June Blog Archives 2019

Gold last traded at $1,426 an ounce. Silver at $15.30 an ounce.

NEWS SUMMARY: Precious metal prices rose further Tuesday on safe-haven buying and a flat dollar. U.S. stocks fell after the release of much weaker-than-expected consumer confidence data.

Gold Goes Boom as High Trend Resistance is Bulldozed by Bulls -Yahoo Finance
"Taking a step back and viewing the wider perspective of the yellow metal's history within the technical analysis, we can see that in 1999 a slow inclination was present stretching across the period of just over a decade, reaching its peak in 2011. The topside run was then posed by a 50% pullback over the next eight consecutive years following the high of 2011, prompting Gold to spend many recent years in a state of consolidation. This was until we hit 2019 where Gold has seen highs reminiscent of eight years ago....This week bullish efforts have been able to bulldoze through Gold's resistance and for the first time since 2013 Gold was trading at huge highs of above $1400. So why has Gold gone boom and is this trend set to continue? Events in the headlines clearly contributed to the events of last week and continuing onto this week, with the Fed and the Central Banks clearly holding onto a dovish posture...this could indicate that there is a further top side to come for Gold in the up-and-coming weeks if the trend is to continue with similarity."

The Federal Reserve is about to create a lot more zombies -Marketwatch
"Corporate zombies, that is. Kept alive by easy-money policies, companies that should have gone out of business keep staggering around. Long-term interest rates just fell off a cliff. And if you think they can't keep falling, think again. Albert Edwards, a strategist at SG Securities, pointed out in a recent note that none of the experts surveyed by the Wall Street Journal at the start of the year predicted 10-year Treasury yields would fall below 2.5%. Current level: 2%. I guess we can toss those forecasting models out the window....Western economists used to say that zero percent rates were a weird and unique thing you only saw in Japan - It would never catch on over here, they said. But they already have. Today European rates are even lower than those in Japan....the Bank for International Settlements - the central banks' central banks - says there is something to worry about, and it's the reason that economic growth, inflation and interest rates can't get off the ground: zombies. The BIS says there are way too many zombies around, and they're killing the economy, and it's all the fault of low interest rates. These 'zombie' companies can stay alive if they can just keep borrowing. Bankers call this 'extend and pretend' (as in, 'extend the term of the loan, and pretend it's ever going to be repaid.') And when money gets cheaper, that's great for zombies....The BIS reckons no fewer than 12% of the non-financial companies on major developed stock markets could be 'zombie' companies. This is an epidemic. In the early 1990s, the figure was about 2%. Zombie companies are bad for the rest of the economy."

America's Fake Money Will Get Fakier -Bonner/Bonner And Partners
"Last week, Fed chair Jay Powell and European Central Bank president Mario Draghi both affirmed their resolve to provide more stimulus in the months ahead. In other words, the guardians of the world's most important measures of value said they would lend more fake money at even fakier interest rates. This, of course, caused hearts to flutter in the markets. Investors are pretty sure that an already nutty situation is going to be even nuttier in the future. And they’re probably right. But there's no guarantee they're going to like it...We rub our eyes in wonder at the nuttiness of it. How could it be? Bond investors own $13 trillion worth of loans… and pay for the privilege by making negative interest payments. The U.S. stock market hits an all-time closing high while the economy actually slows down. And people are so desperate for an honest currency that they turn to bitcoin… which they can't see, can't touch, and can't understand. How could it be? We squint and look closer. And out of the fog emerges a hypothesis… an explanation almost as strange as the picture itself: Americans have allowed the feds to censor their markets."

Low interest rates and sluggish growth may lead to currency wars -Buttonwood/Economist
"In 2010, as the euro zone's sovereign-debt crisis escalated, the euro fell sharply, from $1.45 to $1.19. Soon the talk in America was of a second round of quantitative easing by the Federal Reserve. Was this a coincidence? Many in euro land thought not. QE2, as it came to be known, seemed to them to be mostly a means to a weaker dollar. The grumbles went beyond Europe. That September Guido Mantega, Brazil’s finance minister, said his country was under fire in an international currency war. Now the bellyaching comes from America. On June 18th Mario Draghi, the president of the European Central Bank (ECB), said at a conference in Sintra, Portugal, that the bank stood ready to relax its monetary policy further if the euro-zone economy did not improve. Bond yields fell. So did the euro. President Donald Trump took to Twitter to denounce Mr Draghi for 'unfair' currency manipulation. Earlier this month Steven Mnuchin, Mr Trump's Treasury secretary, had fired a warning shot in the direction of Beijing on currency policy. If China stopped trying to support the yuan, that could be understood as an effort to weaken it. The prospect of a pow-wow between Mr Trump and Xi Jinping, China's president, at a G20 summit in Osaka later this month has raised hopes that the trade war between their two countries does not escalate. A trade truce ought to cool the war of words over exchange rates, too - but not for long. Interest rates are low. The use of fiscal policy is constrained by either politics or debt burdens. A cheaper currency is one of the few ways left to gin up an economy. A world of sluggish GDP growth is one that is primed for a currency war....In the slow-brewing currency war, America is both victim and perpetrator. If you start a trade war with your biggest trading partners, they get a weak currency and you get a strong one. If Mr Trump wants a cheaper dollar, declaring trade peace might be the best way to get it. Otherwise, America risks waging a currency war on itself."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,418 an ounce. Silver at $15.37 an ounce.

NEWS SUMMARY: Precious metals rose to fresh 6-year highs Monday on safe-haven buying and a weaker dollar. U.S. stocks traded mixed as investors looked ahead to a key meeting between President Donald Trump and Chinese President Xi Jinping at this week’s upcoming G-20 summit.

Gold Could Have More Buyers At $1,400 Than At $1,300 -Scotiabank/Kitco
"Gold's most recent move to $1,400 an ounce could attract more buyers than the metal's previous key $1,300 level, Scotiabank said in the latest update. The yellow metal rallied to six-year highs last week following a dovish Federal Reserve announcement, which kept rates unchanged but opened a door for future rate cuts. 'Overall, there is a growing 'FOMO risk', where Gold could attract more buyers at $1400, than $1300, reaffirming the belief of some well-known investors that if $1400 breaks, $1700 will happen 'very quickly',' Scotiabank commodity strategist Nicky Shiels said in a note on Thursday. Gold has been 'quietly' outperforming most G-10 currencies since the trade war began, noted Shiels, describing the latest rally as 'standalone gold breakout' that excludes the metal's usual direct correlation with the U.S. dollar."

The world is crazy and the dollar is lower. Gold is above $1,400 for first time in years -CNN Business
"Gold bugs are finally having a moment. The price of gold topped $1,400 an ounce Friday. That's the highest level since September 2013. The price of gold is now up nearly 10% this year. Gold has gained momentum thanks to expectations of a rate cut by the Federal Reserve as soon as next month. Rate cut hopes have helped push the dollar lower - and gold tends to rally when the dollar gets weaker because that makes it more attractive to foreign buyers. 'Gold, the anti-dollar, is on fire,' noted Kit Juckes, global fixed income strategist at Societe Generale, in a report after the Fed meeting this week. The continued drama surrounding trade talks between the United States and China is helping push gold higher too. Unless US President Donald Trump and Chinese President Xi Jinping come to a deal at next week's G20 meeting in Osaka, Japan, gold prices could keep climbing - especially since the market doesn't expect the Fed to do anything that would push the dollar higher. 'Gold has historically been a pocket of strength in periods where uncertainty increases sharply,' said CFRA investment strategist Lindsey Bell in a report this week. Bell added that gold is 'a smart and defensive way to diversify a portfolio in the later innings of a bull market for which uncertainties have increased.'"

Trader: All-Time Highs Are No Valid Reason To Celebrate -Zero Hedge
"It's hard to tell whose bluff was called last week, but the end result is that almost every systemically important central bank did more than blink. They caved. The question is, did they do so to keep the fun alive? Because they know something that they are loathe to tell us? Or have they finally and totally given up faith in their government counterparts? Whatever the reason, and despite equity markets and related risk assets having a field day, there isn't a great deal to celebrate. There should be no comfort taken that a Fed president argued for a 50 basis point rate cut and wasn’t laughed out of the room. That 10-year Treasury yields are back down to current levels is a clear sign that the battle is being lost....Efforts are being made to lower market expectations for the outcome of trade talks at the G-20 meeting. That's a shame. Rate cuts are worse than an inadequate substitute for real progress. The dollar is trading horribly...data showed an out-sized rotation out of the U.S. currency and into the euro and yen. That helps no one...this year's sell-offs in the Dollar Index puts the next technical target is 95.75."

The Real Reason for Facebook's New Cryptocurrency -New York Times
"Facebook says its new cryptocurrency, Libra, is a tool for financial inclusion and disrupting the world's cumbersome payment systems. In reality, there is a deeper motivation behind it, although not the one its critics imagine: Libra is the last, best hope to re-establish trust between Facebook and the world. Facebook harnessed billions of users to the engine of artificial intelligence and steered unerringly toward advertising riches. Privacy, civic discourse and even democracy were crushed beneath the wheels as Facebook rolled toward global domination. Now it faces angry legislators around the world, huge fines, hostile investigations and punitive regulations aiming to rein it in....Facebook is smart enough to recognize that without the bond of trust, all relationships are merely contingent and transactional. Lack of trust creates a heavy debt that eventually comes due...There is nothing Facebook can say to rebuild the trust it lost. And there is little it can do....This is where cryptocurrency comes into the picture...What makes cryptocurrencies revolutionary is that they create the foundation for a new form of trust. A blockchain is a decentralized ledger, meaning that every participant in the network can be confident in the accuracy of transactions, without relying on an intermediary such as a bank or clearinghouse to verify them...If Facebook can establish Libra as a trusted way for users make their transactions, it will go a long way to rebuilding trust in Facebook itself....Facebook today talks a good game about privacy and combating abuse of its platform, but those words have time and again proven hollow."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,400 an ounce. Silver at $15.29 an ounce.

NEWS SUMMARY: Precious metal prices rose near 6-year highs Friday on safe haven buying and dollar weakness. U.S. stocks traded mixed as investors digested Fed easing as well as lowered geopolitical risks.

Gold Surges to Highest Price Since 2013 After Fed Hints at Rate Cut -Wall Street Journal
"Metal prices shot up Thursday, lifted by a weaker dollar, after the Federal Reserve suggested it was willing to lower interest rates in the coming months. Gold prices rose 3.6% to $1,392.90 a troy ounce in New York, the biggest one-day advance since June 2016 and its highest settle since 2013....Higher metal prices were good news for investors in mining companies, especially those that specialize in precious metals....The precious metal, considered a safe-haven asset, has gained 6.7% this month, boosted by mounting expectations that the Fed and other central banks will ease monetary policy, as well as heightened geopolitical tensions in the Middle East and elsewhere."

The Gold (and Silver) Volcano Is Ready to Erupt -Smith/FX Street
"The 1980 Mount St. Helens explosion offers a fitting metaphor for the pressures building in the gold and silver markets. Tremors are intensifying around the globe due to the massive overprinting of fiat currencies, creating debt levels without historical precedent. Financial 'earthquakes' are taking place as we speak in Venezuela, Argentina, parts of the Middle East and Africa. Yet most people - especially in the West - are simply not paying attention. Yearly gold acquisition by four countries alone - China, India, Russia, and Turkey - now exceeds annual global production. Central banks are vaulting gold at the fastest pace in decades. Falling gold reserves of major producers have declined 26% since 2012....'From a risk/reward perspective, there is no asset class that has anything even close to the positive attributes that gold has at this point in US business cycle time.' Stewart Thomson, Graceland Updates....The policies of central banks - including the Federal Reserve...has created a series of asset bubbles...Now the banks are stuck between the proverbial rock and a hard place, with nowhere to go but zero to negative rates....A number of increasingly evident factors are building pressure under this 'golden volcano.'....Don't let time run out before taking action to protect your finances. Learn from what others, across cultures, have done ahead of time for thousands of years, and from what millions of people around the globe are doing today. The clock on the coming eruption of the gold (and silver) volcano is ticking..."

Stocks are now offering the best selling opportunity in 10 years, thanks to the Fed -Marketwatch
"They're right. It is different this time. It's worse. Much, much worse. What is? Everything, in terms of preparedness for the next U.S. recession. Debt is higher than ever, be it corporate debt, government debt or global central banks' balance sheets. Limited ammunition to deal with a new recession, wealth inequality, the social divisions and political extremes, and now trillion-dollar deficits - everything points to a more fragile system. Here we are, with the great collapse unfolding in front of us. With Wednesday's Fed statement, we continued to witness an utter capitulation to market realities that are forcing central banks to commence new easing cycles. No, this is not a temporary rate-cut event they are promising; it's a new cycle. The Federal Reserve offered a three-rate-cut outlook, which is precisely what markets had been pricing in. The Fed is bowing before market demands. Give us drugs. Yes, whatever you want, you got it....It’s not good news for the economy and ultimately not good news for stocks either....Pouring money into stocks on the premise of yet more cheap money may set up a valley of tears. Therefore, we may be looking at the biggest selling opportunity in a decade....Cutting rates again is making wealth inequality even greater, is again punishing savers, is again pushing wealth toward asset-class holders and again encouraging more debt accumulation. In short: Make the bubble even bigger."

Trump Awards Arthur Laffer The Presidential Medal of Freedom -Benko/American Spectator
"The White House has announced that President Trump is awarding Dr. Arthur B. Laffer the Presidential Medal of Freedom on June 19th. That, along with the Congressional Gold Medal, is America's highest civilian award. It is well deserved. Robert Mundell and Arthur Laffer were Supply-Side Economics' premier intellectual architects. Supply-Side was roundly mocked by establishment Republicans such as George H.W. Bush, Reagan's then-rival. Bush memorably dismissed it as 'Voodoo Economics.' Most, though not all, Democrats mocked it. Many still do....Among its titans count publisher and presidential candidate Steve Forbes, George Gilder, author of Wealth and Poverty, 'the Bible of Reaganomics,' and Larry Kudlow, now Director of Trump's National Economic Council....Reagan campaigned on - while being ridiculed for - Supply-Side Economics. Elected, he put it to good effect. He backed Fed Chairman Paul Volcker's actions to slay inflation. A billion people or so arose from abject poverty. Much of this prosperity is due to the worldwide embrace of much of Supply-Side Economics....Supply-Side Economics calls for a stable currency. Most of its proponents favored the gold standard to seal the deal....Forbes.com columnist Nathan Lewis calls stable money (preferably gold) and moderate tax rates in his columns and his most recent book the 'Magic Formula.' He marvels at why such a simple thing as gold-defined money and low marginal tax rates were, and are, anathema to the policy elites. My guess? It affronts their vanity....A few years ago I estimated the capitalized value of the additional world income created by Mundell and Laffer and their political team to be $100 trillion. Thus, Donald Trump's awarding Arthur Laffer the Presidential Medal of Freedom is profound. Next… to make America fully great again… on to the gold standard as prescribed in the Mundell-Laffer hypothesis and commended by Candidate Trump!"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,396 an ounce. Silver at $15.49 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Thursday on safe-haven buying and dollar weakness. U.S. stocks rose after the Federal Reserve hinted at possible interest rate cuts as soon as next month.

The Fed Prepares for Mistake #3 -Bonner/Bonner And Partners
"You'll recall that Mistake #2 is raising interest rates to try to mitigate the damage done by Mistake #1 (leaving rates too low for too long). Mistake #3 is dropping them too sharply to try to undo the damage caused by Mistake #2....Investors believe that central banks control stock prices - which, of course, they do… to a point...The tide of hope and optimism that had begun with the Reagan Administration crested in 1999. It has been downhill ever since. Since then, GDP growth rates have gone down; real incomes for real people - in America - have declined...From a positive-sum, win-win world… it ebbed back to a zero-sum, win-lose world. From Greed to Fear, that is. That's what we're calling the big moves in our Dow-to-Gold gauge. It peaked out in 1999 at over 40 (it took more than 40 ounces of gold to buy the Dow). Today, it's around 20. Three times in the last century, the gauge went below 5. Our guess is that it would have reached its rendezvous with destiny again - below 5 ounces of gold to the Dow - in 2009, had the Fed not intervened. But the Fed panicked. It then disguised, delayed, and denied the truth of this tidal shift by falsifying the most important price signal in capitalism - the price of capital itself. Mispricing capital - by setting artificially low interest rates - made the downtrend worse. Growth slowed further. The Swamp deepened. The empire grew bigger and more corrupt. The downward trend is not limited to the U.S. Europe, Japan, and China all show the same symptoms."

Gold Achieves Liftoff as Prices Rocket Toward $1,400 an Ounce -Bloomberg
"Gold rose as much as 2.5% Thursday to the highest since September 2013, and traded at $1,381.64 an ounce at 1:03 p.m. in London. Over the past few weeks, a clear bull case has started to emerge. A key resistance level has broken. Investors are pouring money into exchange-traded funds. The dollar is weakening and the Federal Reserve seems to be charting a path to cut interest rates. China is on a buying spree to stock up reserves. 'It has been a long wait,' said Mark O’Byrne, research director at GoldCore Ltd. 'Gold has finally broken out, we nearly touched $1,400.' Although gold has gathered some momentum in the past few weeks, it was the Fed's comments Wednesday that triggered the latest spike. While the central bank left its key rate unchanged, it dropped a reference to being 'patient' on borrowing costs. Lower rates boost the appeal of non-interest-bearing assets like gold."

Bank of America CEO: 'We want a cashless society' -Yahoo Finance
"Bank of America CEO Brian Moynihan embraced the digital money movement on Wednesday, saying his firm has 'more to gain than anybody' from the booming trend of non-cash transactions. 'We want a cashless society,' Moynihan, who heads up the second largest U.S. bank, told attendees at Fortune's Brainstorm Finance conference. He pointed out that more than half of all money transactions are already processed electronically, with the rise of cryptocurrencies, and payment systems like PayPal, Zelle, and digital wallets. A 2018 San Francisco Federal Reserve report found that 'cash continues to be the most frequently used payment instrument, representing 30 percent of all transactions and 55 percent of transactions under $10.'....The banking sector has 'already digitized,' Moynihan said on Wednesday. 'The business has moved digitally and it will continue to move that way.'"

"The Dollar Is Becoming Toxic" - Russian Intel Chief Slams "Aggressive, Unpredictable" US Behavior -Zero Hedge
"China is following Russia's lead and reducing its US Treasury exposure (to two-year lows), as it increases its gold reserves (for six straight months), the unipolar US hegemon faces an ugly trend among the 'rest of the world' attempting to de-dollarize, as Sergey Naryshkin, director of the Russian Foreign Intelligence Service, calls the US dollar is an anachronism of the modern world economy. Countries across the globe, including Russia, China, India, and others, have been working to diversify their foreign reserves away from the greenback. RT reports, the head of the Russian intelligence service has now voiced those concerns clearly - that the use of the dollar presents risks and more nations are looking into finding alternative tools for doing business. 'It seems abnormal that the United States, behaving so aggressively and unpredictably, continues to be the holder of the main reserve currency...Gradually, the dollar is becoming toxic.'....So far, Moscow has managed to partially phase out the dollar from its exports, signing currency-swap agreements with a number of countries, including China, India, and Iran. Russia has recently proposed using the euro instead of the US dollar in trade with the European Union. This comes on the heels of Malaysian Prime Minister Dr. Mahathir Mohamad proposing a gold-backed currency as a unit of account for trade between East Asian nations."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,354 an ounce. Silver at $14.95 an ounce.

NEWS SUMMARY: Precious metal prices hovered near recent highs Wednesday on dollar weakness. U.S. stocks traded mixed as investors waited for the Federal Reserve's latest decision on monetary policy.

Gold To Trade At $1,425 In 12 Months, Boosted By EM Demand -Goldman/Kitco
"Goldman Sachs is upbeat about gold prices, looking for the metal to draw support from emerging-market demand and rise to around $1,425 in 12 months. In a research report late Monday, Goldman was bullish on commodities generally due to easier monetary conditions, calling for a 10% three-month return on the S&P Goldman Sachs Index and a 9% return on a 12-month basis. 'In our view, risks are starting to shift to the upside, particularly in emerging markets,' Goldman said. 'Unlike last year, the Fed is on hold, interest rates are lower and oil prices are weaker, all combining for easier financial conditions than last summer/fall.'....Gold has climbed by around 5% since late May, helped by worries about a trade war and disappointments in U.S. economic data, the investment bank said."

Capitalism gets rid of stuff that doesn't work -P.J. O'Rourke/American Consequences
"The amazing thing about free-market capitalism is that it gets rid of stuff that doesn't work. You say, 'Amazing? When stuff doesn't work, of course you get rid of it!' If you've got a washing machine and - no matter how many times the supposedly lonely Maytag Man has been to your house - it just can't be fixed… do you keep piling dirty clothes into it? You'll run out of things to wear. No, you haul the old appliance to the dump and acquire a new one. This is what free-market capitalism does with businesses....It wasn't until the brilliant Austrian economist Joseph Schumpeter (1883-1950) published his book Capitalism, Socialism and Democracy in 1942 that economists' attention was drawn to the common-sense fact that abandoning what doesn't work is what makes what works work. Schumpeter called this process 'creative destruction.' It's been a catch phrase to describe business cycles ever since. He made it sound more complicated than it is: Capitalism… is by nature a form or method of economic change and not only never is, but never can be stationary… The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets… The process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

Cashless Isn't Just Classist - It's Bad for Business -Fortune
"There’s a growing debate across the U.S., and internationally, about whether businesses should be required to accept cash in face-to-face transactions. San Francisco and Philadelphia have banned cashless-only retailing, arguing that such businesses discriminate against low-income people who might not have bank accounts. The entire state of New Jersey has done likewise. And two bills that would ban cashless stores have been introduced in Congress....There are compelling security, convenience, and business arguments for going cashless, of course. But such benefits would not outweigh the cost to society of leaving economically vulnerable people behind. Regardless of one's view on inequality, there's also a more pragmatic way to frame the debate. Pushing too hard and too fast toward a cashless economy is simply bad for business. If a company refuses to take cash, that leaves a lot of the world's money on the table. The fact is much of the world's money still changes hands as cash. Data from the World Bank shows that small retailers transact $19 trillion in cash a year - nearly one-fourth of global GDP....Around 1.7 billion adults globally do not have access to a transaction account that can be used to receive payments and make deposits....Leaders from the financial, technology, and government sectors need to come together and rethink the future of payments innovation, starting with financial inclusion as a core value."

The economic expansion is poised to be the longest ever. Will it die or get a second wind? -USA Today
"The decade-long economic expansion, poised to become the longest in U.S. history next month, is facing an existential question: Will it sputter to a halt by next year or keep on chugging at the same modest pace that got it this far? On the one hand, the expansion is displaying some telltale signs of old age, such as the 3.6% unemployment rate, a 50-year low; the beginnings of a slowdown in business profit growth; and a mounting debt problem - this time inside corporations. There's also the wild card of an escalating trade war with China. At the same time, inflation is muted, interest rates are still relatively low and household balance sheets are healthy - hardly conditions that traditionally have triggered a spiral downward....Economists polled by the National Association of Business Economics in May foresee a 60% chance of recession by the end of next year. 'I think the economy is on a razor’s edge,' says economist Mark Zandi. 'It can go either way.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,350 an ounce. Silver at $14.99 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and dovish Fed expectations. U.S. stocks rose after President Donald Trump said he will meet with Xi Jinping at the upcoming G-20 summit, boosting hope for a U.S.-China trade deal.

Gold Fever is Spreading -Innes/FX Empire/Yahoo Finance
"Gold prices climbed to the highest levels in more than a year. But adding to Golds allure is that prices traded well despite rebounding equities and a firmer USD. And while the prospect of lower U.S. rates and dovish Fed expectations remain supportive, Gold appeal goes well beyond that and is moving higher on own its accord as a safe and inexpensive hedge against the abundance of tail risks rapidly wagging. The G20 summit will be significant for risk assets and while we don't know if tariffs will escalate from here, but we do know there's a substantial risk that they will. And while we remain unsure how the Fed will react this week, but we do know that if tariffs escalate, it will be a potent threat to U.S. growth and so the likelihood of an aggressive Fed cut will also rise. Gold represents insurance against those risks. If you live in tornado alley you would be crazy not to buy home insurance so with a category five recessionary storms brewing; it only makes sense to purchase Gold as portfolio insurance....And despite all the talk about lower U.S. rates and trade war hedges, it's the official sector that remains the consistent pillar of support. And given the move to de-dollarize reserve, Central bank demand will likely continue especially with trade war and the geopolitical risk abound....I remain unwaveringly bullish on Gold and continue to buy as it remains one of my highest conviction trade into 2020."

Facebook unveils 'its most invasive and dangerous form of surveillance yet' with launch of Libra cryptocurrency -The Sun
"FACEBOOK is launching cryptocurrency next year that will allow people to move money from their smartphone into a digital 'wallet'. Experts have branded the move a dangerous power grab that marks Facebook's 'most invasive' form of surveillance yet. So far, Facebook has enlisted 28 firms, including Spotify and Uber, who each had to invest a minimum of $10 million to be a founding member of the Libra Association, an independent not-for-profit membership organization. It wants to attract 100 businesses in time for launch, which it is aiming for the first half of 2020....Facebook will operate its own digital wallet for people to spend Libra, known as the Calibra Wallet, which will be available in WhatsApp, Facebook Messenger and as a standalone app. Users will be able to send money to each other initially, at low to no cost, the social network said....Phil Chen, Decentralized Chief Officer at HTC, said the move was part of a 'dangerous' power grab by Facebook. 'If you're concerned with Facebook knowing too much or having too much access to your private data or social graph, the GlobalCoin will give Facebook even more direct access to your financial information,' he told The Sun. 'It’s not just access to the information of your transactions, it's direct access to your wealth and capital. This project is the antithesis of bitcoin and is another step towards total control of data and users.'"

Facebook value goes crypto -Ponte/WND
"Facebook, the social network, announced on Jan. 30, 2018, that it would ban all ads for Bitcoin and other cryptocurrencies in order to stop promotions that it sees as 'frequently associated with misleading or deceptive promotional practices.'...Eighteen months later, on June 18, Facebook planned to issue a White Paper unveiling details of its own cryptocurrency, to be known as Libra....Unlike wildly speculative cryptocurrencies such as Bitcoin, the Libra will be a 'stablecoin' whose value is reliably pegged to a 'basket' of various government paper fiat currencies, as well as low-risk stocks, and perhaps even gold to provide the new coin counter-cyclic insurance....On the day it launches, Libra will have a larger customer base than most of the world's central banks. This could be the entire population of every nation south of Earth's equator plus India - one-third of humankind....Because the Libra coin will be openly trackable and taxable by government, and will offer no more privacy than Facebook grants its other customers, critics say it should not even be called cryptocurrency....Libra could quickly become widely used money in many Third World nations, where banking is unreliable, corrupt, expensive or difficult to use. This means that Libra joins Russia and China in undermining America's lucrative 'exorbitant privilege' as printer of the U.S. dollar, the world's reserve currency, as well as speeding the 'cashless society.' Mark Zuckerberg could expand from being only the world’s leading left-leaning free speech censor to one of the world's most powerful bankers, which could make him emperor on a par with China's 'social credit' conformist dictatorship."

A Growing Problem in Real Estate: Too Many Too Big Houses -Wall Street Journal
"Large, high-end homes across the Sunbelt are sitting on the market, enduring deep price cuts to sell. That is a far different picture than 15 years ago, when retirees were rushing to build elaborate, five or six-bedroom houses in warm climates, fueled in part by the easy credit of the real estate boom. Now, many boomers are discovering that these large, high-maintenance houses no longer fit their needs as they grow older, but younger people aren't buying them. Tastes - and access to credit - have shifted dramatically since the early 2000s. These days, buyers of all ages eschew the large, ornate houses built in those years in favor of smaller, more-modern looking alternatives, and prefer walkable areas to living miles from retail....The area around Scottsdale, Ariz., popular with wealthy retirees, had 349 homes on the market at or above $3 million as of February 1 - an all-time high, according to a Walt Danley Realty report. Homes built before 2012 are selling at steep discounts - sometimes almost 50%, and many owners end up selling for less than they paid to build their homes, said Walt Danley's Dub Dellis....The problem is expected to worsen in the 2020s, as more baby boomers across the country advance into their 70s and 80s, the age group where people typically exit homeownership due to poor health or death, said Dowell Myers, co-author of a 2018 Fannie Mae report, 'The Coming Exodus of Older Homeowners.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,342 an ounce. Silver at $14.82 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs Monday awaiting a possible Fed rate cut on Wednesday. U.S. stocks rose slightly as investors looked ahead to a crucial Federal Reserve meeting this week.

Gold Surges to 14-Month High: ETFs to Tap -Yahoo Finance
"Gold price climbed to more than $1,350 per ounce, touching a 14-month high and gaining for the fourth straight week - the longest run since January. Hopes of a Fed rates cut and investors' flight to safety fueled by a myriad of woes fueled the rally in the metal. The Fed early this month hinted at interest rates cut if needed, given the implications of trade tensions on the economy. Speculation increased all the more with the latest weak job data and subdued inflation. Lower rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal's attractiveness as it does not pay interest like fixed-income assets. Global growth worries driven by deepening U.S.-China trade tensions, disappointing economic data across the globe, and geopolitical tensions spurred demand for safe-haven assets....Further, factory activity contracted in the United States, Europe and Asia last month while China's industrial output growth slowed to a more than 17-year low of 5% in May. The World Bank recently slashed its global growth outlook from 2.9% projected in January to 2.6% - the slowest growth in three years - citing trade conflicts, financial strains and unexpectedly sharp slowdown in wealthier countries. Against this backdrop, gold is considered a great store of value and hedge against market turmoil. Moreover, investors poured into exchange-traded funds backed by gold, with holdings rising to the highest since late February."

If Morgan Stanley Is Right, The World Is Now In A Recession -Zero Hedge
"Morgan Stanley's 'prophet of doom', chief US equity strategist Michael Wilson, who writes this morning that he 'sees an increasingly risky environment as deteriorating data and a dovish Fed stand off.'...The strategist writes, 'data points and analyst sentiment are falling and we think PMIs and earnings revisions are next.' Wilson warns, 'be prepared for a sharp fall in Manufacturing Purchasing Managers' Index (PMI)' as the MSBCI suggests the Mfg PMI New Orders component will fall to 40 over the next few months, which would be down approximately 25% on a y/y basis. Another way of putting it - if Morgan Stanley's indicator is right, the world is already in a recession....Shifting to markets, Wilson notes that the Fed has tightened 'a lot' since 2014, when one accounts for QE and QT. In fact, based on the Atlanta Fed 'Shadow' Fed Funds rate, the current tightening cycle has hiked not by 2.25% (or nine times), but by a whopping 6.25%! Extending Morgan Stanley's QE/QT adjustment extrapolation, Wilson repeats what he noted two weeks ago, namely that the 3M/10Y yield curve inverted all the way back in November. And as a reminder, it is the subsequent steepening that crushes markets. The inverted curve has now bottomed....This cyclical bear market...has some unfinished business - i.e., a deeper retracement than most are expecting. The policy mistakes were fiscal + tariffs, not monetary - i.e., the Fed can't 'fix' it."

The American Dream Is Alive and Well — in China -Brown/Truthdig
"Home ownership has been called 'the quintessential American dream.' Yet today less than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes. Over the last decade, American wages have stagnated and U.S. productivity has consistently been outpaced by China's. The U.S. government has responded by engaging in a trade war and imposing stiff tariffs in order to penalize China for what the White House deems unfair trade practices. China's industries are said to be propped up by the state and to have significantly lower labor costs, allowing them to dump cheap products on the U.S. market, causing prices to fall and forcing U.S. companies out of business. The message to middle America is that Chinese labor costs are low because their workers are being exploited in slave-like conditions at poverty-level wages. But if that's true, how is it that the great majority of Chinese families own homes?....In China, the cost of living is significantly lower. The Chinese government subsidizes not only its industries but its families - with educational, medical and transportation subsidies....Unlike the U.S. government, the Chinese government supports its workers and its industries...In the 21st century, it is time to upgrade our economic model from one of feudal exploitation to a cooperative democracy that recognizes the needs, contributions and inalienable rights of all participants."

How To Kill Off Civilization -Independent Mind
"There are lots of ways to kill off a civilization. Wars, politics, economic collapse. Rome did it. Could we do it? If we follow the Progressives and allow them to implement crackpot ideas like Modern Monetary Theory we could be on our way. Ancient Rom...had an advanced civilization. They had running water, sewers, flush toilets, concrete, roads, bridges, dams, an international highway system, mechanical reapers, water-powered mills, public baths, soap, banking, commerce, free trade, a legal code, a court system, science, literature, and a republican system of government. What...happened to Rome? Dictators. After 500 years, the famous Roman Republic ended with the dictator Julius Caesar taking power. 400 years later his progeny and usurpers ran the Empire into the ground and Rome fell to invading barbarians...How did the Caesars do that? They were profligate spenders....They did two disastrous things to solve their deficit. First, they kept raising taxes which became punitive...Second, they debased the currency which led to inflation....Much of Rome's economic history is quite familiar in modern times. Even after thousands of years of evidence of repeated failure, bad ideas simply don't die....One bad idea with ancient precedents is Modern Monetary Theory (MMT). MMT is the New Thing among Progressives in America. Politicians like Alexandria Ocasio-Cortez (AOC) and Bernie are quite excited about MMT. They think they have discovered the Holy Grail of economics. Progressives believe that government can and should cause economic growth and prosperity. They believe government can do this by various controls, regulations, spending programs, and monetary manipulation....The idea of MMT takes this one step further. They believe that the government can spend/buy whatever it wants and print pieces of greenish paper to pay for it....MMT is a crackpot idea... It has been tried many times over the centuries and it has never worked. In every case where governments have printed money to pay for things, the result has been cycles of boom and bust, inflation (and hyperinflation), economic stagnation, and social disorder."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,344 an ounce. Silver at $14.80 an ounce.

NEWS SUMMARY: Precious metal prices shot up to 14-month highs Friday on safe-haven buying despite a stronger dollar. U.S. stocks fell as investors digested a drop in semiconductor shares alongside weak data out of China.

Gold Jumps to 14-Month High -Wall Street Journal
"Gold prices climbed Friday as mounting concerns about the health of China's economy hit riskier commodities and tensions in the Middle East pushed investors into haven assets. Gold prices for August delivery jumped 1.2% to $1,359.50 a troy ounce, the highest level since April 2018...Friday's jump continued a strong run for gold. The precious metal was on course for its 12th daily rise in 13 trading days as investors bet the slowdown in the world economy was hurting growth in the U.S. and would lead the Federal Reserve to lower interest rates. Gold, which has rallied almost 5% over the past month, becomes more attractive to investors when yields on interest-paying assets like government bonds fall. Expectations that the Fed will cut rates have also weighed on the dollar, making commodities priced in the U.S. currency more alluring to international buyers....Analysts think gold could have further to go as long as tensions between the U.S. and China are running high. 'It's been holding really well and as long as trade tensions are in the background it will continue to be well supported,' said Joni Teves, a precious-metal strategist at UBS Group."

Bond king Jeffrey Gundlach bets on gold and rings alarm bell on potential U.S. recession -Marketwatch
"Investors seem eager to insure themselves against geopolitical tensions that have flared up in the Middle East and Hong Kong this week, with gold vaulting on Friday. Meanwhile, U.S. technology stocks might not win any popularity contests as a red flag cropped up over how the trade war is biting that industry....Trade tensions are also one reason DoubleLine Capital Chief Executive Officer Jeffrey Gundlach now sees a bigger chance of a recession hitting U.S. shores in the not-too-distant future. Providing our call of the day, Gundlach predicted a 40% to 50% chance of a U.S. recession within the next six months and a 65% chance of that happening in the next 12 months, in a webcast to clients late Thursday....Gundlach is not expecting an interest-rate cut when the Fed meets next week. Instead, he notes the bond market is tipping two or three cuts by the end of the year. As for where Gundlach is putting his money, he said he is 'certainly long gold,' given expectations the dollar, which stands to take a hit if the Fed lowers interest rates, will close the year weaker."

2 black swans could come out of nowhere and kill stocks this summer -Yahoo Finance
"Investors always need to be prepared for black swans descending onto the markets during the low volume summer months....A black swan event is one that completely surprises a particular asset class. Think along the lines of the dreaded flash crash that sent some stocks instantly to $0 or a worse than expected hurricane in May that could prove devastating to insurance companies (stocks, too)....'If tariffs [on China] go up to 25% and there is an adjustment in the renminbi and it moves much more sharply that could be very de-stabilizing for global capital markets - that to me is a very real clear and present danger. That would trigger outflow pressures from China, destabilize their domestic system,' cautioned Ironsides Macroeconomics managing partner Barry Knapp on Yahoo Finance's The First Trade. Don’t think Knapp is off base here in calling a potentially destabilizing event for markets due to yuan weakness...Veteran strategist Scott Clemons at Brown Brothers Harriman said beware of a surprise uptick in inflation. If inflation picks up out of the blue, the Federal Reserve may not deliver on the interest rate cuts markets have priced in and stocks could react harshly. 'I think one is well-advised to worry about the things no one else is worried about. Nobody is worried about inflation. I just can't help but to think that as wages accelerate, as the labor market continues to tighten I wonder if at some point that turns into an acceleration in prices. That's my black swan,' Clemons said."

Social Security Is Staring at Its First Real Shortfall in Decades -New York Times
"Next year, for the first time since 1982, the program must start drawing down its assets in order to pay retirees all of the benefits they have been promised, according to the latest government projections. Unless a political solution is reached, Social Security’s so-called trust funds are expected to be depleted within about 15 years. Then, something that has been unimaginable for decades would be required under current law: Benefit checks for retirees would be cut by about 20 percent across the board. 'Old people not getting the Social Security checks they have been promised? That has been unthinkable in America... it's just too horrible,' said Alicia Munnell, the director of the Center for Retirement Research at Boston College. 'Action has to be taken to prevent it.' While the issue is certain to be politically contentious, it is barely being talked about in Washington and at 2020 campaign events....Social Security has a long-known basic math problem: more money will be going out than coming in. Roughly 10,000 baby boomers are retiring each day, with insufficient numbers of younger people entering the work force to pay into the system and support them. And life expectancy is increasing. By 2035, Social Security estimates, the number of Americans 65 or older will increase to more than 79 million, from about 49 million now."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,343 an ounce. Silver at $14.89 an ounce.

NEWS SUMMARY: Precious metal prices rose again Thursday on safe haven buying despite a firmer dollar. U.S. stocks rose, lifted by gains in Disney and energy shares, despite geopolitical tensions in the Mid-East.

America's CFOs are bracing for a 2020 recession -CNN Business
"The longest economic expansion in modern American history could come to a screeching halt right before the 2020 presidential election. At least that's what US finance leaders fear. Nearly half (48.1%) of chief financial officers in the United States are predicting the American economy will be in recession by the middle of next year, according to the Duke University/CFO Global Business Outlook survey released on Wednesday. And 69% of those executives are bracing for a recession by the end of 2020....'We're overdue for one of those cleansing recessions,' Duke professor John Graham said in an interview. Graham said CFOs are growing more certain of a 2020 recession because of the paralyzing consequences of economic and political uncertainty - including trade wars - on business. 'Faced with uncertainty, companies may pause by holding off on spending and hiring. That can turn into a self-fulfilling prophesy,' he said....Graham pointed to an unmistakable deterioration in sentiment among America's finance chiefs...'We've shifted from very optimistic to a downward trend with dark clouds on the horizon,' said Graham."

The Fed Is Hereby Exposed as Wholly Political -Earle/AIER
"Last week's disappointing jobs number, as well as major downward revisions to the March and April job numbers, have led to a reassessment of economic conditions facing the United States...The bright side of this is that it has become impossible, even for staunch supporters of the Federal Reserve system, to assert their political neutrality. Consider the following chain of events: In December 2018, the Fed raised the target rate for its benchmark funds rate, from 2.25% to 2.50%...and suggested that the so-called 'neutral' rate at roughly 3%...On February 4th, 2019 Fed Chairman Jerome Powell and Vice Chair Clarida met with the President and the Secretary of the Treasury at the White House for an informal dinner...On March 20th, 2019 the Fed Chairman announced that rate increases for the rest of 2019 would cease - a 'major shift' in its stance from several months before...On June 4th the Fed indicated that it was considering a rate cut, even as rates had not yet reached levels deemed neutral. Thus, in a space of 167 days, the Federal Reserve not only ended their four-year rate normalization campaign but also indicated their openness to return to an easing bias. This is not the promulgation of a conspiracy theory. Rather, it confirms what a growing collection of pundits, even some who long resisted the view, have come to accept: that the Fed is a political body...Far from its mandate of orchestrating monetary policy with the goals of maintaining the purchasing power of the dollar and supporting full employment they are now visibly, wholly indisputably tailoring monetary policy to facilitate and support short-term political initiatives....By supporting the President's tariff war with a sudden, colossal shift to easy money policies the Fed is not only embracing its hyper-politicization, but partnering in the implementation of long-debunked economic theories."

Smaller States Are Destroying Power, Vote of Their State by Supporting Nat’l Popular Vote -Levin/CNS News
"On his nationally syndicated radio talk show 'The Mark Levin Show' on Tuesday, host Mark Levin warned that smaller states are destroying the power, the vote in their state by supporting the national popular vote. Levin's comments came after Oregon’s House passed the national popular vote initiative on June, 5, 2019, according to nationalpopularvote.com. '[T]he National Popular Vote Bill [in Oregon] (status of SB 870) by a 37-22 vote. The bill now goes to Governor Kate Brown, who sponsored the bill when she was in the legislature, testified in favor of it while she was Secretary of State, and has recently publicly stated that she would sign the bill.' New Mexico’s legislature also passed, and Governor Michelle Lujan Grisham signed, a national popular vote bill '(status of HB 55), making New Mexico the 15th jurisdiction to have enacted the bill into law,' on April 3, 2019. Even 'the Nevada Senate passed the National Popular Vote bill 12-8, and sent the bill to the office of Governor Steve Sisolak (status of AB186),' but '[o]n May 30, 2019, Governor Steve Sisolak vetoed the National Popular Vote bill (status of AB186).' The National Popular Vote website explains that now '[national popular vote legislation] has been enacted into law in 15 jurisdictions with 189 electoral votes.' Here is a transcript of Mark Levin's remarks from his show on Tuesday: 'The national popular vote initiative, wow, it sounds so democratic. The point is to try and unconstitutionally get around the Electoral College. So, as California goes, so goes the rest of the nation. Is that what the Framers intended? And then you have these idiots in these smaller states that go along with it. They don't even realize that they're giving up their own autonomy. It's incredible. They're destroying the power of their state, the vote in their state."

Gold Price Going To $1,700 Soon Says Billionaire Paul Tudor Jones -Bloomberg/Kitco
"Another billionaire investor is sounding the alarm for the U.S. and global economies and is looking at gold as the safe-haven play. In an interview with Bloomberg News, Paul Tudor Jones, fund manager and create of Tudor Investment Corp., said that his favorite trade in the next 12 to 24 months is gold. He added that if the price can break through $1,400 it will push to $1,700 an ounce 'rather quickly.' '[Gold] has everything going for it,' he said. During the interview Jones said that the global economy, which has been built on global trade, is on the verge of breaking down as global trade tensions continue to escalate. He said that President Donald Trump's recent threat of further tariffs on $300 billion of imported Chinese goods could be the 'material event,' that could push the U.S. economy into a recession....'We've had 75 years of expanding globalization and trade… and now all of a sudden it's stopped,' he said. 'That would make one think that it's possible we go into a recession; it would make one think that rates in the United States go back down to the zero bound level; gold in that situation is going to scream. [Gold] will be the antidote for people with equity portfolios.' Jones' comments come as gold prices hold on to recent gains and is seeing its best weekly performance in a year."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,336 an ounce. Silver at $14.75 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a flat dollar. U.S. stocks fell for a second day as Wall Street investors paused following tech sector weakness.

The Perfect Storm -Rickards/Daily Reckoning
"What are the three elements of the perfect political and market storm I see coming together this fall? The first is an effort by the Democratic House of Representatives to impeach President Trump. The second is the socialist-progressive tilt in the 2020 presidential election field. The third is the fallout from the Mueller report and the Russia collusion hoax - what I and others called 'Spygate.' These components are independent of each other but are at high risk of convergence in the coming months....Trump is on track to win reelection in 2020. My models estimate his chance of victory is 63% today and it will get higher as Election Day approaches. The only occurrence that will derail Trump is a recession. The odds of a recession before the 2020 election are below 40% in my view...This may sound like a rosy scenario for the economy. But it's not so rosy for the Democrats. Every piece of good economic news will cause Democrats to dial up their political hit jobs on Trump. Each one will try to outdo the next....Any one of these storms would create enough uncertainty for investors to sell stocks, raise cash and move to the sidelines. The combination of all three will make them run for the hills. That's my warning to investors....A perfect storm with no name is coming. The only safe harbors will be gold, cash and Treasury notes. And make sure you have a life preserver handy."

HyperInflation's Ominous 100-Year Return -Craig R. Smith/Swiss America
"2019 marks the 100th birthday of the Weimar Republic taking over post-World War I Germany. Weimar, dominated by the socialist Social Democratic Party (SPD), was a sharp left turn in German politics. We face the same today in the United States, where socialists recently seized control of the Democratic Party. Our future elections will be Russian roulette, a choice between pro- and anti-capitalist parties. Weimar debased German culture. Traditional conservative morality and ethics were replaced by decadence. Hard-working thrifty people lost everything, while speculators and borrowers got rich by repaying debts with worthless money....Weimar was a government that paid its bills by printing limitless paper fiat money out of thin air. This at first created the illusion of prosperity, fake wealth intoxication....The U.S. Dollar was worth 4.2 German Marks when WWI began, but by 1923 it took 4.2 Trillion Marks to buy a single dollar. In 1913, total currency in Germany was just 6 Billion Marks; in November 1923...a kilogram of butter almost 6,000 Billion Marks....In 1914, Germany ended its gold standard that restricted government spending so that it could fund with credit a war it expected to win in weeks. World War I lasted five years, dragging Deutschland deep into debt. Germany lost and was forced also to pay crushing reparations that continued until 2010. In late December, 1913, the United States launched the Federal Reserve, purportedly to defend the dollar's value but actually to create an 'elastic currency' with which spendaholic Progressive politicians could cheaply expand government....Today the paper fiat dollar is worth less than two pennies of the 1913 gold-backed dollar. Reckless spending has put the U.S. in a hole of total debt - more than $1.5 Quadrillion Dollars - that can never be honestly paid, but only 'monetized' by printing endless paper fiat dollars that will hit a tipping point of untrustworthiness and suddenly trigger hyperinflation like Weimar's. Many of the socialist Democratic Party's leading 2020 presidential candidates are promising new giveaways that will cost more than $100 Trillion....Weimar hyperinflation's rebirth will soon come to America. Your family can escape it by converting a share of your paper dollars, and assets denominated in dollars such as stocks and bonds, into something that has been a reliable store of value for thousands of years - gold."

Gold At $1,500, How This Next Move Will Catch You Off Guard -Kitco
"All the right conditions are in place for gold to continue climbing, and one analyst is doubling down on his $1,500 an ounce call by year end. E.B. Tucker, director of Metalla Royalty and Streaming, said all the pieces are in place for a rally, which will come soon and fast. 'The thing I want you to think about is what happens to the market and where is the opportunity when gold hits $1,500. It’s going to hit it fast, I mean, it's up $60, roughly, in the last three trading days, so this move is going to happen quickly, and it's going to catch people off guard,' Tucker told Kitco News on the sidelines of the 121 Mining Investment conference in New York."

Facebook’s Mark Zuckerberg Finds Self on Receiving End of Fake Video -Wall Street Journal
"Facebook Inc. is getting its own taste of video fakery less than two weeks after the company was slammed by U.S. House Speaker Nancy Pelosi for declining to take down a doctored video of her. An altered video of Facebook CEO Mark Zuckerberg has surfaced on the company's Instagram app, where he appears to question his company's data practices. In the video, created by Israeli advertising agency Canny AI, Mr. Zuckerberg's mouth and voice are manipulated to show the CEO briefly discussing Facebook's power in a negative tone. 'Imagine this for a second: One man, with total control of billions of people's stolen data, all their secrets, their lives, their futures,' the altered Zuckerberg says above a fake caption that states Facebook is 'increasing transparency on ads.' The video, which was posted four days ago and seeks to mimic Zuckerberg’s voice, had amassed more than 6,000 views as of Tuesday night. While only seconds long, the video could be one of many to come that confront Facebook's content policy and revive questions about how companies that control content online should handle misinformation....The videos deploy a technology known as 'deepfakes,' which use machine-learning software to re-engineer people's mouths and voices in videos. Facebook, YouTube and other purveyors of user content are facing a constant barrage of digital fakery that is undermining the trust in their platforms."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,331 an ounce. Silver at $14.74 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on bargain-hunting and a weaker dollar. U.S. stocks retreated as a rally in the technology sector fizzled out.

Put Your Trust in Gold -Forbes
"Americans' trust in institutions, from the federal government to banks to the news media, has been deteriorating for decades. Sixty years ago, three quarters of Americans expressed faith in the government to do the right thing 'most of the time' or 'just about always.' Today, only one in five people, a near-record low, believes our leaders make decisions in the country's best interest. The news media fares just as poorly. A new survey finds that Americans believe 'fake news' is a bigger problem right now than violent crime, illegal immigration and terrorism....So where can you still put your trust in today's often cynical world? Friends and family. Our churches and other religious organizations. Our jobs. As an investor, I continue to have great faith in gold as a store of value during times of economic and geopolitical uncertainty. It's behaved precisely as I expect it to. In response to heightened global trade concerns and weakening economic indicators, investors have piled into the yellow metal, pushing its price up for a remarkable eight straight days as of last Friday. We haven't seen such a winning streak since June 2014, when gold traded up for 10 straight days....As I've explained elsewhere, tariffs are essentially taxes and, as such, they're inflationary. This has historically supported the price of gold. Besides Walmart and Costco, a number of other retailers have been telling customers and investors that prices will be going up thanks to the Chinese tariff."

3 reasons real estate is a lousy retirement investment: Location, location, location -USA Today
"Owning a home is wonderful, but don't bank on real estate as your chief retirement investment. People looking to real estate today for retirement riches often point to those big post-crisis gains. Trouble is, you can't buy past performance. And the recent past probably isn't a blueprint for the next 10, 20, 30 years or more. After the housing bubble popped in 2006, prices tanked for five years, bottoming in 2011....Like all assets, home prices move on supply and demand. The key to both? Location, location, location. The housing market isn't uniform nationally or even within the same city...Even where it's cheaper to buy, eye-popping gains aren't guaranteed. If you buy where new construction is limited and job opportunities are humming, keeping supply low relative to demand, you may do very well. But what if you buy where construction eventually outpaces job creation and population growth? What if a city is focused on one or two industries, and what if they fall from favor and fizzle?....Counting on real estate for your retirement nest egg is a very long-term bet on weak real estate development plus good economic fortune - both in one location....Instead, if you see a home purchase as merely guaranteeing a roof over your head and protecting against rising rents, things look different. You don't shun a neighborhood because more housing construction might constrain property values...Homes are great. Banking on them for retirement income isn't."

It's Time To Start Worrying About The Housing Market Again -Financial Samurai
"Despite publishing cautionary posts about investing in stocks, bonds, and alternatives at current levels, the biggest caution I should be writing about is taking out massive debt to buy property at record highs as of 2Q2019. If you lose 50% on your stock and bond portfolio, you'll be upset, but fine. If your property loses 20% of its value, however, this means you've lost 100% of your 20% downpayment. In this scenario, you'll also probably still be fine - if you don't have to sell. But when property prices correct by 20% or more, many people become forced sellers because they've also lost their jobs. Things To Know Before Buying Property Now: 1) Rents have softened from peak levels in many of the most expensive cities. Given property prices are a function of rental income multiples, a real estate buyer should be looking to buy at similar pricing discounts from peak rental periods....2) Mortgage rates are rising. With the surge in the 10-year bond yield all the way up to 3.2% in 2018, mortgage rates followed suit...The 10-year bond yield is hovering at 2.55% again in 2019....3) Prices have blown past their previous peaks in many cities. While every city is different, if you look at the prices in Denver and Dallas, you'll find that the prices are roughly 45% higher than they were in 2006-2007....4) Inventory is slowly creeping higher while rents are flatlining. The construction boom we've experienced over the past several years is finally showing up in the data as a wave of new inventory hits the market. When there's more inventory, pricing comes under pressure....5) It takes a while to recognize a peak. The housing boom that began in January 1996 ended in March 2006. But it wasn't until the beginning of 2008 that people started to accept that the housing market had already peaked....Too much debt is really what will kill you if we ever return to hard times. Buy a house to enjoy life instead of looking to make a profit."

Morgan Stanley bear warns his bleak scenario for 2019 is taking shape -Marketwatch
"Last week, tariffs on Mexico increased the chances that the Fed would cut rates. Investors obviously like that. So, stocks rallied. This week, Trump backs off those same tariffs. Investors apparently like that, too. Stocks again are rallying. Josh Brown of Ritholtz Wealth Management, please explain. 'The market wanted to go up. I don't think it mattered what happened. We just use these things as a reason after the fact to look smart,' the CEO of the New York City-based investment advisory firm wrote. 'That's how it works. It's not meant to be intellectually satisfying. It's meant to take money away from people who think they can explain things.'....Mike Wilson - hailed across Finance Twitter as 'Wall Street’s most bearish analyst' - says there's one big risk out there for investors...'The macro and micro economic data continue to deteriorate,' Morgan Stanley's chief investment officer wrote, pointing to weak durable goods orders, disappointing capital spending, soggy retail earnings, lackluster freight shipments, and a 'very soft' jobs number as evidence of an economy running on fumes....Don't be so quick to blame U.S.-China trade tensions, either, he said. 'The economy was already slowing and escalation potentially makes things worse.' And if you're waiting for a lower interest rates to ignite a rally... don't. 'A rate cut after a long hiking cycle tends to be negative for stocks, in contrast to a pause like in January, which is typically positive,' Wilson said....Wilson's team is looking for GDP to hit the skids in the second half. 'If you listen to what the markets have really been saying this year, they seem to agree with our view that growth will disappoint whether there is a trade deal or not,' he said."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,329 an ounce. Silver at $14.63 an ounce.

NEWS SUMMARY: Precious metal prices eased back from 3-month highs Monday on profit taking and a firmer dollar. U.S. stocks rose after the U.S. reached an agreement with Mexico on tariffs, easing some of the trade concerns.

China Is Buying More and More Gold as the Trade War Drags On -Bloomberg
"China extended its gold-buying spree, adding to reserves for a sixth straight month, as the protracted trade war with the U.S. hurts growth expectations and boosts demand for a portfolio diversifier. The People's Bank of China increased its bullion reserves by 15.86 tons, after almost 58 tons of gold were added to the nation’s stockpile in the five months to April. The rise reflects the government's 'determined diversification' away from dollar assets, Argonaut Securities (Asia) Ltd. analyst Helen Lau said, adding that retail demand has also picked up. At this rate of accumulation, China could buy 150 tons in 2019, according to Lau. China, the world's top gold producer and consumer, is facing the prospect of a slowing domestic economy as the Trump administration raised tariffs on Chinese imports and looked to cut off companies such as Huawei Technologies Co. from the U.S. market. 'It's a diversification away from the U.S. dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,' said Bart Melek, global head of commodity strategy at TD Securities. 'We have to remember that gold is nobody’s liability.' Bullion prices have risen for the past three weeks, hitting the highest level since April 2018, as investors seek out havens and traders increase bets that the Federal Reserve will cut interest rates following signs of weakness."

Americans view fake news as a bigger problem than terrorism -Axios
"Americans view made-up news and information as a bigger problem than other critical issues, including terrorism, immigration, climate change and racism, according to a new survey from Pew Research Center. Why it matters: The survey finds that Americans feel more worried today about fake news because it's undermining their trust in key institutions, like government and the media. The only issues that rank higher than made-up news and information as 'very big problems in the country today' are drug addiction, the affordability of health care, the U.S. political system, and the income gap. An overwhelming majority of Americans (68%) believe made-up news and information has a big impact on their trust in government, according to the survey....The big picture: Misinformation has always existed in various forms, but the internet era has made the problem harder to stop in real-time....What's next: Don't count on the public to be optimistic about the issue ahead of 2020. A majority of those surveyed said they think the problem will get worse over time."

Deepfakes: We Can No Longer Believe What We See. -New York Times
"Digital technology is making it much easier to fabricate convincing fakes. But more complicated fabrications, sometimes called 'deepfakes,' use algorithmic techniques to depict people doing things they've never done...making them appear to say things that they've never said at all. A recent research article suggested a technique to generate full-body animations, which could effectively make digital action figures of any famous person. It's clear that current arguments about fake news are only a taste of what will happen when sounds and images, not just words, are open to manipulation by anyone with a decent computer....We ordinarily tend to think that perception - the evidence of your eyes and ears - provides pretty strong justification. If you see something with your own eyes, you should probably believe it. By comparison, the claims that other people make - which philosophers call 'testimony' - provide some justification, but usually not quite as much as perception. Sometimes, of course, your senses can deceive you, but that's less likely than other people deceiving you. Until recently, video evidence functioned more or less like perception...We all know that Hollywood studios, with enormous amounts of time and money, can use CGI to depict almost anything, but what are the odds that a random internet video came from Hollywood? Now, with the emergence of deepfake technology, the ability to produce convincing fake video will be almost as widespread as the ability to lie. And once that happens, we ought to think of images as more like testimony than perception. In other words, you should only trust a recording if you would trust the word of the person producing it."

Goodbye Middle Class: The Percentage Of Wealth Owned By The Top 10% Just Got Even Bigger -Zero Hedge
"The middle class in America is being systematically eviscerated, and it is getting worse with each passing year...One new study has found that 10 percent of Americans now own 70 percent of all the wealth. Once upon a time, the United States had the largest and most vibrant middle class in the history of the world, but pretty soon we are just going to have the ultra-wealthy and everyone else. Our system has been designed to funnel as much wealth as possible to the very top of the financial pyramid, and that means that most of the rest of us are deeply struggling. And when you are just barely getting by from month to month, all it takes is one bad break to knock you completely out of the middle class and into poverty. According to a study that was recently conducted by the Federal Reserve, the percentage of wealth controlled by the top 10 percent of U.S. households has shot up from 60 percent in 1989 to 70 percent today...The study finds that the share of wealth among the richest 1% increased to 32% from 23% over the same period....Meanwhile, wages have stagnated for ordinary Americans. According to the Social Security Administration, the median yearly wage in the United States is currently just $30,533..and you simply can't support a middle class lifestyle for a typical American family on $2,500 a month....As the cost of living has risen faster than our incomes have, more Americans have been squeezed out of the middle class with each passing month....No matter which political party has been in power in Washington, the middle class has continued to shrink and more wealth and power has become concentrated in the hands of the elite. Now we stand on the precipice of the next major economic downturn, and many are deeply concerned about what that is going to mean for the future of our society."

RealMoneyBlog - Free daily/weekly email