossing party lines in order to support him....Ms. Harris has also spent her own career straddling the line between liberals and moderates, leaving some on the left to wonder whether she would adequately represent their views."

RealMoneyBlog - Free daily/weekly email


8.19.20 - A Blockchain-Based Voting System?

Gold last traded at $1,943 an ounce. Silver at $26.91 an ounce.

NEWS SUMMARY: Precious metal prices stepped back Wednesday on profit-taking and firmer dollar. U.S. stocks rose slightly, with the S&P 500 notching a fresh all-time high, as strong quarterly results from Target lifted the broader retail sector.

Clueless Gold Writers Keep At It -Mish/The Street
"Put Wall Street Journal writer James Mackintosh firmly in the clueless camp. Mackintosh says 'Gold Will Need More Bad News to Keep Prospering'. 'If economic recovery continues, expect gold to suffer: There will be less need for insurance, fewer worries about the dollar's reserve status and lower prospects of more Fed action. Of course, if the Fed lets inflation rip gold might ultimately rise a lot more - but for now, at least, investors see little chance of this.'....Mackintosh does get some things right. He does not expect the dollar is about to lose its status as the world's anchor currency, and neither do I for reasons explained many times. It is lack of faith in central banks propelling the dollar. We had three major recoveries in 2000, in 2009 and in 2020 with gold rising in each. It's the monetary stimulus stupid. We can have a Fed-induced orgy of a recovery (we already have on in the stock market, just not the real economy), and it will fuel gold, not collapse it. Hello. 'There is No Magic Money Multiplier' but the Fed believes there is. As long as central banks and governments keep debasing money, there will be little faith in central banks but lots of faith in gold."

road Traders Brace for Haywire Markets Around Presidential Election -Wall Street Journal
"The presidential election is three months away, but some traders are preparing for the possibility that prolonged political uncertainty will stoke stock-market mayhem. The investors are going beyond the normal hedging ahead of a potential change in power in Washington. Instead they are betting on volatility and a possible market tumble later in the year. Among the concerns expressed by some: speculation that President Trump could try to delay the election or disrupt mail-in voting, as well as the chance that a result remains unclear for weeks after polls close. The election worries amplify existing concerns about the weak economy, a possible second wave of coronavirus infections in the fall and the highflying market. The bearish bet is that turmoil around the election hits the already fragile economy as the cooler months bring on more infections, all hitting the stock market that is priced for a recovery....The main driver of the market right now is the economy and uncertainty of a new stimulus package in Washington, which could hurt the slow recovery recently seen in retail sales and jobs....Bridgewater Associates, the giant hedge fund with $140 billion in assets, told clients last month it believes there is a risk there will be no clear election winner. 'The real uncertainty that could confront investors is if there is material concern over the legitimacy of the process to decide a winner,' Bridgewater told clients....To profit from a rocky presidential election, RBC Capital Markets recently recommended investors buy bullish options that expire in January on one of the biggest exchange-traded funds tracking gold....Meanwhile, gold prices have surged to records recently, driven higher by investors nervous about the world economy."

The USPS Filed A Patent For A Blockchain-Based Secure-Voting System -Zero Hedge
"It looks like the United States Post Office is getting in the business of voting. The USPS filed for a patent on February 7, 2020 for a 'Secure Voting System' that uses a blockchain access layer. Obviously, this could be one of the strongest signals of a welcome adaptation to blockchain by the U.S. government since blockchain was thrust on the map by Bitcoin. 'A voting system can use the security of blockchain and the mail to provide a reliable voting system,' the patent application says. 'A registered voter receives a computer readable code in the mail and confirms identity and confirms correct ballot information in an election. The system separates voter identification and votes to ensure vote anonymity, and stores votes on a distributed ledger in a blockchain.' The 'United States Postal Service' is listed as the applicant on the application. 'Voters generally wish to be able to vote for elected officials or on other issues in a manner that is convenient and secure,' the application says. 'Further, those holding elections wish to be able to ensure that election results have not been tampered with and that the results actually correspond to the votes that were cast. In some embodiments, a blockchain allows the tracking of the various types of necessary data in a way that is secure and allows others to easily confirm that data has not been altered.' Equally as interesting as the patent itself is the fact that the application was filed before the coronavirus had wreaked total havoc on the country and long before the idea of mail in voting was being tossed around by pundits and the mainstream media on the daily."

Pandemic has driven Americans to depression and drinking, CDC says -Yahoo News
"The coronavirus pandemic has led to a marked deterioration in Americans' mental health, according to a new Centers for Disease Control and Prevention study. That study, which surveyed 5,412 Americans, found that '40.9% of respondents reported at least one adverse mental or behavioral health condition.' According to the new study, 31 percent of respondents were suffering from symptoms of anxiety or depression; 26 percent experienced symptoms of traumatic disorder; 13 percent were using drugs or alcohol more heavily, or for the first time, to cope with the pandemic; and 11 percent had seriously contemplated suicide. 'Younger adults, racial/ethnic minorities, essential workers, and unpaid adult caregivers reported having experienced disproportionately worse' mental health outcomes than other groups, the study concluded....Significantly, more than 90 percent said they were not being treated for anxiety, depression or posttraumatic stress disorder before the pandemic struck....Former first lady Michelle Obama admitted that the pandemic, combined with the grotesque images of police brutality...were causing her anguish. 'I am dealing with some form of low-grade depression,' Obama said on her new podcast. She later said she was 'doing just fine,' but the admission seemed to give many Americans license to discuss their own experiences throughout the last six months. With many schools not opening to in-person instruction, the influenza season approaching and the economic recovery in an apparent stall, those experiences could remain challenging well into 2021....Alcohol has become an all-too-reliable crutch for a jittery, lonely population. Just how the nation will emerge from that pit remains unclear."

RealMoneyBlog - Free daily/weekly email


8.18.20 - Berkshire Buys Gold, Dumps Goldman

Gold last traded at $2,006 an ounce. Silver at $28.10 an ounce.

NEWS SUMMARY: Precious metal prices rose further Tuesday on bargain-hunting and ongoing dollar weakness. U.S. stocks traded lower as new pandemic stimulus hopes for an agreement dimmed amid growing political tensions.

Gold Is Flying High, but Getting Harder to Mine -Wall Street Journal
"Gold miners are riding high as the metal trades at record prices, but digging it out of the ground is getting harder. Gold is among the rarest metals in the earth's crust and much of the easier-to-get ore has already been mined. What is left is harder to find and more expensive to extract, miners say. While that isn't an immediate worry, with gold prices hitting $2,000 an ounce for the first time this month, miners face the longer-term prospect of higher costs and drilling in less hospitable places....Gold prices are up around 28% this year. Miners have used the rally to pay down debt and increase dividends, rather than start new projects, with executives wary of repeating their costly overexpansion during the last big run-up in prices. 'We are definitely past peak gold,' said Mark Bristow, chief executive of Barrick Gold Corp., the world's second-largest gold miner by market capitalization. He estimates that the new metal added to miners' reserves since 2000 replaces only half of the gold they mined in that period....The grade of gold being mined - the amount of metal for every ton of rock mined - is also getting worse. The average mine grade has fallen from over 10 grams a ton in the early 1970s to around 1.46 grams a ton last year, according to Metals Focus, a precious-metals consulting firm....All the gold ever mined can fit into a 69-foot cube, according to the World Gold Council."

gold Did Buffett Just Bet Against The US? Berkshire Buys Barrick Gold, Dumps Goldman -Zero Hedge
"Berkshire Hathaway's latest 13F just dropped and contained inside is a signal that none other than the Oracle Of Omaha appears to now be quietly betting against The United States. Why? Because for years - in fact for as long we can remember - Warren Buffet has denigrated gold: In a speech delivered at Harvard in 1998, Buffett said: '(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."....According to the latest 13F, Buffett's Berkshire Hathaway not only dumped all his airlines - as we learned previously, but has also liquidated huge amounts of its exposure to US banks (exiting Goldman Sachs entirely)...Berkshire took a new stake (20.9 million shares) in Barrick Gold, a holding that was valued at about $564 million at the end of that period...So, the famously anti-gold investor has abandoned banks - 'the backbone of America's credit-driven economy - in favor of a gold miner (which was the largest in the world until last year when Newmont bought Goldcorp). Is Buffett betting against America with a levered position on precious metals?....What is most ironic about all of this is that Warren's father, Howard Buffett, is among the great gold bugs of all time....Buffett's father stresses the relation between money and freedom and contends that without a redeemable currency, an individual's freedom and one's access to property is dependent on goodwill of politicians....Did it really take him until he was 90-years-old to realize that his dad was right after all?"

No Ordinary Recession -Akers/Economics21
"As a labor economist, I follow the data releases on the state of the economy pretty closely...There are 13 million fewer jobs in the domestic economy today than in February...The rate of unemployment has skyrocketed from 3.5 percent in February, a 50-year low, to over 10 percent, a level of joblessness that hasn't been seen since the early 1980s. The scale of job loss has been massive....An abrupt and unanticipated stoppage of vast swaths of economic activities, is wildly different in nature from previous economic downturns in the nation's history....At this point, our nation continues to be engaged in an unexpectedly lengthy battle with COVID...The longer that it takes, the more permanent the damage that will be done. For example, if businesses had been required to close for just a few weeks, many could have withstood the disruption, perhaps with help from federal or state programs, and could have brought their operation back online with the same or most of the same workers. If the pause on activity had been just a bit longer, those same businesses might have had to lay off workers but been able to reopen, perhaps with a new staff, in short order. But the longer they are required to tread water, the more of them will have to close their doors for good, taking with them the jobs they had contributed to the economy. The same dynamic is at play for individuals. Some might be able to withstand a few weeks of suppressed income, but as the length of time goes on, individuals and families will have to make accommodations, like selling their homes or relocating, leaving them farther behind financially than they would have been otherwise....The goal of policy interventions today should be to minimize the 'scarring' that will come from leaving the economy largely offline as we battle COVID, while simultaneously supporting efforts to develop a vaccine and a plan for rapid distribution."

People Aren't Reading or Watching Movies. They're Gaming. -New York Times
"Even before the pandemic and the lockdowns, digital games were fast emerging as one of the world's favorite pastimes. But when live entertainment came to a halt, the virtual kind just took off. Since April, every week has ended with U.S. box office receipts down at least 97 percent and gaming revenue up by more than 50 percent, compared with the same week the year before. Driven by widening bandwidths that make digital games fun to play on mobile phones, global gaming revenues have risen steeply from under $20 billion in 2010 and are on track to hit $160 billion this year - more than books, music or movies. But gaming is doing more than displacing other forms of entertainment. It is also providing digital three-dimensional environments in which people can interact freely, develop content and pass on knowledge in new ways....During the lockdowns, gaming platforms have been thriving as venues for all manner of events. Savvy teachers are holding online classes where their students are already spending their time: on game-focused sites like Twitch and Discord....The prospect of a virtual world built on gaming platforms may unsettle those who see digital games as a mind-deadening waste of time at best and full-immersion training in antisocial behavior at worst."

RealMoneyBlog - Free daily/weekly email


8.17.20 - Sweden's Success Shows True Cost of Arrogance

Gold last traded at $1,991 an ounce. Silver at $27.61 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed as investors struggled with overbought conditions and a political stalemate over a new stimulus package.

Billionaire Ray Dalio's Bridgewater fund poured almost half a billion dollars into gold in Q2 -Business Insider
"Billionaire investor Ray Dalio's hedge fund poured more than $400 million into gold in the second quarter of this year, as the price rallied towards record highs, luring in high-profile and amateur investors alike...Bridgewater raised its holdings in the SPDR Gold Trust from $600.6 million to $914.3 million, making it one of the largest investors in the fund, according to data from Bloomberg. The fund's holding in SPDR is now its second-most valuable. The company increased its holding in the iShares Gold Trust from $176 million to $268.4 million. This investment is now Bridgewater's sixth biggest stake, up from ninth the previous quarter....With the rally in the gold price, investors have piled into ETFs at break-neck speed this year. ETFs around the world now own more gold than the German central bank, the world's second biggest holder of bullion after the US....Gold broke the $2,000 mark for the first time ever at the start of the month. The price has gained more than 26% so far this year, making it one of the best-performing commodities and outpacing several peers, even the tech-heavy Nasdaq....While gold's decline this week initially caught traders off guard, the outlook for the market remains bright. Analysts told Business Insider that despite Tuesday's near-6% drop, several factors factors such as the weaker dollar and growing geopolitical uncertainty suggest gold has more room to rally."

bulls The New Fascism -Gilder/AIER
"Up here in Maskachusetts, in the Berkshire Hills, we have a new form of fascism that might well be called 'phasism' as our Governor Charlie Baker phases out our freedoms and our economic life. Banning music and theater and Tanglewood concerts and tennis tournaments and baseball games and track meets and schools and colleges, he has put his knee on the arterial flow of our tourist and services dependent economy and it can no longer breathe....I've written of my colleague John Schroeter's stirring ebook, already available on Amazon: Covid19: A Devil's Choice. With cogent authority, this book presents all the statistical arguments on the insignificance of COVID compared to earlier, more deadly epidemics that brought no lockdowns or mask edicts....Now John Tamny, the libertarian star of Forbes' Real Clear Markets, has unleashed a devastating tract, to be published as soon as possible, entitled When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason. Naming names and describing the endless carnival of outrageous overreach, Tamny vividly shows that Governor Baker is just one of many demented governors reveling in power like a Charlie Chaplin Fuhrer during this mass media madness. Tamny is not much interested in COVID-19 data, except to dismiss the virus drama as just another epidemic event like scores of others over the centuries. He derides the call to continue lockdowns until the arrival of vaccines.... COVID deaths, even according to the Imperial College of London, will be drastically fewer in 2020 than the some 1.4 million new tuberculosis deaths resulting from the lockdowns and COVID hospital distortions....What we have undergone is an egregious and perhaps criminal and certainly unconstitutional power grab by politicians....Tamny is giving us a heroic book just in time to lead this movement. We have been suffering not from a medical crisis but from a political and economic and institutional crisis. We have undergone a vast breakdown of moral, educational, intellectual and journalistic standards. Tamny tells this story better than anyone else. All should read his shocking tale."

Markets rise as economy struggles; 'It does not make sense' -The Hill
"The expression 'stock markets are not the economy' may have never been truer. The S&P 500, an index that tracks the country's largest publicly traded companies, has all but erased its pandemic losses and closed within a fraction of a percentage point of its all-time high Thursday. But far away from Wall Street, the economy on main streets in cities and towns across the country feel as if they are in tatters. Unemployment stands at 10.2 percent as thousands of businesses remain closed. Many of the jobs shed when businesses closed their doors for extended lockdowns have not come back, and the jobless rate remains at its highest level since the Great Depression. Gene Goldman, chief investment officer at Cetera, says that equity markets are enjoying a V-shaped recovery even as the real economy is experiencing a slower, U-shaped recovery. 'It does not make sense,' he said....A central reason for the spike is the Federal Reserve. The Fed dropped interest rates to near zero and opened a slew of new lending facilities to keep financial markets afloat. Its balance sheet exploded from roughly $4.3 trillion in mid-March to about $7 trillion today....'This market feels overdone, overvalued, stretched, speculative, pick your adjective,' said Mark Zandi, chief economist at Moody's Analytics. 'There will be a day of reckoning, but who knows when it will occur. The irony is that it might happen after the pandemic.'"

Sweden's success shows the true cost of our arrogant, failed establishment -Telegraph
"So now we know: Sweden got it largely right, and the British establishment catastrophically wrong. Anders Tegnell, Stockholm's epidemiologist-king, has pulled off a remarkable triple whammy: far fewer deaths per capita than Britain, a maintenance of basic freedoms and opportunities, including schooling, and, most strikingly, a recession less than half as severe as our own. Our arrogant quangocrats and state 'experts' should hang their heads in shame: their reaction to coronavirus was one of the greatest public policy blunders in modern history, more severe even than Iraq, Afghanistan, the financial crisis, Suez or the ERM fiasco. Millions will lose their jobs when furlough ends; tens of thousands of small businesses are failing; schooling is in chaos, with A-level grades all over the place; vast numbers are likely to die from untreated or undetected illnesses; and we have seen the first exodus of foreigners in years....Pandemics always come with large economic and social costs, for reasons of altruism as well as of self-interest...But if a drop in GDP is unavoidable, governments can influence its size and scale. Politicians can react in one of three ways to a pandemic. They can do nothing, and allow the disease to rip until herd immunity is reached. Quite rightly, no government has pursued this policy, out of fear of mass deaths and total social and economic collapse. The second approach involves imposing proportionate restrictions to facilitate social distancing, banning certain sorts of gatherings while encouraging and informing the public. The Swedes pursued a version of this centrist strategy...The third option is the full-on statist approach, which imposes a legally binding lockdown and shuts down society....Almost all economists thought that Sweden's economy would suffer hugely from its idiosyncratic strategy. They were wrong."

RealMoneyBlog - Free daily/weekly email


8.14.20 - Economy Reknitting Itself, Leave it Alone

Gold last traded at $1,953 an ounce. Silver at $26.35 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday on profit-taking despite a weaker dollar. U.S. stocks traded mixed as as the S&P 500 again failed to reach its February record high.

Gold Markets Continue to Build Base for Next Leg -FX Empire
"Gold markets gapped lower during the trading session on Thursday but then turned around to fill that gap. Ultimately, the market looks likely to continue to go higher due to the fact that the $1900 level underneath holding as support. If that is going to be the case, then the hammer that formed during the Wednesday session will be perfect. After all, it did touch a large, round, psychologically significant number...The fact that we are holding up on Thursday also lends credence to the idea of this market looking good, so ultimately, I am not interested in selling. Yes, I recognize that there was a complete thrashing on this market during the Tuesday session, but that was essentially something that was overdue. Now that it looks like we are stabilizing, people will start to dip their toe into the water and go long. For myself, I only added to a longer-term core position that am willing to hold for quite some time. All things being equal, I think that the market goes looking towards the highs again. All things being equal, this is a market that is probably moving more of the Federal Reserve dumping dollars into the system more than anything else, something that is not going to end anytime soon."

economy The economy is reknitting itself, so leave it alone -Yandle/Washington Examiner
"Last Friday, the Bureau of Labor Statistics provided a bit of good news for the beleaguered coronavirus economy: Some 1.8 million jobs were added to the economy in July, and the unemployment rate ticked down to 10.2%...With 140 million working, and with 16.3 million looking, the economy seems to be reknitting itself...A somewhat unregulated market economy, if left alone, is capable of finding its way during pretty bleak times. I should emphasize the 'unregulated' part of that statement. During these challenging coronavirus times, a host of people seem ready to grab the economy's elusive steering wheel and have their time as driver. They yearn to exercise political power. Leaving it alone is the difficult challenge to be met by headline-seeking politicians and wannabes....Countless ordinary people are figuring out how to make a living, and the result of this effort is what I meant earlier when I referred to the economy knitting back. These are the people who previously ran a restaurant and now operate a food truck or a take-out business. Some are people who worked with diverse service providers that now contract with businesses to provide cleaning and decontamination of premises. Others who previously worked in offices and managed construction projects are working from home...Rather than reknitting, some are knitting a replacement economy from new balls of yarn, while finding ways to get costs down and profits up. It's happening all around us...When faced with upheaval, making some changes isn't always a choice. The old law 'necessity is the mother of invention' applies in spades. Innovation is often driven by hard times....The coronavirus is a cruel task master. This is time to give the economy some room to roam, to avoid imposing more restrictions on folks who are trying to rebuild their businesses, and to avoid hitting folks with new taxes, whether they are called tariffs or otherwise."

The Federal Reserve Helps America's Rich Get Richer -Bonner/Rogue Economics
"The feds corrupted the whole economy - and society itself - with their fake money, fake interest rates"¦ and trillions of dollars given to Wall Street. The fake interest rates increased debt and cut growth rates in half. And they twisted the economy away from Main Street (where most people earn their living) and toward Wall Street (where the top 10% of the population owns nearly 90% of the assets.) This 'financialization' made the rich richer, but it left most people (relatively) poorer. People don't understand how it works. And they don't want to understand. But they feel cheated. Many want revenge. The solution is very simple: Just say 'no' to the fakery and the larceny. No more stimulus. No more deficits. No more Federal Reserve support for Wall Street. No more counterfeiting....There are only two kinds of money - real or fake...Real money is created by providing real goods and services to others. Traditionally, it is represented by gold or silver tokens"¦ or pieces of paper backed by gold or silver. Take out the gold or silver, and you just have pieces of paper - which can be printed in any quantity the authorities choose"¦ and used for whatever claptrap purpose they want....What a delight it would be for The Donald to call out one of the biggest hinds in the whole jackass herd - former Fed chief, Ben Bernanke...Bernanke 'printed' $3.6 trillion over a five-year period - an unprecedented increase in America's monetary base. Today's Jerome Powell-led Federal Reserve, however, printed nearly that much in just 90 days. And it's just getting started"¦ Last week, there was a $4 trillion deficit to fund. Next week, the deficit may be $5 trillion or $6 trillion. Neither conservatives nor liberals offer any objection. They, too, have the courage to spend other people's money. Don't ask; don't tell. Just print!"

REI Built an Elaborate HQ. Because of Covid-19, the Outdoor Retailer Wants to Sell It- Wall Street Journal
"Recreational Equipment Inc. is looking to sell its custom-made new headquarters and allow employees to work from home or other offices, the latest sign that the pandemic is driving companies to ditch central offices to raise cash. The retailer, known as REI, was poised to open the new Seattle-area headquarters this summer after creating a unique building that reflected the company's outdoorsy image and could serve as a way to recruit new employees. The property features outdoor staircases and bridges, a courtyard of native plants, and skylights to let in sunshine and air. But the cooperative said on Wednesday it was trying to find a buyer for the property before ever moving in. Instead of a single headquarters, REI will open a number of smaller offices and allow employees to work remotely, the company said. Employees have been working from home since March. REI's about-face on a building that was two years in the making offers the latest example of how the coronavirus pandemic is changing daily work habits and upending the office sector. Many companies say they have been surprised by how productive remote work has been, and they plan to allow their employees to work from home on some days even after the pandemic is over....REI is the latest in a growing list of companies embracing remote work. Twitter Chief Executive Jack Dorsey, for example, said in May that the vast majority of the company's employees would be allowed to work remotely indefinitely. Facebook CEO Mark Zuckerberg has said that he expects half the company's employees to work remotely within a decade. While few observers expect companies to ditch the office altogether, many expect that firms will use less space in the future and in some cases switch from a single, big headquarters to multiple smaller locations."

RealMoneyBlog - Free daily/weekly email


8.13.20 - Kamala Won't Satisfy Progressives -WSJ

Gold last traded at $1,961 an ounce. Silver at $27.24 an ounce.

NEWS SUMMARY: Precious metal prices rebounded sharply Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors digested better-than-expected unemployment data.

Gold Has Always Been The Best Money -Lewis/Forbes
"I have found that, among the mass of simple, hardworking people who don't know much about monetary history, there has always been a basic understanding that money based on gold and silver is a good idea....The history of money since that time is basically one long tale of gold and silver, leading up to the Classical Gold Standard of the pre-1914 era, and then the Bretton Woods gold standard beginning in 1944, and ending in 1971. This is true in the West, but it is also true in the East. Gold and silver coinage was the norm in India from the sixth century BC. Gold was the primary high-value money of the Han Dynasty (202 BC-220 AD) in China....The first government paper currency was issued by the Colony of Massachusetts in 1690; the Continental Dollar died in hyperinflation in 1781. This experience drove the Founders to include a mandate to use gold and silver coinage, in Article I Section 10 of the Constitution of 1789. The U.S dollar maintained a nearly-unchanged value of 23.22 grains of gold ($20.67/oz.) from 1792 to 1933, with a major lapse during the Civil War. After a devaluation in 1933, the dollar was linked to gold at $35/oz. until 1971.Through all this time, a simple pattern emerged: those countries that stuck to gold and silver, and unchanging coinage, tended to be successful. Stable Money works....We say of things that are stable, solid and reliable, that they are 'like a rock.' This is a good thing. This is what we want money to be, and gold is the best approximation of this ideal that we have - and approximation that, while never perfect, has always been Good Enough."

storm Kamala Harris Won't Satisfy Progressives -Wall Street Journal
"By choosing Sen. Kamala Harris as his running mate, Joe Biden is sending a message to the progressive left base of the Democratic Party: Drop dead. The choice indicates that Mr. Biden's centrist establishment handlers view Hillary Clinton's defeat in 2016 as historically anomalous rather than evidence of a flawed strategy....'Joe Biden's top priority in selecting a running mate will be to choose somebody who can help unite and energize the sprawling, restless Democratic coalition,' Errol Louis said last week on CNN. 'At a time when demands for racial justice and inclusion are surging, Harris would be a camera-ready voice from the black base of the party.'....It's hard to believe that younger black voters will look past Ms. Harris's record as San Francisco district attorney and California attorney general. 'That 'top cop' thing has just stuck - she built such a strong brand on it as an AG, as the DA - and it's hard for people to erase that in their memories,' Chivona Newsome, a co-founder of Black Lives Matter, told the New York Times. Kevin Cooper sits on California's death row in part because Ms. Harris refused to allow him to obtain advanced DNA testing to demonstrate his innocence....Mr. Biden probably won't enjoy much of a boost from a running mate primarily chosen to appeal to the older black voters who would have turned out for him anyway. He has certainly alienated progressives. The hashtag #KamalaIsACop will trend again."

How Will the Presidential Election Affect the Stock Market? -McMillan/Commonwealth
"Politics has less of an effect on the economy and, therefore, the markets than we think....Decade after decade, markets have moved ahead as the economy grew, regardless of the party in power. When we do see a political influence, it is not what might be expected. The average Republican administration over that time period saw gains of 3.5 percent per year, while the Democrats saw gains of almost twice as much, at 6.7 percent per year....Put in that context, fears about the election look to be overstated. Trump is a known quantity. So, if he is reelected, the effect should be minor....Biden plans to raise taxes significantly if elected, which would hit corporate profit margins. If margins decline, so do earnings - and so does the stock market. Higher taxes on the rich would also presumably hit their spending, which would be a drag on growth. These are real concerns. They are not, however, any different from the concerns that normally accompany a Democratic administration....The next president will likely have to deal with a divided government, limiting the administration's ability to pass any significant changes. Even if the Democrats were to take the Senate, a Biden administration would not have a filibuster-proof majority and likely could not rely on all the Democrats to vote for anything radical. The American political system is designed to be hard to change. Nothing in this election will change that, no matter who wins....The real risks will come from reactions to the headlines, rather than to the underlying data."

Amid coronavirus outbreak, drive-in theaters unexpectedly find their moment -LA Times
"Brenna Coogle frequented the Paramount Drive-In as a child growing up in Lakewood but hadn't been there in about 30 years. On Tuesday night, however, she decided to visit it for a showing of Pixar Animation Studios' 'Onward' with her 9-year-old son and friends....Drive-in theaters have long been viewed as an anachronistic diversion - perhaps worthy of an occasional visit, if that. Now, though, several among the country's 305 drive-in theaters are experiencing a surge in interest as traditional movie theaters, theme parks and other entertainment options are forced to close because of governmental advisories designed to increase social distancing during the coronavirus outbreak. In interviews with The Times, owners of drive-ins in California, Kansas, Oklahoma and Missouri said that they remain open, with several reporting increases in business in recent days. Ticket sales Tuesday at the two-screen Paramount Drive-In were 'at least double' what they typically would be, said Beau Bianchi, whose family has owned the facility in Paramount since 1946. In all, the drive-in - which offered a double feature on both of its screens - welcomed 136 cars and sold 320 tickets. 'It has been a welcome relief for families and adults looking for a little getaway from the house,' Bianchi said. 'We've been trying to let people know that we have a safe environment and [offer] a little escape.'"

RealMoneyBlog - Free daily/weekly email


8.12.20 - What Did the 'Stimulus Plan' Stimulate?

Gold last traded at $1,938 an ounce. Silver at $25.62 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Wednesday on bargain-hunting and continued safe-haven buying, despite a firmer dollar. U.S. stocks rose as shares of the major tech companies recovered some of their steep losses from the previous session.

What Did the 'Stimulus Plan' Stimulate? -Reynolds/AIER
"Faced with an escalating pandemic in March, the President and most governors did not want to 'stimulate' the private economy. They wanted to shut it down - with stay-at-home orders and mandated business closings...People were not suddenly prohibited from buying many goods and services because they had no income. They had no income because they were prohibited from producing desired goods and services by working in certain 'nonessential' jobs or opening 'nonessential' businesses....Federal officials declared that what was needed was to enact a $3 trillion 'stimulus plan.' By early August, evidently disappointed with the results of their first effort, House Democrats were proposing to rerun the experiment on the same $3 trillion scale while Republican senators suggested borrowing and spending a third as much. Both House and Senate plans include $300 billion for a second round of Economic Impact Payments, however, sending $1,200-2,400 checks to people as if it was free money from generous politicians. Recall that the first big stimulus plan of March 27, 2020 was advertised as a way to boost consumer spending. 'We want to make sure Americans get money in their pockets quickly,' said Treasury Secretary Mnuchin....Mailing $1,200 checks to 159 million people, adding $600 to weekly unemployment benefits and rationing forgivable 1% loans for five years did, of course, raise personal income....In addition to $1,200 in helicopter money dropped on 159 million adults, and subsidized PPP loans to some lucky noncorporate businesses, the 'stimulus' package included longer and larger unemployment benefits - an extra $600 per week....With the federal government's $600 weekly add-on, unemployment benefits were the equivalent of working for $31-36 an hour in Oregon, Washington, Minnesota, New Jersey and Massachusetts. Why work? In June, New Jersey and Massachusetts suffered the nation's highest unemployment rates of 16% and 17.4% respectively....So, what was stimulated by the stimulus? The answer is obvious. Federal nondefense spending rose at a 39.7% annual rate. Big government spending can and does grow big government. The only conceivable rationale for repeating the latest of many failed experiments with fiscal stimulus (borrowing from Peter to pay Paul) might be to 'stimulate demand.' But we just tried that. It didn't work. It never works."

gold and silver What's Next for Gold & Silver in 2020? -Heskin/Swiss America
"It is no secret precious metal prices have been on a steep incline in 2020, due to the dramatic rise in economic uncertainty and a growing distrust of paper currencies, government and the stability of the financial markets. By August, gold prices had risen 35% (rising above $2,000 an ounce) and silver prices were up 60% (approaching $30 an ounce). So what's next? Are we reaching peak gold and silver prices? Is it too late to diversity a portion of your assets into precious metals? Or is 2020 just the start of a new long-term bull market? 'As long as the money-printing continues, gold will continue to rise,' opines legendary businessman, economist and author Bill Bonner who accurately called the last precious metals bull market in 2000. 'Stocks are an indicator of giddy greed,' Bill continues. 'Gold is a measure of sober fear. One is hope. The other is reality....So, what do you think?...Is this the 'bottom' for the U.S. economy... and the peak in the yellow metal?....Or is this just the beginning... the first act in a show that will last for years more? Peak gold is probably still far ahead.' Mr. Bonner is not alone. Scores of respected, mainstream market analysts - such as Goldman Saks and Bank of America - are now calling for $2,300 to $3,000 an ounce gold within the next 2 years; as well as $40 to $75 an ounce silver. Longer-term projections range from a $5,000 to a 10,000 an ounce gold price in the next decade....Over the last forty years, those of us at Swiss America have been passionate about the wisdom of physical gold and silver ownership. We believe physical gold and silver should be viewed as necessary 'wealth insurance' to protect your other assets from the wild swings in the economy and markets we may face in the months and years ahead. No, it is never too late to get started shoring up your financial portfolio with physical gold and silver. Call us today at 800-289-2646 to rediscover gold and silver in 2020!"

Mayhem Continues, Protest Narrative Crumbles -Editors/Wall Street Journal
"The press has been playing defense for Portland anarchists for weeks, suggesting riots and arson against a federal courthouse were provoked by federal agents protecting it. When the Trump Administration lowered the profile of its agents in an agreement with the state government, the media's protest cheerleaders were eager to report that the real cause of the violence had gone away. 'Trump ordered federal forces to quell Portland protests. But the chaos ended as soon as they left,' said a July 31 Washington Post headline. So much for that. Over the weekend Portland police were forced to declare two riots. On Friday police said 'people defied orders to disperse and threw rocks, frozen or hard-boiled eggs and commercial-grade fireworks at officers,' the Associated Press reports. Rioters also 'filled pool noodles with nails and placed them in the road, causing extensive damage to a patrol vehicle.' On Saturday night, arsonists set a fire inside the Portland police union building and rioters outside landed two officers in the hospital. Rioting continued late Sunday, injuring more police. The narrative of peaceful protesters set upon by bloodthirsty law enforcement officers in Portland is becoming unsustainable even for progressives...'When you commit arson with an accelerant in an attempt to burn down a building that is occupied by people that you have intentionally trapped inside,' said Portland Mayor Ted Wheeler, 'you are not demonstrating. You are attempting to commit murder.'....Meanwhile in Chicago on Sunday night, hundreds of looters ransacked stores along the Magnificent Mile, one of America's premier commercial streets. The Chicago Tribune reports that some looters 'could be seen throwing merchandise into rental trucks and other large vehicles before driving away.' The city pulled up drawbridges to control entrance to the downtown, and 13 cops were injured. Homicides in the city are up 52% compared to last year, and Alderman Brian Hopkins told CBS local news on Friday that 'If people are afraid to come downtown, they fear for their life, they're not going to want to shop here.'....All of this raises the question of how long the mainstream press and Democratic politicians can publicly maintain the fiction that violence surrounding 'mostly peaceful' protests is a nuisance of little consequence and that the real villains are the police. The longer this willful distortion continues, the longer the economic immiseration of places like Chicago will persist even after the pandemic ends."

"I Wouldn't Take It" - Former FDA Commissioner Scott Gottlieb Trashes Russia's 'First-In-The-World' COVID Vaccine -Zero Hedge
"Former FDA Director Scott Gottlieb, who has been kicking himself for leaving the Trump Administration to spend more time 'with family' late last year - only to miss out on what could have been a career-making turn as the nation's corona-savior - and trying to compensate by appearing on 'Squawk Box' and myriad other cable-TV shows as a certified 'expert', has some doubts about Russia's new COVID vaccine. And that's hardly surprising. Since, to be fair, Gottlieb has expressed doubts for certain data dumps from Moderna and others which he has dubbed premature. Though it's also worth noting that he's on the board of Pfizer, a big-pharma giant that is working on its own COVID vaccine, having benefited from billions in promised and substantiated funding from the US government. During Tuesday's appearance on CNBC's 'Squawk Box', Gottlieb weighed in on the COVID issue du jour: the newly registered Russian vaccine, which President Putin has touted as a 'first in the world' accomplishment. Gottlieb has his doubts: 'I wouldn't take it, certainly not outside a clinical trial right now, it appears it has only been tested in several hundreds patients at most,' Gottlieb complained. He also warned that the 'adenoviral vector' used by the Russian scientists is similar to the strategy being pursued by CanSino. And Gottlieb alleged the data out of the CanSino trial has been 'suboptimal'. But it's not just the lack of clinical data that bothers Gottlieb: the adenoviral vector used by the Russian vaccine is also being used by CanSino, a Chinese pharma giant working on its own vaccine. Gottlieb says the data released from CanSino so far 'hasn't been great'...and since Russia hasn't released much in the way of any data, Gottlieb says it's fair to question the results touted by the Russian government....Russia declared the vaccine 'ready for use' and extraordinarily 'safe' despite 'international skepticism,' the Associated Press reported. Putin made the announcement during a 'government meeting', where he also revealed that one of his own daughters had participated in the experimental trials."

RealMoneyBlog - Free daily/weekly email


8.11.20 - Why Is Everyone Buying Gold? -NYT

Gold last traded at $1,930 an ounce. Silver at $25.30 an ounce.

NEWS SUMMARY: Precious metal prices pulled back Tuesday as correctional profit-taking offered investors an excellent buying opportunity. U.S. stocks rose amid rumors of a new Russian Covid-19 vaccine as well as investor optimism that some major stocks would benefit from a reopening of the economy, such as cruise lines and airlines.

Why Is Everyone Buying Gold? -New York Times
"This year, gold is the best performing traditional asset in the world. Its price just topped $2,000 an ounce for the first time. From serious investors to newly minted day traders, everyone is talking up its virtues. A recent survey of 1,000 people found that one in six Americans bought gold or other precious metals in the last three months, and about one in four were seriously thinking about it. On Robinhood, the popular online trading platform, the number of users holding two of its largest gold funds has tripled since January. It seems we're all gold bugs now. It's tempting to attribute the vogue for gold to a desire for a safe haven during the pandemic - a kind of financial panic reflex that will release as the crisis abates. But the gold mania is also driven by a hunch that the easy money pouring out of central banks and government stimulus programs could trigger inflation, which makes it a more worrisome economic omen....Investors have driven up the price of gold more than 30 percent this year after a gain of nearly 20 percent last year. In recent weeks, that surge has been turbocharged by growing expectations that all the money governments are pumping into their economies will reignite inflation. In addition, with valuations of stocks well above their long-term average, gold appears relatively cheap. And with central banks printing money hand over fist, some see gold as a stable alternative to the dollar and other major currencies. (Gold is also pulling up the price of its less glamorous relative, silver, which is rising from an unusually depressed level because people see it as a cheaper play on the same trends.)....Unless a vaccine emerges quickly, central banks stop printing money frantically and real interest rates start rising again, it is difficult not to be a gold bug now."

recovery When will the economy be good again? -VOX
"We know the US economy is bad right now. Millions of people have lost their jobs, and millions more will. Estimates for how much unemployment is expected to spike and GDP will fall are staggering. Production and spending across much of the country have been brought to an abrupt halt. It's natural to want to see a light at the end of the tunnel, obviously in terms of the health crisis caused by coronavirus but also for the economy. And there will be one - eventually....'The shock from the virus is going to trigger a broader economy-wide recession,' said Jesse Edgerton, an economist at JPMorgan. 'That's a really harsh reality.' The question of when and how the economy gets better largely hinges on our ability to get the virus itself under control...At some point the economy will bounce back, at least partially. When it does, that new normal will be different. Many Americans may be worse off than they were before, some people may still be afraid to resume their lives as they once lived them, and many businesses may have permanently closed. 'There will likely be some permanent damage inflicted on the economy,' says Greg Daco, chief US economist at Oxford Economics. 'What this shock is doing is exacerbating preexisting inequality issues across the country. The individuals who have been hit the hardest are the individuals who were in the most precarious position to start with.' Economists say it could be anywhere from 2021 to 2031 before the economy returns to something like the pre-coronavirus 'normal.' But it may never be entirely the same....The coronavirus outbreak will need to be firmly under control before the economy can resume anything approaching normalcy, and we just don't know yet when the public health breakthrough will happen....The more small businesses that close because of the initial economic shock or a problem accessing federal benefits, or both, the more the markets they leave behind will be concentrated among a handful of dominant players."

Fed Commitment To Let Inflation Run Isn't A Promise; It's A Threat -Zero Hedge
"According to a recent CNBC report, the Federal Reserve is set to make a major commitment to 'ramping up inflation.' According to the report, the Fed will pivot to 'average inflation targeting.' With this strategy 'inflation above the central bank's usual 2% target would be tolerated and even desired.' Practically speaking, the Federal Reserve would not raise interest rates until both its employment and inflation targets are met, meaning the central bank would likely keep interest rates at zero for years....In a nutshell, the Fed simply wants to make sure it's absolutely clear that it isn't even thinking about thinking about raising interest rates...Of course, the Fed doesn't look at the real rate of inflation. It looks at the CPI or some core index within that number. Peter Schiff said they'll likely look at an index that will never get above 4% even if the actual inflation rate is 20 or 30%....The truth of the matter, the Federal Reserve is in a position where it has to make excuses for allowing inflation to run hot because it simply cannot raise interest rates. Even the hint of a rate hike would crash the stock market and likely take the economy down with it. You simply can't raise rates when the entire economy is built on a giant pile of debt. When gold pushed above $2,000 an ounce, a pundit on CNBC declared it wasn't a big deal and predicted the yellow metal will sell off as soon as real interest rates go positive. Schiff said the Fed is telling you that's never going to happen. 'Saying that they're going to commit to more inflation is a threat against the American public. It's a threat against the American economy. They're saying, 'We're going to wipe out the value of your savings. We're going to increase the cost of living.'...'The Fed is actually about to codify this absurdity by strengthening their commitment to reckless money printing and endless inflation. And you think gold is expensive at $2,000 an ounce? No! It's still cheap.'"

Postal Service emerges as flash point heading into election -Associated Press
"The success of the 2020 presidential election could hinge on a most unlikely government agency: the U.S. Postal Service. Current signs are not promising. The Postal Service already was facing questions over how it would handle the expected spike of mail-in ballots due to the coronavirus pandemic, but several operational changes imposed by its new leader have led to mail backlogs across the United States as rumors of additional cutbacks swirl, fueling worries about the November vote....The pandemic has forced states to expand voting by mail as a safe alternative to in-person polling places. Some states are opting to send ballots to voters or allowing people to use fear of the virus as a reason to cast an absentee ballot. That's led to predictions of an an unprecedented amount of mail voting in the presidential election....The agency's new leader, Postmaster General Louis DeJoy, a former supply-chain CEO...has pushed cost-cutting measures to eliminate overtime pay and hold mail until the next day if postal distribution centers are running late....DeJoy has said repeatedly that the Postal Service is in a financially untenable position and needs to rein in expenses. This past week, it reported $2.2 billion in losses during the three months that ended in June. Postal leaders want at least a $10 billion infusion from Congress as well as regulatory changes that would end a costly mandate that they fund in advance billions of dollars in retiree health benefits. 'Without dramatic change, there is no end in sight, and we face an impending liquidity crisis,' DeJoy told the Postal Service's governing board Friday. Memos from post office leadership, obtained by The Associated Press, detailed an elimination of overtime and a halting of late delivery trips that are sometimes needed to make sure deliveries arrive on time...Additional records obtained by AP outline upcoming reductions of hours at post offices, including closures during lunch and on Saturdays....'Although there will likely be an unprecedented increase in election mail volume due to the pandemic, the Postal Service has ample capacity to deliver all election mail securely and on-time in accordance with our delivery standards, and we will do so,' DeJoy said."

RealMoneyBlog - Free daily/weekly email


8.10.20 - Stunned by Gold's Record Rise? More to Come

Gold last traded at $2,025 an ounce. Silver at $28.90 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday as the dollar extended rally. U.S. stocks traded mixed after President Trump signed several executive orders extending coronavirus relief.

Stunned by gold's record rise? There's more to come, analysts say -Reuters
"The speed at which gold has broken above $2,000 an ounce has left some in the market fearing a correction, but many analysts predict more gains as the coronavirus crisis spurs investors to buy into bullion's relative safety. The record-breaking rally, which lifted gold as high as $2,055 last Wednesday, has made the precious metal one of 2020's best performing mainstream assets. It has risen $500 this year, and $200 in the last two weeks alone. Taking out the totemic $2,000 barrier means investors must change their reference points, said Frederic Panizzutti at Swiss precious metals dealers MKS. 'The adjustment will be higher. We are definitely in a bull run,' he said. Investors see gold as an asset that should hold its value as the health crisis and money printing by central banks erode the value of others. Real returns on U.S. bonds - in normal times a much more popular perceived safe asset than gold - have tumbled to minus 1.07% from 0.15% at the start of the year, making bullion look like a better bet....The dollar, another safe-haven rival to gold and the currency in which it is priced, has slid to 2-year lows as the novel coronavirus infects more Americans....'Ultimately with gold you can't print any more of it, you can't artificially create it. It will hold its value,' said Michael Hewson at CMC Markets. Bank of America says prices could hit $3,000 within 18 months."

beach America Is a Coalition of the Worried -Noonan/Wall Street Journal
"It's August, high summer, and you're trying to ease in and relax with family, and friends. You've imagined it for months. You're at the beach with pails and shovels and towels and the short chairs, and you're trying to sit back and do nothing after this unrelenting year of stress and effort and rolling with every punch...You're looking at the waves with this fixed and pleasant look on your face because the kids or grandkids are always picking up cues and clues. But really you've got this thousand-yard stare, you're a million miles away, immersed in your concerns, your fears. About everything. People who haven't worried in years are worried, and it's not about regular things, it's about big and essential things. It's a whole other order of anxiety....We're in the middle (perhaps - nobody knows) of a world-wide pandemic, a historic occurrence that for everyone alive has been without precedent. We are in the middle (perhaps - nobody knows) of a severe economic contraction that looks likely to produce a long recession. We've experienced a national economic shutdown, again without precedent....Everyone wants a feeling of safety. But no one is certain where safety is. I'm not sure Washington and the national political class see this, but a great question of 2020: What will make us feel safer?....The media, whose job it is to hold it to account, are distrusted. A Knight Foundation-Gallup survey released this week showed 86% of Americans seeing 'a great deal' or 'fair amount' of political bias in news coverage. The Democrats can't agree on what they're running on beyond 'We're Not Trump,' which may or may not be enough, with a presidential candidate age 77 who sometimes seems confused. People can't even be confident the election will work, that it will be orderly, that the old rough integrity of the system will hold. They know there will likely be no 'election night' with states called and a winner declared. But will there be an election week? Month? When you look toward Washington it's not solid ground, it's more shifting sand. And so the mood this charged summer of '20: Everyone's scared, everyone's trying to figure out where safety is, everyone's afraid of making a mistake. You aren't alone. The whole vast middle of the country now is a Coalition of the Worried."

America Is Headed for an Unprecedented Wave of Evictions -The Nation
"The disappearance of renter protections imposed in the wake of the pandemic will almost certainly lead to the worst housing crisis in a generation....When Congress passed the CARES Act, it included a moratorium on evictions in any federally subsidized housing. Any landlord with a federally subsidized loan through, say, Fannie Mae or Freddie Mac, or who accepts Section 8 rent vouchers, couldn't legally evict tenants. But those expired on July 27 as Congress failed to pass an extension....One in five renters was behind on rent at the beginning of July, while about a third of American households missed their housing payment that month. The disappearance of eviction moratoriums will almost certainly lead to a housing crisis the likes of which the country hasn't seen in a generation. Estimates vary: One puts the number of households at risk of eviction at 17 million, while another predicts that between 19 million and 23 million people could face eviction by the end of September. Another found that as many as 28 million people could face eviction or foreclosure....Extending moratoriums is not a solution but a bridge, advocates stress. Many want to buy time until Congress passes substantial rental assistance."

Covid-19 will be painful for universities, but also bring change -The Economist
"For students, covid-19 is making life difficult. Many must choose between inconveniently timed seminars streamed into their parents' living rooms and inconveniently deferring their studies until life is more normal. For universities, it is disastrous. They will not only lose huge chunks of revenue from foreign students but, because campus life spreads infection, they will have to transform the way they operate. Yet the disaster may have an upside. For many years government subsidies and booming demand have allowed universities to resist changes that could benefit both students and society. They may not be able to do so for much longer....Governments have been turning against universities, too. In an age when politics divides along educational lines, universities struggle to persuade some politicians of their merit...Many politicians suspect that universities are not teaching the right subjects, and are producing more graduates than labor markets need....There are questions about the benefits to students, too. The graduate premium is healthy enough, on average, for a degree to be financially worthwhile, but not for everybody. In Britain the Institute for Fiscal Studies has calculated that a fifth of graduates would be better off if they had never gone to university. In America four in ten students still do not graduate six years after starting their degree - and, for those who do, the wage premium is shrinking....The damage from Covid-19 means that, in the short term at least, universities will be more dependent on governments than ever...Those that survive must learn from the pandemic. Until now most of them, especially the ones at the top of the market, have resisted putting undergraduate courses online...Now change is being forced upon them...Many students buy the university experience not just to boost their earning capacity, but also to get away from their parents, make friends and find partners. But it should also cut costs, by giving students the option of living at home while studying....There is huge scope for using digital technology to improve education. Poor in-person lectures could be replaced by online ones from the best in the world, freeing up time for the small-group teaching which students value most."

RealMoneyBlog - Free daily/weekly email


8.7.20 - Why Markets Don't Seem to Care If the Economy Stinks

Gold last traded at $2,033 an ounce. Silver at $28.08 an ounce.

NEWS SUMMARY: Precious metal prices record-breaking 9-week rally paused on Friday for a healthy dose of profit-taking. U.S. stocks traded lower as tensions between China and the U.S., coupled with ongoing coronavirus stimulus negotiations, dampened the market's enthusiasm over an upbeat jobs report.

Gold At $3K? $50 Silver? BofA Raises Metal Price Targets -Yahoo Finance
"Gold prices once again hit new all-time highs Wednesday after breaking the $2,000-per-ounce level for the first time ever this week. Fortunately for precious metal investors, BofA Securities said global economic conditions suggest even more upside ahead...Traders have been flocking to gold in 2020 as a safety investment during a period of economic uncertainty. Gold is also an inflation hedge after the Federal Reserve issued trillions of dollars of stimulus earlier this year. The Fed is expected to commit to near-zero interest rates until inflation hits its 2% target. BofA Securities analyst Michael Jalonen said he's bullish on gold, and BofA raised its average 2021 real gold price forecast from $2,012 to $2,159. The firm also raised its 2021 real silver average price forecast from $21.95 to $30.49....'Continued fiscal spending as governments are mending the damage from COVID-19, backstopped by central banks means that interest rates will remain low, at the same time as the economy reflates,' Jalonen said in a note. Investors can expect gold prices to peak at $3,000 within the next 18 months, the analyst said."

for lease Why Markets Don't Seem to Care If the Economy Stinks -Ritholtz/Bloomberg
"The stock market has been on a tear, yet the economy is in the dumps. So why do so many people believe - undoubtedly incorrectly - that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market's moves....The surprising conclusion: The most visible and economically vulnerable industries are also among the smallest, based on their market-capitalization weight in major indexes such as the S&P 500. Markets, it turns out, are not especially vulnerable to highly visible but relatively tiny industries. The 30 most economically damaged industry categories could be de-listed before tomorrow's market open, and it would hardly shave more than a few percentage points off the S&P 500. This is so despite the worst U.S. economic collapse since the Great Depression. All of the economic data is so bad that figures on gross domestic product, unemployment and initial jobless claims must be re-scaled to even fit on charts. But the U.S. economy is not the stock market and vice versa...The so-called FAANGs derive about half - and in some cases even more - of their revenue from abroad. Beyond that, the pandemic lockdown in the U.S. has benefited the giant tech companies' sales and profits. No wonder the Nasdaq Composite 100 Index, which is dominated by big tech companies, is up about 26% this year....On some level, it's completely understandable why many people believe that markets are no longer tethered to reality because the performance doesn't correspond to their personal experience, which is one of job loss, economic hardship and personal despair. But what's important to understand is that indexes based on market-cap weighting can be - as they are now - driven by the gains of just a handful of companies."

Millions in currency seized at airports, often due to reporting violation -AJC
"Arlington, Virginia-based law firm Institute for Justice says in a new study that, from 2000 to 2016, more than $2 billion was seized by U.S. Customs and Border Protection and other Homeland Security agencies at airports nationally, including $108.8 million at the Atlanta airport. Sometimes, travelers get their money back. But the law firm is arguing that, too many times, it takes months - and that can have long-lasting consequences....People can travel with any amount of money, but are required to report when they transport more than $10,000 in currency in or out of the country. The report can be filed via an online form or by asking a CBP officer for a paper form at a port of entry. Of the money confiscated at Hartsfield-Jackson, in about 64% of the 1,287 seizures in that 17-year period, some amount of money was ultimately forfeited, according the Institute for Justice's study of a U.S. Treasury forfeiture database. The law firm argues that less than a third of the seizures of currency involve an arrest and wants to see the abolishment of administrative forfeiture, which allows a federal agency to seize assets without judicial involvement. 'Congress must reform civil forfeiture,' said Institute for Justice senior research analyst Jennifer McDonald in a written statement. 'No one should lose their property without being convicted of a crime.'"

The Uncertain Future of Places That Preserve America's Past -TIME
"Based on a survey of 760 museum directors released July 22, the American Alliance of Museums says one-third of institutions are not confident that they will survive past the next 16 months, and the same portion expect to lose 40% or more of their budgeted operating income for 2020. More than half (56%) have less than six months of operating reserves. Already museums are losing at least $33 million a day....'The impact of current financial crisis as a result of the pandemic is worse than anything we have seen, certainly that I have seen in my 20-plus-year career in nonprofit finance,' says Laura Lott, president and CEO of the American Alliance of Museums. That doesn't mean museums are giving up. In Salem, that's meant adding a fee to access the gardens, and institutions around the U.S. are seeking their own ways to ensure historic sites stay central to their communities for years to come....One July poll found that only a third of Americans were concerned about local museums, compared with three-fourths concerned about local restaurants and other businesses. And yet, if these sites don't make it, the loss will run deep. Museums exert an enormous economic impact: in an ordinary year, more people go to them than to major-league sports and theme parks combined. Annually, they contribute $50 billion to the U.S. economy, boast more than 726,000 jobs and generate $12 billion in tax revenue. Less tangibly but no less importantly, these places serve as both community spaces and repositories for memory. For individuals, museums are vital for researching family and local history."

RealMoneyBlog - Free daily/weekly email


8.6.20 - Bailouts Won't Stop Credit Card Defaults

Gold last traded at $2,067 an ounce. Silver at $28.38 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Thursday amid growing bullish sentiment and safe-haven buying. U.S. stocks slipped as traders awaited clues on a new coronavirus stimulus package and digested the latest unemployment data.

More Bailout Cash Won't Stop Wave of Credit Card Defaults -Bloomberg
"Despite the coronavirus and millions of jobless claims driving the U.S. economy deeper into recession, the flood of credit card delinquencies that some predicted has yet to materialize. Instead, card debt has actually gone down since the pandemic struck, with many consumers spending less while using bailout money to chip away at balances. But that may not last. Even if Congress passes a new rescue package with more unemployment benefits, the cumulative effect of the ongoing economic catastrophe may finally trigger that default deluge, a new survey reveals. More than half of consumers with credit card debt said they will need more bailout money to make minimum payments over the next three months, but about the same number said employment will be more critical to avoiding default. And right now, roughly 30 million Americans are claiming unemployment benefits. 'I think the overall trend [of credit card debt going down] masks some of the difficulty at the household level, and I do fear that we're going to have more people relying on cards for financing and relying on cards just to make ends meet,' said Ted Rossman, an industry analyst at CreditCards.com, which sponsored the survey. More than one-third of respondents said they had credit card debt. Of those, three in 10 said a lack of additional money from Congress would have a major effect on their ability to make minimum payments between now and mid-October. But even so, 61% of respondents said that not being able to work in the coming months would affect their ability to pay, with majorities of currently full-time employed and unemployed people saying it would have a 'major effect.' More than 60 million Americans used credit cards to meet spending needs within the previous week, according to Census Bureau survey data from July."

gold Gold Barrels Past $2,000 With Stage Set to Rally Further -Yahoo Finance
"Gold advanced to a fresh record beyond $2,000 an ounce as investors assessed increased geopolitical risks and the prospect for further stimulus to combat fallout from the coronavirus pandemic. Bullion is up almost 35% this year, with its haven status enhanced by sliding U.S. real yields. Gold could extend gains as governments and central banks respond to slowing growth with vast amounts of stimulus. The metal's appeal is strengthening as the dollar weakens and a long global recovery looms. Goldman Sachs Group Inc. forecasts a rally to $2,300. 'The stage has been set for gold to continue to climb higher,' Paul Wong, market strategist at Sprott Inc., said in a report. 'We see increased fiscal spending ahead, extremely accommodative monetary policy in place for years and a challenging economic recovery.'....Friday will bring an update of the U.S. labor market in July, with economists expecting unemployment to decline to 10.5%. Even if the data shows some recovery, it will likely still signal greater inflation expectations so long as the Federal Reserve leaves its target rate near zero, which would be positive for gold, Carsten Fritsch, commodity analyst at Commerzbank AG, said by phone. Shifts in the U.S. bond market have helped underpin gold's ascent. Real yields on 10-year Treasuries have collapsed below zero. Still, on CPI-adjusted measures they remain above levels seen during previous gold-price peaks, said Adrian Ash, head of research at BullionVault. That means gold could go 'a long way higher than $2,000 per ounce,' he said."

Who Bears the Burden of Dollars' Falling Purchasing Power? -AIER
"Economists are strange creatures. They use odd words for everyday events; they say things that sound counterintuitive to most people; and they specialize in complicated trade-offs when what the wider public wants usually is simple answers....Rent control, for instance, or tariffs of various kinds - two topics where economists overwhelmingly (90-95% or more) agree: those policies harm the people they intend to help. Don't do them. The public is much less eager to side with the experts here. Another such topic for us monetary geeks is the burden of a falling purchasing power - or what we otherwise call inflation...The dollar, the argument goes, has 'lost its value,' to the tune of some large number over some long-time period, say by 97% or 99.5% over a century. Such numbers are usually correct, at least if you read official statistics like the Fed's Consumer Price Index for Urban Consumers: $1 in 1913 would buy you roughly what would require $26.15 in 2020 - a cumulative loss of a little over 96%.....Mistaking nominal changes for real changes is so pervasive that it even has its own term: money illusion. To judge whether inflation is a burden, predictability is a much bigger problem: a variable rate makes (long-term) planning difficult; a stable 2% decline in the purchasing power of a monetary unit does not. While one virtue of the Classical Gold Standard was that the price level was anchored in the long run (money held its value over decades), what you could purchase with your money was wholly unpredictable in the short run. From one year to the next, it could fluctuate in purchasing power by magnitudes of 5-10%. Holding rent money in a currency that can rise or drop 10% overnight is a financial risk that few people are willing to take. Much of the issue of inflation's burden instead turns on whether it was expected or not. When inflation is expected, as is the case when central banks have anchored their targets (and actually hit them), economists usually don't see much loss done to anyone....If we have inflation of a magnitude other than what was expected, the story changes."

World Gov'ts Eye Blockchain As Dollar's Power Wanes, Says Ripple CEO -Zero Hedge
"Blockchain is offering global governments a serious alternative to a strained financial system, Ripple CEO Brad Garlinghouse says. Cryptocurrency advocates have long been keen to point to the weaknesses of fiat currency. Now an uncertain world rocked by a global health crisis and geopolitical flare-ups is bringing them into dialogue with the mainstream more than ever. In a tweet thread published on Aug. 3, Ripple CEO Brad Garlinghouse engaged with a recent article in Bloomberg, which had surveyed the gamut of potential alternatives to the dollar as the world's reserve currency. The article spanned gold, several major fiat currencies - the yen, yuan and euro - the Special Drawing Rights issued by the IMF, and ended with cryptocurrencies....The COVID-19 economic crisis began bullishly for the U.S. dollar, with investors fleeing to its 'refuge' early on - spurring an exceptional 9% rally. But this familiar pattern has been upended as the crisis wears on. July was the greenback's worst month in a decade. Its recent dip reflects mounting diplomatic tensions between the U.S. and China and the uneasy settlement that the dollar's dominance represents in a tumultuous and multipolar world, thrown into sharp relief by the pandemic....The United States' faltering response to the public health crisis and internal political polarizations have arguably contributed to a loss in its soft power, and investors in the U.S. bond market appear to be pricing-in a disappointing U.S. economic recovery."

RealMoneyBlog - Free daily/weekly email


8.5.20 - Stocks Give Us a Distorted Economic Picture

Gold last traded at $2,049 an ounce. Silver at $26.96 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Wednesday on safe-haven and momentum buying as well as a sharply weaker dollar. U.S. stocks rose on CV-19 vaccine hopes, despite downbeat jobs data and continuing negotiations on a new virus stimulus package.

Why looking at the stock market won't give you full picture of US economy -Gasparino/New York Post
"Between the federal government and the Federal Reserve, about $10 trillion has been pumped into the US economy to prevent a pandemic-fueled economic collapse. Judging by the stock market, you would think we've sidestepped a 2008-size disaster. But stocks, at least in the short run, are rarely a good indication of what's festering inside the US economy. A better oracle is certain aspects of the bond market, particularly those that are tied to real estate. And just like in the prelude to the 2008 collapse, when the stock market was at all-time highs, this particular market is signaling a warning sign that the economy is headed for trouble....Delinquencies and defaults are rising on the mortgages of malls, high rises and office buildings. It's easy to see why: In New York City, will the much-heralded Hudson Yards complex ever reopen? Millions of upper-income New Yorkers are fleeing the city not just because of the pandemic but rising disorder. And who wants to shop in a mall when you need to get your temperature checked every time you walk into a store? It's not just a New York phenomenon. Does anyone really want to work in downtown Portland, Seattle, or San Francisco any time soon? The underpinnings of the commercial real estate market - an estimated $16 trillion business - have begun to turn significantly negative, posing an enormous systemic risk to the US economy....Maybe New York's political leaders will open the city up and help save the commercial real estate market and the economy with it. (Stop laughing.) But those are all big bets, and ones that more and more smart people aren't willing to take."

Why Gold Prices Are Hitting All-Time Highs -Wall Street Journal
"The precious metal has soared roughly 30% in 2020 to stop just short of closing at $2,000 a troy ounce - which would be an all-time high in New York trading - as it outstrips the Nasdaq Composite Index of high-flying technology stocks....There are two gold markets, closely linked because investment banks and other big players are active in both. The first is the physical market, which brings together miners, refiners, jewelers, central banks, electronics manufacturers, banks and investors....The second market is the futures market, for swapping financial contracts based on gold. This market is electronic, hosted by New York's Comex exchange....Most traders exit futures trades before they actually exchange gold. Recently, however, more investors have taken delivery of gold on the Comex, a sign demand for physical gold is unusually high."

gold chart

"The Federal Reserve's March decision to slash interest rates to just above zero and buy hundreds of billions of dollars of bonds has pulled down yields in fixed-income markets, prompting investors to buy gold instead....'Gold is a haven,' said Rhona O'Connell, head of market analysis for Europe, the Middle East, Africa and Asia at StoneX Group. 'It doesn't have anyone else's political or financial risk associated with it.' Another tailwind for gold right now is the depreciation in the dollar....Gold is treated like any other commodity on banks' balance sheets under the Basel III regulatory guidelines, designed to avoid a repeat of the 2008-9 financial crisis. Gold is also a currency. For millennia, the metal has functioned as a store of value, unit of account and medium of exchange....'It is more a currency than a commodity,' said Dr. O'Connor. 'Everything else, to one degree or another, gets used up and doesn't come back into the market. Gold just stays there.'" NOTE: As the chart indicates, gold prices would need to rise above $2,750/oz. to reach a true, inflation-adjust new high.

The Pandemic Is a Dress Rehearsal -Mead/Wall Street Journal
"Eight months after the novel coronavirus burst out of Wuhan, China, it has created unprecedented economic and social disruption, with economies cratering across the globe and more destruction to come. Tens of millions have lost their jobs, and millions more have seen their life savings disappear as governments forced restaurants, bars and other small businesses to shut their doors. Wealthy societies are able, for now, to print and pump money in hope of limiting the social and economic damage, but such measures cannot be extended forever. For the first time since the 1940s, political authorities around the world face a flood of economic and political challenges that could overwhelm the safeguards built into the system. Science will, we must hope, come to the rescue with a vaccine or a cure before our resources are exhausted...The end of the pandemic does not mean a return to the relatively stable world of the post-Cold War era. The pandemic, which is mild as the great plagues of history go, demonstrates that the complexity of this global civilization has become a source of new vulnerabilities...Covid-19 challenges political leaders and institutions in ways that they cannot easily manage. The world needs to get used to that feeling. The pandemic's legacy will be crisis and chaos....The transformation of the workplace by information technology has been a bright spot in the pandemic, allowing many businesses and important institutions to continue functioning even as key employees stay home. But the same transformation is also driving many of the forces destabilizing society....A host of 21st-century problems threaten to overwhelm the institutions of both national and global governance... Covid-19 is less a transient, random disturbance after which the world will return to stability than it is a dress rehearsal for challenges to come. History is accelerating, and the leaders, values, institutions and ideas that guide society are going to be tested severely by the struggles ahead."

Laughter acts as a stress buffer - and even smiling helps -University of Basel
"People who laugh frequently in their everyday lives may be better equipped to deal with stressful events - although this does not seem to apply to the intensity of laughter. These are the findings reported by a research team from the University of Basel in the journal Plos One. It is estimated that people typically laugh 18 times a day - generally during interactions with other people and depending on the degree of pleasure they experience. Researchers have also reported differences related to time of day, age, and gender - for example, it is known that women smile more than men on average. Now, researchers from the Division of Clinical Psychology and Epidemiology of the Department of Psychology at the University of Basel have recently conducted a study on the relationship between stressful events and laughter in terms of perceived stress in everyday life....The questions related to the frequency and intensity of laughter and the reason for laughing - as well as any stressful events or stress symptoms experienced - in the time since the last signal....The first result of the observational study was expected based on the specialist literature: in phases in which the subjects laughed frequently, stressful events were associated with more minor symptoms of subjective stress. However, the second finding was unexpected. When it came to the interplay between stressful events and intensity of laughter (strong, medium or weak), there was no statistical correlation with stress symptoms."

RealMoneyBlog - Free daily/weekly email


8.4.20 - Silver: Poor Man's Gold No More?

Gold last traded at $2,025 an ounce. Silver at $26.13 an ounce.

NEWS SUMMARY: Precious metals rallied Tuesday, with gold prices cresting $2,000/oz and silver rushing past $25/oz., on bullish momentum and a weaker dollar. U.S. stocks rose modestly as lawmakers try to come to a bipartisan agreement on a new coronavirus stimulus package.

Silver: poor man's gold no more? -Saefong/Marketwatch
"Investors have focused on a rise in record prices for gold, but silver's up about 25% in July - the metal's second-biggest monthly gain on record - and it's still undervalued compared with the yellow metal. 'Silver is often called the 'poor man's gold' because some of the same factors that cause gold prices to rise do the same thing to silver prices,' says Ed Moy, chief market strategist at gold retailer Valaurum. 'And what is driving gold prices now are mainly the fear of inflation due to the magnitude of the monetary and fiscal stimulus worldwide, and the flight to safety due to the uncertainty around how and when the global economy will recover.' Silver, however, is 'cheaper per ounce' than gold, and its prices are much more volatile, he says. It has also been 'lagging behind gold's rise' and the ratio of the number of ounces of silver to buy one ounce of gold is historically high...If silver is underpriced, 'there is a lot of money to be made,' says Moy, who was director of the U.S. Mint from 2006 to 2011....'Silver is not even halfway to its all-time high,' says Ryan Giannotto, director of research at exchange-traded-fund-issuer GraniteShares. While it's unlikely silver would more than double in the immediate future, it's "unwise to rule out extreme scenarios." It takes more than 80 ounces of silver to buy one ounce of gold. Though the ratio has seen a significant decline in recent months, it's still well above the typical gold-to-silver ratio, which Moy pegs at one ounce of gold to 60 ounces of silver....Ross Norman, CEO of precious-metals news and information provider Metals Daily, says the ratio between the metals rose to a 4,000-year high at 126 on March 18. 'It has been clear for some time that silver was excessively cheap compared to gold,' he says. The ratio is still historically high, 'suggesting there is scope for greater gains in silver still.'....For most individual investors, government-made silver bullion coins are an attractive way to invest, he says, and governments guarantee the weight, content, and purity of each coin."

dollar Behind the Vast Market Rally: A Tumbling Dollar -Wall Street Journal
"The ICE Dollar Index, which measures the dollar against a basket of other major currencies, in July notched its worst month in nearly a decade and recently hit a two-year low. The fall extended a reversal that began in late March, spurred lately by ballooning worries that mounting coronavirus cases will stall the U.S. economic rebound...Big-name investors such as Ray Dalio and Jeffrey Gundlach have recently said publicly that the flood of U.S. government spending being injected into the financial system could eventually stoke inflation, eroding consumers' purchasing power. Surging budget deficits tend to make investors less likely to hold a country's currency. Fitch Ratings on Friday revised its credit rating outlook for the U.S. to negative from stable. At the same time, the currency's slide is adding further support to the booming market rally, lifting stocks and commodities. A weaker dollar boosts multinational companies, which see their products get more competitive abroad and can more easily convert overseas profits into dollars. 'These things are denominated in dollars, and the dollar is getting crushed,' said Christopher Stanton, chief investment officer of Sunrise Capital Partners. He expects the trend to continue and is directly wagering against the currency, betting on gains in the euro against the dollar and buying gold, which some investors are using as an alternative store of value. Gold recently climbed to all-time highs for the first time since 2011....Net investor bets on a weaker dollar recently climbed to their highest level since April 2018, Commodity Futures Trading Commission data compiled by Scotiabank show. 'We are in a stage of very high momentum,' said Ed Al-Hussainy, senior interest-rate and currency analyst at Columbia Threadneedle Investments....Investors say that the economic picture could make this dollar slide longer lasting."

Data collected from your phone is being used to score you -Washington Post
"Operating in the shadows of the online marketplace, specialized tech companies you've likely never heard of are tapping vast troves of our personal data to generate secret 'surveillance scores' - digital mug shots of millions of Americans - that supposedly predict our future behavior. The firms sell their scoring services to major businesses across the U.S. economy. People with low scores can suffer harsh consequences. CoreLogic and TransUnion say that scores they peddle to landlords can predict whether a potential tenant will pay the rent on time, be able to 'absorb rent increases,' or break a lease. Large employers use HireVue, a firm that generates an 'employability' score about candidates by analyzing 'tens of thousands of factors,' including a person's facial expressions and voice intonations. Other employers use Cornerstone's score, which considers where a job prospect lives and which web browser they use to judge how successful they will be at a job. Brand-name retailers purchase 'risk scores' from Retail Equation to help make judgments about whether consumers commit fraud when they return goods for refunds. Players in the gig economy use outside firms such as Sift to score consumers' 'overall trustworthiness.'....Surveillance scoring is the product of two trends. First is the rampant (and mostly unregulated) collection of every intimate detail about our lives, amassed by the nanosecond from smartphones to cars, toasters to toys. This fire hose of data - most of which we surrender voluntarily - includes our demographics, income, facial characteristics, the sound of our voice, our precise location, shopping history, medical conditions, genetic information, what we search for on the Internet, the websites we visit, when we read an email, what apps we use and how long we use them, and how often we sleep, exercise and the like. The second trend driving these scores is the arrival of technologies able to instantaneously crunch this data: exponentially more powerful computers and high-speed communications systems such as 5G, which lead to the scoring algorithms that use artificial intelligence to rate all of us in some way. The result: automated decisions, based on each consumer's unique score, that are, as a practical matter, irreversible. That's because the entire process - the scores themselves, as well as the data upon which they are based - is concealed from us....The tech industry insists that its every advance improves our lives. But that's a myth. Surveillance scoring enables companies to cloak old-school discrimination in an aura of technological infallibility and wonder....Secret surveillance scoring places us at the precipice of the 'singularity,' a dystopian turning point after which machines will make judgments about humans that will determine our fate. We either seize control of our future, or risk losing it."

Do some people have protection against the coronavirus? -Dr. Grupta/Kane/CNN
"Why do some people get very sick and even die from their illness, while other similar people show no symptoms and may not realize they've been infected at all? We know some of the big factors that put people at higher risk of having a severe, even fatal, course of disease: being over 60; being overweight or obese; having one or more chronic diseases such as diabetes, cardiovascular disease, kidney or lung disease, and cancer; and being a person of color - Black, Latinx or Native American. But might the opposite also be true: Could certain people actually have some type of protection? A recently published summary article in the journal Nature Reviews Immunology put forth a tantalizing possibility: A large percentage of the population appears to have immune cells that are able to recognize parts of the SARS-CoV-2 virus, and that may possibly be giving them a head start in fighting off an infection. In other words, some people may have some unknown degree of protection. 'What we found is that people that had never been exposed to SARS Cov2 ... about half of the people had some T-cell reactivity,' co-author of the paper Alessandro Sette from the Center for Infectious Disease and Vaccine Research at La Jolla Institute for Immunology, told CNN....They speculate that this T cell recognition of parts of the SARS-CoV-2 virus may come in part from past exposure to one of the four known circulating coronaviruses that cause the common cold in millions of people every year....There are also implications for when we might achieve 'herd immunity' - meaning that enough of the population is immune to SARS-CoV-2, thanks either to infection or vaccination, and the virus can no longer be as easily transmitted...If you have 50% already in a way immune, because of these existing immune responses, then you don't need 60 to 80%, you need 10 to 30% - you have covered the 50% already."

RealMoneyBlog - Free daily/weekly email


8.3.20 - The Lockdown's Destruction -Editors/WSJ

Gold last traded at $1,992 an ounce. Silver at $24.51 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs on a firmer dollar and mild profit-taking. U.S. stocks rose, led by tech giant Microsoft, amid upbeat economic data and rising government stimulus agreement hopes.

7 Reasons Gold Will Continue to Soar to Record Highs -Motley Fool
"This has not been an easy year for Wall Street and investors to digest. The coronavirus disease 2019 (COVID-19) pandemic has turned societal habits on their head and displaced more than 20 million workers. It also sent equities to their steepest and fastest tailspin in history during the first quarter, only to see the market rebound ferociously over the past four months. Frankly, no one has any idea what to expect next. However, one group of investors who aren't going to complain are those who own physical gold or gold mining stocks. Physical gold has set two consecutive record-closing highs to begin the week, and is now up almost $390 an ounce in just the past six months. Gold has left the benchmark S&P 500 eating its dust in 2020, and there's a very good probability that this will continue for the foreseeable future. Below you'll find seven reasons why this gold rally still has very long legs. 1. Historically low global bond yields - To begin with, physical gold is ascending to the heavens because income seekers have a narrowing list of options to generate guaranteed income....2. Unlimited quantitative easing - Another reason gold can be expected to continue rocketing higher can be traced to the Federal Reserve's implementation of unlimited quantitative easing....3. Bullion shortages - Never forget the importance of supply-and-demand economics. If demand outpaces supply, the price of a good or service will rise...For months, there have been on-and-off gold bullion shortages....4. Geopolitical risk - Gold is also a haven investment...Although the world is united in their fight against COVID-19...trade tensions between the U.S. and China from once again heating up....5. COVID-19 fear and uncertainty - Gold is often known as a safe-haven investment during periods of panic and fear. The unprecedented nature of the coronavirus pandemic certainly has folks on edge....6. Bull markets are usually long lasting - Gold has history on its side. Although spikes higher do happen in the gold market, it's far more common to see the physical metal enter long bull-market cycles....7. Emotion-driven investing - Finally, don't discount emotion-driven short-term trading as a reason behind higher gold prices....Gold hitting $3,000 by 2022 is a very real possibility."

lockdown The Lockdown's Destruction -Editors/Wall Street Journal
"Democrats and their media allies have trapped themselves in a contradiction. They are deploring last Thursday's grim second-quarter GDP report even as they demand a repeat of the lockdown that caused the economic catastrophe. What do they expect when government orders Americans to sit in their homes for weeks? That's the main message from the 32.9% decline in GDP, the worst ever recorded. The damage extended across the private economy - from business investment to manufacturing and housing. But the greatest harm was from the collapse of consumer spending as the shutdown crushed the service economy. Consumer spending fell 34.6% and accounted for some 25 percentage points of the GDP decline. The fall in transportation, recreation, food services and hotels was brutal. But the biggest surprise was the plunge in health-care spending during a health-care crisis. Health care represents about 12% of the U.S. economy and its collapse subtracted 9.5 percentage points from GDP....The economic harm from stopping all elective surgeries and barring visits to doctors was severe and unnecessary. It was also a terrible public-health blunder. That harm will play out for years as Americans discover cancer, heart-disease and other diagnoses that were missed or delayed. Notably, Congress's nearly $3 trillion in appropriations couldn't stop the economic collapse...The GDP decline shows that $1,200 cash payments and jobless benefits can't replace a dynamic private economy....Hard to believe, but some on the left are stumping for a second nationwide lockdown to control the virus. Shut the U.S. down again until October when the scourge will be gone for good. Do they want another 33% decline in GDP and 40 million more unemployed?....The public is smarter than the media and can adjust its behavior when flare-ups occur."

The Myth of the Failure of Capitalism -Ludwig von Mises/Mises.org
"Capitalism allegedly has failed, has proven itself incapable of solving economic problems, and so mankind has no alternative, if it is to survive, than to make the transition to a planned economy, to socialism. This is hardly a new idea. The socialists have always maintained that economic crises are the inevitable result of the capitalistic method of production and that there is no other means of eliminating economic crises than the transition to socialism. If these assertions are expressed more forcefully these days and evoke greater public response, it is not because the present crisis is greater or longer than its predecessors, but rather primarily because today public opinion is much more strongly influenced by socialist views than it was in previous decades. When there was no economic theory, the belief was that whoever had power and was determined to use it could accomplish anything. In the interest of their spiritual welfare and with a view toward their reward in Heaven, rulers were admonished by their priests to exercise moderation in their use of power. Also, it was not a question of what limits the inherent conditions of human life and production set for this power, but rather that they were considered boundless and omnipotent in the sphere of social affairs. The foundation of social sciences, the work of a large number of great intellects, of whom David Hume and Adam Smith are most outstanding, has destroyed this conception. One discovered that social power was a spiritual one and not (as was supposed) a material and, in the rough sense of the word, a real one....Economic theory predicted the effects of interventionism and state and municipal socialism exactly as they happened....Liberalism cannot be deemed responsible for any of the institutions which give today's economic policies their character. It was against the nationalization and the bringing under municipal control of projects which now show themselves to be catastrophes for the public sector and a source of filthy corruption; it was against the denial of protection for those willing to work and against placing state power at the disposal of the trade unions, against unemployment compensation, which has made unemployment a permanent and universal phenomenon, against social insurance, which has made those insured into grumblers, malingers, and neurasthenics, against tariffs (and thereby implicitly against cartels), against the limitation of freedom to live, to travel, or study where one likes, against excessive taxation and against inflation, against armaments, against colonial acquisitions, against the oppression of minorities, against imperialism and against war....The line of argument that leads to blaming capitalism for at least some of these things is based on the notion that entrepreneurs and capitalists are no longer liberal but interventionist and statist. The fact is correct, but the conclusions people want to draw from it are wrong-headed....Because many ventures depend on political favors, those who undertake such ventures must repay the politicians with favors....It is true that socialism and interventionism have not yet succeeded in completely eliminating capitalism. If they had, we Europeans, after centuries of prosperity, would rediscover the meaning of hunger on a massive scale....The crisis under which the world is presently suffering is the crisis of interventionism and of state and municipal socialism, in short the crisis of anticapitalist policies. Capitalist society is guided by the play of the market mechanism. On that issue there is no difference of opinion....Bastiat has not failed, but rather Marx and Schmoller."

Together, You Can Redeem the Soul of Our Nation -Lewis/New York Times
"[Mr. Lewis, the civil rights leader who died on July 17, wrote this essay shortly before his death, to be published upon the day of his funeral.] While my time here has now come to an end, I want you to know that in the last days and hours of my life you inspired me. You filled me with hope about the next chapter of the great American story when you used your power to make a difference in our society. Millions of people motivated simply by human compassion laid down the burdens of division. Around the country and the world you set aside race, class, age, language and nationality to demand respect for human dignity....Though I was surrounded by two loving parents, plenty of brothers, sisters and cousins, their love could not protect me from the unholy oppression waiting just outside that family circle....If we are to survive as one unified nation, we must discover what so readily takes root in our hearts that could rob Mother Emanuel Church in South Carolina of her brightest and best, shoot unwitting concertgoers in Las Vegas and choke to death the hopes and dreams of a gifted violinist like Elijah McClain. Like so many young people today, I was searching for a way out, or some might say a way in, and then I heard the voice of Dr. Martin Luther King Jr. on an old radio. He was talking about the philosophy and discipline of nonviolence. He said we are all complicit when we tolerate injustice. He said it is not enough to say it will get better by and by. He said each of us has a moral obligation to stand up, speak up and speak out...Democracy is not a state. It is an act, and each generation must do its part to help build what we called the Beloved Community, a nation and world society at peace with itself. Ordinary people with extraordinary vision can redeem the soul of America by getting in what I call good trouble, necessary trouble. Voting and participating in the democratic process are key. The vote is the most powerful nonviolent change agent you have in a democratic society. You must use it because it is not guaranteed. You can lose it. You must also study and learn the lessons of history because humanity has been involved in this soul-wrenching, existential struggle for a very long time....Though I may not be here with you, I urge you to answer the highest calling of your heart and stand up for what you truly believe. In my life I have done all I can to demonstrate that the way of peace, the way of love and nonviolence is the more excellent way. Now it is your turn to let freedom ring...So I say to you, walk with the wind, brothers and sisters, and let the spirit of peace and the power of everlasting love be your guide."

RealMoneyBlog - Free daily/weekly email


7.31.20 - The Road To Inflation by 2022

Gold last traded at $1,971 an ounce. Silver at $24.08 an ounce.

NEWS SUMMARY: Precious metal prices shot upward, with gold reaching toward $2,000/oz and silver fast approaching $25/oz., on continued safe-haven buying. U.S. stocks traded mixed as investors weighed growing negative economic sentiment with strong tech earnings.

Gold - The Currency Of Last Resort -Dimitrov/Seeking Alpha
"The way I see gold is as a special form of currency. A currency that becomes relevant only at times when the risk for the global financial system runs very high. Not the risk of recession nor the equity risk, but rather the risk of the stability of the monetary regime. This is my reason to holding gold as part of my portfolio - as a form of insurance against monetary and fiscal authorities losing control or simply transitioning to a new system. Everyone would agree that one of the most important drivers of the price of gold is the level or real interest rate in the economy and for most of the time this is correct. Even if it's one of the most important drivers for gold during normal times, there is an even more powerful driver of gold prices - the overall risk for the existing monetary regime....The risk for the current monetary regime is significant and even if authorities manage the transition towards a new monetary system well, the level of uncertainty around it would provide a tailwind for gold prices....Holding gold as part of an equity portfolio in a barbell like strategy is my approach to ride the current wave of uncertainty and high risk. I don't see the precious metal as a speculative investment, nor as a simple inflation hedge. The way I see gold is a currency of last resort, which preserves purchasing power over the long term and gains ground at inflection points when the existing monetary system becomes less sustainable."

inflation The Road To Inflation -TSLombard
"Inflation remains an important theme for our clients. Perhaps this reflects supreme confidence in the policies governments and central banks have introduced to support their economies during the COVID-19 pandemic. With stimulus on a scale that is unprecedented outside of the two World Wars, it is not surprising some investors believe the authorities are doing ;too much'...So how serious is this threat? ...History shows inflation is vulnerable to sudden 'regime shifts' - which economists always fail to appreciate in real time - so it would be foolish to rule out big inflation surprises in the years ahead. The worst kept secret in macro is that economists don't really understand inflation. Yet, until recently, there was a still a dominant consensus - in the long term, inflation was "˜always and everywhere a monetary phenomenon'. Certainly, there has always been a compelling relationship between the money supply and inflation, at least over long enough horizons. The underlying behavior of inflation changed after the Gold Standard, which was also testimony to the power of the monetary regime....To be fair to economists, the behavior of inflation makes it inherently tricky to forecast. Since the end of the Gold Standard, it has followed a persistent 'random walk', vulnerable to large structural breaks. It is possible COVID-19 will trigger another regime shift in these dynamics....We can identify the conditions that seem most likely to produce an inflation episode (based on history). They include: 1) Recovery from the current global recession...2) A revival in the velocity of money...3) Large, ongoing fiscal support, especially when the economy no longer needs it...4) Central banks that are prepared to tolerate an 'inflation overshoot', having missed their targets in the opposite direction for much of the past 20 years. Combine these forces and you have a compelling inflation narrative for 2022 and beyond."

U.S. Economy Posts Record Downturn -Wall Street Journal
"The U.S. economy contracted at a record rate last quarter...The Commerce Department said U.S. gross domestic product - the value of all goods and services produced across the economy - fell at a 32.9% annual rate in the second quarter, or a 9.5% drop compared with the same quarter a year ago. Both figures were the steepest in records dating to 1947. The contraction came as states imposed lockdowns across the country to contain the coronavirus pandemic and then lifted restrictions....Separately, the Labor Department said applications for weekly unemployment benefits rose by 12,000 to 1.43 million in the week ended July 25, and the number of people receiving unemployment benefits increased by 867,000 to 17 million in the week ended July 18, signs the jobs recovery is losing momentum....A surge in virus infections since mid-June appears to be slowing the recovery in some states, according to some private-sector real-time data....The decline in GDP in the second quarter reflected the deep hit to consumer and business spending from lockdowns, social distancing and other initiatives aimed at containing the virus. Consumer spending fell at a 34.6% annual rate, amid sharp decreases in services spending like health care and lower spending on goods."

A Quarter Of All Household Income In The US Now Comes From The Government -Zero Hedge
"Following today's release of the latest Personal Income and Spending data, Wall Street was predictably focused on the changes in these two key series, which showed a modest slowdown in personal spending (to be expected one month after the savings rate in the US hit a record), coupled with a modest decline in personal income (as government benefits and stimulus checks slowed substantially). But while the change in the headline data was indeed notable, what was far more remarkable was less followed data showing just how reliant on the US government the population has become. We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment benefits, welfare checks, and so on...As of June when total Personal Income was just below $20 trillion annualized, the government remains responsible for over a quarter of all income. Putting that number in perspective, in the 1950s and 1960s, transfer payment were around 7%. This number rose in the low teens starting in the mid-1970s (right after the Nixon Shock ended Bretton-Woods and closed the gold window). The number then jumped again after the financial crisis, spiking to the high teens. And now, the coronavirus has officially sent this number into the mid-20% range, after hitting a record high 31% in April. And that's how creeping banana republic socialism comes at you: first slowly, then fast."

RealMoneyBlog - Free daily/weekly email


7.30.20 - Gold Prices Nears $2,000, Is $3,000 Next?

Gold last traded at $1,944 an ounce. Silver at $23.37 an ounce.

NEWS SUMMARY: Precious metal prices took a healthy breather Thursday on mild profit taking amid strong uptrend. U.S. stocks fell sharply as big tech shares declined as investors also digested a record 39.2% drop in GDP.

Gold Price Reached Almost $2,000 Today, Is $3,000 Next? -Forbes
"Gold prices are likely to continue their upward journey as investors know that the gold price has broken significant resistance. This resistance level, formed in 2011, reached an all-time high at $1921. As of today, the gold price is trading at $1967 and has reached as far as $1981. The gold price is up nearly 28% YTD. Gold prices have recorded the longest monthly winning streak since 2012...four consecutive months of gains. We have not seen this kind of momentum since 2012. Gold investors know that gold price has strong momentum. For them, the current rally is only the beginning. With a global dovish monetary policy and the central bank running their money printing machine at full pace, investors hope that the gold price will continue its rally until it touches $3,000 an ounce. From the outset, this may seem bizarre, but with a loose monetary policy in place and a significant stock market crash hiding behind closed doors, the gold price will likely continue its run."

gold chart Is This "Peak Gold"? -Bonner/Rogue Economics
"Here's a Bloomberg headline from yesterday: 'As Gold Smashes Records, Forecasters Ask Whether Peak Is Near' You have to wonder: Who are these forecasters? Where have they been? Do they have any idea what is going on? Gold has its nose in the air. Like a deer in a dry forest, it smells the smoke. It knows it's time to get out of town. On Monday, politicians threw another $1 trillion worth of tinder on the fire. The so-called HEALS Act would bring the deficit for the calendar year (the feds operate on a different 'fiscal' year) to $5 trillion - or about 25% of GDP. To spell it out: More spending = More deficits = More fake-money printing. And more fake money pushes up the price of real money - gold. As long as the money-printing continues, gold will continue to rise....The stock market represents hope for the future...Gold, on the other hand, is more of a reminder of the past"¦ a souvenir of all the plans and projects that never paid out as expected. Stocks are an indicator of giddy greed. Gold is a measure of sober fear. One is hope. The other is reality....So, what do you think?...Is this the 'bottom' for the U.S. economy"¦ and the peak in the yellow metal?....Or is this just the beginning"¦ the first act in a show that will last for years more? Are there whole forests yet to light up"¦ followed by houses, factories, furniture, books"¦ and ballot boxes?....There seems to be more than an even-odds chance that the trends now in motion will stay in motion"¦until the whole shebang - the economy, politics, and the social system, too - goes up in flames. As for the peak in gold"¦ it is probably still far ahead."

Fed Maintains Stimulus Commitment as Economic Outlook Dims -Wall Street Journal
"Federal Reserve Chairman Jerome Powell said on Wednesday the U.S. economy faces a long road to recovery that will require greater public vigilance to prevent the spread of the coronavirus pandemic and more spending from Congress and the White House. Fed officials didn't announce new policy steps at the conclusion of their two-day meeting Wednesday and reiterated their pledge to maintain aggressive measures to support the economy....The economic backdrop has weakened somewhat since the Fed's rate-setting committee last met seven weeks ago. After surprising rebounds in employment in May and June, many states have seen significant increases in virus infections, leading to renewed curbs on certain commercial activities and a dampening of consumer confidence. Mr. Powell said various data sources the Fed monitors suggested hiring and consumer spending had slowed recently....Mr. Powell warned that even if the reopening of the economy later this year goes well and millions of people return to work, millions of others employed in industries that depend on large gatherings or close proximity indoors could be out of work for a long time."

Revisiting the White Swans of 2020 -Roubini/Project Syndicate
"At the start of the year, when COVID-19 was barely on anyone's radar outside of China, the global economy was entering a fraught phase, facing a range of potentially devastating tail risks. And though the pandemic has since turned the world on its head, all of these threats remain - and some have become more salient....Since February, the COVID-19 outbreak in China did indeed explode into a pandemic, vindicating those of us who warned early on that the coronavirus would have severe consequences for the global economy. Owing to massive stimulus policies, the Greater Recession of 2020 has not become a Greater Depression...Alternatively, with so much uncertainty, risk aversion and deleveraging on the part of corporations, households, and even entire countries could result in a more anemic U-shaped recovery over time. But if the recent surge of COVID-19 cases in the United States and other countries is not controlled, and if a second wave occurs this fall and winter before a safe and effective vaccine is discovered, the economy would likely experience a W-shaped double-dip recession. ....As I predicted in February, the rivalry between the US and four revisionist powers - China, Russia, Iran, and North Korea - has accelerated in the run-up to November's US presidential election. There is growing concern that these countries are using cyber warfare to interfere with the election and deepen America's partisan divisions....Why are financial markets blissfully ignoring these risks? After falling by 30-40% at the beginning of the pandemic, many equity markets have recovered most of their losses, owing to the massive fiscal-policy response and hopes for an imminent COVID-19 vaccine...The problem is that what was true in February remains true today: the economy could still quickly be derailed by another economic, financial, geopolitical, or public-health tail risk, many of which have persisted and, in some cases, grown more acute during the current crisis."

RealMoneyBlog - Free daily/weekly email


7.29.20 - Currency Debasement to Drive Gold to $2,300

Gold last traded at $1,947 an ounce. Silver at $23.46 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday near all-time highs on a weaker dollar ahead of Fedspeak. U.S. stocks traded slightly higher as investors awaited a congressional hearing on antitrust in Big Tech as well as the Federal Reserve's latest policy decision.

Currency debasement to drive gold price to $2,300 in 12 months -Goldman Sachs/Kitco News
"A fear of rising inflation, growing government debt and concerns that the U.S. dollar is embarking on a new downtrend are all factors that will push gold much higher, according to commodity analysts at Goldman Sachs. In a report Tuesday, analysts at the financial firm reiterated their view that gold will be the currency of last resort; they also increased their forecast for the precious metal. The bank now sees gold prices pushing to $2,300 an ounce within 12 months and silver prices rising to $30 an ounce, up from the previous forecast of $2000 and $22, respectively....The analysts see the potential for higher inflation as governments debase their currencies to deal with burgeoning debt...'When discussing the drivers of investment demand for gold and commodities, it is important to distinguish between debasement and inflation. The key is that the current debasement and debt accumulation sows the seeds for future inflationary risks despite inflationary risks remaining low today,' the analysts said."

dollar Tactical Update: Whither Goest The Dollar -Calhoun/Alhambra
"The most important factors for asset allocation are growth and the trend of the dollar. The uncertainty around those two variables these days is not unprecedented, but the only other comparable time was 2008. That might seem disconcerting at first, but remember that we did recover from 2008. It wasn't a very robust recovery and it took a long time but we did recover. And we'll recover from this virus too. As I've said many, many times, we aren't in the business of predicting the future, because that is an impossible task, but we are trying to interpret the present and that isn't as easy as it sounds. But it is worthwhile because the payoff for getting the big trends right can be enormous. The dominant themes of the last decade are consistent with what we expect from a strong dollar environment outside of recession: US outperforming International, Growth outperforming Value, Large Cap outperforming Small Cap, Developed Markets outperforming Developing Markets, Technology outperforming Everything, Equities and Bonds outperforming Commodities/Real Assets, Stocks outperforming Real estate.Those trends are a result of a (mostly) strong dollar environment with fairly steady growth. Growth has waxed and waned over the last decade but until recently it just oscillated around a 2% trend....Since the panic phase of the virus recession passed, the dollar has been weakening back to the bottom of the range that has prevailed since 2015....We look to momentum in markets to confirm the dollar trend so we are not all-in on a weak dollar outcome. There are still strong dollar trends in place in some areas as shifts like this aren't generally uniform. There are plenty of reasons, as our Jeff Snider is fond of pointing out, to believe this short-term downtrend will be just that - short-term. But a 9% drop in the space of four months cannot be ignored."

It Is Ironic That US "Tech Giants" Don't Actually Produce Anything -Rabobank/Zero Hedge
"Today is a Fed decision day. For the markets, the key question is 'What more can they realistically do at this stage?' Indicative that there is still more to do is the fact that the virus has not stopped raging across the US, and indeed much of the world...The Fed already took the step of announcing a day before their meeting finishes that seven of their nine emergency lending programs will be extended to the end of the year. The Fed today will be thinking about how to maintain as much consumption as possible going forwards and as much stock elevation as required....You will notice one thing missing above for the Fed to worry about: production. Which says a lot about where we stand today and why we stand there...Let other countries 'produce' stuff and we will just buy it, was the ruling economic philosophy in the States from 1945 to 2016, after all....There is another level on which 'the means of production' is relevant today - and that is because US tech giants are being called to testify to Congress against a backdrop of them becoming political footballs in an ever-more polarized society; something their many critics claim they help drive in various ways - have you seen the 'Antisocial media' T-shirts? In such a divided society - where 'cultural Marxism' and 'trained Marxist' are used as criticism and self-identification - it is ironic that most of these firms don't actually produce anything, and certainly not in the US: one lets you search for other things; most of the others have no content unless the users provide it or produce it (in which case, mostly from abroad again). There is no 'means of production' at all in that sense today. Yet clearly there is still vast power - and so an enormous ding-dong going on over who 'controls' them, and to what end."

The economy, not politics, should guide COVID-19 relief -Washington Examiner
"This upcoming COVID-19 fiscal relief package will likely be the last one Congress passes before the election, so it's important lawmakers get it right. The size and the shape of the package should not be pulled out of thin air or based on political wish lists, but rather designed to meet the needs of this crisis. While there is still a lot of uncertainty about how much more time and resources it will take to fight the virus and recession, lawmakers have a lot more economic data than they did in March to target those resources efficiently. Current projections are that the economic output gap due to the recession will be about $750 billion over the next six months. Looking out two years, the output gap could total $2 trillion - though the longer one looks out, the more uncertainty there is. Thus, the right starting point is to decide how much of that gap to fill in, over what time period, and how best to do so, rather than starting a political bidding war with lawmakers trying to outdo each other with how much they can spend. The next step is to determine the most pressing needs and most effective policies. One thing to consider is that every dollar wisely invested in mitigating the effects and spread of the pandemic, and finding a cure is potentially more effective than anything else would be....Here is what we should not do: We should not litter any package with political handouts that aren't targeted to helping the immediate situation....Fighting the pandemic and supporting those harmed by the resulting recession are the top priorities. But we also can't ignore that our national debt is set to reach 100% of the economy in a matter of moments."

RealMoneyBlog - Free daily/weekly email


7.28.20 - The Message Behind Gold's Rally

Gold last traded at $1,952 an ounce. Silver at $24.52 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday, with gold rising above $1,950/oz. and silver trading near $24.50/oz. on safe-haven buying despite a firmer dollar. U.S. stocks fell as lawmakers debated the next coronavirus relief while traders pored over the latest corporate earnings.

Investors Set Aside Coronavirus Worries, Driving a 'Melt-Up' in Markets -Wall Street Journal
"Stocks, bonds and commodities are heading for their strongest simultaneous four-month rise on record, highlighting the breadth of the market recovery during the 2020 economic slowdown....Investors and analysts attribute the broad rise in financial markets to faith in government and central-bank stimulus programs, hopes for vaccine development and wagers that the coronavirus crisis will spell opportunity for a number of large but nimble, well-placed companies at the expense of others whose struggles are deepening. The broad advance is prompting many investors who had been skeptical to pare back their cautious wagers and join the rally, giving it further fuel....Some analysts see recent signs of a 'melt-up' in some market niches, particularly around technology, in which investors are buying assets in large part simply because they are rising. Traders are riding the momentum in everything from large technology stocks such as Apple Inc. to the precious metal silver. Such powerful rises are a concern for analysts who worry that the investments will suddenly fall in tandem if markets or the global economy face a fresh shock....'People are hopping on the train, and they're also looking to get anything else in their portfolio for when the day of reckoning comes,' said Christopher Stanton, chief investment officer of Sunrise Capital Partners. Mr. Stanton is betting against the dollar, expecting Federal Reserve stimulus programs to continue weakening the currency, boosting investments from stocks to commodities that are priced in dollars. He warned that uncertainty about government or central-bank policies could hit markets, pointing to November's presidential election as one possible spark for a reversal. Many investors fear presumptive Democratic nominee Joe Biden will raise corporate taxes if elected."

gold The Message Behind Gold's Rally: The World Economy Is in Trouble -Bloomberg/Yahoo Finance
"The virus has unleashed a torrent of forces that are conspiring to fuel relentless demand for the perceived safety from turmoil that gold provides. There's the fear of further government-ordered lockdowns; and politicians' decision to push through unprecedented stimulus packages; and central bankers' decision to print money faster than they ever have before to finance that spending; and the plunge in inflation-adjusted bond yields into negative territory in the U.S.; and the dollar's sudden decline against the euro and yen; and rising U.S.-China tensions. All these things, when taken together, have even triggered concern in some financial circles that stagflation - a rare combination of sluggish growth and rising inflation that erodes the value of fixed-income investments - could take hold across parts of the developed world....The main driver behind gold's latest rally 'has been real rates that continue to plummet and don't show signs of easing anytime soon,' Edward Moya, a senior market analyst at Oanda Corp., said by phone. Gold is also drawing investors 'concerned that stagflation will win out and will likely warrant even further accommodation from the Fed.'....Analysts have been predicting huge upside for gold for several months. In April, Bank of America Corp. raised its 18-month gold-price target to $3,000 an ounce. 'The global pandemic is providing a sustained boost to gold,' Francisco Blanch, BofA's head of commodities and derivatives research, said Friday, citing impacts including falling real rates, growing inequality and declining productivity. 'Moreover, as China's GDP quickly converges to U.S. levels helped by the widening gap in Covid-19 cases, a tectonic geopolitical shift could unfold, further supporting the case for our $3,000 target over the next 18 months.'"

More riots and lawlessness in cities across nation -Fox News
"Another night of rioting and lawlessness exploded in more than half a dozen U.S. cities Saturday night - with the mayhem including damage to federal buildings, local police precincts, and a fatal shooting in Austin, Texas. Similar protests and violent demonstrations have been seen across the country following the death of George Floyd, a Black man in Minnesota who died while in police custody. Floyd's death - as well as the police shooting death of Breonna Taylor in Louisville, Kentucky, and other Black men and women - sparked widespread protests and demonstrations in the U.S. and across the world, which still continue in some cities to this day. Here's a recap of some of the developments in a sampling of cities. Portland, Ore.: Courthouse fence breached - A huge crowd that included the Wall of Moms and the Wall of Vets turned out for yet another day and night of rioting and lawlessness in Portland, Ore., a city that has seen more than 50 consecutive days of such behavior....Seattle: Explosive blows hole in precinct wall - At one point during Saturday's daylong protests in Seattle, rioters threw an explosive device that created an eight-inch hole in a wall of the police department's East District, police Chief Carmen Best said, according to the Seattle Times....Austin, Texas: Fatal shooting - During a protest in the city, police said a man carrying a weapon approached a vehicle - but a person inside the vehicle fatally shot the man, the Austin American Statesman reported....Oakland, Calif.: Courthouse fire - Hundreds of protesters marched through downtown Oakland, smashing windows of the city's police headquarters and setting a fire inside the Alameda County courthouse, according to reports."

Airline trade union says air travel won't recover before 2024 -The Hill
"The trade union for the airline industry predicted Tuesday that air travel will not recover to pre-pandemic levels until 2024.The International Air Transport Association (IATA) is delaying its original forecast by a year, citing slow containment of the COVID-19 outbreak in the U.S. and developing countries....The group pointed to a sharp decrease in corporate travel and weak consumer confidence as reasoning for the slower recovery. IATA chief economist Brian Pearce told reporters in an online briefing that while airlines are seeing more travel since the lockdowns in April, the improvement is "barely visible," according to The Associated Press. June's air travel, measured in the distance traveled by all paying fliers, decreased 86.5 percent compared to last year, slightly better than May, which saw a drop of 91 percent compared to 2019....Planes reported filling 62.9 percent of capacity for domestic flights around the world, while international flights filled 38.9 percent of their seats."

RealMoneyBlog - Free daily/weekly email


7.27.20 - Smart Money Loves Gold

Gold last traded at $1,930 an ounce. Silver at $24.39 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday, with gold touching all-time highs, as investors sought safe havens from a gaggle of economic uncertainties. U.S. stocks rose, led by major tech names, as investors braced for a week of corporate earnings and coronavirus stimulus negotiations.

The Smart Money Doesn't Like Stocks But Loves Gold -Bloomberg
"Gold is up 25% this year...Meanwhile, global stocks, as measured by the MSCI World index, have recovered almost all of the losses they suffered as the pandemic ushered the world economy into lockdown, and are within 5% of regaining their February highs. A look at where the smart money is going, though, suggests one of these rallies may prove unsustainable. In the first quarter, sovereign funds had reduced their exposure to equities to the lowest level since at least 2014, according to an annual survey published this week by Invesco Ltd. The investment management firm cited 'end of cycle concerns that led to decreasing strategic allocations' as the driving force for the diminishing appetite for stocks. That trend shows no signs of abating. More than a third of wealth funds plan to cut their equity holdings in the coming year, with 18% intending to trim by 5% or more. Contrast the mistrust of equities with a rising enthusiasm for gold. Its performance this year has been spectacular. Gold bugs applaud the precious metal as an insurance policy against financial fiddling by monetary authorities that will stoke runaway inflation one of these days. That interest has further to run. Some 18% of central banks plan to increase their gold holdings in the coming year, according to the Invesco report, while 23% of sovereign funds intend to boost their exposure....'It is only a matter of time' until gold reaches a record high, Citigroup Inc. analysts said in a report this week. Gold bugs can rejoice that the smart money of sovereign funds and central banks is with them. The cheerleaders for equities may want to think again."

free money Governments must beware the lure of free money -The Economist
"It is sometimes said that governments wasted the global financial crisis of 2007-09 by failing to rethink economic policy after the dust settled. Nobody will say the same about the covid-19 pandemic. It has led to a desperate scramble to enact policies that only a few months ago were either unimaginable or heretical. A profound shift is now taking place in economics as a result, of the sort that happens only once in a generation...The pandemic marks the start of a new era. Its overriding preoccupation will be exploiting the opportunities and containing the enormous risks that stem from a supersized level of state intervention in the economy and financial markets. This new epoch has four defining features. The first is the jaw-dropping scale of today's government borrowing, and the seemingly limitless potential for yet more....The second feature is the whirring of the printing presses. In America, Britain, the euro zone and Japan central banks have created new reserves of money worth some $3.7trn in 2020. Much of this has been used to buy government debt, meaning that central banks are tacitly financing the stimulus. The result is that long-term interest rates stay low even while public-debt issuance soars....The state's growing role as capital-allocator-in-chief is the third aspect of the new age. To see off a credit crunch, the Federal Reserve, acting with the Treasury, has waded into financial markets, buying up the bonds of AT&T, Apple and even Coca-Cola, and lending directly to everyone from bond dealers to non-profit hospitals....The final feature is the most important: low inflation. The absence of upward pressure on prices means there is no immediate need to slow the growth of central-bank balance-sheets or to raise short-term interest rates from their floor around zero...accommodative monetary policy now costs so little to service that it looks like free money. Don't fool yourself that the role of the state will magically return to normal once the pandemic passes and unemployment falls....The new era also presents grave risks. If inflation jumps unexpectedly the entire edifice of debt will shake, as central banks have to raise their policy rates and in turn pay out vast sums of interest on the new reserves that they have created to buy bonds....The stakes are high. Failure will mean the age of free money eventually comes at a staggering price."

U.S. Dollar's Strength Is Sagging as America's Economic Model Declines -Hatheway/Barrons
"Few issues in economics more befuddle and divide the profession than figuring out what determines exchange rates....I spent many hours and a lot of course work in graduate school exploring the mysteries of exchange rates, to the point of writing a dissertation that my supervising committee somehow accepted. I surely didn't break the currency code, but when I finished I was more than ready to admit that, when it came to exchange rate determination, I knew vastly more about what didn't work than what did....Which brings me to today's topic: Are the U.S. dollar's days numbered? The question arises because the dollar has slipped over the past month in the world's foreign exchange markets...The dollar is trading near two-year lows against the euro and has fallen some 7.5% against the European single currency since mid-March. Something appears to be going on, but what is it?...Clues for recent dollar depreciation answer reside in prospective relative GDP growth rates and in relative asset returns....Before long the dollar may also suffer from shifting return expectations, particularly in global equity markets. U.S. corporate profitability, which is largely to thank for the 10-year U.S. bull market, is now challenged. The share of profits in GDP - a good proxy for corporate profit margins - has been falling for several years. A Democratic clean sweep in November, which polls suggest looks increasingly likely, would result in higher corporate income taxes and a hit to after-tax corporate profits. Covid-19 related economic weakness would hurt company earnings as well. If the U.S. relinquishes global equity market leadership, the dollar is likely to sag as well....The days of dollar strength look numbered."

No More Blank Checks From Congress for Coronavirus -Sen. Johnson/Wall Street Journal
"A near-record 158.8 million Americans were employed in February, according to the Bureau of Labor Statistics. Then the novel coronavirus brought parts of the economy to a screeching halt. As of June, 142.2 million people were employed, a reduction of 16.6 million, or about 10.5%. Recent economic forecasts have predicted a decline in gross domestic product of between 4.6% and 8% for 2020. The damage from Covid-19 has been significant, but not catastrophic. Congress authorized $2.9 trillion of Covid-19 relief, which represents 13.5% of 2019's U.S. GDP. No one knows exactly how much of the Covid relief has been spent or obligated, but 60% ($1.75 trillion) seems to be a consensus figure in Congress. Let that sink in. We've authorized enough spending to replace 13.5% of annual economic output, and more than $1 trillion of it hasn't yet been spent or obligated. So why is Congress rushing to pass at least $1 trillion more? For Speaker Nancy Pelosi and her fellow Democrats, $1 trillion isn't enough. The House has passed an additional $3 trillion in Covid-19 relief, which would bring the total to $5.9 trillion, 27.5% of GDP....Since the Small Business Administration has disclosed recipients of Paycheck Protection Program loans greater than $150,000, news reports have revealed that the PPP lacked basic controls that any future program and expenditures must contain. Loan forgiveness shouldn't be granted to organizations that have the ability to repay. There is no doubt the PPP was a lifeline to many organizations and their employees. But there's also no doubt many groups that received loans - and will almost certainly have those loans forgiven - didn't need them. As the largest single expenditure of the Cares Act, the PPP deserves more scrutiny....Doesn't it make more sense for Congress to evaluate what has been spent, determine what worked and what didn't, and then redirect the balance based on what Congress finds? We shouldn't authorize another dime until we do so."

RealMoneyBlog - Free daily/weekly email


7.24.20 - Battered Dollar 'Hanging by a Thread'

Gold last traded at $1,899 an ounce. Silver at $23.02 an ounce.

NEWS SUMMARY: Precious metal prices extended gains, with gold topping $1,900/oz, on rising geopolitical and economic worries. U.S. stocks added to a sharp decline from the previous session, as tensions between the U.S. and China keep rising and tech shares struggled once again.

Gold price tops $1,900 on longest winning streak since 2011 -Financial Times
"Gold was closing in on a record high on Friday, climbing above $1,900 a troy ounce as geopolitical tensions kept the haven metal on its longest winning streak since 2011. The commodity, used by investors as a store of value in times of stress, has rallied strongly as other safe assets have become less attractive, strategists say. The US dollar has weakened in recent weeks as America's Covid-19 crisis deepens, while the inflation-adjusted yields available on benchmark government bonds have slumped well below zero. Gold rose almost $20 in afternoon trading on Friday to a high of nearly $1,906 an ounce, keeping it on course for a seventh straight weekly gain, as a deepening diplomatic row fed tensions between Washington and Beijing. The metal is now approaching its record intraday high of $1,921 set in September 2011, having risen about a quarter this year - making it one of the best-performing assets in 2020. 'Financial markets tend to move like a giant pendulum, and once it swings it is very hard to stop it. That's definitely the case in gold,' said Peter Grosskopf, chief executive of Sprott, a precious metals specialist with $12bn under management. 'The latest move is being driven by the Covid outbreaks we are seeing in the US, and the realization that the recovery is going to be longer and harder than many people were expecting a few weeks ago,' said Joe Foster, fund manager at VanEck in New York. 'The US dollar is also weak and silver has broken out, so that probably tells you some speculative money has come into the market.'"

Washington Battered U.S. dollar 'hanging by a thread' as coronavirus cases grow -Yahoo Finance
"A steady decline in the dollar has accelerated in recent weeks, as a resurgent coronavirus outbreak in the United States and improving economic prospects abroad sour investors on the currency. The buck is down 8% from its highs of the year against a basket of currencies and stands near its lowest level since 2018. Net bets against the dollar in futures markets are approaching their highest level in more than two years. 'The dollar is hanging by a thread,' said Mazen Issa, senior currency strategist at TD Securities in New York. 'At this point, the dollar-weakness mindset has become deeply entrenched.' A range of factors are driving the U.S. currency's decline....'Investors don't know what the U.S. is doing" regarding the coronavirus pandemic, said Richard Benson, co-chief investment officer at Millennium Global Investments in London. 'That has been a big drag on the U.S. dollar.'....Low U.S. yields have also raised the allure of investments such as gold, which normally struggles to compete with yield-bearing assets. Prices for the metal are up 23% for the year."

Millennials Flood Into Precious Metals: Is Gold The Next TSLA? -Zero Hedge
"As precious metals accelerated higher in the last few days, we joked (kinda) on Twitter that the surge in momentum would soon become a magnet for the new trading gurus manning their desks at home - whether in China or Chinatown - and send it to new all time highs. One day later, it's happening as Robinhood users flood into the gold and silver ETFs. For SLV, the number of RH users holding the ETF has surged from around 15,000 to 20,000 in the last few days.... making it the 16th most popular pick on Robinhood as of the past 24 hours....And in typical Robinhood fashion, every dip is being furiously bought. Does this spell disaster for the rally in precious metals? With momo chasers piling in at the margin? Well it didn't seem to hurt TSLA... And besides, there are plenty of fundamental drivers for re-allocation into precious metals (as opposed to the vapor underlying TSLA's acceleration), including the resurgence in global negative-yielding debt... The question is, will CNBC cheer the retail participation in gold and silver as loudly as they celebrate the millennials buying the most expensive stock market ever?"

Progressive Policies Keep Failing -Stossel/Reason
"I laughed when I saw The Washington Post headline: 'Minneapolis had progressive policies, but its economy still left black families behind.' The media are so clueless. Instead of 'but,' the headline should have said, 'therefore,' or 'so, obviously.' Of course, progressive policies failed! They almost always do. 'If you wanted a poster child for the progressive movement, it would be Minneapolis,' says Republican Minnesota Senate candidate Jason Lewis in my new video. 'This is the same city council that voted to abolish the police department.' The council, which has no Republicans, spends taxpayer money on most every progressive idea. They brag that they recycle most everything. They have a plan to stop climate change. They tell landlords to whom they must rent. They will force employers to pay every worker $15 an hour. They even tell supermarkets what cereal they must sell. Despite such policies, meant to improve life for minorities and the poor, the Minneapolis income gap between whites and blacks is the second highest in the country....Cam Gordon, a current Minneapolis councilman, tells me the city's economic 'disparities were caused by a long trail of historic racism.' He tweeted: 'Time to end capitalism as we know it.'....In the past 50 years, while progressives attacked profits, capitalism - the pursuit of profit - lifted more than a billion people out of extreme poverty....Sadly, today in America, the progressives are winning."

RealMoneyBlog - Free daily/weekly email


7.23.20 - Insider Selling Soars Near Record Highs

Gold last traded at $1,882 an ounce. Silver at $22.76 an ounce.

NEWS SUMMARY: Gold prices reached toward fresh 9-year highs Thursday on safe haven buying and dollar weakness. Silver prices eased back on mild profit taking after hitting 7-year highs. U.S. stocks retreated on disappointing unemployment data and mixed reactions to the latest corporate earnings.

Silver Surges, Gold Nears Record in Flight to Havens -Bloomberg/Yahoo Finance
"Silver prices climbed to the highest in almost seven years and gold continued its march toward a record on expectations there'll be more stimulus to help the global economy recover from the coronavirus pandemic. Investors have flocked to the metals on surging demand for havens amid a resurgence in virus cases, slowing growth, negative real interest rates in the U.S., flaring political tensions and a weaker dollar. The vast amounts of stimulus unleashed by governments and central banks have also aided prices and, after the success of a European rescue package this week, the focus turns to negotiations on legislation to prop up the American economy. Silver jumped more than 8% on Wednesday - the biggest gain since March - and has been getting an added boost from supply concerns and optimism about a rebound in industrial demand. 'The closer gold gets to its record high the stronger the magnetic field will become and that could see it challenge that level before long,' said Ole Hansen, head of commodity strategy at Saxo Bank A/S. Silver should also continue its run as long as it has support from higher gold, as well as a weaker dollar and bets for more industrial demand, he said....Investors also weighed mounting China-U.S. tensions, with the Asian nation vowing to retaliate after the U.S. forced the closure of its Houston consulate...The fear of missing out is driving a flood of speculative money into gold, piling on top of January-June's heavy physical demand."

"Our Indicator Is Flashing A Warning Sign": Insider Selling Soars To Near Record Highs -Zero Hedge
"With the S&P now back to just a whisker away from all time highs, and a handful of tech stocks at never before seen levels...insiders have had enough and, confirming that valuations are in some cases even beyond dot com levels, have turned from rabid buyers into sellers with data from The Washington Service showing that nearly 1,000 corporate executives and officers have sold shares in their own companies this month, outpacing insider buyers by a ratio of 5-to-1. How big is this insider selling frenzy in context? According to Bloomberg, 'only twice in the past three decades has the sell-buy ratio been higher than now.'"

buyers

"A similar surge in selling in early 2020 and back in 2018 served as a handy indicator of imminent losses. 'Our indicator is now flashing a warning sign,' Moreland said. 'I'm not prepared to say everybody should sell everything and short the market because of the recent insider data. The way I'm using it is, I'm more comfortable selling some of my winners. We still don't trust the market's recent recovery.'....Amid the deluge of selling, some buying still remains, although that number has dropped to fewer than 200 corporate insiders who bought shares in July, compared with a full-month average of 1,160 during the first half of this year, according to the Washington Service data which also revealed that a total of $52.6 million of shares was sold last week while purchases reached a paltry $3.4 million."

U.S. Orders China to Close Houston Consulate -Wall Street Journal
"The U.S. ordered the abrupt closure of the Chinese Consulate in Houston, accusing China of extensive interference in domestic affairs and intellectual-property theft, an escalation of bilateral tensions that Beijing called outrageous and unprecedented. The State Department, in a statement on the closure, accused China of conducting 'massive illegal spying and influence operations throughout the United States against U.S. government officials and American citizens,' and said such activities have increased in recent years. The closure order, first made public by Beijing, coincided with Washington's unveiling on Tuesday of indictments against two hackers in China. They have been accused of targeting American firms involved in coronavirus research and stealing hundreds of millions of dollars in sensitive information from companies around the world while working on behalf of Beijing's main civilian intelligence agency...Footage aired by local television stations purportedly showed people burning documents on the consulate's premises. Washington's demand opened a new front in President Trump's efforts to pressure China in a duel between the world's two-largest economies over trade, technological and military competition, geopolitical influence and the coronavirus pandemic....Beijing has countered each time with heated criticism and retaliatory measures, and did so again following the closure order against its consulate. 'This is a political provocation unilaterally launched by the U.S.,' Chinese Foreign Ministry spokesman Wang Wenbin said Wednesday."

Covid-19 Vaccines With 'Minor Side Effects' Could Still Be Pretty Bad -WIRED
"On Monday, vaccine researchers from Oxford University and the pharmaceutical company AstraZeneca announced results from a 'Phase I/II trial,' suggesting their product might be able to generate immunity without causing serious harm. Similar, but smaller-scale results, were posted just last week for another candidate vaccine produced by the biotech firm Moderna, in collaboration with the US National Institutes of Health. As both these groups and others push ahead into the final phase of testing, it's vital that the public has a clear and balanced understanding of this work - one that cuts through all the marketing and hype. But we're not off to a good start. The evidence so far suggests that we're getting blinkered by these groups' PR, and so seduced by stories of their amazing speed that we're losing track of everything else. In particular, neither the mainstream media nor the medical press has given much attention to the two vaccines' potential downsides - in particular, their risk of nasty adverse effects, even if they're not life-threatening. This sort of puffery doesn't only help to build a false impression; it may also dry the tinder for the future spread of vaccine fearmongering....The first people to get vaccines are carefully picked to be the least likely to have a negative reaction....The press release for Monday's publication of results from the Oxford vaccine trials described an increased frequency of 'minor side effects' among participants...But moderate or severe harms - defined as being bad enough to interfere with daily life or needing medical care - were common too. Around one-third of people vaccinated with the Covid-19 vaccine without acetaminophen experienced moderate or severe chills, fatigue, headache, malaise, and/or feverishness. Close to 10 percent had a fever of at least 100.4 degrees, and just over one-fourth developed moderate or severe muscle aches. That's a lot, in a young and healthy group of people - and the acetaminophen didn't help much for most of those problems....There is already a high level of misinformation and distrust about fast-tracked Covid-19 vaccines in the American community. This week, a new preprint from Kin On Kwok and colleagues found that even a sizable proportion of nurses in Hong Kong would be hesitant to take one. We may have a vaccine soon, say the authors of that paper, but 'communities are not ready to accept it.' It won't help to overcome this skepticism if notable evidence of harms keeps getting pushed off to the side. It's much better to be straight up about what it's really like to take one of these vaccines. Why would anyone trust the experts otherwise?"

RealMoneyBlog - Free daily/weekly email


7.22.20 - Gold, Silver Prices Surge to Highest Levels Since 2011

Gold last traded at $1,865 an ounce. Silver at $23.14 an ounce.

NEWS SUMMARY: Precious metal prices rose near 9-year highs Wednesday on rising uncertainty and a weak dollar. U.S. stocks traded mostly flat as traders grappled with renewed U.S.-China tensions.

Fed Nominees Shelton, Waller Confirmed by Senate Committee -Wall Street Journal
"The candidacy of Judy Shelton, an economic adviser to Mr. Trump's 2016 presidential campaign, for the Fed's Board of Governors was approved by the Senate Banking Committee in a party-line vote despite objections from Democrats. Her next and final stop will be a confirmation vote on the Senate floor, where Republicans hold a 53-47 majority. Senators on the panel also voted 18-7 to advance the nomination of St. Louis Fed director of research Christopher Waller to fill the remaining vacancy on the central bank's seven-member board in Washington....Ms. Shelton has been a longtime proponent of a return to the gold standard, which would limit the Fed's ability to influence inflation and employment, and concedes that her views are outside the mainstream of economics....The nominations could take on extra significance if Mr. Trump wins reelection this year because he could tap a sitting governor to succeed Fed Chairman Jerome Powell when his four-year term expires in early 2022....'I spent a lot of time reading a lot of Dr. Shelton's works,' senator John Kennedy of Louisiana told reporters Monday. 'My criteria for judging any Federal Reserve nominee is: Does the nominee have the intellectual heft to do the job? And No. 2, will they be independent? And she satisfied both of those criteria.'"

TTAM Gold, silver prices surge to highest levels in years -Fox Business
"Spot gold rose $24.50 to $1,840.40 an ounce, its highest level since Sept. 9, 2011, while silver gained $1.34, hitting a more than 6-year high of $21.46 an ounce. At the same time, the U.S. dollar index slid 0.54 percent and neared its lowest point in two years....Precious metals have had a banner year in 2020 as the lockdowns ordered to slow the spread of COVID-19 led to drastic action from policymakers, devaluing currencies and prompting investors to turn to precious metals as a safer store of value....James O'Rourke, commodities economist at the London-based research firm Capital Economics, expects real yields to 'remain low' and interest rates to stay at current levels as the 10-year Treasury note will be 'firmly anchored by loose monetary policy.' He sees gold ending 2020 at $1,900 an ounce, and remaining 'elevated over the next couple of years.' While gold prices have garnered all of the attention lately, silver has been the big winner since precious metals bottomed in March. Back then, the gold/silver ratio was near 122 - it has since fallen to 85.74. 'Silver has been a misunderstood component of the reopening because the industrial part that held it back for months is now in its back, propelling it forward,' George Gero, managing director at RBC Global Wealth ManagementGe said, noting he sees the metal's price climbing to as high as $22 by year-end and the gold/silver ratio falling to around 80." NOTE: Learn more about the wisdom of owning precious metals in Swiss America's free report The Timeless Truth About Gold and Silver

People are more likely to contract COVID-19 at home, study finds -Reuters
"South Korean epidemiologists have found that people were more likely to contract the new coronavirus from members of their own households than from contacts outside the home. A study published in the U.S. Centers for Disease Control and Prevention (CDC) on July 16 looked in detail at 5,706 'index patients' who had tested positive for the coronavirus and more than 59,000 people who came into contact with them. The findings showed just two out of 100 infected people had caught the virus from non-household contacts, while one in 10 had contracted the disease from their own families. By age group, the infection rate within the household was higher when the first confirmed cases were teenagers or people in their 60s and 70s. 'This is probably because these age groups are more likely to be in close contact with family members as the group is in more need of protection or support,' Jeong Eun-kyeong, director of the Korea Centers for Disease Control and Prevention (KCDC) and one of the authors of the study, told a briefing. Children aged nine and under were least likely to be the index patient, said Dr. Choe Young-june, a Hallym University College of Medicine assistant professor who co-led the work...Children with COVID-19 were also more likely to be asymptomatic than adults, which made it harder to identify index cases within that group....Data for the study was collected between Jan. 20 and March 27, when the new coronavirus was spreading exponentially and as daily infections in South Korea reached their peak."

Building Work-Life Boundaries in the WFH Era -Harvard Business Review
"Remote work used to be an option for those employees who could convince their manager that it was a good idea. All that changed with the arrival of Covid-19. For many, the transition to remote work has been remarkably smooth, aided by technologies such as fast internet, smartphones, and video- and audio-based conferencing. Yet the technologies that have made remote work possible have also created a more permeable boundary between work and family roles. In many cases, employees must attend to email, Slack, and video meetings alongside family members who are also working or learning from home. Compounding this change is the fact that working from home was mandated seemingly overnight for many knowledge workers, rather than a thought-out plan that employees could adequately prepare for or opt into at their discretion. All of this makes it more difficult to psychologically detach and recover from work, and creates a need to more actively manage boundaries between work and family....Back when you worked at an office, maybe your family dropped by to visit you or you regularly took work home. Or you may have tried to separate home and family, taking work-related calls at work and family-related calls at home. These preferences - known as integration and segmentation - are key factors in the ways we navigate our daily boundaries. Integrators, as the first example above demonstrates, tend to blur work-family boundaries; segmentors, on the other hand, strive to preserve clear ones....Today, segmentors' strong desire to keep their office and family lives separate is almost impossible to satisfy while working from home. For integrators, the sudden and fully immersive blurring of work and home boundaries can be difficult if they've never felt the need to separate work and home in the past but might have to now. Here are ways both segmentors and integrators - and their managers - need to reconsider both time and space. Putting boundaries around your time is important regardless of whether you are an integrator or a segmentor. This might come easier to segmentors, who crave clear boundaries. Integrators might have to work harder at this skill by creating more schedules and routines....Whether you are an integrator or a segmentor, you need to select your work-from-home space carefully - but where you set up shop may be different. Integrators may be comfortable setting up their home office somewhere central, like the kitchen or dining room, where they can keep an eye on what is happening with family members. However, segmentors should choose a room with a door, if possible. They should also pay attention to what home-related items are in their office and consider moving them to another room, so that family members don't need to come in and look for items while they are working....By understanding how everyone works best from home, leaders can turn this unexpected crisis into opportunity as we develop new and better ways of working in the future."

RealMoneyBlog - Free daily/weekly email


7.21.20 - US Companies Lose Hope for Quick Rebound

Gold last traded at $1,844 an ounce. Silver at $21.65 an ounce.

NEWS SUMMARY: Precious metal prices shot up Tuesday on safe haven buying, fresh Fed stimulus talk and a weaker dollar. U.S. stocks traded mixed on upbeat earnings as investor looked for clues on further U.S. fiscal stimulus.

It's 'Only a Matter of Time' Before Gold Hits a Record -Citi/Yahoo Finance
"Bullish factors building in the gold market are set to see prices take out the record set in 2011, according to Citigroup Inc. The metal is benefiting from loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation, the bank's analysts including Ed Morse wrote in a report. Gold is expected to climb to an all-time high in the next six-to-nine months, and there's a 30% probability it'll top $2,000 an ounce in the next three-to-five months. 'Nominal gold prices have already posted fresh records in every other G-10 and major emerging market currency this year,' the analysts said. 'It is only a matter of time for fresh' highs in U.S. dollars, they said, adding that demand for a store of wealth should also lift silver, which touched a three-year high in New York on Monday. Citigroup is among a long line of market watchers in predicting bullion will either test or top its long-standing record as the resurgence of coronavirus cases in several parts of the world point to a prolonged and uneven global economic recovery. Spot gold has surged 19% this year to the highest since 2011 as the pandemic drove investors to havens, while easier monetary policy and other measures to shore up economies also supported demand....Citi sees silver rising to $25 in the next six to 12 months, with a potential for $30 based on the bank's bull case, additionally supported by a recovery in global economic activity."

spending U.S. Companies Lose Hope for Quick Rebound From Covid-19 -Wall Street Journal
"The fierce resurgence of Covid-19 cases and related business shutdowns are dashing hopes of a quick recovery, prompting businesses from airlines to restaurant chains to again shift their strategies and staffing or ramp up previous plans to do so. They are turning furloughs into permanent layoffs, de-emphasizing their core businesses and downsizing production indefinitely. Delta Air Lines Inc. curtailed plans to add more summer flights and said it doesn't expect business flying to recover to pre-pandemic levels. Chipotle Mexican Grill Inc. is adding staff and changing operations to accommodate more to-go business. Vox Media, the publisher of New York magazine and several news websites, said it would lay off 6% of its workforce as the company confronts a prolonged drought for its lucrative events business. 'We cannot defy gravity and continue with the business model we had before the pandemic,' Pret A Manger Chief Executive Pano Christou said on Friday as the sandwich chain reported an 87% drop in U.S. sales and announced plans to close nearly 20 stores. Executives who were bracing for a monthslong disruption are now thinking in terms of years. Their job has changed from riding it out to reinventing. Roles once thought core are now an extravagance. Strategies set in the spring are obsolete. 'It's going to be a different game,' said Bill George, former CEO of medical-device company Medtronic PLC and a senior fellow at Harvard Business School....'It's becoming increasingly clear that the second half of the year will not rebound anywhere near our pre-Covid forecasts,' Vox Media Chief Executive Jim Bankoff wrote in a memo to staff. 'Furthermore, as cases rise tragically across the country and many of our elected leaders avoid decisive action, we have very limited visibility into the timing or strength of a recovery.'"

Silver Hits $20 For The First Time Since 2016... And Why It Will Go Much Higher -Zero Hedge
"For the first time since September 2016, Silver futures just broke above $20...Just a few short months after dropping to the lowest since 2009. But, as tsi-blog.com explains, silver is set to continue outperforming over the next year. Gold is more money-like and silver is more commodity-like...In particular, gold, being more money-like, tends to do better than silver when inflation expectations are falling (deflation fear is rising) and economic confidence is on the decline. Anyone armed with this knowledge would not have been surprised that the collapse in economic confidence and the surge in deflation fear that occurred during February-March of this year was accompanied by a veritable moon-shot in the gold/silver ratio. Nor would they have been surprised that the subsequent rebounds in economic confidence and inflation expectations have been accompanied by strength in silver relative to gold, leading to a pullback in the gold/silver ratio....We are intermediate-term bullish on silver relative to gold. We don't have a specific target in mind, but...it isn't a stretch to forecast that at some point over the next three years the gold/silver ratio will trade in the 60s. Be aware that before silver commences a big up-move in dollar terms and relative to gold there could be another deflation scare."

Coronavirus in Arizona: Stick to data and stop media-induced panic -Rep. Biggs/Washington Examiner
"Drs. Anthony Fauci and Deborah Birx continue to offer up interesting contradictions on COVID-19. Birx has told us that a rise in positive test results for the coronavirus indicates a spike in deaths to come. Fauci, on the other hand, says that the mortality rate is irrelevant. They're both wrong, and Arizona is demonstrating as much amid the current outbreak. By far, the largest spike in positive tests right now is in the 21-to-44 age group, which accounts for more than half of all cases and more than half of all new cases. If the rise in positive tests indicates a coming spike in deaths, one would expect within seven to 14 days a rise in the fatality rate among that age group. Fortunately, that isn't happening, according to data from the Arizona Department of Health Services. In fact, the death rate among that group is 0.22% now, with the rapidly rising number of nonlethal cases. Speaking of which, Fauci has said the death rate from COVID-19 is unimportant. Again, the case of Arizona suggests otherwise. The low and declining death rate mirrors a broader situation in which, although there are far more positive tests for the coronavirus, there is no reason to panic....But are the hospitals being overrun? Phoenix Mayor Kate Gallego recently commented that Arizona hospitals are triaging patients, so short of facilities that they were sending people home to die. Fortunately, that was simply a politician's falsehood that was quickly checked and refuted by local journalists. Typically, Arizona's intensive care unit usage is at around 80% to 90%. That currently stands at about 88% to 90% for the past three weeks, and only about 60% of the ICU cases are COVID-19-related, although not all of those have confirmed COVID-19 diagnoses....The sad part of all of this is that some people, a lot of them in the media, prefer fear and loathing instead of having the humility to look at the data, accept that there will be risks, and determine how we can reasonably minimize them....The evidence so far suggests that children have virtually no chance of contracting COVID-19 or dying from it and that they are not superspreaders of the virus....Let's start telling the unvarnished truth and let people make decisions on how to live their lives."

RealMoneyBlog - Free daily/weekly email


7.20.20 - Debt Fatigue is Destroying America

Gold last traded at $1,816 an ounce. Silver at $20.25 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on rising risk aversion and a weak dollar. U.S. stocks traded mixed as traders weighed the prospect of a potential coronavirus vaccine and more U.S. fiscal stimulus.

The COVID Economy In Suspended Animation -Global Macro-Monitor
"Summary: The U.S. economy is not real and in a current state of 'suspended animation.' The COVID rescue package has introduced significant distortions into the economy. The 'Corona Capitalists,' some very well capitalized and liquid corporations, have accounted for a large portion of the loan volume in the Paycheck Protection Program (PPP). Almost 30 percent of renters and homeowners failed to make all or some of their payments in July. The buildup of rental and mortgage payment arrears is a very complicated and potentially menacing problem, threatening the very heart of capitalism, itself. Personal income is up almost 7 percent year-on-year, though wages and salaries are down 6 percent, the result of a 70 percent increase in government transfer payments. Personal savings skyrocketed from 7.9 percent of disposal personal income (DPI) in January to 32.2 percent in April, providing some of the jet fuel for a rocketing stock market. The Fed's digital printing press has financed most, if not all of the increase in the transfers and savings. Markets remain detached from economic reality....It's stunning to us that the markets continue to hold up, choosing to take the blue pill of bliss and ignorance, believing the Wizard of Oz, dressed up as the Federal Reserve, will always be there to bail them out no matter their level of stupidity. Then again, there really are no free markets left after the Fed has effectively nationalized just about anything that moves."

gold A Monetary System as Good as Gold -Salter/AIER
"John Maynard Keynes, the progenitor of modern macroeconomics, famously dismissed the gold standard as a 'barbarous relic.' Commodity monies have been held in low regard by economists ever since. The disdain has spread to noneconomists in policy making circles, as well. Dr. Judy Shelton is a rare exception. She is a well-known defender of the gold standard. For this reason, her nomination to the Federal Reserve's Board of Governors has been somewhat controversial....The low regard economists and policymakers have for the gold standard is unfounded. Sadly, many of these supposed 'experts' are almost completely innocent of monetary history...In practice, the gold standard provides a better anchor for inflation expectations without an obvious cost in terms of lower output or higher unemployment....If the gold standard were really so inferior to fiat money managed by modern central banks, you would expect it to show up in the historical time series. As it turns out, the evidence suggests the opposite....Rather than an antiquated holdover retarding economic performance, the gold standard was a crucial component of the impressive economic growth that occurred during the late 19th and early 20th centuries....The inescapable conclusion is that gold is no 'barbarous relic,' as Keynes maintained. If anything, it is a civilizing force...As my dissertation adviser, Lawrence White, puts it: The gold standard is still the gold standard among monetary systems."

Debt fatigue, not coronavirus, is destroying America -The Hill
"The United States is experiencing its worst crisis since World War II. No, it is not the coronavirus pandemic. New York and other states are demonstrating how to bend the coronavirus infection rate down, and other states will soon follow. The crisis that is destroying America is debt fatigue....Over the past half century governments at all levels have experienced debt fatigue. The federal government has again increased debt to levels exceeding our national income. Much of this debt was incurred in response to the 2008 financial crisis and the coronavirus pandemic. But the fundamental cause of this debt crisis is not these economic shocks, but rather debt fatigue. For decades, debt has been increasing as a share of national income. Although the federal debt crisis is widely acknowledged, less well understood is the state and local government debt crisis. Over the past five decades, most state governments have allowed debt to increase to more than 10 percent of personal income, a debt level that exposes them to risk of default. Most of this increase in debt at the state and local level in recent years is in unfunded liabilities in pension and other post-employment benefit plans....The Federal Reserve has now allowed the states to designate municipal governments and public enterprises to access emergency lending programs directly. This massive bailout of our state and local governments is not only bankrupting the federal government, it is undermining the future of the nation. If we can't rely on elected officials to pursue responsible fiscal policies, how can we solve this debt crisis? Countries that have been successful in solving their debt debacles, like Switzerland, have done so by imposing 'debt brake' rules. When debt levels exceed a debt tolerance level, the debt brake rules mandate a reduction in the rate of growth in government spending until debt is reduced below that debt tolerance level....If our country is to retain even a modicum of a federalist system, we must restore fiscal autonomy and responsibility at each level of government....At the federal level, a debt brake could be incorporated in a balanced budget amendment to the U.S. Constitution. If Congress fails to propose such an amendment, citizens could enact the amendment through an Article V Amendment Convention."

Drive-thru job fair helping unemployed workers find new jobs -MSN/Fox 29
"A staffing company in West Palm Beach is making it easier for job seekers to find employment amid the coronavirus. Express Employment Professionals developed an innovative hiring event to get people back to work - a drive-thru job fair. 'We really wanted to try and think outside of the box and how we can attract new applicants,' said Cameron Smith of Express Employment Professionals....The process is simple yet effective. 'We're doing an interview kind of quick, a screening interview, and then we are basically trying to figure out what direction to head and have them go onto our website and fill out an application, send their resume and get them a place,' said Smith. The company works with a variety of local businesses - everything from warehouse jobs, administration work and information technology."

RealMoneyBlog - Free daily/weekly email


7.17.20 - What if Gold Goes to $5,000 or $10,000?

Gold last traded at $1,800 an ounce. Silver at $19.57 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on strong demand and a weak dollar. U.S. stocks traded mixed as a sharp decline in Netflix shares pressured the rest of the market.

What if gold does go to $5,000 or $10,000? -Kitco
"With gold hitting nine-year highs this month - and staying above $1,800 - readers are asking for guidance on what to do if gold not only reaches new nominal highs, but blows by $2,000 and keeps going. What if it really does go to $5,000 an ounce, $10,000"¦ or higher? And what if silver hits $100 and keeps rising?....I think we'd be seeing 1970s-style stagflation, and there would be great political and social unrest. I think it's unlikely someone with the guts Paul Volker had would step in to set things right. And I think there's zero chance today's politicians would give such a person the power to do so. I don't think $10,000 gold would be the end of the story. If it does rise that high, I think the US would fall into a true hyperinflationary death spiral. At that point, the price of pretty much everything would be about to take off. At the same time, the actual value of many things would go into decline as people focus their spending on survival. In short, the real endgame would be a major financial and social reset - after a collapse. I hope I'm wrong. Or, if I'm right about what $10,000 gold implies, I hope we never get there. Just reaching Bank of America's now-famous $3,000 call would be more than enough to make fortunes for gold bugs like me. No need to wish for far greater misfortune befalling the rest of the world. But frankly, with the Republicans joining the Democrats in pulling out the control rods that keep the US economy from overheating and melting down"¦ well, I don't want to predict a global collapse , but I think it would be foolish not to make contingency plans for the possibility."

debt ceiling The Covid Fiscal Crisis Is About Debt and Taxes -Sternberg/Wall Street Journal
"The only thing worse than how we'd pay for pandemic relief is what will happen when, inevitably, we don't. Alas, it's time to talk about what the coronavirus pandemic means for your tax bill...Policy makers and voters alike are waking up to the fact that those trillions of dollars and euros and pounds our governments spent were real money. The Congressional Budget Office (CBO) last week pegged the federal budget deficit at $2.7 trillion for the October through June period....The conventional explanation for why this should alarm us is that taxes inevitably must rise to repay those debts. Such fearmongering has the virtue of being true. Expect politicians on the left to seize on high pandemic deficits and debt loads as an opportunity to overhaul taxation, and not for the better. A President Biden will welcome the excuse to reverse the 2017 Trump tax reform while sidestepping the boost the tax cuts gave to economic growth - 'because the deficit.'....An underappreciated aspect of our growing mountain of government debt is the political pressure it places on central banks, not least the Federal Reserve, to suppress interest rates for the purpose of making debt service affordable....The U.S. thus finds itself stuck in a debt trap, alongside the rest of the developed world. Economists at the Bank for International Settlements coined that term to describe a situation in which prolonged low interest rates induce the accumulation of so much unproductive government and private debt that to raise rates would risk a catastrophic financial-system or fiscal crisis...The path of least resistance instead becomes to keep rates low forever, in turn encouraging more debt....The result is a brittle economy that churns out too many houses, financial assets and overindebted retailers, and too few productive job opportunities - and creates one financial crisis after another. That's a fate worse than any tax hike. The worst part is we'll probably get both the taxes and the financial crisis before this pandemic-debt story is done."

The world's wealthy push for higher taxes, but few volunteer -Worstall/Washington Examiner
"The patriotic millionaires are at it again, insisting that they should be made - forced, I tell ya'! - to pay more in taxes to help pay for recovery from the coronavirus. No, it's not good economics, but more than that, it's not even what they themselves believe. It's entirely possible to pay more taxes any time you want, and there's no real evidence that the rich have been volunteering. The bad economics argument is that right now really, really isn't the time for tax increases. The Federal Reserve is creating money down in the basement as fast as it can - that's what quantitative easing is - and Congress is throwing it out the door in unemployment checks, pandemic schemes, and sheer free cash. The justification is to stop the recession from turning into a depression, and raising taxes to cover all of this would be exactly and precisely the wrong thing to do. Near every strand of economic thinking tells us this, too. But there's more to it than that. Economists insist that we shouldn't listen to what people say. If we want to know their true desires, we should instead watch what they do....Standard economics also tells us that wealth taxation is a really bad idea, as is taxing the income from investments. Perhaps that's an argument for the wonks requiring specialized knowledge of the subject, so how about a simple argument? When those millionaires and billionaires voluntarily pay higher taxes, they can bring us their thank you letters - yes you do get one, I checked - and then we'll talk."

"Probably By Year End" - Alasdair Macleod Warns "The Dollar Is On Its Way To Zero" -Zero Hedge
"Finance and economic expert Alasdair Macleod says the gold market is 'extremely dangerous as far as the bullion banks, swaps and trading desks' that, at some point soon, are going to have to deliver physical gold they do not have....Macleod thinks failure to deliver gold is coming soon where the contract will be settled in cash and not physical metal. How many times can the gold market do this? Macleod says, 'I think it will be the end of the futures market because nobody would trust it as a means of delivering gold. I mean it would have demonstrably failed. So, why would you play with it again? Of course, the failure of COMEX contracts is a very, very serious issue.' What happens to the price of gold? Macleod says, 'The price is already on its way to infinity or, put more accurately, the dollar is on its way to zero...Probably by the end of the year because we've got another thing happening in the background, and that is we have a banking crisis developing. This is the natural consequence of the contraction of bank credit. There is the effect of tariffs on top of that that turn a normal cycle of bank credit contraction into a 1929 to 1932 horror show. . . . If you have a banking collapse, then those assets values will just go down in the pan. The next thing, of course, bond yields start rising because of the inflationary implications of a financial collapse. At that stage, government financing becomes impossible because governments are in effect bankrupt.' Macleod says stocks, the dollar and bonds all go down together and explains, 'That is the lesson of history. Everything just goes away. If you destroy the currency, you destroy all the financial assets that are priced in it.'"

RealMoneyBlog - Free daily/weekly email


7.16.20 - Hedge Fund Sees Gold Topping $3,000/oz.

Gold last traded at $1,800 an ounce. Silver at $19.57 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on normal short-term profit-taking. U.S. stocks fell, led by tech shares, as investors digested the latest corporate earnings reports and mixed U.S. economic data.

Doomsday Hedge Fund Sees Gold Topping $3,000 an Ounce -Bloomberg
"A hedge fund manager who returned 47% this year by betting on gold and Treasuries says the next decade is going to be marked by inflation that central banks are powerless to control. Diego Parrilla, who heads the $450 million Quadriga Igneo fund, says unprecedented monetary stimulus is fueling asset bubbles and corporate debt addiction - rendering interest-rate hikes impossible without an economic crash. In the ensuing market mania, the manager whose portfolio is loaded up with cross-asset hedges says gold could rise to $3,000 to $5,000 an ounce in the next three to five years, up from the current price of $1,800. 'What you're going to see in the next decade is this desperate effort, which is already very obvious, where banks and government just print money and borrow, and bail everyone out, whatever it takes, just to prevent the entire system from collapsing,' Parrilla said in an interview from Madrid. While traditional funds are tasked with generating steadily positive returns over time, Parrilla's fund is predisposed toward hedging the next big crash while generating capital over time. Managers with a tail-risk bias position for extreme market events, typically bucking mainstream views on Wall Street."

covid Mis-Reporting of Virus Deaths From Alarmist Media -Real Clear Markets
"'Virus Deaths Climb as Cases Hit New High' was the original title of a recent front-page Wall Street Journal feature, later changed online to 'Deaths Begin Trending Higher.' Either title portends important news, but the only evidence is gibberish: 'The average daily death toll in the U.S. rose to 599 in the seven days through July 8, up from 510 deaths a day as of July 4, according to a Wall Street Journal analysis of data from Johns Hopkins University.' July 4 is obviously one of the 'seven days through July 8' so the alleged 'rise' makes no sense. A correct apples-to-apples comparison would have said, 'The average daily death toll in the U.S. fell to 599 in the seven days through July 8, down from 786 in the seven days through July 1.' Those averages (599 and 786) are from the Wall Street Journal's own graph of 'Daily reported Covid-19 deaths.' But revealing the actual 35% drop in deaths over back-to-back seven-day periods would require rewriting the headline. In a remarkable understatement, the article admits 'deaths haven't surged in the same way the infections have.' In fact, nationwide deaths have fallen according to all of their own figures. The graph accompanying the article, reproduced here, shows a 7-day rolling average of daily cases and deaths expressed as an index number, where April 1=100. The death index jumped from 100 on April 1 to a peak of 284 on April 18. But it then fell steadily to 76 by June 23 - which was nearly two months after many states reopened for business from April 24 to May 4. There was then a brief uptick in the death index above 100 from June 25 to July 1, which appears consistent with a multi-week lag between infection and death following the late May Memorial Day activities and mass protests. Since July 4, however, the 7-day average of deaths has again fallen well below 100 - even as the number of positive tests keeps moving in the opposite direction....As the authors reluctantly concede, 'soaring case counts are partly attributable to expanded testing that is detecting asymptomatic or less severe cases, often among younger people.' Quite right. But that makes it deceitful to keep equating more positive tests with 'more infections' - as they do eight times....At the national level, the week ending July 4 was the 11th week in a row the CDC reported declining deaths from COVID-19, flu and pneumonia."

COVID-19 Proved the U.S. Is Mired in Corruption -Bonner/Rogue Economics
"Today, let's continue exploring Lord Byron's formula for the cycle of empires. From freedom to glory... And when that fails... to wealth, vice, corruption... and finally, barbarism...You'll recall our corollary, too: that you can tell where you are in the cycle by watching the monuments...At a glance, we seem to be in the corruption stage. The vice stage, we reckon, commenced with the introduction of the fake, non-gold-backed dollar in 1971. It took a while to find the gas valve. But once the feds realized what they could do with an almost-unlimited amount of money, well"¦ the sky was the limit. The federal government never ran a real surplus again. And then, with its no-limit credit card, it could squander $21 trillion on the War on Poverty"¦ over $1 trillion on the War on Drugs"¦ $7 trillion on the War on Terror"¦ and, so far, $2.3 trillion (the CARES Act) on fighting COVID-19 and the Lockdown Recession....Each time, it took more hot air to levitate the bubble; the latest whoosh cost $3 trillion in the Fed's new money"¦ plus a $4 trillion deficit from the Trump team. And more hot air is on the way. Both Democrats and Republicans are reaching for the controls"¦ one with a $3 trillion bill already in Congress; the other still working out the details on one that, says the president, could be even 'larger.'....Corruption takes many forms. For example, there is a whole army of Deep State careerists, posing as 'experts' and 'advisors,' making their fortunes by pretending to have useful knowledge....The Fed, meanwhile, has its own 'No Rich, Mismanaged Corporation Left Behind' program. So far, it's helped such big names as Berkshire Hathaway Energy, McDonald's, Southwest Airlines, CVS, AT&T, Boeing, Coca-Cola, ExxonMobil, Ford, Walmart, UnitedHealth Group, Philip Morris International, and many, many more borrow at lower rates....Corruption? Check! Barbarism lies dead ahead."

U.S. June Consumer Prices Rose Sharply -Wall Street Journal
"U.S. consumer prices rose sharply in June while states were broadening efforts to reopen, with costs snapping back for products and services that were hit hard by the coronavirus pandemic. The consumer-price index - which measures what Americans pay for everyday items including groceries, clothing and shelter - rose 0.6% in June, the Labor Department said Tuesday. The index had fallen in each of the previous three months, with particularly sharp declines during the earlier part of the pandemic in March and April. 'June represented the beginning of a return to normal for prices, as most of the categories that had been depressed by the COVID lockdowns rebounded once the economy started to recover in earnest,' said Stephen Stanley, chief economist at Amherst Pierpont, in a note to clients, referring to the illness caused by the coronavirus....Gasoline prices, which rose 12.3% last month, also drove the gains and accounted for more than half of the monthly increase in overall prices, according to the Labor Department...Prices for dining out also rose in June, by 0.5%, the biggest monthly gain so far in 2020."

RealMoneyBlog - Free daily/weekly email


7.15.20 - The Case for Reopening Schools -WSJ

Gold last traded at $1,814 an ounce. Silver at $19.76 an ounce.

NEW SUMMARY: Precious metal prices rose Wednesday supported by a weaker dollar and geopolitical tensions. U.S. stocks traded mixed despite a potential coronavirus vaccine and a record quarter for Goldman Sachs.

Silver to become the new gold -Credit Suisse/FX Street
"Strategists at Credit Suisse have noted a great silver performance lately and expect the white metal to look for the $26.22 resistance on a break above $21.14. What's more, Gold/Silver ratio shows the latter is in line to extend its outperformance. 'Silver continues to push its way higher and there are seen clear similarities between price action now and that of gold last year. However, only above 19.65/21.14 would see a multi-year base confirmed, with next resistance then seen at $26.22. The Gold/Silver ratio is also back pressuring price and retracement support, beneath which would suggest silver can extend its current outperformance. At present though, this is still a correction within the longer-term gold outperformance trend.'"

fed Federal Reserve's $3 trillion virus rescue inflates market bubbles -Reuters/Yahoo Finance
"The Federal Reserve's $3 trillion bid to stave off an economic crisis in the wake of the coronavirus outbreak is fueling excesses across U.S. capital markets. The U.S. central bank has pledged unlimited financial asset purchases to sustain market liquidity, increasing its balance sheet from $4.2 trillion in February to $7 trillion today....'COVID-19 is now inversely related to the markets. The worse that COVID-19 gets, the better the markets do because the Fed will bring in stimulus. That is what has been driving markets,' said Andrew Brenner, head of international fixed income at NatAlliance. Here are some of the market bubbles that investors are attributing to the Federal Reserve's intervention. STOCK MARKET BONANZA - Near-zero interest rates and credit support for large swathes of Corporate America have driven yield-hungry investors back to the equity market....IPO FRENZY - Stock market euphoria has spilled over into initial public offerings (IPOs) and other stock sales to investors....DEBT BINGE - The Fed's bond-buying programs encouraged companies to tap credit markets and made the second quarter the busiest ever for debt issuance....Some $1.2 trillion of investment-grade paper was sold in the first half of the year, the highest issuance volume recorded by the Securities Industry."

The Case for Reopening Schools -Editors/Wall Street Journal
"Everything else about the coronavirus has become politicized in America, so why not a return to school as well? That's the depressing state of play as President Trump pushes schools to reopen while Democrats heed teachers unions that demand more federal money and even then may not return. The losers, as ever, would be the children. The evidence - scientific, health and economic - argues overwhelmingly for schools to open in the fall...According to the Centers for Disease Control and Prevention, 30 children under age 15 have died from Covid-19. In a typical year 190 children die of the flu, 436 from suicide, 625 from homicide, and 4,114 from unintentional deaths such as drowning....Parents and teachers understandably worry that children might spread the virus. But a recent retrospective study of schools in Northern France, from February before lockdowns, found that "despite three introductions of the virus into three primary schools, there appears to have been no further transmission of the virus to other pupils or teaching and non-teaching staff of the schools."....These risks can be managed... Space desks six feet apart, stagger class periods, make kids wear face coverings when possible, keep them in the same cohort, and have them eat, play and learn outdoors as much as possible. Teachers can also wear face shields, and schools can use plastic barriers in higher-grade level classrooms to separate them from kids....Research outfit NWEA has projected that 'students are likely to return in fall 2020 with approximately 63-68% of the learning gains in reading relative to a typical school year and with 37-50% of the learning gains in math.' Another half-year or year of lost instruction will be impossible to make up. Achievement gaps will surely increase....Millions of parents can't return to work if their children can't attend school. Opening the schools is essential to the well-being of students, and teachers and administrators have a duty to make it happen."

Looming evictions may soon make 28 million homeless, expert says -CNBC
"Emily Benfer is a leading expert on evictions. She is the chair of the American Bar Association's Task Force Committee on Eviction and co-creator of the COVID-19 Housing Policy Scorecard with the Eviction Lab at Princeton University. CNBC spoke with Benfer about the coming eviction crisis and what can be done to turn it around. CNBC: How does the eviction crisis brought on by the pandemic compare with the 2008 housing crisis? EB: We have never seen this extent of eviction in such a truncated amount of time in our history. We can expect this to increase dramatically in the coming weeks and months...We're looking at 20 million to 28 million people in this moment, between now and September, facing eviction. CNBC: You study the intersection of housing and health. What will all these evictions mean for people's health during the pandemic? EB: Eviction negatively impacts the trajectory of an individual's life, and it can do that in a permanent way. Studies have demonstrated that eviction causes increased mortality and causes respiratory distress, which in the Covid-19 pandemic can put people in even greater peril. It results in depression, suicides and other poor health outcomes. And the primary response to Covid-19 has been to shelter in place. If there's an increase in homelessness [one economist estimates homelessness could rise by more than 40% this year], that could spread the virus....CNBC: What can be done to make this eviction crisis less devastating? EB: As an immediate measure, we need a nationwide uniform moratorium on eviction, and it has to be coupled with financial assistance to ensure that the renter can stay housed without shifting the debt burden onto the property owner. The owners that are the most likely to be affected by the eviction crisis right now are those who have small properties and don't have the financial cushion to make ends meet over a period of months when they're not receiving that rent. Once that's in place, we really need to start addressing the root causes of the eviction crisis and the lack of affordable housing."

RealMoneyBlog - Free daily/weekly email


7.14.20 - Round Two Of The Jobs Apocalypse

Gold last traded at $1,813 an ounce. Silver at $19.55 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Tuesday on safe-haven buying and dollar weakness. U.S. stocks traded mixed as bank earnings rose but tech stocks stumbled amid speculation of overvaluation.

Gold gains above $1,800 per ounce as infection cases mount -CNBC
"Gold prices rose above the key $1,800 level on Monday, underpinned by surging coronavirus cases globally and concerns that they may slow down recovering economies. U.S.-China trade tensions and the record number of COVID-19 cases being reported on a daily basis are the underlying themes supporting the gold market, Kitco Metals senior analyst Jim Wyckoff said. 'Of course, there's going to be normal downside corrections, but the trend remains up.' Global coronavirus infections passed 13 million on Monday, according to a Reuters tally, marking another milestone in the spread of the disease which has killed more than half a million people in seven months. Driving inflows into the safe-haven asset further, China announced 'corresponding sanctions' against the United States on Monday after Washington penalized senior Chinese officials over the treatment of minority Uighur Muslims in Xinjiang....The yellow metal has risen over 19% so far this year due to massive stimulus from governments and central banks across the globe to revive coronavirus-hit economies...Silver climbed 3.1% to $19.25 per ounce after hitting $19.31, the highest since Sept. 5."

jobs The Second Jobs Apocalypse -Axios
"This week, United Airlines warned 36,000 U.S. employees their jobs were at risk, Walgreens cut more than 4,000 jobs, it was reported Wells Fargo is preparing thousands of terminations this year, and Levi's axed 700 jobs due to falling sales. We have entered round two of the jobs apocalypse. Those announcements followed similar ones from the Hilton, Hyatt, Marriott and Choice hotels, which all have announced thousands of job cuts, and the bankruptcies of more major U.S. companies like 24 Hour Fitness, Brooks Brothers and Chuck E. Cheese in recent days...The initial jobs apocalypse was due to the mandated and temporary closures of businesses across the country in an attempt to contain the coronavirus pandemic. Part two is the fallout from the decline in consumption that resulted and will likely include the wreckage from wide-ranging business closures and a reckoning for white collar jobs, experts say....'The pickup in COVID is going to increase uncertainty and make people cut back on spending, but ... even without that pickup in the pandemic, the economic weakness will lead to layoffs and failures from businesses that are only being indirectly hurt' by the pandemic, says Edelberg, who was previously chief economist at the Congressional Budget Office....More than 1 million Americans filed for traditional unemployment benefits last week for the 16th week in a row, the Department of Labor reported Thursday. But perhaps more distressing has been the increase in claims filed for the Pandemic Unemployment Assistance program. First-time PUA claims rose above 1 million for the first time since the week of May 23 last week, while the number of people approved for and receiving PUA benefits increased to 14.4 million, as of June 20, the last week for which data are available."

Silver Soars, Outpacing Gains in S&P 500 and Gold -Wall Street Journal
"Silver prices climbed to their highest level in 10 months Monday, lifted by factory re-openings and soaring investor demand for precious metals. Silver metal rose 2.3% to $19.50 a troy ounce in New York, putting them on course for their highest settlement since September 2019. Silver prices have soared 66% since their nadir in mid-March, outstripping gold, the S&P 500 and an ICE BofA index of U.S. government bonds. Investors have snapped up precious metals in recent months, encouraged by the extraordinary steps central banks and governments have taken to shore up economic growth during the coronavirus pandemic. The drop in short-term interest rates and the Federal Reserve's purchases of a range of bonds have lowered yields in a swath of debt markets, reducing the opportunity cost of owning precious metals, which pay no income. Silver prices have also benefited from the reopening of factories in the U.S., China and elsewhere. Silver has widespread industrial applications in making solar panels, medical equipment and consumer electronics, among other goods. As a result, prices typically rise when economic growth accelerates, a key difference between silver and gold. 'You're flying on two engines, which are commercial demand and investor demand,' said Michael Widmer, a commodities strategist at Bank of America. 'That's driving silver prices higher.'....'It's the more volatile brother of gold,' Ms. Boele said. 'The market is much thinner so when you get a move it's generally big.' Giving prices an extra lift, the pandemic has disrupted mines in Latin America, the world's main silver-producing region."

China Renews Push for Increased Global Role for the Yuan -Bloomberg/Yahoo Finance
"Faced with the prospect of restricted access to U.S. dollars, China's answer is to get more people to use its own currency instead. The increasing spillover of Sino-American tensions into the financial sphere has ignited a fresh push by China to promote the global use of the yuan. A growing number of government officials and influential market watchers have in recent weeks urged greater efforts on the endeavor, which gained renewed significance after China's new Hong Kong security law triggered the threat of retaliation from Washington. While such drastic action is far from being implemented by the U.S. - and could potentially do major damage to American interests and the entire global financial system - the risks alone have raised alarm bells. With almost a trillion dollars in offshore bonds and loans and $1.1 trillion in state-owned bank liabilities, access to the greenback is vital for Chinese companies and lenders. 'Yuan internationalization morphed from a desirable to an indispensable thing for Beijing,' said Ding Shuang, chief economist for greater China and north Asia at Standard Chartered Plc. 'China needs to find a replacement for the dollar amid the political uncertainty, otherwise the nation will see financial risks.'....Chinese regulators are building the China International Payment System to settle transactions outside the dollar-based platforms where the U.S. holds sway. Hong Kong, which supplies around half of the world's offshore yuan liquidity, is also aiming to become a more prominent yuan trading center."

RealMoneyBlog - Free daily/weekly email


7.13.20 - $2,000 Gold is Now Even More Likely -Goldman

Gold last traded at $1,806 an ounce. Silver at $19.50 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying and a weaker dollar. U.S. stocks rose as investors looked past record numbers in coronavirus cases from the weekend amid vaccine hopes and lower fatality rates.

Gold at $2,000 Is Now Even More Likely, Goldman Says. -Barrons
"An 'uneven recovery' lies ahead for commodities, but Goldman Sachs analysts are more confident than ever that gold will hit $2,000 an ounce. A scenario in which the U.S. is hit by a second wave of coronavirus cases, while China - the world's largest retail buyer - recovers strongly is 'ideal for gold,' the investment bank's commodities research team said in a note. The team said it now has 'even greater conviction' in its bullish 12-month target for the precious metal. Gold futures settled at a 9-year high of $1,820.60 per ounce on Wednesday....'Go long copper, silver and steel and stay long gold,' was their advice for investors...Silver stands to benefit from ongoing demand among investors for safe haven assets, as well as the Chinese industrial recovery, they said."

chaz The Brief And Strange History of CHOP (AKA CHAZ) -Counter Punch
"The end has come for CHOP - or CHAZ. At first the six-block area just east of downtown Seattle was called CHAZ. The area was occupied by protesters on June 8th after it was reluctantly ceded to them by Seattle Mayor Jennie Durkan and the police. That was the day that the Seattle Police Department vacated and locked up its East Precinct building on 12th Avenue. When the police left, the occupiers painted 'People' over the 'Police' in the sign, 'Seattle Police Department, East Precinct.' Then they declared the surrounding area the Capitol Hill Autonomous Zone, soon referred to simply as CHAZ. Whatever exactly it was, it had a name. Then some black community leaders suggested it be called Capitol Hill Organize Protest. Hence, CHOP, although CHAZ was still being used....The next day June 9th one of the protesters posted on a blog a list of thirty demands. That's a lot of demands. Soon four more would be added. For a nation used to the brevity of text messages and tweets even reading them was demanding. Among the demands foremost were the defunding or possibly the abolition of the Seattle Police Department and even the court system, the release of all protesters who had been arrested. then things followed like free health care, free college, free housing - I'll stop there. The shopping list of demand is really only germane to this essay as an indication of the confusion that was to follow....Seattle Times columnist Danny Westneat dropped by CHOP on the 23rd, the day after the last of the three shootings. Westneat wrote: 'We can police ourselves!' a man was still insisting in one of the CHOP's intersections on Tuesday when I stopped by. 'The hell we can,' a woman responded under her breath. Whether the perpetrators of the shootings on Saturday and Sunday were gang members or rightwing militia members is unknown....The end of CHOP seemed in sight. On Monday June 22nd, Seattle Mayor Jennie Durkan said, 'It's time for people to go home.' To finally help CHOP go gentle into that good night, the mayor called for help from leaders of the black community in Seattle. Early the next morning June 23rd, another man was shot and wounded near the northeast corner of Cal Anderson Park....Regarding all the chaos, the violence and deaths Kshama Sawant said the violence was due to capitalism. Therefore, she and the protesters at CHOP bore no responsibility. It's true that Seattle shows some of the most egregious features of capitalism per Marx. It is the city of Jeff Bezos' global colossus Amazon and it is also a city where a full-time employee of the US Postal Service lives in a tent under a freeway ramp because she can no longer afford the lease on her apartment. But Sawant cannot blame capitalism for the naivete of many in CHOP who were oblivious to the possibility that criminal gangs and rightwing militias might exploit their social experiment with fatal consequences, nor can she blame capitalism for the attempted rape of the deaf woman by one of her confederates....On July 1st, Seattle Police in riot gear cleared CHOP with the help of the Bellevue Police. At 4:58 am Mayor Durkan issued an order to clear the area. At 5 am the police entered CHOP and ordered everyone to leave within eight minutes or they would be arrested. They arrested at least 32 people."

Covid-19 Is Bankrupting American Companies at a Relentless Pace -Bloomberg
"Retailers, airlines, restaurants. But also sports leagues, a cannabis company and an archdiocese plagued by sex-abuse allegations. These are some of the more than 110 companies that declared bankruptcy in the U.S. this year and blamed Covid-19 in part for their demise. Many were in deep financial trouble even before governors ordered non-essential businesses shut to help contain the spread of the virus. Most will reorganize and emerge from court smaller and less-indebted. The hardest hit, however, are selling off assets and closing for good. They include plenty of big, iconic names. Hertz and J.C. Penney and now Brooks Brothers, too. The vast bulk, though, are small and medium-sized businesses scattered across the country. Their downfall might not normally garner much attention, but it does underscore the full extent of the damage Covid-19 has inflicted on the economy. The list compiled for this story is based on court records, statements or interviews in which company executives explicitly linked the virus to their filing. It is only a snapshot of the thousands of corporate entities that have landed in bankruptcy court since the pandemic took hold in March."

The Press Is Already Trying To Whip Up A New Pandemic Panic -Issues & Insights
"Oh, no! With the planet still unlocking and some parts still tightly buttoned down, and with the world economy plummeting, 'China Researchers Discover New Swine Flu with Pandemic Potential,' blares CNN. 'Scientists Say New Strain of Swine Flu Virus Is Spreading to Humans in China,' shrieks the New York Times. Say it ain't so! Okay, it ain't so. Not in any meaningful way. The media should go back to 'murder hornets,' or find another asteroid with a chance in a zillion of hitting Earth....First, while the Times says the virus 'is spreading silently in workers on pig farms in China,' that means pigs-to-humans and that's been going on for so time. 'This is not a new new virus; it's been very common in pigs since 2016,' tweeted Carl Bergstrom, a professor of biology at the University of Washington. 'There's no evidence that G4 is circulating in humans, despite five years of extensive exposure. That's the key context to keep in mind.' Okay, but it's a swine flu !!! Um, yes, pigs appear to play a role in most strains of flu, along with birds. Specifically, the massive swine farms of China are 'mixing bowls' to produce new flu strains....If G4 followed in the footsteps of its 'ancestor,' H1N1 (and the Times even admits that humans infected with G4 are showing no illness), and ended up actually saving a lot of lives, the WHO could (and of course would) declare it a pandemic. And given that the world seems to have decided that quarantining healthy people and destroying economies is a proper way of trying to reduce pandemic viral deaths, we could see a repeat of the horrors we're still experiencing. But that word 'pandemic' will set off alarms everywhere, as indeed G4 is already doing. At a Tuesday Senate hearing the ever-reliable National Institutes of Allergies and Infectious Diseases Director Anthony Fauci said G4 was not an 'immediate threat but something we need to keep our eye on just the way that we did in 2009 with the emergence of the swine flu.' Inevitably some flu virus will be antigenically different enough and widespread enough to qualify as a 'pandemic.' If we allow ourselves to forget how much damage we let the coronavirus cause, prepare for a sequel of what we're going through now. And gosh, like 'The Godfather II,' it may be even more powerful than the original."

RealMoneyBlog - Free daily/weekly email


7.10.20 - Is America Heading For Civil War?

Gold last traded at $1,801 an ounce. Silver at $19.06 an ounce.

NEWS SUMMARY: Precious metal prices rose for the fifth consecutive week Friday on safe-haven buying and dollar weakness. U.S. stocks drifted lower, despite upbeat CV-19 treatment news, as investors worried about how record high pandemic infections might impact the economy.

Miserable Economic Outlook Could Yield Record Gold Prices -Wall Street Journal
"Gold prices ticked past $1,800 an ounce this week, and are now not far from the all-time highs reached in 2011, in the bleak aftermath of the financial crisis. New records could be ahead. Since the financial crisis, the movement of gold prices has been a near-mirror image of movements in the yield on 10-year Treasury inflation-protected securities, which this week touched a seven-year low of minus 0.78%. The ratio between the two assets' price moves has varied, but the relationship hasn't broken meaningfully during the past decade....Even with the current substantial fiscal support, the recovery in economic data seems to be leveling off, some Fed policy makers have noted. And that is before even considering what might happen in financial markets if would-be vaccine producers run into difficulties....Who is buying all this gold? Inflows into gold exchange-traded funds in the first half were the largest ever, and largely from North America. Flows into gold from institutional investors in developed markets have predominated....It is hard to see gold falling much, and it isn't unreasonable to believe it will reach new highs in the months ahead."

guns Is America Heading For Civil War? -Smith/Alt-Market
"In last week's article I discussed the issue of American 'balkanization' and the rapid migration of conservatives and moderates from large population centers and states that are becoming militant in their progressive ideology...Uprooting and moving to an entirely new place is not an easy thing to do, especially in the middle of a pandemic...That's how bad the situation has become - Rational and reasonable people are willing to leave behind their old life and risk it all to keep a margin of freedom. In my view it is clear that the political left has gone so far off the rails into its own cultism that there is no coming back. There can be no reconciliation between the two sides, so we must separate, or we must fight. I advocate for separation first for a number of reasons: First and foremost, conservatives are the primary producers within American culture. If we leave the leftists to their own devices there is a chance they will simply implode in on themselves and eat each other because they have no idea how to fill the production void. The recent developments in the defunct CHAZ/CHOP autonomous zone are a perfect example....Third, if the leftists decide they don't like that we have separated and are thriving on our own, and they attempt to antagonize or attack us where we live...I fully realize that the third outcome is the most likely...Why? Because collectivists and narcissists are never satisfied....I am often asked these days about my view of the 2020 election and how it will turn out....I am not convinced there will even be an election in November. With pandemic lockdowns surely returning as infections spike once again, the US economy will be in ruins by winter. Voting in a traditional fashion will be difficult or restricted in some states. And, mail-in or digital ballots will not be accepted by most conservatives because of their history of being used to rig election outcomes. Look at it this way: If Trump 'wins', or delays the election, the left will riot and a civil war will be triggered. Conservatives will have to deal with the violence of the left while also dealing with the potential for martial law (which we cannot tolerate or support either). If Biden 'wins', it will be perceived by many conservatives who still think elections matter as a stolen presidency engineered through fraudulent ballot practices....The truth is, in 2020-2021 we stand at a massive nexus point in human history. We are spiraling into a decade and a fight that will decide the fate liberty for the next century or more. On one side stands the global elites and the useful idiots on the hard left...On the other side stands the people that just want to be left alone; the free minds, the people that don't need or desire to have power over anybody. If humanity is to have a future at all, the second group must continue to exist and prosper." [image: Courtesy Alt-Market]

Our Cash-Free Future Is Getting Closer -New York Times
"The pandemic is propelling a shift toward a cashless society in ways that no other single event has. Experts say that's not necessarily a good thing....Cash was already being edged out in many countries as urban consumers paid increasingly with apps and cards for even the smallest purchases. But the coronavirus is accelerating a shift toward a cashless future, raising new calculations for merchants and enriching the digital payments industry. Fears over transmission of the disease have compelled consumers to rethink how they shop and pay. Retailers and restaurants are favoring clicks over cash to reduce exposure for employees....Cash is certainly not dead. Before the pandemic, bills and coins were used for 80 percent of the transactions in Europe, and there are few signs that the pandemic is about to wipe it out. Yet for a growing number of people sensitized by Covid-19 quarantines, cash is a fading routine....Propelling the trend is a surge in online shopping as homebound consumers turn to digital tools for basic items. In the United States, 40 million customers went online for groceries in April....There is no medical evidence that cash transmits the virus. Nonetheless, 'perceptions that cash could spread pathogens may change payment behavior by users and firms,' the Bank for International Settlements said....Among those hoping to profit from the discomfort is Tappit, a British company that provides data gathering and cashless solutions such as wristbands and apps...Its sales pitch during the pandemic to promote 'No more dirty cash,' has experienced a surge in interest by sporting arenas, hotels and restaurants seeking to revive business quickly after lockdowns, said Jason Thomas, the chief executive....The authorities that manage the world's currencies say the dangers of going fully cashless are rife....Consumer groups warn that vulnerable people risk being marginalized....'Cash is not going to disappear,' said Mr. Jorgensen. 'But it will continue to decline, and Covid is accelerating that trend.'"

U.S. town creates local currency to boost coronavirus relief -Reuters
"Tucked away under lock and key in a former railroad depot turned small-town museum in the U.S. state of Washington, a wooden printing press cranked back to life to mint currency after nearly 90 dormant years. The end product: $25 wooden bills bearing the town's name - Tenino - with the words 'COVID Relief' superimposed on the image of a bat and the Latin phrase 'Habemus autem sub potestate' (We have it under control) printed in cursive. With the coronavirus pandemic plunging the United States into a recession, decimating small businesses and causing job losses across the country, some local governments are looking for innovative ways to help residents weather the storm....Tenino, a town of less than 2,000 people located about 60 miles (95km) southwest of Seattle, started printing the local banknotes in April, five weeks into Washington state's lockdown. Anyone with a documented loss of income as a result of the pandemic is eligible for up to $300 a month of the local currency....Businesses up and down the town's quaint Main Street accept the wooden note for everything except alcohol, tobacco, cannabis and lottery tickets. Tenino's city government backs the local currency, which merchants can exchange for U.S. dollars at city hall at a 1:1 rate....The tiny town founded around a sandstone quarry achieved national prominence in 1931 when civic leaders printed a wooden local currency to restore consumer confidence after the town's bank failed during the Great Depression....In April the city council approved the proposal to issue up to $10,000 in local scrip. So far, 13 residents have successfully applied for the funds and some $2,500 worth of wooden bills have been issued, with donations upping the total funds available to $16,000."

RealMoneyBlog - Free daily/weekly email


7.9.20 - Gold Leaps Above $1,800

Gold last traded at $1,806 an ounce. Silver at $18.99 an ounce.

NEWS SUMMARY: Precious metal prices held near 9-year highs Thursday on rising economic uncertainty. U.S. stocks fell amid renewed concerns over the coronavirus and its impact on the economy.

Gold leaps above $1,800 for the first time since 2011 -Business Insider
"Gold spot prices broke above $1,800 per ounce on Tuesday afternoon for the first time since 2011, bolstered by record inflows and widespread risk-off attitudes. The precious metal continued trading above that level Wednesday morning. Safe havens are enjoying their time in the sun as the stock market's run-up slows. Spiking coronavirus case counts have fueled new concerns of a second plunge for risk asset prices. Federal Reserve officials warn the virus' resurgence could freeze an economic recovery, and the Organization for Economic Co-operation and Development recently referred to the pandemic's labor market damage as 'far worse' than during the financial crisis. The wave of gloomy news has pushed investors back to gold at a blinding pace. Year-to-date inflows for exchange-traded funds tracking the metal reached 655.6 tons on Wednesday, Bloomberg reported, surpassing the full-year increase seen in 2009....Some analysts think gold has plenty of room to run. Goldman Sachs raised its 12-month price target for the popular hedge on June 19 to $2,000 per ounce, expecting gold to reach a record high amid lasting virus damage. With interest rates set to remain close to zero for years to come and the US dollar facing significant pressure, the metal's rally shows no signs of stopping, the bank's analysts said."

crisis The U.S. Is On a Downward Spiral -Bonner/Rogue Economics
"Freedom to glory"¦ and when that fails, to wealth, vice, corruption"¦ and finally, barbarism. That was how the 19th-century English poet, Lord Byron, described the cycle of empires....You can tell where you are in the cycle by checking the monuments. They go up in the glory stage"¦ they come down as you get close to barbarism....Our rough guess is that the 'freedom' stage came to an end for America at the beginning of the 20th century....Being a great nation seems to chaff against being a good one. A world power needs to throw its weight around. And for that, it needs the heft of unhedged support from compliant people. And it needs institutions that set up the government as master of them, not as servant. These institutional changes came in a rush in 1913. Changes to the Constitution created a powerful central bank - the Federal Reserve - along with federal income tax and the direct election of U.S. senators....The glory stage was next. But it was short-lived. It probably peaked out in World War II. The U.S. won in both theaters - against Germany and against Japan - leaving it with undisputed control of the Pacific and the Atlantic....As the glory failed, the pursuit of wealth became paramount. For the first three decades after World War II, American industries turned out some of the best products in the world - the best cars"¦ the best houses"¦ the best movies....But then, vice was already sneaking into the Empire in the form of fake money. The post-1971 dollar no longer had any connection to the gold or silver that the Constitution seemed to require. First, stocks fell. Next, stagflation took hold, with a slumping economy and, by 1979, double-digit inflation....Manufacturing centers, such as Detroit, Michigan and Gary, Indiana, fell hard as new centers of money and power - Manhattan and Washington, D.C. - rose up. Wall Street flourished. By 1999, the dot-coms were all the rage. Stocks had gotten so high that it took 44 ounces of gold to buy all the Dow stocks....It now stands at only 14 ounces of gold"¦ a two-thirds loss over 20 years. And the wealth of the 90% of the population that sells its time by the hour, the week, or the month has fallen along with the real value of stocks...It would take the typical working stiff two whole weeks of work to buy an ounce of gold"¦.Wealth peaked out 20 years ago"¦All that is left are corruption and barbarism."

New Coronavirus Surges Slow Economic Recovery -Wall Street Journal
"The nation's fledgling economic recovery is losing momentum, as a new wave of coronavirus infections causes businesses to scale back or reshutter in several big states and consumers to retreat anew. Restaurant seating rates have fallen of late in Florida, California, Arizona and Texas. Foot traffic to businesses has ebbed in some states since late June. Google searches for 'file for unemployment' in Arizona and Florida are rising. The new economic disruptions are concentrated in the three most populous states - California, Texas and Florida - and Arizona, all of which have seen a rise in infections in recent weeks. Together, those states make up about 30% of all U.S. economic output, according to Moody's Analytics. State and city leaders have imposed new restrictions on businesses to prevent further spread, though many consumers had already voluntarily stopped going out, according to foot-traffic data....The shape of the recovery will be jagged rather than a V signifying a sharp drop in activity followed by a similarly sharp rebound. Moody's now projects U.S. output to grow at an annual rate of 17% in the third quarter, far less than what is needed to get the economy back to its pre-pandemic state and below the company's prior estimate of 20%. 'While it's only begun to bear out over the past week, there are some early signs that the recovery may be losing steam,' said Matt Sigelman, CEO of Burning Glass Technologies, a labor-market data analytics software firm....Individuals' choice to stay home to avoid the virus was a much larger driver of the economic collapse during the pandemic than government-mandated restrictions, according to research from the University of Chicago's Becker Friedman Institute."

How Businesses Have Successfully Pivoted During the Pandemic -Harvard Business Review
"The nearly instantaneous economic recession triggered by the Covid-19 shutdown has wreaked havoc on businesses large and small. Our very way of life is also said to be threatened....Accordingly, the recipe for survival is supposed to be a thorough transformation of the entire company - or else a bankruptcy filing. The reality of how companies are dealing with the crisis and preparing for the recovery tells a very different story, one of pivoting to business models conducive to short-term survival along with long-term resilience and growth. Pivoting is a lateral move that creates enough value for the customer and the firm to share. Consider Spotify, the global leader in music streaming. In principle, this type of platform has all the ingredients for success in the lockdown economy....One pivot Spotify made in response was to offer original content, in the form of podcasts. The platform saw artists and users upload more than 150,000 podcasts in just one month, and it has signed exclusive podcast deals with celebrities and started to curate playlists....Let's examine the world of restaurants. They have been battered by the lockdown, with many owners pondering whether to close for good...Eat-in, take-out, delivery, and catering are just the tip of the iceberg. One pivot would be to offer a flat rate for a set number of meals per week or per month, with limited menu choices. Restaurants could increase their margins as they learned how to manage captive demand....Not all pivots result in good business performance. Three conditions are necessary for such lateral moves to work. First, a pivot must align the firm with one or more of the long-term trends created or intensified by the pandemic, including remote work, shorter supply chains, social distancing, consumer introspection, and enhanced use of technology....Second, a pivot must be a lateral extension of the firm's existing capabilities, cementing - not undermining - its strategic intent...Third, pivots must offer a sustainable path to profitability, one that preserves and enhances brand value in the minds of consumers. The economic crisis triggered by the pandemic does not necessarily spell the end of entire industries or companies. It does weed out business models that fail to pivot toward the new reality."

RealMoneyBlog - Free daily/weekly email


7.8.20 - A Mob's Monumental Failure

Gold last traded at $1,818 an ounce. Silver at $19.13 an ounce.

NEWS SUMMARY: Precious metal prices rose to fresh 9-year highs Wednesday on safe-haven buying and dollar weakness. U.S. stocks traded mostly lower as investors weighed the latest, troubling U.S. coronavirus data and its impact on the economic recovery.

Gold at $1,800: 'There's little to stop the gold-up trajectory' -Bloomberg Intelligence/Kitco
"Gold is heading to $1,900 an ounce, and little can stop the precious metal from reaching its all-time high in U.S. dollars, according to the latest Bloomberg Intelligence's commodity outlook. 'It's logical to expect gold to outperform most assets in an environment of unparalleled central-bank easing, and we foresee the precious metal maintaining the upper hand in most scenarios. There's little to stop the gold-up, copper-down trajectories, in place well before the coronavirus struck,' wrote Bloomberg Intelligence senior commodity strategist Mike McGlone. Slow economic recovery is going to put pressure on commodities, except for gold, which will head to its record high of $1,900 an ounce, McGlone pointed out. 'Depression-like global conditions should press the BCOM below the 2016 trough and gold above its all-time high, about $1,900 an ounce,' he said....Gold has been trading above its new base level of $1,700 an ounce since mid-April. And the longer it can stay above that level the more prepared the precious metal will be to head to higher levels. 'Every day that passes above this level builds a firmer base for the metal to make the next move in its stair-step rally,' McGlone wrote. In the meantime, a V-shaped recovery is looking more and more unlikely, which is boosting the case for $1,900 gold."

statues A Mob's Monumental Failure to Understand -Wall Street Journal
"My elegant old hometown of Bristol, England, made world headlines when it kicked off the statue-bashing craze that swept many Western cities. Amid the uproar of argument, the central consideration remains overlooked: No country or culture's historical record is spotless. The vital question is whether, at each stage of evolution, the balance of good over bad was sufficiently decisive to build a civilization that advances humanity generally....The statue toppled on June 7 depicted Edward Colston (1636-1721), Bristol's slave-trading philanthropist. That may seem an easy moral win for iconoclasts. By the same criterion, however, one should also destroy copies of the Magna Carta for guaranteeing the rights and property of English barons against royal encroachment while they owned entire villages, including the people in them. Yet the pact King John signed (reluctantly) in 1215 launched the long march toward parliamentary democracy and the rule of law...Some cultures learn from their wrongs and painstakingly evolve toward enlightenment....Statues like Colston's deserve to endure because they celebrate the right kind of historical process, one that consistently delivers a present broadly better than the past....The mobs don't seem to understand how hard it is to get to this point, or how the monuments embody an arc of achievement. In Russia or China, when citizens look back on past monuments, they generally see symbols of disruption and tyranny like Stalin or Mao or more-benign figures who failed to establish enduring institutions. Any historical character in the West whose statue is under threat doesn't fall into those categories. Even Confederate leaders in the U.S. advanced civilization by losing. Whether it be Colston, Cecil Rhodes, Churchill or Jefferson, each overtopped his flaws with sufficient idealism or altruism to make our present better - not only for us in the West but for everyone who can aspire to replicate our standards."

The stock market is poised for a 40% drop, warns economist -Marketwatch
"'I think we've got a second leg down and that's very much reminiscent of what happened in the 1930s where people appreciate the depth of this recession and the disruption and how long it's going to take to recover.' That's A. Gary Shilling, longtime economist and president of A. Gary Shilling & Co., again delivering a gloomy take on what's next in a recent CNBC interview. 'Stocks are [behaving] very much like that rebound in 1929 where there is absolute conviction that the virus will be under control and that massive monetary and fiscal stimuli will reinvigorate the economy,' he said, adding that the market could drop as much as 40% over the next year....Shilling laid out his prediction in more detail earlier this year, explaining in a Bloomberg News op-ed that while many economists are looking for a V-shaped, or quick, rebound to deliver a sharp recovery in the second half of the year, he remains much more skeptical. 'This pandemic is likely to be the most disruptive financial and social event since World War II with equally long-lasting consequences,' Shilling wrote, citing the stark unemployment numbers at the time. 'Many will no doubt restrain spending in future years to rebuild savings, especially since the crisis caught them at a time of high debts and short financial reserves.'"

The impending retail apocalypse -Axios
"Because of the coronavirus and people's buying habits moving online, retail stores are closing everywhere - often for good. Malls are going belly up. Familiar names like J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy. Increasingly, Americans' shopping choices will boil down to a handful of internet Everything Stores and survival-of-the-fittest national chains. A research report from UBS predicts that 100,000 brick-and-mortar U.S. retail stores will close by 2025, in a trend that started before the pandemic and has accelerated amid coronavirus-related shutdowns. Indoor malls - which were turning into ghost towns even before the pandemic - are being converted into apartment complexes....A relatively new retail model - buy online, pick up in-store - is gaining traction....The retail sector lost about 1.2 million jobs between March and June, according to Bureau of Labor Statistics figures released last week. Many COVID-19 store closures that were supposed to be temporary will wind up being permanent. Among household names that have announced they're shuttering some stores for good: Nordstrom, Bath & Body Works, Gap, and Zara....Budget retailers Dollar General, Dollar Tree and Five Below are bucking the trend - they plan to open hundreds of stores."

RealMoneyBlog - Free daily/weekly email


7.7.20 - CV-19 Not About Red vs. Blue

Gold last traded at $1,809 an ounce. Silver at $18.66 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying despite a firmer dollar. U.S. stocks traded mixed as investors digested jobs data and tried to determine how bumpy the pandemic recovery might be.

Gold Markets Continue to Look Strong -FX Empire
"Gold markets went back and forth during the trading session on Monday, as we continue to see a lot of back and forth in this market overall. However, we do have more of an upward trend, so I certainly do not have any interest in trying to short gold. The $1800 level above should continue to be massive resistance, but if we can get a daily close above that level, we could then start to see the market take off to the upside, perhaps reaching towards the $2000 level over the longer term....At this point in time, I buy dips and I do not short this market although I do recognize that the market is probably going to continue to find trouble above at the $1800 level. I think that every time we pull back after rising towards that area we have continued to chip away at the resistance, and it is only a matter of time before gives way due to plenty of central bank monetary policy and of course the whole host of potential negative headlines out there."

bear market The Bear Market in Happiness -A Wealth of Common Sense
"For years researchers have been showing through the science of happiness that experiences give you a bigger bang for your buck than material purchases. Experiences make us happier because they involve sights, sounds, social interactions and nostalgia. A trip, a concert, a sporting event, a special night out on the town or a party with close friends will make you much happier than spending money on stuff....This is one of the reasons the uncertainty around the pandemic is so troubling. It's almost impossible to anticipate good times right now because there is a dark cloud hanging over the majority of the best experiences....Our species has of course been through much worse than this and come out the other side, but we happen to be in a massive happiness bear market right now. The entire concept of happiness is often counterintuitive even during normal times. According to Jonathan Rauch in his book The Happiness Curve: People who live in fast-growing economies are less happy than people in slower-growing economies. Rapid change typically makes people very unhappy....Rauch's research shows gratitude can increase optimism, happiness and even physical well-being. Grateful people have been known to be healthier and even sleep better. The simple act of writing a thank you letter or email can improve two lives - the sender and the receiver."

Media refuse to admit the coronavirus doesn't care about red vs. blue -New York Post
"With coronavirus cases surging in the United States, the media were quick to blame: 'Several Republican-led states that moved quickly to reopen this spring at the urging of President Trump have seen new cases explode,' The New York Times reported. Yet hyper-Democratic California is actually seeing the highest number of new cases. Yes, GOP-led Arizona, Florida, Georgia and Texas are also seeing issues. But the red-v.-blue template doesn't fit reality. Last week, the United States saw a single-day record of more than 52,000 new COVID-19 cases....Six states including Cali saw record highs in cases on Wednesday - but Florida wasn't one. Why not flag that? Much of California fears hospitals will be overwhelmed, with Los Angeles County saying it could run out of hospital and ICU beds in two to three weeks. In response, Gov. Gavin Newsom restored restrictions in counties that hold more than 70 percent of the state population - closing bars entirely and shutting down indoor dining and even zoos....In all, 37 states are concerned after seeing their coronavirus cases rise week-over-week last week. The good news is that deaths so far aren't surging in the same way, while hospitalizations aren't lasting as long. In April, the national daily death toll was often above 2,000. Now it's around 600 and continues to drop. So the national surge in cases is concerning but not alarming. One reason for the disparity is that younger people - for whom the virus is far less deadly - are driving the numbers."

7 Social Security mistakes that could cost you a fortune -USA Today
"By taking the time to claim your benefits the right way for you, it maximizes the money you get from Social Security. To ensure you don't cost yourself, here are seven mistakes that are easy to make but important to avoid. 1. Failing to make sure your earnings record is correct - if your earnings record is incorrect, you might not get credit for all of the wages that you paid Social Security tax on....2. Underreporting your income - will reduce your Social Security benefits since the size of your check is based on your average wage....3. Working for too few years - the agency calculates average wages based on the 35 years in which your earnings were highest....4. Quitting work at the peak of your earnings potential - If you're making a lot more late in life, staying on the job a few extra years could let you replace several low-earning years....5. Claiming your benefits at the wrong time - Think about what makes sense for you, and don't make your choice until you understand how your age will affect your benefit amount....6. Failing to explore all the benefits available to you - Spousal and survivors benefits could be available if you're married or widowed...even after a divorce....7. Not understanding the rules before you act - By taking the time to claim your benefits the right way for you, it maximizes the money you get from Social Security so your retirement will be more financially secure."

RealMoneyBlog - Free daily/weekly email


7.6.20 - The American Revolution Occurred in a Pandemic

Gold last traded at $1,783 an ounce. Silver at $18.26 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying and a weaker dollar. U.S. stocks rose, led by strong gains in the tech sector, as Wall Street tried to shake off a continued rise in coronavirus cases.

Gold Gains 16% with an 8-Year High: Why It Will Continue to Rise -Yahoo Finance
"Gold is a highly valuable commodity. It tends to perform opposite stocks and bonds. Because the value of gold holds well, investors consider it a safe-haven, especially during turbulent economies. In the coronavirus crises, gold is a shiny asset that will likely soar in price in the coming weeks. Here are the reasons why. The global markets experienced severe declines early this year due to the COVID-19 outbreak. As fear creeps out on the second wave of coronavirus infections in different countries, risk-averse assets like gold are attracting more investors. South Korea is now experiencing what seems to be a second wave of coronavirus....Economists worry that there will be more debt and more money circulating. Interest rates and gold correlates negatively. To date, countries with rising infection cases are Iran, Algeria, Israel, and the USA. Confirmed coronavirus cases are now around 10 million, with nearly 500,000 deaths. The US is likely to force tariffs on $3.1 billion worth of UK and EU imports with duties of up to 100%....The heating US-China trade war contributed to the rising interest in gold, pushing its price further up."

MktRisk A $10 Trillion Rally Hinges on Earnings Nobody Has a Clue About -Bloomberg
"Remember last earnings season? When companies were reporting their worst quarter since the financial crisis. And nobody dared guess what the future held. Bankruptcy risk was everywhere. Oh, and stocks rallied so hard that $5 trillion got added to share prices. It's safe to say investors were in a forgiving mood back then...But stocks are also coming off their best quarter in 22 years, with valuations by some measures the most expensive in two decades. Add to that: earnings estimates proffered by analysts are even more speculative this time around, after 80% of companies refused to provide guidance over the last three months. 'Investors are going to start demanding a little bit more clarity - whether it's good or bad, they just want to know,' said David Lebovitz, a global market strategist at JPMorgan Asset Management. While there are nascent signs that the incessant downward revisions to earnings estimates may be over, with the worst of the cuts in the past, there's nothing approaching clarity over what the path forward will look like....Aggregate sell-side estimates for S&P 500 companies expect profits to have declined 44% in the three months ended in June, with earnings seeing double year-over-year declines again in the third and fourth quarters, Bloomberg Intelligence data show. 'When we look at 2021 earnings, we feel those still need to come down quite a bit because they're basically saying next year's earnings will be like 2019,' according to Jerry Braakman, chief investment officer of First American Trust. 'That assumes a V-shaped recovery and I think the stats out there today tell you that maybe a V-shaped recovery is not necessarily what we're going to see,' he said."

Are Stock Investors "˜Irrationally Exuberant' Again? -Hulbert/Wall Street Journal
"The term 'irrational exuberance' traces to a now-famous speech in December 1996 by Alan Greenspan, then chairman of the Federal Reserve. Persuaded by comments by Yale University professor Robert Shiller, Mr. Greenspan wondered, 'How do we know when irrational exuberance has unduly escalated asset values?' The comment caused a sensation among investors, and for years, the term and the date Mr. Greenspan uttered it was referenced whenever the press published stock charts on milestones in the markets. Though the warnings from Mr. Greenspan and Prof. Shiller were sounded early, they were remarkably prescient. In the 2 ½ years following the bursting of the internet-stock bubble, from March 2000 to October 2002, the Nasdaq Composite Index fell 78%. Years later, Prof. Shiller would be awarded the Nobel Prize in economics in part for the research that became the basis of his book 'Irrational Exuberance.' There of course is plenty of anecdotal evidence that individual investors today are rushing into the market in a way reminiscent of the late 1990s. Commission-free brokerage platforms have experienced a surge in new customers, for example. And we're seeing huge swings in individual stocks-sometimes, for little to no reason at all. Consider: In the two weeks after Hertz declared bankruptcy, the company's stock doubled, and investors appeared eager to participate in a secondary offering. The company subsequently withdrew its offering after security regulators vowed to review it. Though fracking company Chesapeake Energy indicated in May that it likely would have to declare bankruptcy, in just one session in early June its stock jumped more than 180%. The company in late June did formally file for chapter 11 protection. Given these examples, it is hard to argue that there aren't pockets of irrational exuberance in the market."

The American Revolution Occurred in the Middle of a Pandemic -Tucker/AIER
"One of the most marvelous books I've read this year is Donald Henderson's personal story of the eradication of smallpox. The book is Smallpox: The Death of a Disease: The Inside Story of Eradicating a Worldwide Killer. It's a brilliant and thrilling adventure story by a man who worked his entire life to make the world a better place. He was also the author (with others) of a mighty treatise against lockdowns that appears at AIER. He died in 2016, which is tragic because we could have used his wisdom in these crazy times. Smallpox is unknown to the current generation precisely because of Henderson's incredible work. It's a wicked disease. One in three who get it die. Many are left with lifetime scars. It's horrid. In the entire centuries-old battle against it, however, no one ever imagined that lockdowns had anything to contribute to its management. What eradicated this horror was a serious effort on the part of medical professionals. Smallpox was a huge player during the American Revolution. It was generally a greater threat to the troops than foreign armies. Here we are today celebrating this Revolution while an entire nation cowers in fear of a virus that is hardly a threat at all to 99.5% of the population while the average age of death is two to four years longer than the average lifespan. There is not a single verified case of reinfection in the world, which implies that the immunities are easily acquired and sustained so far. For soldiers in the Revolutionary War, COVID-19 would have been hardly noticed. Instead they dealt with something far more ghastly. And yet they fought. For freedom."

RealMoneyBlog - Free daily/weekly email


7.2.20 - Joe Biden's Plan to Wreck the Economy

Gold last traded at $1,789 an ounce. Silver at $18.32 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on upbeat jobs data and a weaker dollar. U.S stocks rose as investors cheered a bigger-than-expected increase in jobs in June as the economy attempts to rebound from the coronavirus shutdown.

Gold Market Zeroes In on Curve Control After Futures Top $1,800 -Bloomberg
"Fresh from futures cracking $1,800 an ounce, the global gold market wants to know what the Federal Reserve may do next to rescue the U.S. economy, with minutes due Wednesday that are expected to shed light on the central bank's willingness to embrace yield curve control. Gold futures eased after reaching the highest in more than eight years, with a focus on the central bank release and warnings about the coronavirus pandemic. Pinning U.S. yields down - if adopted - may aid bullion's allure. On the outbreak, Fed Chair Jerome Powell stressed on Tuesday that getting the virus under control was vital, while disease expert Anthony Fauci said new U.S. cases could spike. Gold's ascent this year has been underpinned by aggressive central bank action to counter the pandemic's economic fallout, with U.S. real interest rates already negative. If 'the prospect of Yield Control Curve (YCC) draws closer and further green lights the hunt for yield,' gold will benefit, Eleanor Creagh, a market strategist at Saxo Capital Markets, said in a note. 'Alongside the hedge against debt monetization and central bank largesse is also the added kickers of persistent virus uncertainties and geopolitical tensions which continue to fuel upside momentum in gold.' A retest of gold's record high could happen before year-end, she said....Sprott's Grosskopf said control of yields may in effect be here already... 'In this situation, gold becomes a much more attractive asset as a hedge to other markets and store of purchasing power.'"

zombie America Is Turning Into A Zombie Economy -Bonner/Rogue Economics
"The big picture: The feds, state and federal, aimed to stifle the spread of COVID-19 by locking down the economy. But just last week, the U.S. reported a 'record number' of new infections. The infections are becoming more and more common, say the reports, among young people. And testing has revealed that the virus is, or was, more widespread than previously thought. But infections aren't deaths. And they aren't necessarily bad. If you can't stop a disease, you're better off when healthy people get it, and get over it, while the unhealthy people lay low. Then, with antibodies widespread, the virus finds fewer victims who can pass it on....So now, although the lockdown approach hasn't beaten the virus, it has flattened the economy. In the U.S., 47 million people applied for unemployment benefits after their jobs were terminated. An estimated 1 million businesses are expected to RIP. Permanently. Globally, as much as $5 trillion of GDP has given up the ghost....A year ago, it was estimated that about 10% of the world's companies were already zombies, unable to earn enough money to pay the interest on their debt (but, thanks to the Federal Reserve and other global central banks, still able to buy back their own shares and pay generous bonuses to managers). So... what to do when these companies face bankruptcy in the COVID Crisis? Lend them more money, of course! Corporations are borrowing at a faster pace than ever before...So, welcome to the Zombie Economy. Giving COVID checks - to the quick and the dead"¦ lending PPP money to zombie companies"¦ No distinction is made between the living and the dead"¦ between real money and fake money"¦ between the just and the unjust"¦ between Heaven and Hell"¦ between getting rich by flimflam or making an honest dollar"¦ People get fake money for not working. Companies get fake money for not turning a profit. The feds grow more powerful by making problems worse. And we all get poorer."

Biden's plan to wreck the economy -Worstall/Washington Examiner
"To the extent that anyone believes 'Sleepy Joe' i