February Blog Archives 2019

Gold last traded at $1,316 an ounce. Silver at $15.63 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday on a firmer dollar. U.S. stocks slipped on economic data as talks between President Donald Trump and North Korean leader Kim Jong Un ended abruptly.

A New Bull Market In Gold? -Seeking Alpha
"The gold speculative futures position indicator went from substantially oversold late last year, to now back around its longer term average. This is important because what we are witnessing here is a clear turnaround in sentiment and at this point the signal is bullish momentum, rather than a contrarian bearish signal....The $1380/oz. resistance zone has been clearly established now, and a break out above this point could well clear the path for a new bull market in gold (after an almost 8 year bear market)....A number of old headwinds are starting to turn: the Fed is on hold and may pause QT (a headwind for gold); real yields have stopped rising (real yields and gold tend to move inversely); the USD bull run is likewise on hold; and the supply imbalance (excess supply on our metrics) is starting to improve. So as old headwinds begin to turn and key technical levels come into focus, gold could well be on the cusp of a new bull market."

The Doomsday Scenario for the Stock and Housing Bubbles -Charles Hugh Smith Blog
"The Doomsday Scenario for the stock and housing bubbles is simple: the Fed's magic fails. When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed's magic only worked the first three times: three bubbles and the game is over. So what happens when punters realize there won't be a fourth bubble? They sell....The loss of faith in central bank magic will be gradual at first, as magical thinking dies hard....Does making it cheap to borrow improve the productivity of capital investments? You must be joking. The poster child of Fed magic is corporate stock buybacks, which 1) create no goods 2) create no services 3) do nothing to improve real wealth creation, i.e. higher productivity and 4) burden the company with higher debt loads, inhibiting future capital investment in actual productive capacity. The only thing stock buybacks accomplish is to enrich shareholders and top managers with stock options....The structural problems of the U.S. economy cannot be solved by inflating asset bubbles, but that's all the Fed can do....This will lead to a sudden realization that the Fed has failed and can't possibly succeed in inflating a fourth asset bubble. This will unleash a phase shift in the market's belief system that will lead to a conclusion that the only rational strategy is to sell now before the bid disappears entirely. But by then, of course, it's too late, because everyone else will be hitting the 'sell' button at the same time."

U.S. Economy Cooled as G.D.P. Grew at 2.6% Rate in Fourth Quarter -New York Times
"The American economy slowed at the end of 2018 - and there could be a further slowdown to come. Gross domestic product - the broadest measure of goods and services produced in the United States - grew at a 2.6 percent annual rate in the final three months of last year, the Commerce Department said Thursday. That marks a significant slowdown from the middle of the year, when a sugar high fueled by tax cuts and government spending increases briefly pushed growth above 4 percent. This year looks to be off to an even worse start. Many economists expect growth to drop below 2 percent in the first quarter, in part because of the partial government shutdown, which began in December and extended through most of January....'The economy’s already slowing and there are a bunch of reasons why it could slow down even more, and that just makes you vulnerable,' said Mr. Alexander of Nomura. 'It would take less of a shock to push you over the edge' into a recession. It might not even take a shock at all. If businesses and consumers get nervous about the economy, that could set in motion a vicious cycle of reduced spending and job cuts, said Lindsey Piegza, chief economist for the financial services firm Stifel. 'The recession is almost going to sneak up on us,' she said."

Minimum Wage Boosts Are Great - For Robots -Reason
"In recent weeks, Illinois mandated a huge increase in the state minimum wage, Pennsylvania's governor proposed to double his state's minimum wage, and New Mexico lawmakers moved forward with a plan to raise the minimum wage there, too. Hiking the cost of labor is a popular cause once again - even among people who've demonstrated in the past that they know perfectly well this is a recipe for limiting opportunity and trapping people in poverty....'Raising the minimum wage by a substantial amount would price working poor people out of the job market,' wisely editorialized The New York Times back in 1987....'Increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become nonemployed or employed in worse jobs,' Grace Lordan of the London School of Economics and David Neumark of the University of California, Irvine, reported in a paper published last year in Labor Economics.... A few years ago, Momentum Machines was a buzzy startup leveraging the movement to boost minimum wages by promising to replace wage-earners with burger-flipping robots. Now, under the name Creator, the company has opened a high-profile demonstrator restaurant that does just that, with hamburgers cooked and served, untouched by human hands. A few actual people take orders on iPhones and keep the automated burger line stocked with supplies....In New York, where the $15 minimum wage is an accomplished fact, 'advocates for low-wage workers' now push for more rules on scheduling and dismissing fast food workers. That would, it goes without saying, make hiring those workers more expensive. If I was a robot, or if I manufactured them, I'd root for those 'advocates' to succeed."

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Gold last traded at $1,324 an ounce. Silver at $15.81 an ounce.

NEWS SUMMARY: Precious metal prices slipped back Wednesday on profit-taking and a flat dollar. U.S. stocks fell as investors grappled with key testimonies on U.S.-China trade relations, Fed monetary policy as well as a host of geopolitical issues.

Gold To Obliterate $1350 Resistance Level -Seeking Alpha
"Since 2016, gold has been making somewhat of a comeback and is now trading close to $1350/Oz...This resistance level needs to be obliterated with some gusto and gold needs to find the traction to take out the next resistance level which is $1400/Oz before there is more or less a clear run to $1800/Oz and then new all-time highs of $2000/Oz and beyond for gold....A lot depends now on monetary policy easing by the Federal Reserve which would weaken the dollar and due to its inverse relationship with gold, strengthen gold....Central bankers around the world are becoming more and more aware that the recovery in the stock market is coming to an end, so the tendency for them will be to follow the Fed's lead and ease monetary policy. Now is a good time to invest in gold and silver and their associated mining stocks as once this train leaves the station, prices will move quite quickly....This market sector is tiny so when it catches fire and it will, prices will move with considerable rapidity leaving many investors empty-handed, so don’t delay to take a small position now."

Why Socialism Sucks In One Simple Chart -Zero Hedge
"Based on today’s BLS report for CPI price data through December, I’ve updated the chart above with price changes through 2018. During the most recent 21-year period from January 1998 to December 2018, the CPI for All Items increased by exactly 56.0% and the chart displays the relative price increases over that time period for 14 selected consumer goods and services, and for average hourly earnings(wages). Seven of those goods and services have increased more than average inflation, led by hospital services (+211%), college tuition (+183.8%), and college textbooks (+183.6%). Average wages have also increased more than average inflation since January 1998, by 80.2%, indicating an increase in real wages over the last several decades. The other seven price series have declined since January 1998, led by TVs (-97%), toys (-74%), software (-68%) and cell phone service (-53%). The CPI series for new cars, household furnishings (furniture, appliances, window coverings, lamps, dishes, etc.) and clothing have remained relatively flat for the last 21 years while average prices have increased by 56% and wages increased 80.2%. Various observations that have been made about the huge divergence in price patterns over the last several decades include: The greater the degree of government involvement in the provision of a good or service the greater the price increases over time, e.g., hospital and medical costs, college tuition, childcare with both large degrees of government funding/regulation and large price increases vs. software, electronics, toys, cars and clothing with both relatively less government funding/regulation and falling prices. As somebody on Twitter commented: Blue lines = prices subject to free market forces. Red lines = prices subject to regulatory capture by government. Food and drink is debatable either way. Conclusion: remind me why socialism is so great again."

NOTE: As Craig Smith explains in his latest Special Alert, 10 Reasons to Double-Up on Gold in 2019, gold prices have risen 375% over the last 19 years, far outpacing the rising cost of living as well as other asset classes.

Home Assistants with 'Moral AI' Could Call Police on Owners -Breitbart
"The Daily Mail reported that home assistants could soon report their owners to the police for breaking the law based on a 'Moral A.I.' system, if the ideas of academics in Europe are implemented. The newspaper reported that academics at the University of Bergen in Norway discussed the idea of a 'moral A.I.' for smart home assistants, like the Amazon Echo, Google Home, and Apple HomePod, during a conference. Moral A.I. would reportedly make home assistants have to 'decide whether to report their owners for breaking the law,' or whether to stay silent....'Devices would then have an internal discussion about suspect behavior, weighing up conflicting demands between the law and personal freedoms, before arriving at the ‘best’ course of action,' the Mail noted. Home assistants, most notably Google Home and Amazon Echo devices, have been at the center of privacy and security concerns since their release. Amazon Echo devices have been known to scare owners by randomly laughing, and telling one crying woman, 'It’s going to be OK,' after she lost her job....A report last year also indicated that Amazon Echo devices can be hijacked. This month, it was revealed that Google failed to disclose a 'secret' microphone on its home security product Nest Secure. The company’s failure to disclose the microphone was only discovered after Google announced that users 'would now be able to use Google Assistant' on the security devices."

Why older workers are the economy’s hidden asset -Fast Company
"Older Americans are showing plenty of zest for life at work and at home. They aren’t doddering life away as antiquated stereotypes, and tasteless jokes suggest. The swelling numbers of Americans age 50 and older and their experiments in rethinking and reimagining the second half of life will have a profound impact on everyday life in America. An impressive body of scholarly research suggests that, given the opportunity, people in the second half of life can be as creative, innovative, and entrepreneurial as their younger peers, if not more so. Experienced adults are experimenting with different ways to stay attached to the economy, including self-employment, entrepreneurship, full-time jobs, part-time work, flexible employment, and encore careers....'Perhaps the greatest opportunity of the twenty-first century is to envision and create a society that nurtures longer lives not only for the sake of the older generation, but also for the benefit of all age groups – what I call the Third Demographic Dividend,' writes Linda Fried, dean of the Mailman School of Public Health at Columbia University. 'To get there requires a collective grand act of imagination to create a vision for the potential of longer lives.' Fried is spot on....Experienced workers are no longer obsolete. They’re a valuable asset – productive and creative – with older entrepreneurs in the vanguard."

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Gold last traded at $1,328 an ounce. Silver at $15.83 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Tuesday amid Fedspeak and a weaker dollar. U.S. stocks fell following the release of weaker-than-expected Home Depot earnings and a big drop in housing starts.

10 Reasons to Double-Up on Gold in 2019 - Craig R. Smith/Swiss America
"2019 represents a golden opportunity to double-up on your precious metals holdings for many fundamental reasons. Gold prices have quietly crept up over 10% just since November 2018, which may indicate the beginning of a new long-term bull market cycle. Below are ten common sense reasons you should consider adding to your gold holdings this year...1. Rising Political Uncertainty....2. High Stock Market Valuations....3. Institutional & Billionaire Buying....4. Rising Central Bank Purchases....5. Growing International Risks....6. The Rising Cost of Living....7. Increasing U.S. Dollar Weakness....8. The Fed is Out of Bullets....9. Experts Warn of a Recession by 2020....10. Gold is a Proven Safe Haven....Empires and currencies come and go, but gold remains as the truest monetary plumb line over time. This is why it serves as the ultimate safe-haven which becomes even more valuable during times of rising economic turmoil and uncertainty such as we are presently facing. The only question remaining is how much physical gold is right for you? I suggest reviewing your gold holdings with your Swiss America broker. Give them a call at 800-289-2646. Find out how much gold you should consider adding to your portfolio this year - before gold prices begin an even steeper upward trajectory."

Now that Housing Bubble #2 Is Bursting...How Low Will It Go? -Charles Hugh Smith Blog
"There are two generalities that can be applied to all asset bubbles: 1. Bubbles inflate for longer and reach higher levels than most pre-bubble analysts expected. 2. All bubbles burst, despite mantra-like claims that 'this time it's different'. The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise. If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X. If we look at the chart of the Case-Shiller Housing Index, this symmetry is visible in Housing Bubble #1 which skyrocketed from 2003-2007 and burst from 2008-2012. Housing Bubble #1 wasn't allowed to fully retrace the bubble, as the Federal Reserve lowered interest rates to near-zero in 2009 and bought $1+ trillion in sketchy mortgage-backed securities (MBS)....As noted on the chart, this suggests the bubble burst will likely run from 2019-2025, give or take a few quarters. The question is: what's the likely magnitude of the decline? Scenario 1 (blue line) is a symmetrical repeat of Housing Bubble #2: a retrace of the majority of the bubble's rise but not 100%....There is a good case for Scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003. Why is Scenario 2 not just possible but likely? There are no more 'saves' in the Fed's locker. Dropping interest rates to zero and buying another trillion in MBS won't have the same positive effects they had in 2009-2018. Those policies have run their course."

This Stock Market Rally Has Everything, Except Investors -New York Times
"The stock market is off to its best start since 1987, but these investors are expected to dump hundreds of billions of dollars of shares this year. So who is pushing prices higher? In part, the companies themselves. American corporations flush with cash from last year’s tax cuts and a growing economy are buying back their own shares at an extraordinary clip. They have good reason: Buybacks allow them to return cash to shareholders, burnish key measures of financial performance and goose their share prices. The surge in buybacks reflects a fundamental shift in how the market is operating, cementing the position of corporations as the single largest source of demand for American stocks. The binge has helped sustain a bull market approaching its 10th birthday, even in the face of political, international and economic uncertainty....In the fourth quarter last year, American companies bought an estimated $240 billion of their own shares, according to an analysis by the Goldman Sachs team that handles stock buybacks for major companies. That’s nearly 60 percent higher than during the same period in 2017....Traditional investors like mutual funds, pensions, endowments and individuals are expected to be net sellers, parting with roughly $400 billion in shares."

Alexandria Ocasio-Cortez's Green New Deal Could Cost $93 Trillion -Bloomberg
"The so-called Green New Deal may tally between $51 trillion and $93 trillion over 10-years, concludes American Action Forum, which is run by Douglas Holtz-Eakin, who directed the non-partisan CBO from from 2003 to 2005. That includes between $8.3 trillion and $12.3 trillion to meet the plan’s call to eliminate carbon emissions from the power and transportation sectors and between $42.8 trillion and $80.6 trillion for its economic agenda including providing jobs and health care for all. 'The Green New Deal is clearly very expensive,' the group said in its analysis. 'It’s further expansion of the federal government’s role in some of the most basic decisions of daily life, however, would likely have a more lasting and damaging impact than its enormous price tag.'....Representatives of Ocasio-Cortez, a New York Democrat, didn’t immediately respond to a request for comment. Republicans have embraced the sweeping plan because they think they can use it to cast Democrats as extreme, take back seats in Congress and possibly keep the White House in 2020."

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Gold last traded at $1,328 an ounce. Silver at $15.82 an ounce.

NEWS SUMMARY: Precious metal prices traded steady ahead of data on a flat dollar. U.S. stocks rose after President Trump said he would delay placing additional tariffs on Chinese goods.

As Fed Eyes Inflation Overshoot, JPMorgan Likes Gold, TIPS -Bloomberg
"Many assets have been labeled inflation hedgers in market lore, but some of them might not work so well as the Federal Reserve considers trying to let inflation run above target. According to JPMorgan Chase & Co...there are two that stand out as the best choices at the moment. 'TIPS and gold seem like the most durable inflation hedges for a unique macro environment when the Fed’s reaction function isn’t the only regime change impacting real assets,' strategists led by John Normand wrote in a note dated Feb. 22....The Fed appears to be considering trying to let inflation run hotter than its 2 percent target to make up for years below that level, and JPMorgan’s recommendations respond to the 'newish attempts' to generate an overshoot....They like gold on the idea that the Fed will erode real yields to spur the economy, undermining the dollar....'We keep the most durable inflation hedges simple: mainly TIPS and gold,' JPMorgan said."

5 Strong Reasons People Should Sell Their Homes This Year -24/7 Wall Street
"There are two primary schools of thought about the residential housing market in 2019. The first is that there will be a recession. While not as deep as the last one, it will drag down home prices, nevertheless. The second is that the economy will continue to be healthy, albeit growing at a slower rate. Low unemployment and the ongoing benefits of tax cuts and low interest rates will still drive a good housing market over the foreseeable future. Right now, the case to sell a house before the market deteriorates is a strong one. Realtor.com gives five reasons to sell this year: 1. 'You won’t be the only listing for long.' Inventory, scarce for several quarters, is beginning to rise. 2. 'You still stand to make a handsome profit.' While home prices continue to rise, some pending home sales data point to an unsettled future. 3. 'There’s high demand for homes under $300K.' Very simply, for people who want to sell relatively expensive homes, there is a problem. 4. 'Mortgage rates are at a new low.' There was a period that went on for the better part of the last year when it appeared the Federal Reserve would aggressively raise rates to fight inflation. 5. 'Millennials are flooding the market.' This is a cycle that hits when each new generation reaches the point when its members have money to buy a home. However, as strong as these five reasons are, the most powerful one continues to be the next recession, particularly because it could come this year."

Gold Takes a Healthy Breather -Zero Hedge
"Based on what I am seeing today in the data, the balance of probabilities signal a move in Gold back up to the 1360s and 70s, once we hit bottom here shortly...Following that pullback, Gold is likely heading to new highs later this year, as the prospect of new stimulus policies from the Fed, global central banks, and governments around the world become increasingly likely and fiat currencies continue to be devalued en masse, especially the dollar....Personally, I would like to see a healthy pullback to 1280 or further, or at least go sideways for a while...to provide Gold with the energy it needs to take out key resistance at 1377....Funds have gone from short to long at an extremely fast pace, and a short-term reset would be ideal to provide the ammunition to move up to new highs....Central banks are buying Gold at the highest rate since the 1970s. The Fed’s actual reversal to rate cuts and QE is inevitable....Now is the time to be patient once more."

Trump to Delay Tariff Increases on Chinese Imports -Wall Street Journal
"President Trump said Sunday he would delay an increase in tariffs on Chinese goods set to take effect at the end of this week, citing 'substantial progress' on issues including intellectual property and technology transfer after a weekend of talks. In a tweet, Mr. Trump wrote that should progress continue, the U.S. would plan a summit with President Xi Jinping of China to 'conclude an agreement' that would settle a yearlong trade fight between the two nations....U.S. tariffs on $200 billion of Chinese goods had been scheduled to rise to 25% from 10% at 12:01 a.m. Saturday. In recent talks, Beijing offered to increase purchases of U.S. farm and energy products and services, ease restrictions on U.S. firms in financial services and auto manufacturing and improve protection of U.S. intellectual-property rights, according to people briefed on the discussions....'There is still a yawning gap between the two sides on major issues due to U.S. lack of trust in China’s commitments on structural issues and China’s unwillingness to make any fundamental changes to its industrial and economic strategies,' said Cornell University China expert Eswar Prasad....Some in the White House worry that Mr. Trump will be so committed to getting a deal that he will settle for a weak agreement."

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Gold last traded at $1,328 an ounce. Silver at $15.80 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks traded higher as trade talks between the U.S. and China gave investors hope for a deal.

Gold price jumps to 10-month high -Mining
"Institutional and retail investors have piled into gold in recent months. Holdings in global gold-backed ETFs rose 72 tons in January to reach 2,513 tons, hitting the highest levels in nearly six years, according to data from the World Gold Council (WGC). In dollar terms, net inflows in January equaled $3.1B with the value of gold held in ETF vaults reaching just shy of $107B by the end of the month, a 6% increase. January was the fourth consecutive month of net inflows, according to WGC data and thanks to a blockbuster December 2018, 185 tons, or $8B was injected into the scores of funds listed around the world over the past four months. The bullish sentiment is also evident in the results of the survey by the London Bullion Market Association of 30 analysts' predictions for the gold price in 2019. Two-thirds of those polled believed gold will either reach or exceed $1,400 this year. Bloomberg reports analysts at Societe Generale, a French investment bank with a long history of commodity investment, recommend buying both gold and gold mining stocks this year, saying the precious metal should 'break free' in 2019 amid a scarcity of safe havens."

China's social credit system shows its teeth, banning millions from taking flights, trains -South China Morning Post
"Millions of Chinese individuals and businesses have been labelled as untrustworthy on an official blacklist banning them from any number of activities, including accessing financial markets or traveling by air or train, as the use of the government’s social credit system accelerates. The annual blacklist is part of a broader effort to boost 'trustworthiness' in Chinese society and is an extension of China’s social credit system, which is expected to give each of its 1.4 billion citizens a personal score. The social credit system assigns both positive and negative scores for individual or corporate behavior in an attempt to pressure citizens into behaving....Over 3.59 million Chinese enterprises were added to the official creditworthiness blacklist last year, banning them from a series of activities, including bidding on projects, accessing security markets, taking part in land auctions and issuing corporate bonds....About 17.46 million 'discredited' people were restricted from buying plane tickets and 5.47 million were restricted from purchasing high-speed train tickets, the report said....Lawyers worry that the accelerated use of the creditworthiness system will violate an individuals right to privacy. 'Many people cannot pay their debt because they are too poor, but will be subject to this kind of surveillance and this kind of public shaming,' a lawyer said. 'It violates the rights of human beings.'"

Is China Gaming America in the Trade Talks? -New York Times
"U.S. frustrations grow over China trade talks. China’s vice premier, Liu He, is scheduled to hold face-to-face trade talks in Washington today, before attending a meeting with President Trump in the Oval Office. There is still plenty to be discussed. 'The tone of the negotiations between the two nations has grown more stern,' according to Ana Swanson and Alan Rappeport of the NYT, citing unnamed sources. 'American officials have come to realize that China has been repackaging promised reforms and trying to sell them as concessions to Mr. Trump,' which has 'caused deep frustration among the administration’s China hard-liners.' Here are some of the key issues on the table: • Trade deficits. The two nations have 'reached consensus on how to alleviate the trade imbalances,' Reuters reports....• Currency stability. U.S. negotiators are said to be demanding that China stop devaluing its currency as part of a deal....• Enforcement mechanisms. 'Negotiators have struggled this week to overcome differences on specific language to address tough U.S. demands for structural changes in China’s economy.'....'The final terms of the deal are likely to be worked out in a meeting or phone call between Mr. Xi and Mr. Trump himself,' Ms. Swanson and Mr. Rappeport write."

The entire economy is Fyre Festival -Financial Times Alphaville
"Earlier this week I penned a column about the rise of abstract wishy-washy roles in the corporate and start-up space. Things like 'Chief Vision Officer', 'Influencer' and 'Thought Leader'. I equated these roles with the positions of mystics, magicians and warlocks in historic feudal courts and argued they were probably popping up because corporates no longer understood their purpose in society and the marketplace....Critical thinking that challenges the rise of executives who normalize or celebrate such practices is understandably a threat to such business models....The entire economy may indeed be Fyre Festival. It's an argument we've tried to make before, especially with respect to misleading online data metrics and the dangerous economic misallocations they may be encouraging:'...over the past 20 years we have normalized a digital economy that funds itself either by appealing to the sort of investors who will tolerate long-term cash burn if the ultimate pay-off is monopoly control or by creating business models that profit from morally ambiguous situations.' It's an argument BBC documentary-maker Adam Curtis has also been making in films such as Hypernormalisation: 'We live in a world where the powerful deceive us. We know they lie. They know we know they lie. They don't care. We say we care but do nothing.' But perhaps, just perhaps, the trance is finally breaking? And Fyre Festival was the straw that broke the camel's back?"

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Gold last traded at $1,328 an ounce. Silver at $15.80 an ounce.

NEWS SUMMARY: Precious metal prices eased back from 10-month highs Thursday on profit-taking. U.S. stocks backpedaled following the release of disappointing U.S. economic and housing data.

Hedge Funds Coming Off Record Short Could Boost Gold Rally -Bloomberg
"Gold’s recent rally could have further to run if hedge fund managers ramp up bullish bets after last year’s extended big short. The metal soared to a 10-month high of $1,346.80 an ounce on Wednesday as a mounting chorus warn of an imminent slowdown in global growth - yet, the fast money has largely missed this uptrend. On the heels of their record short, money managers remain only modestly allocated to the metal, according to futures positioning data from the end of January, delayed by the recent U.S. government shutdown....Heavyweight commodity analysts like those at Societe Generale SA have recommended buying both gold and miners this year, saying the metal should 'break free' in 2019 amid a scarcity of havens. A dovish Federal Reserve and central-bank buying are also providing bulls with fodder."

Socialism, Some Thoughts on its Eternal Appeal -AEI.org
"I’ve lately been recording and watching episodes of the fascinating CNBC series 'American Greed.' I’ve noticed a common theme in these episodes, and perhaps that theme is one explanation for the eternal fascination with, and perpetual attraction to, the fantasies of 'getting something for nothing' and 'prosperity for everybody without sacrifice' known as 'democratic socialism.' As I wrote in my 1995 article 'Why Socialism Failed': 'Socialism is the Big Lie of the Twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny...The temptress of socialism is constantly luring us with the offer: give up a little of your freedom and I will give you a little more security. As the experience of this century has demonstrated, the bargain is tempting but never pays off. We end up losing both our freedom and our security.'....Like the con artists profiled on American Greed (now mostly incarcerated) the 'democratic socialists' of today, like Bernie Sanders, Elizabeth Warren, and AOC, are trying to sell you 'the economic snake oil of socialism' that is as worthless and bankrupt in the long run as the numerous Ponzi schemes being profiled regularly on American Greed that leave investors penniless.....The temptation of both Ponzi schemes and socialism is based on two seductive factors common to both fantasies: a) the initial success of both Ponzi schemes (early investors temporarily get high returns in the beginning of the financial con job/flim-flam) and socialism, and b) the attraction of both myths of getting something for nothing, i.e., they are both 'get rich quick schemes,' or 'get rich at the expense of somebody else schemes.' So if thousand of financially successful Americans with a lifetime of work experience and millions of dollars in savings fall for financial Ponzi schemes so regularly on the American Greed TV series, is is any wonder that millions of millennials with limited life experience and limited financial savings are now falling for the economic snake oil and economic Ponzi scheme known as 'democratic socialism' being peddled today by AOC, Warren, and Sanders?"

US existing home sales fall sharply to 3-year low -CNBC
"U.S. home sales fell in January to their lowest level in more than three years and house prices rose only modestly, suggesting a further loss of momentum in the housing market. The National Association of Realtors said on Thursday existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month. That was the lowest level since November 2015 and well below analysts' expectations of a rate of 5.0 million units....The drop in January came after months of weakness in the U.S. housing market. Existing home sales were down 8.5 percent from a year ago. The U.S. housing market has been stymied by a sharp rise in mortgage rates since 2016 as well as land and labor shortages. That has led to tight inventory and more expensive homes. Last month, existing home sales fell in three of the country's four major regions, rising only in the Northeast."

Chinese hackers are ramping up attacks on US companies -CNN Business
"Hackers in China have significantly stepped up attacks on US companies as the two countries have clashed over trade and technology. Top cybersecurity firm CrowdStrike saw 'a big resurgence' last year in efforts by China-based groups to break into the systems of American businesses for commercial gain - a trend that 'shows no sign of stopping,' said Michael Sentonas, the company's vice president of security technology. The spike in attacks on US targets - which include telecom operators, pharmaceutical firms and hotel chains - is 'likely tied to increased tensions between the two countries,' CrowdStrike said in a report published Tuesday. The Chinese government has repeatedly denied any involvement in cyberattacks. Even after US President Donald Trump and Chinese leader Xi Jinping agreed to a truce in the trade war in December, the American government continued to pressure Beijing on cybertheft....Hackers in China are showing particular interest in targeting telecommunications operators around the world. That's a sensitive issue a time when many governments, under pressure from the United States, are debating whether using Huawei equipment in next-generation wireless networks poses a security risk."

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Gold last traded at $1,347 an ounce. Silver at $16.17 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on momentum buying and dollar weakness. U.S. stocks traded mostly flat as investors awaited the release of a summary from the Federal Reserve's meeting in January.

Gold Is Having a Great Run -Barrons
"Gold prices on Tuesday staged their biggest gain since last November, with Comex futures jumping $22 an ounce, or 1.67%, to $1,340. Gold’s advance has come in the face of the continued rally in stocks and other risky assets - instead of moving in the opposite direction of those investments. Since Barron’s first noted the nascent strength in the metal last September, gold is up from around $1,200 an ounce. Trey Reik, senior portfolio manager at Sprott Asset Management, says gold’s steady rise reflects the market’s recognition that the Federal Reserve will not raise interest rates further and will end the contraction of the balance sheet. He contends gold investors anticipated the central bank’s pivot, first enunciated by Fed Chairman Jerome Powell on Jan. 4. Since then, both financial assets and gold have been lifted by the Fed’s pause. In addition, Reik said, given the much smaller size of the markets for gold and mining stocks, it doesn’t take more than a few money managers adding a bit of these investments to their portfolios to give bullion and gold stocks a lift. Finally, the dollar has been easing after having initially rallied in tandem with the U.S. stock market since the end of 2018."

The Unrealistic Economics of the Green New Deal -Wall Street Journal
"The Green New Deal that some Democrats unveiled last week is actually two deals: one to combat global warming, another to create millions of well-paid jobs for targeted groups. Individually, both goals have their merits. But by combining them, the Green New Deal promises to make climate mitigation both absurdly expensive and deeply partisan and is thus more likely to set back than advance the climate cause....Consider its goal of massive public investment to achieve 100% renewable energy in as little as 10 years. Kevin Book, head of research at ClearView Energy Partners, a research firm, estimates replacing the 83% of current U.S. generation that is not renewable with solar photovoltaic, wind and biomass would cost $2.9 trillion - nearly a full year’s tax revenue. This excludes any cost for interest, operations, maintenance, new transmission lines or compensation to private investors for writing off natural-gas and coal plants with plenty of useful life left. It assumes cheap battery storage that doesn’t yet exist. Even so, this works out to $83 to avoid one metric ton of carbon dioxide. The Green New Deal’s plan to upgrade every building in the U.S. to 'maximum energy efficiency' is even more questionable....What the U.S. needs is the Green New Deal’s sense of urgency combined with market mechanisms that incentivize carbon reduction at the lowest price, such as a carbon tax, carbon credits or tradable emission permits."

Russia to China: Together we can rule the world -Politico
"In the halls of the Kremlin these days, it’s all about China - and whether or not Moscow can convince Beijing to form an alliance against the West. Russia’s obsession with a potential alliance with China was already obvious at the Valdai Discussion Club, an annual gathering of Russia’s biggest foreign policy minds, in 2017. At their next meeting, late last year, the idea seemed to move from the speculative to something Russia wants to realize. And soon....Russia’s view of China has shifted significantly over the past five years. Moscow has abandoned any hope that the Chinese economy is an example it might emulate. Instead, foreign policy experts now talk of how Russia can use China to further its geopolitical goals. There was no doubt at Valdai that China knows how to do economic growth, and that Russia does not....Seen from Moscow, there is no resistance left to a new alliance led by China. And now that Washington has imposed tariffs on Chinese exports, Russia hopes China will finally understand that its problem is Washington, not Moscow....This alliance, if it becomes concrete, would overturn how we do global politics. Imagine an international crisis in which Russia and China suddenly emerge as a single bloc."

A Nation of Weavers -Brooks/New York Times
"The social renaissance is happening from the ground up....Our lack of healthy connection to each other, our inability to see the full dignity of each other, and the resulting culture of fear, distrust, tribalism, shaming and strife....This problem is being solved by people around the country, at the local level, who are building community and weaving the social fabric...This is a movement that doesn’t know it’s a movement....We’re living with the excesses of 60 years of hyperindividualism...We are born into relationships, and the measure of our life is in the quality of our relationships. We precedes me....The trait that leaps out above all others is 'radical mutuality': We are all completely equal, regardless of where society ranks us. 'I am broken; I need others to survive,' an afterschool program leader in Houston told us. 'We don’t do things for people. We don’t do things to people. We do things with people,' said a woman who builds community for teenagers in New Orleans....Declare your own personal declaration of interdependence and decide to become a Weaver instead of a ripper. Every time you assault and stereotype a person, you’ve ripped the social fabric. Every time you see that person deeply and make him or her feel known, you’ve woven it."

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Gold last traded at $1,344 an ounce. Silver at $15.97 an ounce.

NEWS SUMMARY: Precious metal prices rose to 10-month highs Tuesday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed amid ongoing geopolitical worry and China trade negotiations.

Investors Sound Warning About Markets’ Complacency on Interest Rates -Wall Street Journal
"Stocks and bonds are rising on bets that the Federal Reserve has ended its nearly four-year campaign of interest-rate increases, worrying investors who believe the central bank could upend those expectations later this year....Some believe the Fed’s next move could be to cut the benchmark short-term rate, something it hasn’t done since December 2008, when the global financial crisis forced the central bank to slash rates to near zero. The shift is unsettling some investors who believe that much of this year’s rebound across stocks and bonds has been fueled by bets that the Fed won’t raise rates again in the foreseeable future....'China is probably going to get worse before it gets better, and the U.S. will feel that slowdown,' said Andrea Cicione, head of macro strategy at TS Lombard, who believes the Fed is likely to lower rates by the end of the year."

When trouble strikes, where should you hide? The case for gold -The Economist
"Imagine the world economy goes into a tailspin. There is panic selling of risky assets. Where should you seek safety? Cash is the most liquid asset; but which kind? The dollar is a natural focal point. Yet America’s fiscal indiscipline and its sizeable current-account deficit might give pause. Other currencies have their faults, too. There is one other destination you might consider, if only because others are starting to think the same way. And that is gold....Gold keeps some strange company. Ardent gold bugs seem to know a lot about firearms, the best places with access to fresh water and the best ways to preserve food....Consider the alternatives, though. The euro is flawed. It has no unique sovereign issuer to stand behind it. And the yuan is not a currency you can trade easily....And the dollar? As a global currency it has no peers. During the last big crisis, in 2008, the dollar rallied...Tellingly, the managers of those rainy-day funds seem a mite concerned that they are crammed into the same spot. The dollar’s central role in global trade and finance allows America to impose financial sanctions to great effect. It has been doing so with greater frequency, so Russia, for instance, has drastically cut the dollar share of its reserves, to 22%, while raising the shares of euros and yuan. Russia has been a big buyer of gold, too. In that, it is not alone. Net purchases of gold by central banks rose by 74% last year to the highest since 1971, the year the dollar’s peg to the gold price broke. Now, as then, there are growing concerns that the dollar is a crowded trade... It is why gold is starting to appeal again as a spot to converge upon."

Only A Matter Of Time Before Gold Beats The U.S. Dollar -Analysts/Kitco
"Commodity analysts have noted that gold’s recent bullish moves are impressive, as they have been made in the face of continued U.S. dollar strength...Gold has managed to hold above the critical psychological level at $1,300 an ounce. April gold futures last traded at $1,323.90 an ounce, slightly up from last Friday’s settlement price....While it’s not uncommon for the U.S. dollar and gold to rally together, the trend has never proven sustainable. Looking ahead, many analysts think that gold will eventually beat the U.S. dollar. Eugene Weinberg, head of commodity research at Commerzbank, said that he sees growing headwinds for the U.S. dollar, which will continue to benefit gold. 'There are a number of factors weighing on the U.S. dollar: growing recession fears, weaker manufacturing data and a Federal Reserve that will not be raising interest rates anytime soon,' he said....Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that he also sees the recent rally in equity markets supporting the U.S. dollar, but this will only prove to be a limited catalyst. 'The dollar is on thinner ice, in our view, with its primary remaining support factor - the outperforming stock market - running into layers of resistance,' he said in a report Friday."

For retailers who say "no cash" Philadelphia says no dice: bill bans cards only -USA Today
"Philadelphia's city council voted Thursday to require most local businesses to accept cash as payment, pushing back on a growing trend in which restaurants and retailers accept credit and debit cards only. 'There's a reasonable segment of people who wouldn't be able to patronize those stores because they don't have any kind of credit or debit card,' said Councilman Bill Greenlee, who introduced the bill. 'It's setting up an us and them kind of situation . . .And those people tend to be a little lower income, and also minority and immigrant. I don't think that's the kind of message we want to be sending.' Mayor Jim Kenney is reviewing the bill, says Lauren Cox, a spokeswoman for the administration....A rising number of retailers are cutting out cash to speed up transactions, reduce the chance of theft, and accommodate the increased use of credit and debit cards, as well as digital wallets like Apple Pay and Google Pay, to buy services and products. Cash purchases were down to thirty percent of all retail transactions as of last year compared to 40 percent in 2012, according to IHL and the Federal Reserve."

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Gold last traded at $1,324 an ounce. Silver at $15.75 an ounce.

NEWS SUMMARY: Precious metal prices rose to two-week highs Friday despite a firmer dollar. U.S. stocks surged amid increasing hopes for a U.S.-China trade deal and equities were on pace to post their 8th weekly gain.

Gold hits two-week high as weak U.S. data lifts likelihood of Fed pause -Reuters
"Gold rose to its highest in two weeks on Friday after weak U.S. economic data compounded concern over a global slowdown and dialed down the chances of the U.S. Federal Reserve raising interest rates this year. 'The weak retail sales data from the U.S. in the previous session falls in line with general expectations that the Fed will not be pushing through with monetary tightening as hard as they were planning,' said SP Angel analyst Sergey Raevskiy. Gold gained 0.5 percent in the previous session after weak U.S. retail sales data, along with soft inflation numbers on Wednesday, added to disquiet about slowing growth, which could allow the Fed to hold interest rates steady for a while. The disappointing U.S. data followed a spate of weak economic reports from China and Europe. This helped gold to hold its ground amid a slight rebound in the dollar."

Guess Who's Buying Gold? -Zero Hedge
"Over the long-run, I contend something has changed in the gold market. Something we should all be paying attention to....Gold is not going up because of US dollar weakness - it’s going up in real terms. The question is why? There is little doubt that the dovish tilt by Powell has helped gold, but if you look at when the rally started, it was way before his post-Christmas cave....Central Bank buying up 74% year-over-year! Highest annual net purchases since Nixon closed the gold window! These are some astounding figures that few are talking about....For the past eight years Central Banks have been hoovering gold faster than Lindsey Lohan downs greyhounds at her LL vodka launch party....Yeah, yeah, I know. Gold is a barbarous relic that has no economic value. Well, just don’t tell that to the Central Bankers who are loading up their vaults with it."

Trump Declares Emergency Over Border Wall -Wall Street Journal
"President Trump declared a national emergency to bolster his border-wall plans, he said Friday, supplementing the funding contained in a spending bill passed by Congress with billions in additional funds diverted from elsewhere in the government. The moves stave off a second government shutdown but have ignited a new battle over the legality of his border-spending ambitions. Speaking in the Rose Garden, Mr. Trump said a border wall was key to national security. 'We’re talking about an invasion of our country,' he said. The House approved the spending bill late Thursday, hours after its passage in the Senate, sending the legislation to the president’s desk. The $333 billion package of seven spending bills includes $1.38 billion in funding for 55 new miles of physical barriers....Federal law doesn’t define an emergency. The first formal emergency proclamation was issued by President Wilson in 1917....There are currently 30 national emergencies in effect, including those related to the Sept. 11, 2001, terrorist attacks and the Iraq war. President George W. Bush declared 13 national emergencies, and President Obama declared 12."

New York Could Have Avoided Amazon HQ2 Heartbreak -Bloomberg
"How romantic. Amazon chose Valentine’s Day to break off its engagement with New York City, announcing that it has withdrawn plans to build a sprawling corporate campus in Queens. In truth, who could blame one of the world’s most valuable companies from feeling spurned? It promised a long-term relationship: as many as 40,000 jobs with an average salary of $150,000 over the course of two decades. And what did it get in return? A chilly response. There were objections from citizens, politicians and neighborhood groups to the $3 billion in subsidies the city and state were offering the company. There were fears that affordable neighborhoods would suddenly become out of reach for New York’s struggling middle class....Some of these concerns were reasonable; all of them could have been addressed and resolved with smarter management and better leadership....A word to the leaders who are trumpeting Amazon’s withdrawal: The city now has a reduced capacity to improve education, housing, health care and more. These are all services that Amazon’s presence would have supported. When they are constrained, the effects fall most heavily on the less fortunate....This is an unhappy day for New York - and potentially an ominous one. Tech-world entrepreneurs are going to think twice before considering a relationship with the city, questioning its steadfastness and commitment. HQ2 is no more. All cities should learn from this breakup."

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Gold last traded at $1,314 an ounce. Silver at $15.52 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying despite a firmer dollar. U.S. stocks fell following the weakest retail sales data in a decade as well as uncertainty around U.S.-China trade talks.

Gold rises on hopes of Fed pause; trade talks in focus -Reuters
"Gold prices edged higher on Thursday as soft U.S. inflation data raised expectations that the Federal Reserve will pause rate hikes this year, while investors were looking for developments in trade talks between Washington and Beijing....U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Federal Reserve to hold interest rates steady for a while. Gold prices have risen nearly 13 percent since touching more than 1-1/2-year lows in mid-August, mostly on expectations of a pause in interest rate hikes and tumultuous stock markets."

Reflections On Capitalism And The Morality Of It with Craig R. Smith -The Wealth Standard
"Capitalism seems to have more bad than good reputation among people. Breaking down some reasons why it is misrepresented is Chairman of Swiss America Trading Corporation, Craig R. Smith. He gives his thoughts about capitalism and the relevance of money in a laissez-faire capitalist society. He talks about China, the government, and what they have been doing to the markets. Helping those who are still grappling with the monetary system, Craig defines sound money and why it is important. He also reflects about humanity, equality, and where we are headed in the next ten years with our current situation. Ultimately, amidst everything going on in politics, he reminds us how we, the people, are the government."

Is the Fed Insolvent? -New York Sun
"Is the United States Federal Reserve, central bank to the greatest economy in the history of the world, insolvent? Technically it is, writes James Grant in the latest number of his famed newsletter, Grant’s Interest Rate Observer....Mr. Grant, who holds an honorary doctorate in acerbic studies, has pressed this point in an open letter to Wm. C. Dudley, who was until recently the president of the New York Federal Reserve Bank. Mr. Grant was moved to write by an op-ed that Mr. Dudley wrote and that appears on Bloomberg under the headline 'Let’s Stop Worrying About the Fed’s Balance Sheet.'....The reason we’re not supposed to worry about it, after all, is because we live in the age of fiat money. Or irredeemable electronic paper ticket legal tender...Such scrip enables the central bank to print endless amounts of money to cover its largesse. The scale of this was described in an article by Alex Pollock in American Banker. Mr. Grant cites the piece, which notes that in December the Fed disclosed that it had, as Mr. Pollock put it, '$66 billion in unrealized losses on its portfolio of long-term mortgage securities and bonds (its quantitative easing, or QE, investments), as of the end of September.' That amounts, Mr. Pollock notes, to '170% of the Fed’s capital' and means 'on a mark-to-market basis' that 'the Fed had a net worth of negative $27 billion.' If long-term interest rates rise by 1%, Mr. Pollock estimates, 'the Fed’s mark-to-market loss would grow by $200 billion more.'....Mr. Grant...ends his piece with an expression of admiration for the classical gold standard. He quotes a study from the Fed itself that, in 1959, suggested that under the gold standard, as Mr. Grant summarized, 'a currency derived its strength from the integrity of the balance sheet of the central bank that issued it.'"

The new millennial retirement dream -Fox Business
"The traditional view of retirement needs to be rebooted...For the largest generation in the U.S. workforce, the idea of completely stopping work in your golden years seems outdated....Instead of retirement being a singular stopping point, millennials see it as a fluid and longer lasting life stage. And they don’t see the benefit of deferring pleasure until you reach a certain age, when the benefits aren’t guaranteed. Millennials view retirement not as a number, but as a life stage. They want the ability to travel more, donate both time and money to charities and enjoy experiential purchases throughout their working years, thus reaping a higher return on their investment. In retirement, millennials envision switching from their career income to an income that will supplement their desired lifestyle. They want to pursue passion projects, explore hobbies, engage in activist opportunities and monetize their skills. This new definition of retirement is already motivating many millennials to start saving."

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Gold last traded at $1,315 an ounce. Silver at $15.65 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and dollar volatility. U.S. stocks rose on investor hopes that Chinese and U.S. trade authorities would reach an agreement before a March 2nd deadline.

Government debt, a real crisis -Rahn/Washington Times
"There is a real crisis that is much more likely to adversely affect most people’s lives much sooner and with greater consequences than climate change, and that is the rise in government debt as a percentage of GDP in many of the major countries. For an individual or private business that has a debt burden and an interest payment burden growing faster than net income, eventually, there will be a day of reckoning. This will necessitate a cut of expenditures until their spending - after payment for interest and principal on their debt - is no greater than income. There is also a day of reckoning for governments that take on too much debt. At some point, interest payments take a higher and higher percentage of government outlays....In 2015, interest payments on the debt amounted to 6 percent of U.S. federal government spending. This year they will be 8.5 percent, and in four years (2023) they are projected to rise to 12 percent. As bad as the situation is in the United States, it is much worse in Japan, Italy and France....Both political parties in the United States are in denial. Some Democrats have proposed trillions of dollars in new spending - for free medical care, education, a guaranteed income, etc., etc. - moving the day of reckoning closer....The real crisis is the failure of too many in the global political class and their media enablers to admit to the public that they are spending addicts, and their refusal to go into fiscal rehab."

Gold Bulls Are Everywhere -Kitco
"The consensus on gold is that interest is back. Experts on the Ultimate Gold Panel at the Vancouver Resource Investment Conference unanimously agreed that sentiment on the precious metals has turned more bullish. With central banks like China buying gold for the first time in years and funds that were previously not interested in gold starting to add the metal to their portfolio, investors have been showing more confidence. Frank Holmes, CEO of U.S. Global Investors, noted that gold is benefiting from the 'great unwind' of quantitative easing, which has created a cascade of tailwinds for gold. 'This QE unwinding is so disruptive to the stock market, and you could see that when QE3 came in, all of a sudden gold was not moving with this debt creation, and now it is. We also have the trade wars, and the concern that rates are peaking and they’re going to fall, the dollar will fall dramatically, and like in a blink of an eye, gold will be $1,500 or $1,600 [an ounce],' Holmes said. Peter Hug, Global Trading Director of Kitco Metals, pointed out that while investors are concerned gold has not been moving to all-time highs, like $1,900 an ounce, long-term investors of gold would have realized a steady annual rate of return had they held the yellow metal."

Coming Downturn. Cranking Leverage. What Could Go Wrong? -Institutional Investor
"Private equity firms have a gloomy view of the markets, but deal activity is strong - and they’re still leveraging up their portfolio companies. According to a survey released today by advisory firm BDO, 89 percent of private equity respondents said they expect a long downturn in the next two years, with almost a quarter of those expecting a correction in the next six to twelve months....And they're still in love with leverage. In this year’s survey, BDO asked private equity firms for the first time about debt and new companies. About one-third of sponsors said they’re putting more debt on new companies, while one-quarter say they’re using average leverage, in the range of two to three times EBITA....'Debt markets remain strong despite nerves around a recession and leverage is still very much on offer,' wrote the report’s authors. 'But to survive the next recession, PE firms will need to take a more conservative approach to structuring deals and sensitize acquisitions towards a recession scenario.'"

After El Chapo conviction, use seized $14 BILLION to build border wall? -American Mirror
"Could El Chapo’s seized drug money be used to build the border wall? That’s one of the questions many are asking on Tuesday following news of the former drug kingpin being found guilty on all counts. Mexico’s most notorious drug kingpin, Joaquin 'El Chapo' Guzman, will spend the rest of his life in prison after a jury found him guilty on all 10 counts following a three month trial. According to Breitbart, the United States has seized $14 billion from the former drug lord, which gave Sen. Ted Cruz a brilliant idea. The Texas Republican introduced the Ensuring Lawful Collection of Hidden Assets to Provide Order (EL CHAPO) Act in April 2017, which calls for the use of the $14 billion seized from the cartel drug lord to be used to pay for the wall. 'Fourteen billion dollars will go a long way toward building a wall that will keep Americans safe and hinder the illegal flow of drugs, weapons, and individuals across our southern border,' Cruz said in a statement. El Chapo’s $14 billion would fund well over half of the proposed wall along the southern border between the U.S. and Mexico."

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Gold last traded at $1,314 an ounce. Silver at $15.70 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks rose amid news that U.S. lawmakers had secured a tentative deal on border security funding and upbeat hopes for U.S.-China trade deal.

Wall Street firm says there is now a 'strong case' for gold over bonds, stocks -CNBC
"As recession fears rise, Bernstein is suggesting investors look to gold and gold mining stocks to reduce risk. The firm's global quantitative trading strategy group on Monday sent a note titled 'a strong case for holding gold.' 'We show that from current equity valuations and from similar points in previous cycles gold and equities give more similar returns ... [to] risk assets such as equities,' Bernstein said. 'A material shift in geopolitical risk and a near-record build up in government debt make other potential risk-free assets more questionable and also bring a temptation to create inflation, thereby further enhancing the case for gold,' the note added. The current geopolitical environment is heading toward a period in which neither stocks nor bonds will work - therefore pushing investors to gold, Bernstein said."

We're Overdue for a Sell-Everything/No-Fed-Rescue Recession -Smith/Of Two Minds
"Central banks, like generals, always fight the last war - until the war is lost. The global economy is careening into recession (call it a 'slowdown' if you are employed by the Corporate-State Media), and while we don't yet know just how deep and wide this recession will be, we can make an educated guess that it won't be a repeat of any of the previous five recessions: 1973-74, 1981-82, 1990-91, 2001-02 or 2008-09. Recessions triggered by energy or financial crises tend to be short and shallow as the crisis soon eases; recessions caused by structural imbalances tend to be enduringly brutal....No longer content with blowing one credit-speculative bubble at a time, central bankers coordinated their efforts in 2009-2018 and inflated the Everything Bubble. But the Everything Bubble didn't resolve or even address the multiple structural imbalances in the U.S. and global economies; it merely papered them over with a triple-whammy credit-speculative orgy of unprecedented enormity....The instabilities and imbalances of economies can be papered over with debt for a time, but debt and financialization tricks don't actually fix what's broken - they make the problems worse. Welcome to the recession of 2019-2021, when central bank policies are finally revealed as the source of half our problems rather than the solution. We're way overdue for a sell-everything recession, one that the Fed will only make worse by pursuing its usual policies of lowering interest rates and goosing easy money. The structural problems are now acute, and giving more free money to financiers and politically powerful corporations isn't going to fix what's broken in the U.S. economy."

Lawmakers Reach Agreement in Principle to Fund Border Security, Avoid Shutdown -Wall Street Journal
"Senior lawmakers said Monday night they had reached an agreement in principle on a sweeping deal to end a monthslong fight over border security and avoid a partial government shutdown this weekend...The deal would include $1.38 billion for 55 miles of modern physical barriers along the border with Mexico, according to congressional aides from both parties. The deal gives both parties something they had sought. Democrats kept funding for physical barriers along the border far below President Trump’s request. But Republicans blocked Democrats' efforts to place certain limits on detention beds, an issue that had derailed the talks over the weekend....'We reached an agreement in principle between us on Homeland Security and the other six bills,' Mr. Shelby said. 'Our staffs are going to be working feverishly to put all of the particulars together.'....Lawmakers said they expected the agreement could be written into legislation that could pass both chambers of Congress before the Friday midnight deadline, avoiding a second partial government shutdown. The biggest question is likely to be whether Mr. Trump will sign the congressional deal. Mr. Trump had sought $5.7 billion to build a border wall and the agreement’s funding is far lower than that."

The Looming Entitlement Problem Is Bipartisan -Samuelson/Real Clear Markets
"One of the great challenges of our time is to prevent Social Security and other programs for the elderly from taking over the national government. It may already be too late. Recently, the Congressional Budget Office reported that federal spending on the 65-plus population now amounts to 40% of non-interest outlays, up from 35% in 2005. By 2029, the CBO projects it to be 50%....By the CBO's math, two-thirds of the projected growth in federal spending over the next decade, after adjustment for inflation, will stem from programs for the elderly - mostly Social Security and Medicare, but also long-term nursing home care under Medicaid and civil-service retirement. Against that backdrop, raising Social Security benefits would seem a non-starter. Guess again. Congressional Democrats have proposed legislation to increase spending....There are roughly 50 million Americans 65 and over. In a population so large, there are bound to be some Americans who are in dire straits because they don't have retirement savings or have retirement plans that are tragically underfunded. There may be targeted remedies that can help them. But the notion that there is pervasive poverty among older Americans is a political fantasy that is used to justify spending that, as a society, we cannot afford....It is conventional wisdom in Washington that the Republican addiction to tax cuts is mainly responsible for the huge budget deficits. This is, at best, a half-truth. Democrats are equally responsible, because they refuse to come to grips with the massive spending on retirement and health care. Expanding Social Security is mostly a political bribe that comes at the expense of other programs and workers, who must pay the resulting taxes."

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Gold last traded at $1,312 an ounce. Silver at $15.69 an ounce.

NEWS SUMMARY: Precious metal prices eased Monday on a firmer dollar. U.S. stocks wobbled as investors weighed the possibility of the U.S. and China striking a deal to end the ongoing tariff war.

3 Reasons to Buy Gold Here -The Street
"Wobbly stock prices are sending many panicked people running scared for gold, sending prices for the yellow metal soaring. Savvy investors should follow suit. Arthur Hogan, chief market strategist at New York City-based investment bank broker-dealer National Securities, says gold is rallying because 'investor appetite for risk is reduced.' He sees three reasons for that: 1. Geopolitical Risk. The U.S. trade war with China, the humanitarian crisis in Venezuela, and Britain's planned Brexit from the European Union are three examples of this. Each raises uncertainty for investors about the future, and that tends to make them anxious. 2. High Stock Valuations. Investors are also increasingly wary of the stock market that's pricey relative to projected earnings. So, some investors are cashing in at least part of their stock holdings and sending some of the proceeds to gold funds. 3. The Federal Reserve. Hogan says the Fed also seems to be at 'an inflection point' when it comes to U.S. interest rates. He notes that the investment community went from expecting the Fed to boost rates multiple times this year to now perhaps making no increases in 2019....Add it all up and it probably makes sense for small investors to follow the lead of professional investors and buy some gold. After all, gold is like life insurance for your portfolio....Most investment strategists suggest somewhere making gold 5% to 15% of portfolio's value."

Dow Rises for Seven Straight Weeks -Fox News
Swiss America chairman Craig R. Smith was a guest with Neil Cavuto/Fox News on Friday discussing the stocks market's resiliency given the increased uncertainty over whether or not the U.S. can negotiate an acceptable China trade agreement prior to the March 2 tariff deadline.

A looming retirement crisis threatens us and future generations -CNBC
"Every day, millions of Americans go to their jobs, work hard, and play by the rules to pay the bills and put food on the table each night. But they often struggle to then find any way to save for retirement. Currently, almost half of all American families do not have any retirement savings. That's a time bomb waiting to go off....We face a looming retirement crisis that will impact millions of elderly and soon-to-be elderly Americans, as well as our children and grandchildren who will have to bail out those generations....How we will afford to care for older Americans when most American families have no or very little retirement savings? First, individuals and families must make saving for retirement a priority....Second, Congress must act as well. This retirement crisis is not news for policy makers. The dirty little secret is that government can provide all the incentives in the world for workers and families to save for retirement. But none of it will matter unless those workers and families make saving for retirement a priority as well."

The Enduring Power of Connecting The Generations -Book Review/Medium
“For the first time in American history we now have more older people than younger ones in America....'1 in 3 Babies Born Today Will Live to 100,' reads a Prudential insurance billboard…'Let’s get ready for a longer retirement,' says the tagline....'How To Live Forever' by Marc Freedman offers readers a preview into this brave new intergenerational future where the gifts and talents of an aging population fit hand-in-glove to meet the needs of a younger generation seeking the encouragement of true mentors. Author and founder of Encore.org Marc Freedman presents an impassioned call to readers to accept the longevity decades now opening up between midlife and old age as an entirely new stage of life, which he dubs the 'encore' years. Freedman feels strongly that modern American culture has been age-segregated for far too long, which has stunted a deeply rooted instinct to connect the generational chain. Surveys show a high degree of mutual respect exists between boomers and millennials. Marc encourages boomers to 'resist the mandate to go off in pursuit of their own second childhood. Instead of trying to be young, we should focus on being there for those who actually are [young].' In the eight short chapters that follow Freedman unpacks how and why 'Age Apartheid' is hindering both young and old and then offers readers scores of examples of courageous age-connecting models that are popping up all over the nation and the world thanks to intentional, innovative grassroots efforts....'Planting, tending, bequeathing to the next generation - it’s an essential human project, one we’ve long understood yet let slip over the past half century…The real fountain of youth is the fountain with youth. And the only true way to live forever is to live together…'"

Learn more about how owning physical gold and silver can help you prepare for your "golden years" in Swiss America's 2019 Real Money Perspectives Newsletter. Call 800-289-2646 to request a free copy or register HERE.

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Gold last traded at $1,318 an ounce. Silver at $15.80 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a flat dollar. U.S. stocks fell as investors worried about ongoing U.S.-China trade negotiations as well as slowing economic growth.

Gold is back in fashion -Moneyweek
"Base metals prices are likely to weaken as the Chinese economy keeps slowing. The gold price rebound, however - the yellow metal is now above $1,300 for the first time since last summer - does look sustainable. One source of demand is central banks, who, according to the World Gold Council, haven’t been buying this much gold since the world came off the gold standard in 1971, says Henry Sanderson in the Financial Times....The key theme here is a need (especially among emerging- market central banks) to diversify currency reserves away from dollars, to which they tend to be highly exposed. This has been the case for several years, but geopolitical tension seems to have accelerated the trend. There should be plenty more demand from this source over the longer term....Gold’s reputation as a safe haven is also coming to the fore now that markets have become more volatile and the political backdrop less predictable....The possible return of inflation is another reason to hold gold."

If people knew the actual inflation rate, it would implode the entire system -Smith/The Daily Reckoning
"Our real-world experience tells us the official inflation rate doesn't reflect the actual cost increases of everything from burritos to healthcare. In our household, we measure inflation with the Burrito Index: How much has the cost of a regular burrito at our favorite taco truck gone up? The cost of a regular burrito from our local taco truck has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016. That's a $160% increase since 2001...If the Burrito Index had tracked official inflation, the burrito at our truck should cost $3.38 - up only 35% from 2001. Compare that to today's actual cost of $6.50 - almost double what it 'should cost' according to official inflation calculations....The takeaway? Our money is losing its purchasing power much faster than the government would like us to believe....The grim reality is that real inflation is 7+% per year....Here are a few of the consequences: 1. Social Security beneficiaries would demand annual increases of 7+% instead of zero or near-zero annual increases....2. Global investors might start demanding yields on Treasury bonds that are above the real rate of inflation....3. Private-sector interest rates would also rise, crushing private borrowing....4. Any serious decline in private and state borrowing would implode the entire system."

Stamp Price Index: Further evidence that the true rate of inflation is at least three times higher than the official CPI Index is reflected in the price of a postage stamp; which is supposed to reflect only the government's pure increase in the cost of living. As the chart illustrates the price of a U.S. first class stamp has risen from $.47 in May 2016 to $.55 in January 2019 - and increase of 16.2%, or 6.48% per year - which is a far cry from the official 2% CPI. Another example is the price of gold, which has risen from $300/oz. in 2000 to over $1,300/oz. in 2019, which is an average increase of 10% per year. This illustrates why gold is a trusted safe haven which outpaces the rising cost of living.

What Will Trigger the Next Crisis? -Wall Street Journal
"The biggest distortion in global markets is also the most important. Rock-bottom interest rates, driven by central banks to allow economies to heal, have encouraged risk-taking. Barring a downturn, interest rates will rise in most of the world, and rising interest rates always expose cracks in the financial system. That was clear in February when a slight uptick in U.S. inflation expectations sent rates higher and ultimately caused the implosion of a multibillion-dollar fund that bet against market volatility....Higher rates have typically pushed down stocks and commodities. In a crisis scenario, that would be just the beginning....The flip side to low interest rates has been a chase for yield that has driven investors to embrace riskier bonds. The result has been a boom in corporate borrowing and a race to the bottom both for high-quality and junk-rated companies....That raises the risk of significant losses for credit investors - from pension funds and insurers to mutual funds, ETFs and banks."

It's Mad for Economists to Ignore the Budget Deficit -Samuelson/Real Clear Markets
"Let's coin a new law of politics. Call it Neuman's Law after Alfred E. Neuman of Mad magazine fame, whose philosophy is, 'What, me worry?' The latest champions of Neuman's Law are Lawrence Summers, Treasury secretary under President Clinton and director of the National Economic Council under President Obama; and Jason Furman, the last chairman of the White House Council of Economic Advisers under Obama. Both are economists; both teach at Harvard....'Deficits ... should not cause policymakers much concern, at least for now,' they write. 'It's time for Washington to put away its debt obsession,' they conclude. 'Obsession'? They must be kidding. This inverts the truth. If Washington feared debt, Congress would long ago have tamed budget deficits...What both Democrats and Republicans actually fear are the highly unpopular steps - spending cuts or tax increases - they might have to take to reduce or eliminate the deficits, which are huge....The message that a reasonable person would take from their essay is that the government can borrow unlimited amounts for the foreseeable future...The essay's true purpose seems to be to provide intellectual support for what self-interested politicians would do in any case: enjoy present pleasures and postpone any future unpleasantness. Let someone else worry about the future. That's Neuman's Law, and it's mad."

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Gold last traded at $1,313 an ounce. Silver at $15.67 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a flat dollar. U.S. stocks fell sharply after a report that a meeting between President Donald Trump and Chinese President Xi Jinping is unlikely before a key March deadline.

Wells Fargo Online Banking Goes Down, Customers Unable To Access Accounts -Zero Hedge
"After their first attempt to provide people with account access crashed and burned, Wells Fargo is now simply apologizing and letting people know they can go to a branch or an ATM for their banking needs. The bank has apologized again in a second Thursday tweet: 'We’re experiencing a systems issue that is causing intermittent outages, and we’re working to restore services as soon as possible. We apologize for the inconvenience.' Many who have tried the links provided were met with a '502 Bad Gateway' error. Wells Fargo's online banking and mobile app went down Thursday morning, leaving customers unable to access their accounts and conduct banking needs. It is the second time their system has gone down in less than a week. Spokeswoman Hillary O'Byrne says that the bank is investigating the cause of the outage. Virginia Sportscaster Bill Rose tweeted: 'It's like the 1800's: No ATM's, no credit/debit cards, no online banking, and no way to cash a check at a branch. New corporate slogan:'@WellsFargo- It's like banking in Venezuela'"

Palantir Knows Everything About You -Bloomberg
"Founded in 2004 by Peter Thiel and some fellow PayPal alumni, Palantir cut its teeth working for the Pentagon and the CIA in Afghanistan and Iraq. The company’s engineers and products don’t do any spying themselves; they’re more like a spy’s brain, collecting and analyzing information that’s fed in from the hands, eyes, nose, and ears. The software combs through disparate data sources - financial documents, airline reservations, cellphone records, social media postings - and searches for connections that human analysts might miss. It then presents the linkages in colorful, easy-to-interpret graphics that look like spider webs....The U.S. Department of Health and Human Services uses Palantir to detect Medicare fraud. The FBI uses it in criminal probes. The Department of Homeland Security deploys it to screen air travelers and keep tabs on immigrants. Police and sheriff’s departments in New York, New Orleans, Chicago, and Los Angeles have also used it, frequently ensnaring in the digital dragnet people who aren’t suspected of committing any crime. People and objects pop up on the Palantir screen inside boxes connected to other boxes by radiating lines labeled with the relationship: 'Colleague of,' 'Lives with,' 'Operator of [cell number],' 'Owner of [vehicle],' 'Sibling of,' even 'Lover of.' If the authorities have a picture, the rest is easy. Tapping databases of driver’s license and ID photos, law enforcement agencies can now identify more than half the population of U.S. adults....All human relations are a matter of record, ready to be revealed by a clever algorithm. Everyone is a spidergram now....Thiel started Palantir - named after the omniscient crystal balls in J.R.R. Tolkien’s Lord of the Rings trilogy - three years after the attacks of Sept. 11, 2001. The CIA’s investment arm, In-Q-Tel, was a seed investor....Palantir is twice the age most startups are when they cash out in a sale or initial public offering. The company needs to figure out how to be rewarded on Wall Street without creeping out Main Street....'The world changed when it became clear everyone could be targeted using Palantir,' says a former JPMorgan cyber expert who worked with Cavicchia at one point on the insider threat team."

Gold Prices Turn Higher As Traders "Buy The Dip" -Kitco
"Gold and silver prices have erased modest early losses and have moved to slightly higher levels and at their session highs in morning dealings Thursday. Once again, traders have stepped in to 'buy the dip' in the metals prices, which is a bullish phenomenon that occurs when prices are in an uptrend and the charts are bullish. The U.S. dollar index has also backed down from its daily high, which is encouraging a bit of buying interest in the precious metals markets. April gold was last up $1.30 an ounce at $1,315.60."

Who’s Afraid of Socialism? -Wall Street Journal
"Now that Donald Trump has criticized the 'new calls to adopt socialism in this country,' Democrats and the media are already protesting that the socialist label doesn’t apply to them. But what are they afraid of - the label or their own ideas? The biggest political story of 2019 is that Democrats are embracing policies that include government control of ever-larger chunks of the private American economy. Merriam-Webster defines socialism as 'any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.' ....You decide if the proposals meet the definition of socialism. • Medicare for All. Bernie Sanders’ plan, which has been endorsed by 16 other Senators, would replace all private health insurance in the U.S. with a federally administered single-payer health-care program. • The Green New Deal. This idea, endorsed by 40 House Democrats and several Democratic presidential candidates, would require that the U.S. be carbon neutral within 10 years. • A guaranteed government job for all. To assist in this 10-year transformation of society. • A new system for corporate control. Senator Elizabeth Warren wants a new federal charter for businesses with more than $1 billion in annual revenue that would make companies answer to more than shareholders. • Vastly higher taxes. These ideas would require much more government revenue, and Democrats are eagerly proposing ways to raise it. Mr. Sanders wants to raise the top death tax rate to 77%. Ms. Ocasio-Cortez wants a new 70% tax rate on high incomes....The American public deserves to have a debate about all this, lest it sleepwalk into a socialist future it doesn’t want. Credit to Mr. Trump for teeing it up."

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Gold last traded at $1,314 an ounce. Silver at $15.70 an ounce.

NEWS SUMMARY: Precious metal prices eased slightly Wednesday on a firmer dollar. U.S. stocks traded mostly flat as Wall Street digested mixed quarterly earnings and the State of the Union address.

Gold Getting Set For Bull Run -Sharps Pixley/Zero Hedge
"After seven disappointing years - in US dollars at least - it is hard to shake off some skepticism. That said, gold is showing vigor in no less than 72 currencies where it is at or close to an all-time high. Looking ahead - it is our view that gold is currently firing on 2 cylinders - out of 4. So the best is yet to come. The excellent news is that gold is seeing strong buying from the highest quality, glacial if you like, and perhaps less apparent sectors - that is Central Bank buying and from institutional investors. The official sector is acquiring gold at the fastest rate since 1971 when the Gold Standard ended under Nixon. Not only is the tonnage impressive, it is also the number of participants involved, which suggests this may have legs to run. It begs the question what can they see, that others have not....Meanwhile, institutional buyers (especially in Europe) are starting to throw themselves heavily into gold ETFs. In December 2018 they acquired 76 tonnes taking total holdings to levels not seen since 2013....Gold has all the appearance of an early stage bull run - it mirrors what we have seen before. And secondly, not untypically it is the smart money which is getting in first. It is tempting to declare the bull run in full flow and we see confirmation of this once gold has crossed the magical figure of $1360."

The Coming China Shock -Project-Syndicate
"In September 2018, we argued that China’s economic and foreign policies were defying the 'laws' of economics and geopolitics, and warned that the situation could not last. Since then, our assessment has been borne out, and our concerns have deepened. Until recently, China had been able to pursue a unique development path, owing to the government’s far-reaching control over the economy (and society more generally). But those days are over. The country’s internal debts are mounting to unsustainable heights, and domestic investment levels have passed the point of diminishing returns and are veering toward negative territory. Moreover, China’s strategy of fostering exports, promoting industrial 'national champions,' and expropriating foreign technology has crossed the threshold of what the West, especially the United States, is willing to tolerate. In response to the current global slowdown, the Chinese government has decided to loosen restrictions on private and public borrowing. But this will merely aggravate the country’s debt and overinvestment problems. Or, as a famous Chinese saying goes, it is akin to 'drinking poison to quench one’s thirst.'....Unfortunately, any discontinuity in China’s economic performance would have a seismic effect on the rest of the world, because it would lead to a significant weakening of the renminbi...Such a scenario would have a tsunami-like impact on global currencies....One way or another, China’s continued defiance of the 'laws' of macroeconomics, geopolitics, and economic development will hasten its inevitable return to normalcy. When that happens, the world had better brace itself."

Billionaire Rules -Ponte/World Net Daily
"According to self-described socialist Congresswoman Alexandria Ocasio-Cortez (D.-N.Y.), 540 Americans should not be permitted to exist. America is 'immoral,' she says, for letting anybody be one of these billionaires, to have net worth of $1 billion or more. Equality is the highest ideal of socialists, an ideal Ms. Ocasio-Cortez wants to impose with a very unequal progressive income tax of 70 percent on the rich. Another Democrat in Congress wants 90 percent....Oddly, 39 percent of the billionaires in the crosshairs of such new laws are not Republicans. Many - especially in Hollywood, Silicon Valley, and Wall Street - are among the biggest donors to the Democratic Party and its candidates....Billionaires such as Donald Trump and Howard Schultz create leavening, independence and alternative ideas in our culture. They are too rich to be bullied or silenced. They laugh when 'woke' radicalized billionaire Nicolas Hanauer declares collectivist Ms. Ocasio-Cortez the 'centrist' and capitalist Schultz the extremist. Some billionaires are better than the poor, servile politicians who are bought, sold or controlled by conformist leftist mobs."

Car Dealer Lots Are Flush With Unsold Cars as Sales Are Expected to Drop -Wall Street Journal
"Car dealers are beginning 2019 with a heavier inventory of unsold vehicles on their lots, a situation that some analysts say will put pressure on them to cut factory output as U.S. auto sales are expected to cool this year. There were 3.95 million vehicles on dealership lots at the end of January, a 4% increase from December and up nearly 3% from the prior-year January, according to data released Monday by WardsAuto. Industry forecasters and some auto executives predict sales this year will drop to under 17 million vehicles for the first time since 2014....General Motors Co. has already moved to end production at five North American factories this year in response to falling sedan sales, and aiming to get ahead of an expected U.S. car market downturn....Ryan Gremore, president of the O’Brien Auto Team, a dealership chain in Illinois, Florida and Kentucky, said low interest rates in the past have made it cheaper for dealers to carry higher levels of inventory. But with rates now going up, it will become more expensive to hold on to unsold vehicles and retailers are likely to be pickier about what they stock, he added. 'We’ve carried too much inventory because we’ve been conditioned at artificial rates,' Mr. Gremore added."

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Gold last traded at $1,319 an ounce. Silver at $15.83 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Tuesday on safe-haven buying despite a stronger dollar. U.S. stocks rose as the corporate earnings season rolled on and investors eagerly await President Donald Trump's State of the Union speech tonight.

The relevance of gold as a strategic asset -World Gold Council
“Gold is a highly liquid yet scarce asset, and it is no one’s liability. It is bought as a luxury good as much as an investment. As such, gold can play four fundamental roles in a portfolio: A source of long-term returns, a diversifier that can mitigate losses in times of market stress, a liquid asset with no credit risk that has outperformed fiat currencies, a means to enhance overall portfolio performance. Our analysis shows that adding 2%, 5% or 10% in gold over the past decade to the average pension fund portfolio would have resulted in higher risk-adjusted returns. Gold is becoming more mainstream. Since 2001, investment demand for gold worldwide has grown, on average, 15% per year....Today, gold is more relevant than ever for institutional investors....As a strategic asset, gold has historically improved the risk-adjusted returns of portfolios, delivering returns while reducing losses and providing liquidity to meet liabilities in times of market stress."

Mr. President, Tear Down That Word -Noonan/Wall Street Journal
"President Trump just took a drubbing on immigration, undone by the deadly competence of Speaker Nancy Pelosi, who is now generally regarded as the answer to the question: 'What if a Prada bag with a gun in it became a person?' Republicans on the Hill are negotiating for a new deal, but their team just lost and Democrats are heady...If no deal is struck, the president can risk another shutdown or attempt to secure wall funding by declaring a national emergency. The more-serious Republicans do not want that historic precedent set, and in any case it would get bogged down in the courts. What should the president do?....The word 'wall' has become as symbolic to Democrats as it is to the president. When they add, 'But I’m not for the wall,' they are telling their immigrant constituents, 'I don’t fear you, I’m for you.' The Democrats must defeat the president on that one word. The president should let them, while pretending it pains him....Mr. President, tear down that word....He should push and push and then accept a solid deal that doesn’t mention a wall but includes everything else. Then he should act defeated. He should run around looking slump-shouldered and lost in his big blue overcoat. It won’t be hard! He should ask the media please, in the coming year and now that a deal has been passed, to cover the border, talk to people who work there, find out if what we’ve done has controlled illegal immigration. Within a year the answer should be apparent. If the border is secure Mr. Trump will look good: He’s the first president in a quarter-century to get the job done. It was five-dimensional chess after all! If it doesn’t work he’s got a big fat 2020 issue: 'I bowed to reality, I made a deal, and look what they did.'"

Public employees are living longer than expected, deepening state pension crisis -City Journal
"The second-longest bull market in American history hasn’t stopped the deterioration of state and local pension funds, whose unfunded debt has almost quadrupled - by their own accounting - from about $360 billion in 2007 to $1.4 trillion today. Having relied on overly optimistic and inaccurate financial assumptions for decades, public pension administrators are now forced to acknowledge that the systems owe much more than previously thought. Even as local governments struggle to pay for this debt, it keeps growing. Concerned that mortality tables for private-sector workers don’t accurately reflect what’s going on among retired government employees, the Society of Actuaries conducted a three-year study of public-pension retirement systems, evaluating approximately 580,000 deaths between 2008 and 2013, across 78 public-pension plans. The study found that, on average, female teachers were living 90 years, while male teachers lived 87.7 years. By contrast, the Social Security Administration’s life expectancy tables for the U.S. population show that men who reach 65 can expect on average to live 84.3 years, and women 86.7 years....Longer lives for public employees will mean higher costs, and not just for pension plans. Many state and local governments promise to pay for the health care of their retired workers, but few have enough money set aside to do so....Consequently, the amount of money that local governments must pay into the system has been rising steadily. As the latest study on mortality rates shows, that trend is going to continue."

Do you have enough retirement savings to last 23 years? -Marketwatch
"Looking at the income, living expenses and lifespans of today’s retirees can help you make the right financial moves so your golden years aren’t tarnished by an unexpected shortfall....The average remaining life expectancy of someone who’s made it to their early 60s (23.3 years), according to the Centers for Disease Control and Prevention - you should plan to be retired for at least a few decades....The average budget for a retiree, according to Bureau of Labor Statistics data, provides even more color on what to expect when you’re expecting to retire. Older households, defined as ones headed by someone 65 or older, spend $46,000 annually, versus the $57,000 average spent by all U.S. households combined. On average, about half of a retired household’s income comes from Social Security and private and government pensions, according to the BLS, with personal savings and investment and rental income providing 6.9%....If you’re not yet retired, one of the best moves is postponing your retirement party. This strategy is especially valuable for those in their peak earning years."

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Gold last traded at $1,318 an ounce. Silver at $15.90 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed on Monday despite a stronger dollar. U.S. stocks traded mostly lower as investors awaited the latest batch of corporate earnings releases.

Here's why gold is key to Venezuela's crisis-stricken government -CNBC
"Gold is fast becoming indispensable to those clinging onto power in crisis-stricken Venezuela. Political tensions in the South American country are reaching boiling point, with the oil-rich, but cash-poor, country in the midst of the Western Hemisphere's worst humanitarian crisis in recent memory. Thousands of anti-government protesters took to the streets of the capital city over the weekend to demonstrate against President Nicolas Maduro....Why is gold so important? 'It's important for three reasons: First, gold can act as fresh cash to help (Maduro's administration) survive. Second, it can help provide security or military protection. And, third, it can help them to live, hide and maybe even prepare a comeback,' Moya-Ocampos said. Countries typically only tend to sell large volumes of gold reserves in the most extreme financial circumstances. And, hyperinflation, mounting U.S. sanctions and collapsing oil production prompted Maduro to start selling off gold about a year ago."

The evidence is in: Stocks are in a 'bull trap' -Marketwatch
"The 'Central Bank Two-Step' is back: Dovish + dovish = nothing but higher prices. The lows are in; what else can I buy? This pretty much sums up current sentiment. And so goes the familiar script during emerging bear markets: A general sense of relief that the lows are in, and a return of optimism and greed after an aggressive counter rally following an initial scary drop. Long forgotten are the December lows after six weeks of higher prices. While indeed a renewed fully dovish Fed may be all that’s needed to keep 2019 bullish, there is evidence that this rally may turn out to be a big, fat bull trap....I recognize that between the dovish Fed and a potential China deal, markets may just drift higher and any pullbacks could turn into buying opportunities. However, as long as SPX remains below its 200 MA without a confirmed breakout above the confluent set of elements discussed above, there is well-founded risk that this market can still turn into a full-fledged bear market. After all, economic growth is slowing, earnings growth is slowing and the last three times the Fed halted its rate-hike cycle a recession soon followed....While the bull case remains technically unconfirmed at this stage, the bull-trap scenario will also remain unconfirmed for some time...I suspect we’ll know more in the next month or two."

Gold and Silver both rallied smartly last week -Merriman/FX Street
"Gold and Silver both rallied smartly last week, with Gold trading above $1330 for the first time since last April. Ever since our special reports on Gold issued in August, when Gold fell to $1167, the yellow metal has been in a very bullish pattern, right in line with those reports pointing to the start of a new long-term 31-month cycle. The start of all long-term cycles is bullish. Silver also performed well last week, crossing above $16.00 for the first time in six months....The amount of gold bought by central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). Central banks bought the most gold by volume since 1967, according to the industry research firm, which also highlighted it was the largest amount since former U.S. President Nixon Richard's decision to end the dollar's peg to bullion in 1971. The WGC said the bulk of the buying was carried out by a handful of central banks with Russia leading the way as it looks to swap out dollars from its portfolio... The Federal Reserve is reported to hold the most, amounting for almost three quarters of the nation's foreign-exchange reserve pot."

The Clash of Generations, Fed, China, And The S&P500 -Macro Monitor
"Unfortunately, the policy of manipulating asset prices higher to save the economy from the Great Financial Crisis (GFC) over the past decade has created unsustainable politics. It has set the young, who own relatively few assets, versus the old, who own the most. 'For Americans under the age of 40, the 21st century has resembled one long recession,' reports New York Times. 'Many younger workers are struggling to launch themselves into good-paying careers. They then lack the money to buy a first home or begin investing in the stock market...Over all, the generational gap in both income and wealth is growing.' The young finally came out to vote in the 2018 midterms and they brought, and will continue to bring, their pitchforks....What if the country (the majority) is moving left, which we believe it is as the younger generations, saddled with debt and carbon from the baby boomers enter the political fray en masse? Back To The Market. The Fed has thus far been all talk and has done nothing yet to back up its dovishness. But if the labor markets continue to tighten, and tight they are - ask any contractor trying to build or a young couple trying to buy their first home - the Fed will have to move back to a tightening bias....The next big macro factor to move the market is a China trade deal....Thus we expect the market to kiss, or temporarily pierce the 200-day moving average at 2740, before reversing and setting on a new trajectory to test the December low."

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Gold last traded at $1,322 an ounce. Silver at $15.93 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 9-month highs Friday amid ongoing economic uncertainty. U.S. stocks traded mostly higher after upbeat U.S. jobs growth data beat expectations.

Gold steadies near 9-month peak -Reuters
"Gold steadied on Friday after hitting a nine-month peak in the previous session, as the market awaited U.S. jobs data for indications on the strength of the world’s biggest economy. A more dovish U.S. Federal Reserve outlook and a weaker dollar had lifted gold on Thursday, although it later steadied as optimism about U.S.-China trade talks lifted appetite for riskier assets. Still, the precious metal remained on track for its second straight weekly gain and weak Chinese factory data lent support....Additionally, data on Friday showed Chinese factory activity shrunk by the most in almost three years in January, adding to concerns of global growth, which has triggered increased interest for gold of late. Reflecting investor interest, holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose to their highest since June on Tuesday."

Will Border Wall Fight Impact China Trade Deal? -Fox Business
Swiss America chairman Craig R. Smith discusses how the Democrat's interference in funding the construction of a U.S.-Mexico border wall may be influencing the China trade negotiations.

The Fed's latest move proves it's lost -Crudele/New York Post
"Read between the lines and the Federal Reserve is admitting that it is lost. 'Puzzled' might be a better word. And while the stock market loves that idea because it means there probably won’t be as many interest rate hikes as expected this year, this situation isn’t good for America. Interest rates were left where they are at this meeting and the Fed looks more reluctant to raise them in the months ahead....Why isn’t the Fed pushing rates higher? Because there are 'crosscurrents,'says Fed chief Jerome Powell... the most significant of those crosscurrents, namely the fact that the stock market throws a tantrum when the Fed raises interest rates and so, too, does President Trump. It would be messy for the Fed president to admit that he’s watching Wall Street or listening to the president....There’s one other problem that the Fed has - and it’s a very big one. Back in 2009, the Fed started printing fake money so that it could buy government bonds and keep interest rates extraordinarily and artificially low. The government had purchased around $4 trillion in government bonds, bank debt and Treasury securities from 2009 to 2011. The Fed never had a plan to get out of this fake-money situation. It never knew how to 'quantitative tighten,' that is, sell all those trillions in securities without affecting the markets and the economy. The Fed has started selling off those excess assets, something that the financial markets didn’t seem to like....The Fed is like someone driving a car with a navigation system that keeps rerouting. It really doesn’t know if it is going in the right direction. It is lost."

‘Medicare for All’ Will Terrify Voters -Rove/Wall Street Journal
"In a CNN town hall Monday, Ms. Kamala Harris endorsed 'Medicare for All.' Pressed about whether the proposal would abolish private health insurance, the California senator breezily declared, 'Let’s eliminate all of that. Let’s move on.' After Republicans jumped on her for this policy’s radicalism, a Harris adviser said the attacks were 'good trouble' for her. A Jan. 14 Kaiser Family Foundation poll seems at first glance to support that view. It found 56% of Americans favor 'a national health plan, sometimes called Medicare for All, where all Americans would get their insurance from a single government plan,' compared with 42% who opposed the idea. Medicare for All becomes less popular when people hear more about its possible effects. Support dropped to 37%, with about 60% opposed, when respondents were told it would 'eliminate private health-insurance companies' or 'require most Americans to pay more in taxes.' Support fell to 32% when respondents were alerted it would 'threaten current Medicare.'....Just wait until Republicans raise question about how much single-payer health care will cost. In an analysis last summer, Charles Blahous of George Mason University’s Mercatus Center pegged its price tag at $32.6 trillion over the first decade. The total federal budget for this fiscal year is only $4.4 trillion....Republicans cannot merely stand on opposition to Medicare for All; it’s hard to beat something with nothing. The GOP also must lay out ideas to make health care better, more affordable and more accessible with choice, competition and markets. The rush by Democratic presidential candidates to embrace Medicare for All - and measures like 'free' college, guaranteed jobs and universal basic income - may make the 2020 election a contest between promise-them-anything democratic socialism and free enterprise. The stakes don’t get much higher than that."

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