December Blog Archives 2018

Gold last traded at $1,305 an ounce. Silver at $16.92 an ounce.

NEWS SUMMARY: Precious metal prices ended 2017 on a high note as gold topped $1,300/ounce and silver crested $17/ounce. U.S. stocks slipped back after a record-breaking year.

Gold breaks above $1,300/oz, best year since 2010 -Reuters
"Gold hit its highest in 2-1/2 months on Friday and remained on track for its biggest annual rise since 2010 as a wilting dollar, political tensions and receding concerns over the impact of U.S. interest rate hikes fed into its rally. The dollar, in which gold is priced, is sliding towards its worst year since 2003, damaged by tensions over North Korea, the Russian scandal surrounding U.S. President Donald Trump’s election campaign, and persistently low U.S. inflation. The dollar's drop to three-month lows versus a basket of currencies on Friday lifted gold to its highest since mid October at $1,303.90 an ounce. 'In the last couple of weeks, trade has been relatively thin, yields have been under pressure and the dollar as well, so gold has profited from that,' ABN Amro analyst Georgette Boele said. 'If you look over the year, dollar weakness has been the main theme.'....Spot silver was up 0.7 percent at $16.99, while platinum was 1.2 percent higher at $933.90. This year the two metals have risen by 6.5 percent and 3.8 percent respectively."

The Greatest Bubble Ever: Why You Better Believe It - Part 1 -Stockman/Zero Hedge
"During the 40 months after Alan Greenspan's infamous 'irrational exuberance' speech in December 1996, the NASDAQ 100 index rose from 830 to 4585 or by 450%. But the perma-bulls said not to worry: This time is different -- it's a new age of technology miracles that will change the laws of finance forever. It wasn't. The market cracked in April 2000 and did not stop plunging until the NASDAQ 100 index hit 815 in early October 2002. During those heart-stopping 30 months of free-fall, all the gains of the tech boom were wiped out in an 84% collapse of the index. Likewise, the second Greenspan housing and credit boom generated a similar round trip of bubble inflation and collapse....And this time was also held to be different because, purportedly, the art of central banking had been perfected in what Bernanke was pleased to call the 'Great Moderation'....Wrong again! Now has come the greatest central bank fueled bubble ever. During nine years of radical monetary experimentation under ZIRP and QE, the value of equities owned by US households exploded still higher -- this time by $12.5 trillion....Nevertheless, this time is, actually, very different. This time the central banks are out of dry powder and belatedly recognize that they have stranded themselves on or near the zero bound where they are saddled with massively bloated balance sheets. This time is also very different because there will be no instant financial market reflation by the central banks. And that means, in turn, that there will be no fourth great bubble, either. Here's why. In the first instance, the market is not merely complacent; it is insouciant (indifferent) -- indulging in an eye-wide-shut orgy of recklessness that truly has no parallel, not even the mania of 1927-1929....In all, we'd say Wall Street is calling the sheep to the final slaughter. At the moment, in fact, the bleating is so loud that the gamblers are seriously debating whether the 50X gain in bitcoin in just 22 months is sustainable. But that's surely derangement at Tulip Mania scale, as we will further consider in Part 2."

Gold Survey: Gold Prices To Shine In 2018 -Kitco
"Wall Street and Main Street figure 2018 will be another good year for gold prices. Instead asking for short-term outlooks, this week's Kitco gold survey asked Main Street and Wall Street participants alike where they see gold finishing 2018. Gold was just above $1,300 an ounce mid-morning on Friday, the final trading day of 2017. Assuming prices end 2017 right around here, then of the 1,527 votes cast in the online survey, 975 respondents- or 64% - called for gold to rise in 2018. There were 360 votes, or 24%, calling for gold to be above $1,500 an ounce when 2018 winds down. Another 264, or 17%, see the metal between $1,400 and $1,499, while 351, or 23%, said between $1,300 and $1,399. Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, sees gold ending 2018 around $1,397 an ounce. He said the Federal Reserve's expected monetary tightening is already discounted into prices, and likely to be 'modest and slow,' thereby supporting gold. Day also commented that Europe 'could get messy again' due to trade negotiations over Brexit, a uncertain German government, 'growing stridency by Poland and Hungry to the annoyance of France and Germany,' Italian elections and more Greek debt talks. Further, several geopolitical hotspots persist, including North Korean, the Middle East, Russia and a U.S.-supported Ukraine, and ongoing tensions with China over the South China Sea. Also, he continued, an 'overheated' stock market is likely to have a correction by mid-2018. 'Given the overvaluation and air in many high flyers, the pullback could be severe, helping gold as a hedge,' Day concluded."

Bitcoin at risk of Chinese sabotage -Telegraph
"Bitcoin is vulnerable to sabotage from the Chinese government because of its overwhelming exposure to the country, researchers have warned. Beijing could render the Bitcoin network effectively useless by taking control of the powerful computers used to maintain the digital currency, which are largely based in China, according to a report from security companies Hacken and Gladius. Bitcoin is seen by its supporters as free of government control, a feature that is highlighted as one of its key benefits. The digital currency is maintained not by any central organization but by a collection of 'miners', computers that are rewarded in new Bitcoins for updating the ledger of all transactions known as the blockchain. As Bitcoin has grown, it has required more expensive and powerful computers, and meant mining has migrated to parts of the world where electricity is cheap, in particular China. China hosts almost 80pc of the Bitcoin network power."

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Gold last traded at $1,297 an ounce. Silver at $16.92 an ounce.

NEWS SUMMARY: Precious metal prices rose to 4-week highs Thursday on bargain-hunting and a weaker dollar. U.S. stocks struggled for gains as the trading year wound down and biotech stocks fell.

Why Gold Still Glitters -Melvill/BizNews
"Will we ever join a gold standard again, you may ask? I don't know, but in the meantime it makes sense to return to your own gold standard. Former US Federal Reserve Chairman, Alan Greenspan, was one who held positive views on the gold standard. In a 1966 essay entitled 'Gold and Economic Freedom,' Greenspan argued the case for returning to a 'pure' gold standard. He described supporters of fiat currencies as 'welfare statists' using monetary policy to finance deficit spending. President Ronald Reagan was eager to return to a Gold standard, he urged Congress to appoint a Gold Commission to see how they could implement it. However he was persuaded to not pursue it if he wanted a second term of office. It would appear that China is making a concerted effort to increase their gold reserves. They are not only the world's biggest producers of gold, they also do not sell any of their gold. Together with Russia they are the biggest buyers of gold, while they are able to keep the price subdued....We would do well to heed James Rickard's sage advice in his book: 'Gold is money, monetary standards based on gold are possible, even desirable, and in the absence of an official standard, individuals should go on a personal gold standard, by buying gold, to preserve wealth.'"

Like Odysseus new Fed chairman must navigate troubled waters -American Enterprise Institute
"Homer's Odysseus navigated successfully the dangerous straits between Scylla and Charybdis. It remains to be seen how successful present day Federal Reserve Chairman Jay Powell will be in navigating the dangerous straits in which the U.S. economy now finds itself....It would be a gross understatement to say that Powell has inherited from former Chairwoman Janet Yellen a very difficult economic situation to manage. Years of low interest rates and massive Fed bond buying, which saw an increase in the Fed's balance sheet from $800 billion in 2008 to around $4.5 trillion at present, did succeed in returning the U.S. economy to close to full employment. However, along with similar massive bond buying programs by the Bank of England, the European Central Bank and the Bank of Japan, it has also created a global asset bubble of major proportions....Past experience suggests that asset price bubbles tend to burst when the central banks start raising interest rates...If he has the Fed raising interest rates too quickly, he risks bursting the bubble...if he does not raise interest rate sufficiently quickly, he risks both further inflating the bubble and inviting a return of inflation to the U.S. economy. Hopefully, like Odysseus before him, Powell will have the skill to steer the U.S. economy through the difficult straits in which it now finds itself."

Bitcoin In 2018: "There Will Be At Least 4 Crashes Of 40% Or More" -Zero Hedge
"#1: We expect bitcoin will trade for between $6,470 and $21,600...If bitcoin were worth 10% of the $100s in circulation, its value would be $6,470. The math: $110 billion divided by 17 million bitcoins equals $6,470....Bitcoin can rally to $22,000 and still be reasonably priced, or plummet to $6,500 and also be correctly valued. We expect to see bitcoin trade for both prices in 2018....#2 Bitcoin will lose market share to other crypto currencies in 2018...The reason: bitcoin is still about 44% of total crypto currency market cap. Backers of other crypto currencies have an outsized incentive to encourage bitcoin holders to switch....#3 Many major US brokerage firms and asset manager will announce plans to open a crypto desk...Early adopters of bitcoin and other crypto currencies are an untapped source of profitable new clients for high net worth brokers and asset managers....#4 There will be at least 4 crashes of 40% or more...Of course the volatility we've seen will continue....#5 Coinbase will improve operational quality ahead of an IPO, helping crypto currency adoption rates...Coinbase needs to improve its customer experience a lot, and quickly...when it does improve, more investors will feel comfortable buying crypto currencies."

To learn more about the dramatic rise of bitcoin and other cyrptocurrencies in 2017 - and the outlook for 2018 - request a free copy of our Special Report: BITCOIN: The Future of Money?

Why are so many Americans angry about a tax cut? -Crudele/New York Post
"Santa Trump gave American taxpayers a gift that they should have been thrilled and thankful to receive. Yet polls - starting from before the plan was actually passed - show that Americans hated the idea of a tax cut....President Ronald Reagan's first tax cut, in 1981, got a 51 percent approval rating. The 2001 tax cut by President George W. Bush got a 49 percent thumbs-up. An extension of the Bush cuts in 2010 got a 54 percent approval rating. Yet the average approval rating from all the polls for Trump's tax cut was only 32 percent. I know why I opposed what the Republicans were doing. With the US already $20 trillion in debt, I think it was unconscionable for Washington to change the tax laws in a way that will increase that debt by $1.5 trillion over the next 10 years....Another reason might be that Americans bought into the idea that this tax cut was disproportionately going to benefit the rich. And it probably will. That anti-rich argument was mostly a story planted by Democrats and other Trump haters....But I can think of another reason Americans might have been against the tax cut...It's called cynicism. Maybe we've gotten to the point where nothing that Washington does is right."

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Gold last traded at $1,291 an ounce. Silver at $16.75 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe haven buying and dollar weakness. U.S. stocks struggled for gains in thin holiday trading.

Why It Is A Good Time To Buy Gold Now -Seeking Alpha
"With the start of 2018 just around the corner, many investors are now wondering what will happen to gold next year. At the current junction, the yellow metal seems to present a good buying opportunity for investors. This is further supported by fundamental, technical and sentimental analysis....One of the major issues that could potentially affect gold prices moving forward would be the debt issue...The more debt is created, the lower the value of currencies, the higher the value of gold....From a technical perspective, gold is in an uptrend and still respecting the ascending channel....The net non-commercial positions (Contracts of 100 Troy Ounces) have started to pick up recently...This suggests that a reversal may be unfolding....To conclude, the analysis made from the fundamental, technical and sentimental perspective seems to favor longing gold."

Who Regulates Bitcoin Trading? No U.S. Agency Has Jurisdiction -Wall Street Journal
"The Commodity Futures Trading Commission, the agency with closest oversight of bitcoin trading, began the year by launching an in-house lab to encourage advances in blockchain, the technology that underpins digital currencies. Yet the regulator recently sounded an alarm on bitcoin itself, noting most exchanges are completely unregulated while the cryptocurrency is prone to wild price swings and potential flash crashes. The CFTC has labeled bitcoin a commodity, but as with other commodities, the agency mostly lacks jurisdiction over the primary market....'A lot of people, retail traders in particular, have gotten used to securities laws and commodities laws protecting them,' said Kipp Rogers, a former proprietary trader who is now a blogger and researcher. 'And so they don’t just even know what to be on guard for.'....The SEC has sued two ICOs that it said committed fraud by allegedly taking investors' money for tokens that didn't exist or promising outlandish returns....'When there is a lot of money in the space, you get well-meaning entrepreneurs and you get charlatans only looking to scalp, and pump and dump, and flip ICOs,' said Chris Padovano, a New York attorney specializing in advising blockchain-based businesses."

Americans' most harmful financial habit? -USA Today
"Americans aren't exactly known for having the best financial habits. Many of us are deep in debt, and the majority of U.S. adults don't have enough savings to cover a moderate financial emergency. In a new Allianz survey, Americans pointed to spending too much money on things they don't need as their worst financial habit. That was closely followed by not saving any money, not saving enough money, and not paying down debt quickly enough. Clearly, none of these make for a financially secure lifestyle. But if you have a tendency to fall into the overspending trap, there are different things you can do to help break that nasty habit. Here are just a few. 1. Set a budget....2. Don't take your credit or debit cards along shopping....3. Never shop out of boredom."

Can Central Banks Keep Control of Interest Rates? -Wall Street Journal
"Investors are elated by a booming global economy and the promise of central banks to tighten monetary policy only gradually. The risk in the coming year: that long-term interest rates develop a mind of their own....Economists disagree about how much control central banks really exert over longer-term borrowing costs, which are gauged by government-bond yields. So those rates could stop playing along. If longer-term rates suddenly rose, that could throw cold water on stock markets that have been hitting repeated new highs....Other investors have a different worry: They fear that yields will stay low even if central banks try to tighten policy because they are concerned a recession may be coming."

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Gold last traded at $1,287 an ounce. Silver at $16.51 an ounce.

NEWS SUMMARY: Precious metal prices rose above 3-week highs on year-end positioning and a weaker dollar. U.S. stocks fell as tech giant Apple weighed on investor confidence going into 2018.

Everyone Wishes For Silver And Gold -Seeking Alpha
"Over the last 20 years going long silver or gold into the new year has been profitable about 70% of the time. As far as trading is concerned those are pretty good odds and a reason why many traders, fund managers and the like may choose to go into a seasonal position like this. Looking at the S&P 500 over the last 20 years, equities are down about 50% of the time. Of all the seasonal trades we hear about the stock market, the long gold and silver trade into the new years seem to be one of the most reliable....we can safely say that there should be some long-sided price action going into the new year....The positioning data looks to be telling us to watch for a near term bounce and overall sentiment is negative on the USD and starting to turn a bit negative on equities."

Prediction #1: Dawn of the Petro-Yuan – Will It Doom the Dollar? Pontification Blog
"'We are engaged in a new era of competition,' said President Donald Trump in his December 18, 2017 speech about America's national security strategy. We face 'rival powers, Russia and China, that seek to challenge American influence, values, and wealth.' A week earlier, White House National Security Adviser H.R. McMaster foreshadowed President Trump's meaning. China, said McMaster, was committing 'economic aggression' and China and Russia 'are undermining international order and stability.'....Much of America's prosperity since World War II came from the Western economic system of the Bretton Woods Agreement, which made the U.S. Dollar the World Reserve Currency, the global money used to trade key commodities such as oil. The U.S. Dollar was to be pegged to the value of gold, and the currencies of favored nations were to be pegged to the dollar....When President Richard Nixon in 1971 suddenly severed the dollar's anchor to gold...we switched from the precious metal-backed dollars of our Constitution to 'Petro-Dollars.' China now threatens this fundamental part of the 'international order' by being on the verge of creating the 'Petro-Yuan' through contracts backed by gold to sell oil in exchange not for dollars but for China's currency. This will send the value of gold soaring, ZeroHedge predicts, as 'China Kneecaps The Dollar.'" Full story

Bitcoin: Beginning Of The End... Or Bump In The Road? -Zero Hedge
"A crypto-Christmas miracle? Bitcoin is now unchanged from the pre-Friday bloodbath, having scrambled higher for the last 24-48 hours as much of the world enjoyed a day off. The entire crypto space is rallying once again today but the question remains, is this another dead cat bounce on the way to 'zero' or is Tom Lee, John McAfee, and Mike Novgratz right, this is a bump in the road to $40k and beyond...Bitcoin, Ethereum, Litecoin and other major cryptocurrencies have been on a wild ride this year, and over the past 10 days the volatility that we have witnessed in the marketplace has been absolutely breathtaking....So where do things go from here? There are many that believe that in the short-term the price of Bitcoin will fall back toward the actual cost of production. It has been estimated that the cost to produce a new Bitcoin is currently between three and four thousand dollars, and with the price of Bitcoin so high there is a tremendous incentive for Bitcoin miners to produce as many as possible right now. But there are others that are convinced that Bitcoin could eventually go to zero..."

Learn more about the biggest mania to hit the world since the internet, request a free copy of our Special Report: BITCOIN: The Future of Money?

3 Things That Can Go Wrong in 2018 -Wall Street Journal
"Investors who spend their holidays looking back at what's happened this year will be wallowing in happy nostalgia, as virtually every asset went up. But investing is about the future, not the past, so break away from the complacency-inducing returns of 2017 and think about what could go wrong...Here are three big things that didn't happen in 2017, and could hurt: 1) Monetary tightening. The Federal Reserve raised rates three times this year, yet it became easier to borrow and over long periods actually got cheaper. Instead of rising, long-dated bond yields fell, and global monetary conditions were further eased by the weakness of the dollar....2) China. The last two falls of more than 10% in global equities were triggered by fears about China, in the summer of 2015 and the start of 2016. The dangers are unchanged; yet, markets have stopped worrying. The risk has been discussed for years: China has too much debt and has used it to finance nonviable projects....3) A correlation correction. One reason investors hold bonds is to cushion losses in an equity downturn. Since the late 1990s it has worked wonderfully, as bond prices tended to move in the opposite direction to shares over the short term, but the same direction in the long run....One plausible cause: Inflation returns, but growth stays weak."

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Gold last traded at $1,278 an ounce. Silver at $16.44 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying despite a firmer dollar. U.S. stocks drifted lower as lawmakers agreed on a plan to prevent a government shutdown.

Bitcoin plunges 44%, below $11,000 -CNBC
"Bitcoin plunged Friday, taking the digital currency briefly below $11,000 and down 44 percent from a record high hit at the start of the week. Bitcoin had rallied to a record high above $19,800 on Sunday and was trading near $15,500 for much of Thursday New York time, according to Coinbase. But an afternoon selloff accelerated into the night, and bitcoin dropped 30.2 percent Friday morning to a low of $10,400 on Coinbase. It was trading back near $12,750 mid-morning Friday....Bitcoin futures also tumbled Friday. The CME bitcoin futures expiring in January, which launched Sunday, reached 'limit down,' falling nearly 20 percent to $12,265 in morning trading before recovering slightly to $12,760. Markets were still open for trading....The bitcoin offshoot, bitcoin cash, collapsed, temporarily falling 40 percent Friday to $1,873, after topping $4,000 two days ago, according to Coinbase. Bitcoin cash recovered to trade near $2,200 in mid-morning trading....The sharp drop in the cryptocurrency prices came as demand from South Korean and Japanese investors fell."

Crypto-mania volatility has arrived in time for Christmas. Riding the bitcoin roller coaster is only for those with a very strong stomach and money they are willing to lose. Learn more about the biggest mania to hit the world since the internet, request a free copy of our new Special Report: BITCOIN: The Future of Money?

Stockman: "Gold Is The Only Safe Asset Left" -Zero Hedge
"Record high stock and bond prices are flashing danger signs to former Reagan White House Budget Director David Stockman. Stockman contends, 'I don’t think we are going to have a liquidity crisis. I think it’s going to be a value reset. I think there is going to be a jarring downward price adjustment both in the stock market and in the bond market. This phantom or phony wealth that has been created since the last crisis is going to basically evaporate.' So, what asset is safe? Stockman says gold and goes onto explain, 'I think the time to buy (gold and silver) is ideal. Gold is the ultimate and only real money. Gold is the only safe asset when push comes to shove. They tell you to buy the government bond, that's a safe asset. It's not a safe asset at its current price. I am not saying the federal government is going to default in the next two or three years. I am saying the yield on a 10-year bond of 2.4% is way below of where it’s going to end up. So, the only safe asset left is gold. This crazy Bitcoin mania has drained off what would otherwise be a demand for gold....When Bitcoin collapses, spectacularly, which it will because it's sheer mania in the markets right now. When it collapses, I think a lot of that demand will come back into gold, as well as people fleeing the standard stock and bond markets for the first time in 9 or 10 years.'"

Trump signs tax cut bill and resolution to keep the government's lights on -Daily Mail
"Donald Trump signed his tax cut bill on Friday morning in the Oval Office with little fanfare in his final order of business before the start of his Christmas holiday away from the White House. Calling it 'the biggest tax cut, the biggest reform of all time,' he told reporters that 'the numbers will speak' for themselves when taxpayers start to see results in their paychecks just weeks from now. The president also signed a last-minute resolution to keep the government's lights on through January 19, averting a partial shutdown. Trump highlighted a provision that sets aside $4.6 billion for missile defense before he affixed his signature to the bill, saying in a tweet that the funds were 'much needed.'....Trump predicted that tax reform would lead to an even greater reduction in unemployment, new highs for the stock market and an increase in wages. 'That's going to be tremendous for people. They're going to start seeing the results in February. This bill means more take home pay,' he said."

Presto! Tax Cuts Already Working Their Magic -Investors
"Tax reform was passed with the promise that it soon would start to work wonders to kick economic growth into high gear and boost workers' pay. Don't look now, but it's already working. Just one day after the tax bill was finally passed, companies were already scrambling to do things with their money. It's an impressive list and, no doubt, not comprehensive: AT&T's CEO said the company will hand out bonuses of $1,000 to more than 200,000 of its workers in the U.S., thanks to tax reform. Comcast NBCUniversal, not to be outdone, also handed out a special bonus of $1,000 to more than 1,000 employees, thanks to 'passage of tax reform and the FCC's action on broadband.' Boeing's CEO Dennis Muilenburg said his company will spend $300 million, with $100 million going to charity, $100 million for workforce development (including training and education for Boeing workers), and $100 million for 'workplace of the future' infrastructure. Fifth Third Bankcorp said it will give 13,500 employees a bonus and lift the minimum wage to $15 an hour. Wells Fargo also raised its minimum wage to $15 an hour, and said it would donate $400 million to community and nonprofit groups in 2018....Despite complaints about the corporate tax cut that will bring the top rate down from 35% to 21%, that will benefit employees in both the short-run, as the bonuses and minimum wage hikes show, and the long-run, as new corporate investments turn into revenues and profits."

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Gold last traded at $1,270 an ounce. Silver at $16.22 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 2-week highs Thursday on a flat dollar. U.S. stocks rallied as some companies pledge to spend tax bill savings on higher wages.

Should You Consider Investing In Gold? -Seeking Alpha
"Recently, we have been asked by a number of clients about the precious metals and what our advice would be with regards to buying, selling or holding physical or trading positions in the metals. There are really only a few short and simple answers to this question and they revolve around the concept of providing a hedge against risk, capital preservation and opportunity for returns. First, gold historically has been and will continue to be the basis of physical wealth for the foreseeable future...right now is the time to be acquiring gold and silver as a low price hedge against another global crisis event or market meltdown. People are starting to park their money in digital currencies, like Bitcoin and Ethereum, rather than parking them in fiat currencies...This is primarily due to the Negative Interest Rate Policy of the Central Banks, which explains the sharp rise in the price of Bitcoin, this year....Second, the fact that the gold and silver price ratio is historically very low also means that cash can be traded for physical gold with very limited risk and provide an excellent hedge for inflation, global market crisis events and as long-term investments....Lastly, gold and silver are very limited in supply on this planet and, unless society decides that gold or silver is absolutely worthless as a substance, will likely continue to increase in value."

Clock ticking toward government shutdown -Associated Press
"Lawmakers hope to approve a must-pass spending bill on Thursday as the clock ticks toward potential government shutdown this weekend. Despite the perilous situation, House Republican leaders are still struggling to unite the GOP rank-and-file behind a plan that would punt most of their remaining work into next year....The upcoming short-term measure would fund the government through Jan. 19, giving lawmakers time next month to try to work out their leftover business....Democrats are opposing the GOP endgame agenda because their priorities on immigration and funding for domestic programs aren't being addressed. Opposition from Democrats means Republicans need to find unity among themselves."

10 Things You Need To Know About The Debt Ceiling -Forbes
"Given the amount of misleading news reports likely to appear in the coming weeks until a final resolution, here are ten things you need to know about the debt ceiling and a potential government shutdown. 1. Congress must do something to authorize government debt. 2. Extraordinary measures are really just internal borrowing between accounts. 3. Not raising the debt ceiling does not mean a default or not paying our debts. 4. Not raising the debt ceiling does not mean not paying for things already bought. 5. Spending can be cut to balance the budget, but not without cutting entitlements. 6. In the case of a government shutdown, the president gets to decide who is essential and keeps working. 7. Government workers will be paid in the end. 8. Congress was supposed to have this all done before October 1, but is fighting over how much more to spend. 9. We keep hitting the debt ceiling because of spending. 10. It’s not the tax cuts....The government doesn’t need more money; it needs to do and spend less."

Tax cut could spark a reckless rush into the stocks -CNBC
"Boosters of the new corporate tax cut are effectively promising it will spark a rush of 'rational recklessness.' That's not how Republicans in Congress and economists who favor the new law might put it. They argue the new 21 percent corporate rate and ability to deduct the full cost of new capital investment immediately will make American companies more competitive and unlock pent-up demand for corporate investment. But the idea of cutting taxes on capital, allowing more investment income to flow to asset owners and creating strong incentives for companies to spend heavily on plant and equipment eight years into an economic expansion implies a hope that businesses and investors will bet heavily on a stronger, longer economic cycle when they otherwise might be bracing for a slowdown....One can certainly argue that the economy and markets can be carried along by this virtuous cycle for a while before the good news curdles into higher interest rates or inflation or fears of overheating or signs of uneconomic over-investment."

WashPost: 'Fedcoin' Will Be 'Bigger' Than Bitcoin -Zero Hedge
"Fedcoin doesn't even exist yet, and yet the Washington Post is already hyping it as the primary cryptocurrency that we will be using in the future. Just a few days ago I warned that global central banks could eventually try to take control of the cryptocurrency phenomenon, and so I was deeply alarmed to see the Post publish this sort of an article. We want cryptocurrencies to stay completely independent, and we definitely do not want the Federal Reserve and other global central banks to start creating their own versions....The one thing that could derail the cryptocurrency revolution faster than anything else would be interference by national governments or global central banks. Unfortunately, now that Bitcoin, Litecoin, Ethereum and other cryptocurrencies are getting so much attention, it is inevitable that the powers that be will make a move....The Federal Reserve is far from alone. Other global central banks are doing their own research, and the Bank for International Settlements says that “all central banks” may eventually need their own cryptocurrencies."

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Gold last traded at $1,268 an ounce. Silver at $16.27 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain hunting and a weaker dollar. U.S. stocks traded mixed.

Blockchain: We Got Ourselves a Full Blown Mania -The Macro Tourist
"I often get asked by younger traders what it was like to trade in the DotCom bubble. When I tell them stories about the madness that prevailed at the time, they shake their heads in disbelief about how stupid my generation could have been....Well, my millennial readers, I will let you in on a little secret. You guys are in the midst of blowing your very own bubble...blockchain technology....According to Spencer Bogart, head of research at BlockChain Capital, Bitcoin has reversed the laws of supply and demand. By his logic, it's a better investment at $20,000 than it was at $1,000. I have heard these sorts of arguments before…in 1999. Regardless of the long-term investing merits of Bitcoin and Blockchain technology, we have entered into a period where it is difficult to deny that it has turned into a full-blown mania....I am not going to claim this is the top. But all I request is for you to stop asking me what it was like to trade in the DotCom bubble, because you already know... It was just like today."

Do some people get rich during manias? Yes, a few. Just like other pyramid investment schemes, those who get in early often reap big rewards. But those who jump in later usually end up holding the bag (full of nothing). Learn more about the biggest mania to hit the world since the internet, request a free copy of our new Special Report: BITCOIN: The Future of Money?

Expect the Unexpected in 2018 -Daily Reckoning
"The financial web is now brimming with bold prognostications for stocks, bonds, commodities, and which celebrity is next in line to kick the bucket. Everyone from big bank analysts to lowly bloggers is taking a stab at what 2018 will unleash on unsuspecting investors. But the yearly ritual always ends in disappointing, mundane projections. No one has the guts to stick their neck out and predict a huge move in the markets....'Most of Wall Street's 2018 economic and market forecasts are interchangeable with those from last year,' Barron’s notes. 'And the year before that. And the year before that.' But I don’t blame these analysts for their wimpy market guesses...They all know how to play the game. In the button-down world of Wall Street, you don’t make bold calls. If you want to keep your job, you blend in with the herd....Instead of boring you with flat, single-digit S&P predictions, we're slapping you in the face with some of our wildest market guesses for 2018. Stocks. Commodities. Bitcoin. Maybe even a few surprises…Our boldest market calls for 2018 are on the way every day this week. Buckle up. It's gonna be a wild ride…"

Expect Much Higher Gold Prices in 2018 -The Street
"'The last three days have reconfirmed by commitment for a much higher gold price in 2018. We are making higher lows for the year - the recent behavior made me nervous, but something very telling happened in the last three days,' says longtime commodities trader Vince Lanci, founder of Echobay Partners. Lanci noted he could see the metal hitting $1,700 an ounce or higher in 2018. If correct, his forecast would be an over $450 rally from the current level of $1,250 an ounce....The point Lanci stresses is that gold is now back in a 'safe area' between $1,250-$1,275 an ounce. 'The $1,700 call I believe in is going to come to fruition- [if gold gets] above $1,275 I will double down on a momentum bet.'"

Litecoin Founder Cashes Out, Sells Entire Stake -Zero Hedge
"Charlie Lee, the creator of the world’s fifth-biggest cryptocurrency, Litecoin, announced shortly after midnight that he was cashing in his profits after a torrid, 9,300% rally in the past 12 months. In a post on reddit, the San Francisco-based software engineer who founded litecoin in 2013, said that he sold and donated all of his holdings over the past few days. 'Litecoin has been very good for me financially, so I am well off enough that I no longer need to tie my financial success to Litecoin's success. For the first time in 6+ years, I no longer own a single LTC that's not stored in a physical Litecoin' Lee said in the post....However, Lee insisted in his post that his sale wasn't a sign that he has lost faith in the cryptocurrency: 'I will still spend all my time working on litecoin,' he said....How does it feel to take profits on a high from the crypto boom that has been described as the biggest financial bubble of all time? 'Weird' but also 'somehow refreshing,' Lee wrote."

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Gold last traded at $1,264 an ounce. Silver at $16.14 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Tuesday ahead of tax reform vote. U.S. stocks fell as a decline in Apple shares pushed the broader tech sector lower.

Russia-China real gold standard means end of US dollar dominance -RT
"The BRICS countries are considering starting an internal gold trading platform, according to Russian officials. When this happens, the global economy will be significantly reshaped, and the West will lose its dominance, predicts a precious metals expert. 'China dominates the world economy and has displaced the US as the world’s most formidable economic powerhouse,' according to Claudio Grass, of Precious Metal Advisory Switzerland. The creation of a new gold standard by BRICS is also a step to end the US dollar's domination of the global economy. 'As Bejing and Moscow understand that America used the dollar to control the world, by implementing a new kind of 'Gold standard 2.0' they want to distance themselves from this control. Furthermore, the vast majority of the people in Asia sees gold as superior, or 'real' money, something the West has forgotten, because of all the paper wealth (credit) they have accumulated,' said Grass....A attempt to move away from traditional currencies will be positive for gold and will take it to the next level."

Swedish co-founder of Bitcoin.com has sold all his bitcoins -Business Insider
"Bitcoin is 'as good as useless' and has no future as a tradeable currency says Emil Oldenburg, the co-founder and CTO of bitcoin.com, one of the world's largest bitcoin websites. Oldenburg has sold his bitcoins and believes others will do the same when they realize how illiquid the market is. He says bitcoin's drawbacks are high fees and transaction lead times - a heated topic of discussion in the community today - and resistance to change from people running the old bitcoin network. Oldenburg believes there's a brighter future for Bitcoin Cash, a spinoff currency of bitcoin that is now being actively promoted by bitcoin.com....All in all, he doesn't believe bitcoin will be the currency for everyday use the world has been hoping for."

Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin -Hussman/Hussman Funds
"Across centuries of history, speculative financial bubbles have repeatedly emerged from the seeds of distorted financial environments, where speculative behavior increasingly produces self-reinforcing feedback....The 1929 bubble was built on the foundation of real economic prosperity during the roaring 20's, but the late stages of that boom were largely fueled by debt and easy money....The 2000 tech bubble featured the same process in a slightly different form. The inputs and premises that investors observed were valid, but incomplete....The delusion of paper wealth - Across history, the evaporation of paper wealth following periods of speculation has repeatedly taught a lesson that is never retained for long....The delusion of a booming economy - A second delusion, unleashed by exuberance over the prospect of tax reductions, is the notion that U.S. growth has even a remote likelihood of enjoying sustained 4% real growth in the coming years....The delusion of Bitcoin - My view is that the Blockchain algorithm itself is brilliant. Bitcoin itself, however, is just one application of Blockchain, and a rather awkward one....As with all speculative bubbles, buyers are conflating 'rising price' with 'store of value.' Meanwhile, there's little evidence to suggest that Bitcoin will ever be an efficient means of payment for ordinary goods and services."

Cryptocurrency exchange Youbit files for bankruptcy after hack -CNBC
"Yapian, a company that owns the Youbit exchange in South Korea, has filed for bankruptcy Tuesday after a hack that resulted in the loss of 17 percent of its cryptocurrency, according to a statement on its website. The exchange was used to purchase and sell cryptocurrencies including bitcoin and Ethereum. A translated statement posted by the company on its website said customers will be able to withdraw 75% of assets held there until the bankruptcy process is complete. Youbit was previously hacked in April, after which the company did its 'best to improve the security, recruitment and system maintenance,' according to the statement."

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Gold last traded at $1,265 an ounce. Silver at $16.21 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday amid economic optimism about tax reform and a weaker dollar. U.S. stocks rallied on 'goldilocks' 2018 forecasts, sending the NASDAQ index to a fresh high of 7,000.

TAXING TIME -Pontification Blog
"President Trump has called the $1.5 Trillion tax cut that Republicans are on the verge of passing a Christmas present for the entire nation," reports the New York Times. If Republicans cut taxes, this will be 'the end of the world…Armageddon,' said House Minority Leader Nancy Pelosi days ago. A chorus of Democrats claim that thousands of government dependents will literally die if taxes, and the size of government, are cut. If Democrats want to take from the rich, then they should reach into the government's pile of loot. The Federal Government, for example, owns 28 percent of the 2.27 billion acres of land in the U.S. - but such politicians want government ultimately to own everything, not to sell it when money is needed....President Donald Trump aims to reduce taxes on business, shrink government, and spark economic growth that puts millions back to work. He is gambling that this stimulus will move companies to hire, not buy 75,000 robot workers as Amazon recently did. Trump is gambling that companies that bring trillions of dollars home from overseas will use it to expand, not simply buy back stock and reward stockholders." Full story

Tax Cut Fear mongering: "Misleading and Dangerous" -Risk & Reward/Fox Business
Swiss America chairman Craig R. Smith on Fox Business's Risk & Reward last Friday to discuss the "misleading and dangerous" claims by democratic leaders who have stated that the GOP's proposed tax reform bill will "destabilize America by doubling the debt." Mr. Smith outlines some of the many economic benefits of this "good" tax reform package offers which he feels could boost the economy and create new jobs.

Gold extends rally as dollar wobbles -Marketwatch
"Gold prices traded higher Monday as the dollar index slipped, building slowly on what was the yellow metal’s first weekly gain in a month last week. Financial markets continue to monitor Washington’s progress on tax-law changes, which hold mixed implications for gold prices....'Gold futures, as well all of the precious metals, are looking good as it appears the tax cut deal is done and it could increase the odds for inflation in the new year. On top of that the Fed interest rate increase is in the rearview window, so the outlooks look more shiny in the near year,' said Phil Flynn, senior market analyst at Price Futures Group....For the year, gold remains up about 9%, underpinned by global political uncertainty around North Korea, and, more broadly, trade and security questions."

U.S. Economic Optimism Soars -CNBC
"American optimism on the economy is reaching new heights and President Donald Trump's approval ratings look to be benefiting, at least somewhat. The CNBC All-American Economic Survey found that for the first time in at least 11 years, more than half of respondents to the survey rated the economy as good or excellent, while a near record 41 percent expected the economy to improve in the next year....The survey found that 42 percent of Americans expect their wages to rise in the next year, and 41 percent of homeowners see their home values going up, the highest level recorded since 2007. In 2011, while the country remained in an economic funk from the financial crisis, just 15 percent of homeowners thought their home prices would rise....The president's approval numbers are substantially better on the economy. Forty-seven percent approve of his handling of the economy, up 4 points from September, while 43 percent disapprove, up 2 points. "

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Gold last traded at $1,257 an ounce. Silver at $16.06 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain hunting despite a firmer dollar. U.S. stocks rallied on the expectation of a Republican tax bill that would slash corporate taxes.

Gold will continue its climb in 2018, World Gold Council predicts -Marketwatch
"Gold prices have climbed this year despite rising U.S. interest rates, a rally in global stock markets and a jump in cryptocurrency prices - and the yellow metal has lots of reasons to stretch its gains into 2018, according to a report from the World Gold Council released Friday. Gold futures have gained more than 9% year to date, garnering support, in part, from haven demand on the back of geopolitical jitters. The precious metal notched a rise of roughly 8.6% last year, after three consecutive years of declines. John Reade, chief market strategist at the WGC, cited several reasons why gold 'could maintain upward trajectory' in the year ahead: Monetary policy and policymakers....U.S. dollar and equities....Physical market trends...Structural changes in the gold market....Banks and mints are also continuing to develop gold products that are Sharia compliant, so that part of the market may gain traction, said Reade. And in India, moves to develop a spot exchange for gold could lead to greater transparency, boosting the country’s gold trade, he said."

How the Fake Boom Ends -Bonner/Bonner And Partners
"Already, the Fed's rate hikes have boosted the interest cost of credit card debt by about $7.5 billion a year. That will rise by another $8 billion as future scheduled increases take effect. Extrapolate to include all the nation's debt - consumer, business, and government - and every quarter-point rate hike costs $170 billion extra in carrying costs a year. Add a whole percentage point… and you are up to $680 billion - about equal to the Pentagon's annual budget. And so cometh, like the Grim Reaper, the end of the biggest fake boom ever. Inflated with fake money lent at fake rates… it will deflate when rates go up....Here is the key to understanding debt money, as opposed to real money: Real money is the fruit of past efforts - distilled and preserved for future use. Debt money is a claim on wealth that has never been produced. And perhaps never will be....as the supply of debt money increases, more people owe more and more money; the economy becomes more fragile… and eventually goes broke. Real money must be earned; like wealth, it cannot be printed. That is true of bitcoin, too, by the way....That is why gold is such good money. The supply of it increases more or less at the same rate as the economy. More gold usually means more wealth. Fake money...operates in the opposite fashion. The more it increases, the poorer you get....The feds increase the money supply before any new wealth is created. This Fed debt - in the form of Federal Reserve Notes - is a fraud; it breaches the laws of nature. It doesn't add to wealth. Instead, it is a claim on wealth that other people already own… or wealth that hasn't been created yet."

Surge in investor cash triggers fear stock rally is near an end -CNBC
"A year during which the market exceeded all expectations ends not with investors backing off but rather with them throwing caution to the wind. The trend was particularly prevalent among those who prefer index funds, as ETFs saw their second-biggest week of inflows ever at $31.4 billion, according to fund flow data from Bank of America Merrill Lynch. Active strategies, as expressed through mutual funds, saw huge outflows, with the $22.7 billion leaving the fourth-worst week on record. However, the difference of $8.7 billion still left the equity side of the ledger with a big week. Speculation continues to build that the bull market is running out of steam, even as the major indexes continue to set records."

Alabama Teaches America a Lesson -Noonan/Wall Street Journal
"So much hinges on the coming year - who is in Congress and what they think they were sent there to do, the results of the Mueller investigation. If the latter finds crimes and the former goes Democratic there will be moves for impeachment in 2019. There will be international crises as always, but 2018 may produce one of unprecedented historical gravity in nuked-up North Korea. This is a dead-serious time, and we keep forgetting it because the times have been serious so long. It might help if all public actors, from leaders and investigators to journalists and voters, made a simple vow to make it a little better, not a little worse. The other night a dinner partner marveled at the expensive new fitness monitor he wears on his wrist. I wish there were an Ethical Fitbit that could report at the end of each day that you'd taken 12,304 constructive steps, some uphill, or 3,297 destructive ones, and appropriate action is warranted. There is inspiration in the Alabama outcome....Thirty-three states have U.S. Senate races next year. Primary voters should absorb what happened to Alabama Republicans after they picked Mr. Moore. They took it right in the face. They misjudged their neighbors....Domestically the only thing they're clear on is identity politics. Who's going to unite or find the place of common ground between the rising left and the older middle?....We are a divided country...Everyone involved should sober up, think about the long term, and be aware of the impression they’re making."

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Gold last traded at $1,257 an ounce. Silver at $15.93 an ounce.

NEWS SUMMARY: Precious metal prices traded in a narrow range Thursday on a firmer dollar. U.S. stocks rose, boosted by Disney agreement to buy Fox assets.

Who Is Propping Up The Bitcoin Market? -Zero Hedge
"Deutsche Bank reveals in a new report by Masao Muraki, 'Japanese men in their 30s and 40s who are engaged in leveraged FX trading (or who used to trade but have stopped) are driving the cryptocurrency market' and who according to DB, happen to be more or less idiots, arguably because for the time being they are outperforming every other asset class....Here are the details: The identity of who is propping up the Bitcoin market; 1. 40% of cryptocurrency trading is Japanese yen-denominated. 2. The true face of investors engaged in leveraged FX trading...'Mrs. Watanabe' is a buzzword often used by US/European media and market participants to symbolize the typical Japanese retail investor who trades in FX. 3. Financial literacy...The poor literacy of Japanese retail investors also stands out beside UK and German investors....8. Fair value of cryptocurrency...Cryptocurrency such as Bitcoin that have pure distributed systems do not have an underlying value like precious metals. Value is not guaranteed by an issuer because there is no issuer. The value of cryptocurrency is thus entirely based on the belief that it can be exchanged for goods or sovereign currencies (BoJ review of December 2015)."

On 12.12.17 bitcoin officially became the biggest "mania" in history, having surpassed the infamous Tulip Mania of 1634-1637, where tulip bulbs reached incredibly high prices before collapsing. This year bitcoin's price rose over 17 times, from $1,000 to over $17,000, superseding the Dutch Tulip's price climb over the same time frame. Will the plunging fate of bitcoin also follow tulip bulbs? To learn more, request a free copy of our new Special Report: BITCOIN: The Future of Money?

Busting the myth that bitcoin is actually an efficient payment mechanism -Financial Times
"As an actual payments mechanism, bitcoin sucks. It's expensive to use and getting ever more so. It can be slow and unpredictable. It's complicated and very user unfriendly (computer nerds will dispute this, but in doing so show how detached they are from the everyday needs of the average population). It depends on untested third parties for usability even more so than conventional electronic money. It's prone to hacking. It demands users read Reddit all day every day to keep up with the latest exchange, transaction and wallet updates. It passes way too much responsibility to the average user (even the well-educated lose passwords). It sucks on the energy efficiency front. Its volatility makes it a crappy medium exchange. And finally, if not foremost, the more of a speculative asset it becomes the less useful it becomes as a currency....The above was summed up in an even more compelling way by Philip Lowe, governor of the RBA, in a speech this week...'So the current fascination with these currencies feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment.'"

Investors' 2018 wish: That fundamentals justify prices -El-Erian/Marketwatch
"Investors could be forgiven for hoping for more of the same. After all, with less than a month to go, 2017 is on course to be a hugely, if not historically rewarding year for them. As of Dec. 12, global stock markets, and in particular the S&P index, had returned around 20% for the year - and this on top of an already-strong multi-year run....Despite the impressive equity rally, the price of longer-term U.S. Treasury bills was higher at the beginning of December than at the start of the year....Now for the less exuberant news: without continued economic and policy improvements, the factors that have delighted investors in 2017 risk generating an unpleasant reversal of fortune. This year's strong performance has, after all, been buoyed significantly by 'borrowed' returns from future years. With regard to mitigating portfolio risk, the increase in government bond prices leaves little room for this traditionally safe asset to compensate for a possible decline in stocks. Given how many value-at-risk-based models work, the persistence of low volatility has resulted in a crowded trade in a number of areas, which could turn out to be technically fragile. As for bitcoin, its vertiginous rise - fueled in part by the growing participation of institutional investors - may imply that it is on the path toward broad acceptance. But it may also turn out to be little more than a large financial bubble, implying serious damage when it inevitably collapses."

Faster Pace of Fed Rate Increases Could Rattle Markets -Wall Street Journal
"Investors have greeted the Federal Reserve's recent string of interest rate increases with some of the most docile market conditions in years, a sign that they could be in for a shock if the central bank decides to ramp up the pace of rate rises next year. Financial conditions are now looser than they were before the Fed began lifting rates in 2015. Typically, the prospect of Fed rate increases tightens financial conditions by pushing up borrowing costs for companies and governments, lifting the value of the U.S. dollar against its peers, and restraining a rise in the stock market. But that hasn't happened this time around. Two years into the Fed's rate-rise cycle, stocks have been on a near-uninterrupted climb and longer-term Treasury yields have barely budged and lingered near the technically-important level of 2.4% for much of the past few months. The WSJ Dollar Index, a measure of the U.S. currency against 16 peers, is down 3% from its December 2015 level....Jerome Powell is expected to take the helm of the central bank in 2018, and could shift course, particularly with a new batch of policy makers expected to favor faster rate increases. If inflation begins to accelerate next year, the pace of rate increase could also pick up, economists say."

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12.13.17 - Why the Fed Should Embrace More Pain

Gold last traded at $1,255 an ounce. Silver at $16.05 an ounce.

NEWS SUMMARY:Precious metal prices rose Wednesday on a weaker dollar after the Fed's quarter point interest rate hike. U.S. stocks extended gains on optimism about tax reform, rising inflation and rosy 2018 projections.

Bitcoin now 'biggest bubble world has ever seen' -Express
"Bitcoin has become the biggest bubble in history and has surpassed the infamous Tulip Mania of 1634-1637, according to experts. Tulip Mania refers to the period in the Dutch Golden Age where tulip bulbs reached incredibly high levels before collapsing in February 1637. Robert Wu, co-founder of Convoy, said bitcoin's 'price has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip's climb over the same time frame'....Another bubble it has surpassed is the South Sea bubble. This occurred in 1720 when the South Sea Company a monopoly traded with South America. Shares rose to 10 times their value and then the bubble burst and its stock crashed. The whole country suffered a catastrophic loss of money and property."

Debt and Fear Remain Eerily Nowhere Near, and That's Scary -Real Clear Markets
"Doubt and fear remain absent from Wall Street despite the specter of numerous potentially adverse economic, interest rate, inflationary, political, geopolitical and market outcomes. Exaggerating the uptrend is the underappreciated and more dominant role of passive investing strategies that, when combined with the global short volatility bubble, is distortive to the markets and limits price discovery....Nearly every cyclical market peak is accompanied by a new and different version of robust speculative activity, and 2017 is no exception as bitcoin has been the subject of media and investors' attention with the hope of untold riches rising to the investing surface....Central banks, oblivious to the real reasons for low wage inflation - namely, globalization and advances in technology - have created a monster bubble and the markets, rather than being frightened by this, have celebrated it....Remember Joseph in The Bible? When things were good, he put grain in the silos to have sustenance for an eventual bad day. Our purported leaders, while often citing The Bible, apparently missed this part. They are eating the nation's seed corn. It's bad all around - substantively, morally and intellectually. It is driven by discredited ideas that few are willing to challenge....By my calculus the market's downside is at least 4x greater than the upside today - even with a tax reduction, which will likely not 'trickle down' and catalyze. From my perch there is no margin of safety left in today's market."

Fed should embrace more pain for good of the economy -SF Chronicle
"Despite the stock market being up, unemployment being down, and inflation remaining low, significant risks of a financial meltdown remain. When Jerome Powell takes over the chairmanship of the Fed next February, he should make three moves to ward off future financial collapses like the one consumers and investors suffered in 2008. He should push the Fed to: Be more discerning before interfering in the economy, and, when doing so, limit the dosage and duration; Sell off quickly the bond investments it already has made to stimulate the economy; and Let bankruptcy be a normal byproduct of the business cycle. He needs to do this swiftly as the financial system has entered its own 'opioid crisis' as the economy and investors have become addicted to the Fed's extraordinary pain-relieving measures....To paraphrase Gordon Gekko, Michael Douglas' character in the 1987 movie 'Wall Street,' sometimes pain is good."

Bitcoin mining causing electricity blackouts -Daily Mail
"The virtual mining of Bitcoins is using up so much energy that it is causing electricity blackouts in some countries, it has been revealed. Experts say the high-tech activity is consuming a higher level of power than in 159 countries across the globe - amid fears it will use more than the world by 2020....Analytics firm Digiconomist estimates that every Bitcoin transaction uses up enough energy to power nine homes in the US for one day. The virtual currency is made up of lines of computer code which are digitally signed each time they travel from one owner to the next....But for the average person, the costs involved with mining are so high that it is no longer worth getting involved....One facility in China - where half of the world's Bitcoin miners are based - has 25,000 computers running up a daily energy bill of $40,000. By July 2019 the bitcoin network will require more electricity than the entire United States currently uses."

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Gold last traded at $1,242 an ounce. Silver at $15.72 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday ahead of Fed interest rate decision. U.S. stocks rose on growing optimism over passage of tax reform bill.

Cryptocurrency exchanges Coinbase, Bitfinex down -Reuters
"Digital currency exchange operators Coinbase and Bitfinex reported problems with service through their websites on Tuesday, frustrating traders seeking to cash in on the latest surge in the value of bitcoin and other cryptocurrencies. Wallet-provider Coinbase's website showed 'service unavailable' early on Tuesday U.S. time, flashing a message that said it was down for maintenance. Its exchange gdax.com was still quoting prices, although it also said it was experiencing a 'minor service outage'. Bitfinex, another cryptocurrency exchange, tweeted it was under heavy distributed denial of service (DDoS) and its application programing interface was down....DDoS attacks have been common on the internet, using hijacked and virus-infected computers to target websites until they can no longer cope with the scale of data requested....Bitcoin exchanges and wallets have a history of being hacked, and security experts say they become more vulnerable to cyber-crime as valuations rise."

Economists Explain Tax Cuts, Stock Market & Bitcoin Realities -Fox Business
Swiss America chairman Craig R. Smith and MacroMavens president Stephanie Pomboy were guests of Neil Cavuto's Coast to Coast today weighing in on the economic impact of the upcoming tax reform on the financial and stock markets, the Fed's potential role as spoiler as they lift interest rates and whether or not investors should buy into the bitcoin frenzy, which today surpassed the historic Tulip Mania of 1634.

80% of Wall Street economists, strategists believe bitcoin is a bubble -CNBC
"Eighty percent of respondents to the December CNBC Fed Survey said the current valuation of bitcoin is a bubble. Only 2 percent of respondents said the valuation is based on fundamentals, and 17 percent responded that they don't know or are unsure....After launching on Sunday evening on the Cboe Futures Exchange, bitcoin futures surged nearly 20 percent, to $18,545, on their first full day of trading, according to the January futures contract....Wall Street also does not seem convinced of bitcoin's role as a currency. Of the 44 economists, fund managers and strategists surveyed last week, 66 percent said bitcoin does not qualify under the definition of a currency, while 17 percent said it does."

SEC Statement on Cryptocurrencies and Initial Coin Offerings -Chairman Jay Clayton
"The world's social media platforms and financial markets are abuzz about cryptocurrencies and 'initial coin offerings' (ICOs). There are tales of fortunes made and dreamed to be made. We are hearing the familiar refrain, 'this time is different.'....I have asked the SEC's Division of Enforcement to continue to police this area vigorously and recommend enforcement actions against those that conduct initial coin offerings in violation of the federal securities laws....Conclusion: We at the SEC are committed to promoting capital formation. The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing....Sample Questions for Investors Considering a Cryptocurrency or ICO; *Who exactly am I contracting with? * Where is my money going and what will be it be used for? Is my money going to be used to 'cash out' others? * What specific rights come with my investment? * Are there financial statements? If so, are they audited, and by whom?"Full SEC statement

James Grant: Markets Trust Too Much in Central Banks -Finanz
"Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm. The financial markets seem to like it: Stocks are close to record levels and the global economy is finally picking up. Nonetheless, James Grant sees no reason to sound the all-clear signal. The sharp thinking and highly regarded editor of the iconic Wall Street newsletter 'Grant’s Interest Rate Observer' argues that historically low interest rates are distorting the perception of investors. 'We live in a hall of mirrors which our central banks have made for us and that hall of mirrors distorts perceptions. That, I think is a big problem.'....'In short, interest rates are prices and prices convey information and distorted prices convey misinformation. It seems to me that the unintended consequences are very much adverse of these policies. Namely, the world-wide distortion of interest rates because markets are connected by arbitrage.'....'The gold market will respond to the demonstrated failure of radical monetary policy. I have no idea when that collective perception might come that the central bankers are not fully clothed. But it will come, and a good portion of the world will come to the conclusion that gold represents a very good store of value outside the banking system and outside the electrical grid and outside the world of technology. These cryptocurrencies, on the other hand, propagate like rabbits: One day there are 900 cryptocurrencies, the next week there are 1200 and the week after that 1500. On the contrary, gold has been with us for millennia and the only way to get more is by a collision of two neutron stars or something like that. So alchemy may work in the cryptocurrencies but it's not going to work in gold.'"

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Gold last traded at $1,244 an ounce. Silver at $15.71 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on a weaker dollar ahead of Fed meeting. U.S. stocks rose, led by energy and tech despite explosion near Times Square.

Gold's Time Is Nigh -Bloomberg
"With bitcoin sucking up all the crazy in financial markets, gold looks to have lost its luster. The CBOE/Comex Gold Volatility Index, a rough proxy for the amount of fun and profit available for precious metal traders, touched a record low of 10.17 last month, from levels north of 37 back in 2011. That may be overdue a change. Despite suffering its worst week since May last week, the outlook for gold could be stronger now than it has been for several months. Here's why. 1. Interest rates...Every time yields have peaked north of 2.5 percent over the past five years, gold has promptly rallied. 2. The seasons, they go round and round...Gold tends to do well in January and February...it's enough of a consistent pattern these days that it's starting to become a self-fulfilling prophecy. 3. What an unpleasant surprise...Stock market expectations eventually catch up to a run of positive surprises, leading to disappointment. 4. A bit of bad news...Bitcoin's wild gyrations could be the spark to set any of the above factors in motion....Gold may be a barbarous relic - but relics are rarely more attractive to investors than when they're trembling before the power of the market's gods."

Why Economists Are Morons -Bonner/Bonner And Partners
"Why are most modern economists such nincompoops? The quick answer: because it pays....In 1760, Saint-Simon was born into an aristocratic family in France. He had a talent for broad, moronic ideas...with French philosopher Auguste Comte, Saint-Simon developed an idea that, like a malevolent weed, flourished: positivism....The Industrial Age was just beginning. Progress was undeniable. So why not apply the 'positive knowledge' idea to personal relationships, business, government, and culture? Wouldn't that make things better, too? But the relationships between people are not as simple as the relationship between a nail and a hammer. You can beat on people, too. But it's hard to drive them straight where you want them to go. And in the 250 years that have elapsed since - in which the propositions put forward by positivists were exhaustively rehearsed by governments, activists, and world improvers - no persuasive evidence of any real improvement has emerged....This school of thought - which attempted to reduce all human behavior to logical and scientific foundations - became so popular, it filled the universities, sloshing over department walls like an overflowing septic tank, and poisoning many other disciplines – notably economics. Today, practically all economists believe they can assemble 'data,' manipulate rates and rules, stimulate an economy, or calm it down... and thereby make things better....Modern economists have preached and practiced intervention and activism for the last 50 years."

"It has enabled them to earn decent incomes... win Nobel prizes... pretend to know what they were talking about... and exert huge influence on their victim economies. None of it made people richer or better off. Instead, it was all fraudulent and futile....Economies discover wants and prices by allowing win-win deals. These deals discover both what people really want... and how much it really costs to get it. The feds – aided and abetted by their positivist economists – just get in the way."

Why bitcoin's success could be its downfall -Washington Post
"Digital currencies have been front-page news as the value of bitcoin, the most popular of the cryptocurrencies, continues to surge, albeit with wild fluctuations. Bitcoin backers argue that once digital currencies become widely used, governments will be unable to destroy them - users simply won't allow it. This view falls short on two points. First, digital currencies, even in their current form, are a bigger threat to national governments than most people currently understand. Second, bitcoin's success would also be its downfall. As bitcoin gains popularity, and especially if it stabilizes in value, it becomes a viable substitute for government-backed currencies. But national governments have little incentive to allow this type of direct competition. National governments tolerate bitcoin and other forms of cryptocurrency because these currencies are still bit players in the global economy....For now, currencies like bitcoin are too volatile to be used for long-term saving or lending - this means they won't readily replace dollars or euros....Few economists doubt that the U.S. government can force Americans to abandon bitcoin if it wants. As Nobel laureate Joseph Stiglitz put it recently, 'They can crack down at any time, and then [bitcoin] collapses.'"

Our "Downsized" Future -Pontification Blog
"Republicans cutting taxes would be 'the end of the world...Armageddon,' said House Minority Leader Nancy Pelosi days ago. This could certainly be the end of her world, because Democratic Party power comes largely from taxing and redistributing to its voters the earnings of Republicans. Congressional leaders of both parties understand that their money and power have come at a terrible cost to America's liberty, prosperity, and individual independence. To make itself big, government has made many of us small, like the people who decide to save money by being shrunk to 5 inches tall in Matt Damon's insightful forthcoming movie 'downsizing.' We are headed for the end of America, as our nation's Framers dreamed it, if our citizens cannot make their courage and self-reliance big enough to force our government to be small again - small enough to fit inside the Constitution. Look what we have become. Instead of honest hard money, our dollar has been turned into 'an elastic currency,' as the enabling legislation of the Federal Reserve called for. Now our government simply prints as much as it wishes to spend, leaving us to pay for this with the invisible tax of inflation." Full story

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Gold last traded at $1,250 an ounce. Silver at $15.82 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Friday on bargain hunting despite a firmer dollar. U.S. stocks rose on upbeat jobs data as Congress kicked the budget agreement can forward two weeks.

Where The Jobs Were In November -ZeroHedge
"Assuming that the BLS' estimate of avg hourly warnings growing only 0.2% in November is accurate, it would imply that the bulk of job growth in November took place in minimum-paying and other low-wage jobs. However, a breakdown of jobs added by industry shows the contrary to expectations, the bulk of new job creation, and 3 of the 4 top category, were not in the 'low wage' bucket. In fact with the exception of Education and Health jobs which rose by 54K in November, Manufacturing (+31K), Professional and Business Services (+27), and Construction (+24) were the fastest growing occupations in the previous month....On the negative side, consumer spending does not appear to be driving much hiring."

Bets against bitcoin will 'annihilate' once futures begin trading -Cramer/CNBC
"Bets against bitcoin will 'annihilate' the digital currency once futures begin trading over the weekend, CNBC's Jim Cramer predicted Friday. Cboe bitcoin futures are set to begin trading on Sunday. The CME contracts launch on Dec. 18. Nasdaq, meanwhile, plans to start its own bitcoin futures as early as the second quarter of 2018. 'I think the short selling is just going to annihilate people when you can start trading it,' Cramer said after talking with sources in the bitcoin community. 'Once this thing starts trading the futures, they are just going to kibosh it,' Cramer said on 'Squawk on the Street.' 'You're going to see a lot of shenanigans.'....Cramer has been a vocal critic of bitcoin, warning investors that it's like 'Monopoly money' and people would be better off going to Vegas."

This has been another rollercoaster week for bitcoin prices - ranging from $12,000 to $19,000. Is this the final speculative blowout? As bitcoin futures begin trading next week will they puncture the bitcoin bubble? Stay tuned. Meanwhile, call Swiss America at 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

Bitcoin is the Greatest Bubble in Human History -Hedgeye
"The biggest winners from bitcoin so far - and for the foreseeable future in my opinion - are the inspired developers, early investors, exchanges, miners, money-launderers, and thieves. Bitcoin may continue to swell in value, but the future of viable blockchain applications lies elsewhere....Are cryptocurrencies in a bubble? Yes, definitely. In fact, they are the greatest asset price bubble in human history. Bitcoin is a perfectly engineered bubble machine. Its value is what buyers believe it is. This is key to understanding the current mania....Bitcoin should be a low cost money transfer mechanism...unless you were moving bitcoin last week, at which time the costs rose to $5-20 per transaction. Bitcoin should be fast to transfer ... unless you need to wait 24 hours (as also occurred last week) for clearing....Other problems with bitcoin: 1. There are four mining pools providing half of Bitcoin’s capacity (and making it more susceptible to majority attack). 2. There are numerous, and often confusing, blockchain forks. 3. Bitcoin transaction speed falls far behind bank transactions, and it cannot be fixed in its main branch. 4. Use of bitcoin in daily transactions is not increasing. 5. By the number of the wallet its owner’s transactions can be tracked, which substantially undermines anonymity. 6. Governments are not sitting idly as cryptocurrencies rise in value and popularity...The FBI, U.S. Treasury, and others seized the servers of exchange BTC-e. 45 percent of all currencies in the accounts were lost. 7. Without acceptance of cryptocurrencies as actual fiat currency by governments, then the regulatory environment will be prohibitive to their common use."

What Is The Fundamental Value of Bitcoin? -Lewis/Forbes
"What is the fundamental value of bitcoin? It seems that even the Bitcoin enthusiasts themselves have trouble answering this question. Bitcoin does not have any assets, cashflow, cost of production or final consumptive demand, the traditional basis of most asset valuation techniques. The market price of anything is determined by supply and demand, in the market....It is, arguably, not a very good form of money, as its value is intensely volatile....The spectacular rise in market value of Bitcoin and its imitators has focused people's interest in them; this interest in turn leads to exchange market liquidity, and broader adoption, for monetary purposes or just experimentation. I think this will pass in time - but that time may be still several years away. At first, people like to go with what other people are using. But, after the novelty wears off somewhat, there might be something of a shakeout, with the focus moving towards cryptos' usefulness as a means of commerce, rather than a speculative toy....If cryptocurrencies are going to take the place of existing government currencies, they will need some of the properties of existing currencies, including enough stability of value to serve as the basis of contracts and basis of pricing."

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Gold last traded at $1,253 an ounce. Silver at $15.81 an ounce.

NEWS SUMMARY: Precious metal prices retreated Thursday on profit-taking and a firmer dollar. U.S. stocks rose, led by the tech sector, as investors sought clues about tax reform and a possible government shutdown.

Bitcoin tops record $19,000, then plunges -CNBC
"In trading on the Coinbase exchange, the digital currency rose above $19,000 before falling more than 12 percent from that high. The price on Coinbase is often at a premium over other exchanges. Coinbase is one of the major cryptocurrency exchanges accounting for a third of bitcoin trading volume....The digital currency began the year below $1,000 and its gains have accelerated as investor interest grows. Chicago-based Cboe Global Markets is planning to launch bitcoin futures on Sunday, while the world's largest futures exchange, CME, is set to launch its futures product the following week....Digital currency investor and former Fortress hedge fund manager Michael Novogratz also said last week that cryptocurrencies like bitcoin are 'going to be the biggest bubble of our lifetimes.' Novogratz also predicted last week that bitcoin could reach $40,000 by the end of next year. Between 5 and 6 a.m. New York time, bitcoin jumped past $15,000, its latest milestone after soaring through $12,000, $13,000 and $14,000 over about the last 33 hours, according to an index on CoinDesk."

$62 Million In Bitcoin Stolen -IBTimes
"Cryptocurrency mining marketplace NiceHash announced Wednesday that it suffered a security breach that resulted in a loss of as much as $62 million in Bitcoin. The announcement came after hours of speculation sparked by the service being unavailable for the better part of Wednesday. Several reports from users noted that their Bitcoin wallets associated with NiceHash had been emptied. While NiceHash originally claimed to be 'under maintenance' during the outages, the company admitted that it had suffered a security breach involving the NiceHash website that resulted in loss of funds....NiceHash has yet to place an amount on how much is stolen, a Bitcoin wallet address highlighted by NiceHash users that appeared Wednesday and has received a large deposit out of nowhere contains 4,736.42 BTC, valued at about $62 million at current prices. The full extent of the breach is still unknown, and it is not clear if the attackers were able to compromise user information in addition to stealing Bitcoin. NiceHash has advised its users to change their passwords as a safety precaution."

With every upward tick in bitcoin prices another hacker enlists in a growing army of bitcoin thieves. Wise money shifts profit from overpriced markets, like stocks and bitcoin, into underpriced markets, like precious metals. Call 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

You Can't Print Real Wealth -Bonner/Bonner and Partners
"Bitcoin rose another $1,000 in the last 24 hours. Whoopee! And whoa... What's going on? ... You put 'money' into an economy and prices float up. Take it away, and prices fall. Prices float on a sea of liquidity. Which prices rise depends on where the money flows....Real wealth must be earned... by someone. It can't be printed....Real wealth is a win-win for everyone. But fake money is win-lose; you only gain wealth by taking it from someone else. The consumer price inflation of the '60s and '70s caused a selloff in stocks and bonds, reaching a bottom in 1982. Main Street 'won.' Wall Street 'lost.' Now, the situation has reversed. The money flows to Wall Street… we're near a top for stocks and bonds… and Main Street sinks. The 'One Percent' build their palaces in Aspen, Colorado, and Greenwich, Connecticut… while in the mill towns of Ohio and the hill towns of Missouri, people get poorer."

The Case of the Bankerless Bubble -The Reformed Broker
"We have a full-blown mania on our hands and Wall Street is still at the drawing board! It's the first ever Bankerless Bubble. And I've read all the market history books. There's never been a phenomenon like this where the general public beats the Big Money in. It usually works the other way 'round - Wall Street pumps up a story, enriching themselves, finally retailing exposure out to the moms & pops when they're ready to take profits. They have no profits currently, because they own none of it. No one needed them to create it, promote it, trade it, package it, hype it, hold it, analyze it, manage it, custody it, store it, move it, leverage it or even talk about it. So either the banks missed it or we're really just getting started. I have no idea, but I find the whole idea of a speculative bubble that moved too fast for the banks to be a delicious one. The irony of it all is that the Bitcoin whitepaper sprung directly from the crisis itself in 2008. It was a reaction to the bailouts and money-printing that generated the idea and the Genesis block to begin with."

North Korea says U.S. threats make war unavoidable -Reuters
"Two American B-1B heavy bombers joined large-scale combat drills over South Korea on Thursday amid warnings from North Korea that the exercises and U.S. threats have made the outbreak of war 'an established fact'. The annual U.S.-South Korean 'Vigilant Ace' exercises feature 230 aircraft, including a range of the U.S. military's most advanced stealth warplanes, and come a week after North Korea tested its most powerful intercontinental ballistic missile (ICBM) to date which it says can reach the mainland United States. A spokesman for the North's foreign ministry blamed the drills and 'confrontational warmongering' by U.S. officials for making war inevitable....China, North Korea's neighbor and lone major ally, again urged calm and said war was not the answer. 'We hope all relevant parties can maintain calm and restraint and take steps to alleviate tensions and not provoke each other,' Chinese Foreign Ministry spokesman Geng Shuang said in a statement. 'The outbreak of war is not in any side's interest. The ones that will suffer the most are ordinary people.'"

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Gold last traded at $1,266 an ounce. Silver at $15.95 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday amid geopolitical worry and a firmer dollar. U.S. stocks traded flat on Mideast worry ahead of tax reform details despite upbeat economic data.

Bitcoin Tops $12,000 -Wall Street Journal
"The price of bitcoin surged above $12,000 early Wednesday morning, the latest milestone in the cryptocurrency’s massive rise. Bitcoin, which is up almost 1300% this year, was more than halfway toward eclipsing $13000 by late morning, a 7.7% increase on the day, according to the research website CoinDesk. The continued gains come just a week after bitcoin broke above $11,000 for the first time. Bitcoin by now is gaining attention beyond a niche group of early supporters, with small-time investors now jumping into the fray as they seek to capture the returns of one of the year's best-performing assets. Three exchanges are now set to offer futures contracts on bitcoin, another step toward building a traditional market around the stateless digital currency. The gains have also sparked growing concerns that the asset is turning into a speculative bubble that will eventually collapse in dramatic fashion....Executives at CME Group, which is set to launch its bitcoin futures on Dec. 18, said at a Goldman Sachs financial services conference this week that they are seeing significant demand for bitcoin futures contracts from hedge funds and asset managers. Other cryptocurrencies, such as rival ethereum, have hit record highs in recent weeks as well. JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou estimated this week that the market value of cryptocurrencies has topped $300 billion. But that still pales in comparison to gold as a store of wealth, which he estimates at $1.5 trillion."

Did you buy into bitcoin early? If so, it may be wise to take some profit off the table now and move it into real money - gold. Call 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

2018 Outlook -Axel Merk, Merk Investments
"With the stock market and Bitcoin reaching all-time highs, what can possible go wrong? In offering my thoughts on 2018, I see my role in reminding investors to stress test their portfolios. Is your portfolio built of straw, sticks or brick? First, let me allege many investors have portfolios built of straw and sticks rather than brick. If a robust portfolio is a diversified one, then please check whether you have rebalanced your portfolio of late. If not, odds are equities have taken on an oversized portion in your portfolio, thus making it more vulnerable than you might have intended in a downturn....What are the optimists missing? First, let me make clear that you do not have to be a pessimist to be concerned. Risk assets are called risk assets for a reason: if you aren't concerned, that should be the very first sign why you should be concerned. The prudent investor manages risk....The Fed can set interest rates, but doesn't dictate how easy it is for borrowers to get credit....So what does it mean for different asset classes: Equities: ...I don’t like where equities are, rather seek my returns elsewhere....Treasuries...My view is the Fed's actions (together with fewer global central bank purchases) will lead risk premia to expand once again....Gold has been resilient despite higher rates...in our analysis, the correlation to equities since 1970 is just about zero. To get non-correlated returns otherwise, you either need to move to cash (which many are reluctant to do) or embrace sophisticated long-short strategies."

Netanyahu: Israel's National, Historical Identity Recognized Today -Haaretz
"Prime Minister Benjamin Netanyahu said Wednesday that Israel's 'historical and national identity is receiving important expressions every day, but especially today.' The prime minister was speaking in a Facebook video ahead of the expected announcement by U.S. President Donald Trump to recognize Jerusalem as Israel's capital. Earlier Wednesday, in his first public comments since the White House confirmed Trump will make the Jerusalem announcement, Netanyahu avoided any mention of the decision. Instead, the prime minister focused his remarks on the Iranian threat to the region on Wednesday....'We say what we mean and mean what we say,' Netanyahu said. The prime minister called on other nations to pressure Iran, while at the same time support the Iranian people....On Tuesday, Israeli ministers were instructed, per the White House’s request, to keep mum on the issue until a final decision is made by President Trump on whether or not to sign the waiver that would determine the future of the embassy for the next six months....As Netanyahu was speaking about the strengthening diplomatic ties between Israel and the world, China and Russia expressed concern over Trump's expected recognition of Jerusalem as Israel's capital. China warned on Wednesday that Trump's decision could fuel tensions in the region, AFP reported. President Reuven Rivlin also addressed the expected announcement by the American president later on Wednesday, saying that neighboring Arab countries that oppose a recognition of Jerusalem as the capital need to resign themselves to Israel's sovereignty. 'Our neighbors ought to understand, whether they like it or not, that we are here to stay,' Rivlin said."

The government shutdown deadline is just two days away -MSNBC
"There’s never been a federal government shutdown when one party controls both the White House and Congress. That may change this week. The first step in preventing the government from shutting down will be a spending bill in the House. Politico reports that Republican leaders appear to have settled on a plan. 'House Republican leaders have promised conservatives that they won't grant concessions to Democrats to get enough votes for a stopgap spending bill - gaining GOP support but also raising the specter of a government shutdown later this month.' As John Boehner can attest, House Republican leaders are in an awkward position. There's a sizable contingent of far-right House members who don't like to vote for spending bills, pushing GOP leaders to turn to Democrats for votes. In this case, however, Dems have a lengthy list of priorities they'd love to see tied to the temporary spending bill - called a 'continuing resolution' (or CR) - which Republicans naturally oppose....As things stand, the House is scheduled to vote tomorrow on its spending bill, the same day the White House hosts a conversation with Congress’ bipartisan leadership about keeping the government’s lights on....Based on my best guess, I'd put the likelihood of a shutdown at about 35%, but that could change based on how things unfold on Capitol Hill today."

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Gold last traded at $1,264 an ounce. Silver at $16.06 an ounce.

NEWS SUMMARY: Precious metal prices fell Tuesday on technical selling and a firmer dollar. U.S. stocks traded mixed as investor bullishness ebbed following advances fueled by GOP tax reform hopes.

Rally Kicks Into Dangerous Overdrive -Barrons
"As tax reform gets closer, the stock market melts up. It won't last. The stock market was usually strong after the Thanksgiving holiday, and now the specter of sweeping tax reform has pushed that to the extreme. Indeed, the term 'melt-up' is in play as investors seemingly stampede into the already sky-high stock market. The problem with melt-ups is that they can mark the end of the road for the bulls. When sentiment leans too bullish and prices move at an unsustainably fast clip, bad things can happen. Forget the politics. Forget the fundamentals. What we see now in the stock market is a stretched trend, overbought conditions in several time frames, and sentiment that is a bit frothy. We also see the market's big technology leaders already pulling back....Chasing this rally cannot be a good strategy, and that suggests taking a few chips the table. It couldn’t hurt to have a little cash on hand to buy whatever dip is ahead...no bull market is infallible, not even this one."

The looming government shutdown, explained -The Week
"Senate Republicans managed to shove their version of the tax bill out the door last week. But if you thought that frenzy of late-night dealmaking would give way to a moment of calm in American governance, I have bad news: Congress and President Trump now have four days to avert a government shutdown. At issue is legislation authorizing federal spending for the next fiscal year. Since any final deal must clear the filibuster in the Senate, Republicans will need at least eight Democrats to sign on. And current authorizations run out by the end of Friday. If the two parties can't reach an accord by then, the federal government will go dark. What's standing in the way of agreement? First off are spending limits....Another problem is the Children's Health Insurance Program (CHIP)....But the real stumbling block looks like it will be immigration....The last government shutdown lasted 17 days in 2013, and it did not go over well with the public. So far, everyone sounds confident they'll strike a deal in time. It's just not clear what the route to agreement looks like right now."

Bitcoin futures could lead to a Lehman-style collapse -Marketwatch
"CBOE Global Markets announced Monday that it will launch trading of bitcoin futures, under the 'XBT' ticker symbol, next weekend, giving crytpo traders the 'tools to help them express their views and hedge their exposure.' It could also give them - and many others - plenty of heartache, if this warning sounded by Interactive Brokers Chairman and CEO Thomas Peterffy, in an interview with Fortune, turns into a reality: 'My fear is in the unlikely event something like that happens, we’ll have something like Lehman Brothers - or worse.' The 'unlikely event' he's referring to is his fear that, if bitcoin falls dramatically - we KNOW this is possible/probable - clearing houses could be exposed to traders who can't cover the shortfall when their contracts go sideways....'The issue is they're putting bitcoin in the same basket as U.S. Treasuries, stock-index futures, and all the really serious products,' Peterffy told Fortune."

Bitcoin continues to defy gravity, currently trading above $11,000 each. When the financial markets begin trading bitcoin futures on December 18th, will that propel prices upward or downward? Get up to speed fast, call 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

The end of government monopoly money -Washington Times
"After two centuries of government monopoly money, private monies are re-emerging and will likely come to dominate ultimately. Back in 1976, Nobel Laureate F.A. Hayek published his little classic, 'Denationalization of Money.' In essence, Hayek argued that money is no different than other commodities, and it would be better supplied by competition among private issuers than by a government monopoly....Even though many agreed with Hayek's argument, it was not clear until now how the government monopoly on money would be broken. As with so many other things, technology has come to the rescue. We are now witnessing the beginnings of the development of practical, private, digital cryptocurrencies, the best known being bitcoin. Bitcoin and most of the other new currencies enable users to make transactions from person to person without going through a bank or other intermediary....Bitcoin is not money in the true sense of the word, because it is only unit of account and a method of exchange, and not a store of value. Combining claims on real assets such as gold, silver, aluminum, wood, wheat, oil and other commodities with blockchains will create true cryptomoney....When there is a market need, entrepreneurs always step in to try to solve the problem, either through legal or illegal ways - that is what is driving much of the effort to develop the best cryptocurrency. The energy and the intelligence are on the side of the entrepreneurs, not on the side of the government regulators."

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Gold last traded at $1,277 an ounce. Silver at $16.38 an ounce.

NEWS SUMMARY: Precious metal prices traded in a narrow range Monday on a firmer dollar and upbeat tax reform progress. U.S. stocks cheered Senate approval of the GOP tax reform bill despite tech weakness.

98 Trillion Reasons to Be Worried About 2018 -Bloomberg
"The total value of companies listed on the world's stock markets as of Friday's close was $98,750,067,000,000 - within touching distance of $100 trillion for the first time. That surge in equity values has been accompanied by a drop in price swings....Pockets of the bond market also look troublesomely bubble-like. Two-year euro zone government bonds have raced below zero this year....In the U.S. Treasury market, the flattening of the yield curve is worrying some bond investors, including billionaire fund manager Bill Gross....And then there's the bubbliest market of them all: Bitcoin. The price of the virtual currency recently crossed $10,000 for the first time....Still feeling comfortable about 2018?"

Is the IRS Taking Control of Bitcoin? -Pontification Blog
"The widespread fascination with Bitcoin, the digital cryptocurrency, has been in part from its pirate-like mystique as 'money,' not created nor controlled by any government, that could be used anonymously to buy and sell privately, free from tax collectors’ prying eyes and greedy grasp. On November 28, after more than a year of a legal case by the Internal Revenue Service, U.S. District Court Magistrate Judge Jacqueline Corley ordered Coinbase, the San Francisco-based largest Bitcoin dealer in America, to turn over to the IRS the names, addresses, and taxpayer identification numbers of at least 14,355 people who were some of its customers between 2013 and 2015. The IRS originally had sought the identity of all Coinbase clients as potential tax evaders after it found that only 802 Americans nationwide in 2015 had declared either losing or gaining any money related to Bitcoin. From 2013 to 2015, according to Fortune Magazine, 'the price of Bitcoin soared from $13 to over $1,100.' The price of a single bitcoin in recent days skyrocketed beyond $11,000. This ruling, therefore, could become a legal precedent requiring dealers such as Coinbase to report anyone to the government tax authorities who buys or sells two wildly-fluctuating bitcoins or less. Will bitcoin owners soon have to kiss their aspirations of financial freedom and anonymity goodbye? Full story

Metascarcity and Bitcoin's future -TechCrunch/Yahoo
"The problem with writing about Bitcoin is that the subject has become so emotional. The very name inspires triumph, greed, resentment, or fury....Let's at least try to take a step back from the emotional minefield of day-to-day valuations, and difficult personalities, and take a long-view look at Bitcoin and other cryptocurrencies. Even their most vicious critic would have to admit that they have had a truly extraordinary run over the last eight years. A good question to ask is: where will Bitcoin be a decade from now?....Is permissionless programmable money a fad which will go away? I really don't think so...It might possibly settle into a relatively minor niche, but it's not going away....Is Bitcoin going to become the dominant global currency for daily transactions? I really, really don't think that's going to happen either...governments are extremely powerful entities who get to dictate much of the future within their borders....Will financial institutions around the world wind up using Bitcoin as the global settlement currency? Almost certainly not."

Get the full story on Bitcoin. Swiss America has researched Bitcoin extensively to help YOU get up to speed FAST. Call 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

Sell Cryptos - Buy Gold -Egon von Greyerz/Gold Switzerland
"Stock markets and cryptocurrencies are ignoring the risks in the world. We are not just looking at financial risk. Political risk is increasing in many areas....The situation in the Middle East is becoming more serious by the day...as the life of the petrodollar is coming to an end in the next few years, the balance of power will change dramatically towards the petroyuan. So aren't cryptocurrencies the best alternative to fiat money, issued and controlled by governments. Well that is clearly what the issuers and investors in cryptos believe currently. There is a real bonanza in the ICOs (Initial Coin Offerings) of cryptos. Currently there are 1,320 cryptos and they are increasing by the day. Many of them have no value but there are 726 worth $1 million or more. The biggest is Bitcoin which is around $11,000 at and valued at $180 billion. Ethereum has gone up 50% in the last ten days and is second at $46 billion. Ethereum was launched just two years ago....Cryptos must not be confused with gold. They have virtually nothing in common. One is an electronic entry on a number of computers and the other is a scarce physical element and the only money which has survived for 5,000 years. It is extremely unlikely that Bitcoin will replace gold as money for the next 5,000 years or more....For anyone who wants to preserve wealth, now is a good time to sell cryptos and buy gold. It could turn out to be the trade of the century. But even if it isn’t, there is no better form of insurance against the coming global problems than physical gold and silver."

One of Largest Brokerages In World Halts Online Trading After "Glitch" -Zero Hedge
"Yesterday, customers of Fidelity, the third largest brokerage in the world, found themselves unable to access their online accounts. The company is responsible for an estimated 8% of total US wealth management. With such a huge responsibility, Fidelity, like most companies, works hard to ensure clients have access to online accounts at all times. Yet it still happened, reminding investors of the risks posed by digital assets - be they stocks, gold or indeed deposits - held solely through online accounts and platforms - the 'Single point of failure'. Fidelity is just one of many online 'outages' or 'glitches' reported by financial institutions in the last year....Absolute reliance on online accounts and digital cash and digital gold is not prudent. When such accounts can be rendered non-viable in a matter of seconds, there is little recourse for the digital saver and investor should they not also own some tangible assets."

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Gold last traded at $1,282 an ounce. Silver at $16.38 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Friday as political controversy delayed tax reform vote. U.S. stocks fell on a report that former national security advisor Michael Flynn was directed to talk to the Russians.

Dow sheds 300 points -CNBC
"Stocks fell Friday on a report that Michael Flynn was directed by President Trump to talk to Russians. ABC News reported that Flynn would testify that he was directed to make contact with the Russians. 'If you believe the market has been rallying in the last 13 months [on hopes of fiscal stimulus, etc, this report] potentially unravels all of that,' said Jeremy Klein, chief market strategist at FBN Securities. 'Markets don't like uncertainty and this is the ultimate uncertainty.' The major averages hit their session lows, with the Dow Jones industrial average briefly falling more than 250 points before trading 180 points lower. Gold and Treasuries spiked higher following the ABC report as investors fled to market safe havens. 'It comes down to did trump obstruct justice in any way,' said Peter Boockvar, chief market analyst at The Lindsey Group. 'It's another potential political blindside. We've gotten a lot of those,' he said."

Where to stash your money when this bull market makes you sweat -Marketwatch
"It's almost getting boring: the three major U.S. stock market indexes keep hitting record highs...So, it's not surprising a giddy JPMorgan analyst wrote that 'the market is significantly underestimating the probability of tax reform passage.' Goldman Sachs declared the economic outlook 'as good as it gets' and upgraded its projections for global GDP growth to 4%. Other Wall Street strategists are using phrases like 'positive feedback loop' and 'synchronized' global growth. The bullish chorus is drowning out the few dissenting voices....When even bad news becomes good news, contrarians should start getting nervous....An ETF or index fund allocation of 50% domestic and international stocks; 35% bonds of various maturities; 5% cash; 5% inflation-protected securities, and 5% gold (to hedge against the risk of black swans like North Korea) looks like a good way to stay in the bull market and still get a good night’s sleep."

Coinbase Loses Bid to Block U.S. Tax Probe of Bitcoin Gains -Bloomberg
"U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that the tax agency's demand for information isn't overly intrusive. The price of bitcoin has been soaring and crossed $10,000 Tuesday. With just 800 to 900 taxpayers reporting bitcoin gains from 2013 through 2015 in a period when more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin, 'many Coinbase users may not be reporting their bitcoin gains,' she wrote. 'The IRS has a legitimate interest in investigating these taxpayers.'....'The government has sensed a windfall - any company that has a plethora of wealthy users might be in the sights,' Charles Hayter, chief executive officer of market tracker CryptoCompare, said in an email. 'If there is tax to be paid the government is going to go after it if it makes an example' or a return on investment."

The Bitcoin phenomenon is fast becoming 2017's story of the year. Swiss America researched Bitcoin extensively to help YOU get up to speed FAST. Call 800-289-2646 or click on the title to request a free copy of our new Special Report: BITCOIN: The Future of Money?

Bitcoin Futures Set to Start Trading -Wall Street Journal
"The U.S. Commodity Futures Trading Commission said it would allow two major Chicago exchanges to launch bitcoin futures. The Friday announcement paves the way for the start of bitcoin futures on CME Group Inc. and Cboe Global Markets Inc. in the coming weeks - a potentially huge step in the evolution of the digital currency, making trading bitcoin easier for Wall Street banks and small investors alike. CME said its bitcoin futures would launch Dec. 18. Cboe said it would shortly announce the start date for its new bitcoin contract....Bitcoin futures would allow traders to bet the price of the digital currency will rise or fall, as they can with commodities such as oil, corn and gold....The 'cash exchanges' where bitcoin is traded - not to be confused with futures exchanges like CME - have also suffered repeated hacks, outages and flash crashes."

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