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June Blog Archives 2018

June Blog Archives


6.29.18 - Housing Unaffordability Nears Peak

Gold last traded at $1,252 an ounce. Silver at $15.97 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a sharply weaker dollar. U.S. stocks were boosted by gains in banks and Nike, but ended with weekly losses amid anxiety over global trade frictions.

A minimum-wage worker in Venezuela could afford 5 cups of coffee each month - and nothing else -The Week
"Thanks to stunning inflation, it now takes 1 million bolivars to buy a cup of coffee in a Venezuelan cafe, Bloomberg reports. That's one-fifth of Venezuela's monthly minimum wage, and a 10,000-bill stack of Venezuela's most common bank note, the 100-bolivar bill. To illustrate Venezuela's rampant inflation, Bloomberg has tracked the price of a cup of coffee since December 2016 on its Cafe Con Leche index. One dose of caffeine cost 450 bolivars when the index launched two years ago, but 43,378 percent inflation in the last year has led to today's astronomical price. Additionally, if the pace of inflation over the past three months continues, Bloomberg estimates that inflation would be 482,153 percent after a year."

gold U.S. Housing Unaffordability Remains Near All-Time Peak -Political Calculations
"In February 2018, the ratio of the trailing twelve month averages of median new home sale prices in the United States to median household income reached an all time high value of 5.45, which is to say that the typical new home sold in the U.S. cost nearly 5 and a half times the annual income earned by a typical American household. Since then, preliminary sales data indicates that the prices being paid for new homes have slightly declined in recent months, while median household income has inched upward, where as of May 2018, the median new home costs 5.41 times the median U.S. household income. Looking at the data a little differently, we find that the growth of new home sale prices is indeed decelerating as incomes continue to grow."

It's no secret housing prices are approaching bubble levels again. Recently Craig R. Smith compared the price of gold with the Dow so far in the 21st century, which clearly show gold prices have risen more than threefold compared to the Dow. The chart above compares U.S. average income, new home prices, new car prices and gold prices between 1954 and 2018 (64 years). Notice it took 628 ounces of gold to buy a new home in 1954, but today it only takes 248 ounces of gold to buy a new home. Gold outpaced housing price inflation by over 250% - making gold a better store of value than both real estate AND the Dow stocks over the long-term!

U.S. Inflation Hits Six-Year High in May -Wall Street Journal
"U.S. inflation posted its highest annual growth rate in six years last month as lower unemployment and faster output of goods and services reduce slack in the economy. The personal-consumption expenditures price index, a broad measure that serves as the Federal Reserve’s preferred inflation yardstick, rose 2.3% in May from a year earlier, its biggest annual rise since March 2012, the Commerce Department said Friday. The year-over-year increase in April was 2%....It was the first time since early 2017 that the overall index surpassed the Fed’s 2% target, underscoring most policy makers' belief that the chronically low inflation of recent years is a thing of the past and that higher interest rates will be needed to keep prices in check from rising too much....At their most recent meeting earlier this month, Fed officials moved their median estimate for the necessary number of interest-rate increases in 2018 to four from three."

Deep State Goes to Silicon Valley -Bonner/Bonner And Partners
"Everybody knows that the feds played an important role in the funding and development of the internet. Al Gore even claimed he 'invented' it. Less well known is how the Deep State's clandestine agencies provided early-stage financing for today's Big Tech companies…and how they enjoy a cozy and mutually profitable relationship, controlling the flow of ideas, information, and opinions to the public…and preparing for the next stage: directly controlling its money…and its behavior....In the private sector, win-win is the only way to go. Whether at home or at work, you get along and go along, one-to-one, face-to-face…You give…and you get...roughly in equal measure. You say please and thank you, hoping to stay on good terms with your customer, your boss, or your spouse...Trade happens spontaneously between individuals, not between governments....Until a few months ago, the U.S. was engaged in only three major fake wars: A war against terror, (a big boom for the military/industrial complex) fought on many fronts around the world. A war on drugs (a big boom for the prison/police/law enforcement cronies), which has been going on since 1971, when Nixon declared it. A war on poverty, since Lyndon Johnson launched one in 1965 (an almost perpetual boost to the social welfare/crony complex). And now comes a war on trade, too. Yes, it's 'us' versus 'them' again! And happy days for the swamp’s lobbyists, schemers, chiselers, negotiators, contractors, and schmoozers. The regulations multiply. The power of the state increases. The win-win deals decrease. The win-lose deals increase. And the private sector pays."

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6.28.18 - Data breach exposes "Almost Every American Adult"

Gold last traded at $1,251 an ounce. Silver at $16.04 an ounce.

News Summary: Precious metal prices end lower on U.S. dollar momentum. U.S. stocks advance, but limited by ongoing uncertainty surrounding trading policy.

A new data breach may have exposed personal information of almost every American adult- Market Watch
"A little-known Florida company may have exposed the personal data of nearly every American adult, according to a new report. Wired reported Wednesday that Exactis, a Palm Coast, Fla.-based marketing and data-aggregation company, had exposed a database containing almost 2 terabytes of data, containing nearly 340 million individual records, on a public server. That included records of 230 million consumers and 110 million businesses. 'It seems like this is a database with pretty much every U.S. citizen in it,' security researcher Vinny Troia, who discovered the breach earlier this month, told Wired. 'I don’t know where the data is coming from, but it’s one of the most comprehensive collections I’ve ever seen,' he said...If confirmed, the data leak would be one of the largest in history, and far bigger than the Equifax data breach last year that exposed the personal information of about 148 million consumers."

GDP US first-quarter growth slowed more than estimated, weighed down by the weakest consumer spending in nearly 5 years - CNBC
"The U.S. economy slowed more than previously estimated in the first quarter amid the weakest performance in consumer spending in nearly five years....Gross domestic product was increased at a 2.0 percent annual rate in the January-March period, the Commerce Department said on Thursday in its third estimate of first-quarter GDP, instead of the 2.2 percent pace it reported last month. The economy grew at a 2.9 percent rate in the fourth quarter. The downgrade to first-quarter growth reflected weaker consumer spending and a smaller inventory accumulation than the government had estimated last month.....The United States is engaged in tit-for-tat trade tariffs with its major trade partners, including China, Canada, Mexico and the European Union, which analysts fear could disrupt supply chains and undercut business investment and potentially wipe out the fiscal stimulus."

China Think Tank Warns of Potential ‘Financial Panic’ in Leaked Note- Bloomberg
"A leaked report from a Chinese government-backed think tank has warned of a potential “financial panic” in the world’s second-largest economy, a sign that some members of the nation’s policy elite are growing concerned as market turbulence and trade tensions increase. Bond defaults, liquidity shortages and the recent plunge in financial markets pose particular dangers at a time of rising U.S. interest rates and a trade spat with Washington, according to a study by the National Institution for Finance & Development that was seen by Bloomberg News and confirmed by a NIFD official. The think tank warned that leveraged purchases of shares have reached levels last seen in 2015 -- when a market crash erased $5 trillion of value. 'We think China is currently very likely to see a financial panic,' NIFD said in the study."

US Jobless claims rise more than expected - Fox Business
"The number of Americans seeking unemployment benefits was larger-than-expected last week, with 227,000 people filing for jobless benefits versus the 220,000 Thomson Reuters consensus estimate. Applications for jobless benefits were also higher than the prior week, when 218,000 people filed. The 4-week average jobless claims applicants rose to 220,000, up slightly from the 221,000 in the prior week. Continued claims fell to 1.705 million, from 1.726 million in the prior week, slighltly less than the 1.725 million consensus estimate. The U.S. uninsured employment rate was unchanged at 1.2%."

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6.27.18 - A Bear Market Retirement Crisis

Gold last traded at $1,254 an ounce. Silver at $16.03 an ounce.

News Summary: Precious metal prices end lower on stronger U.S. dollar. U.S. stocks turned lower as a drop in technology stocks offset a rally in the energy sector.

Why Russia and Turkey Are Such Gold Bugs - Bloomberg
"Since December, 2017 Russia has cut its holdings of U.S. foreign debt by more than half. Instead, it’s been increasing the share of gold in its international reserves. That’s understandable behavior for a country that has to deal with an unpredictable U.S. sanctions policy, but it’s also part of a trend. Foreign governments and international organizations account for a decreasing share of outstanding U.S. debt, and some economies have in recent years aggressively upped the share of gold in their reserves instead....And yet the U.S. does have a few things to worry about when it comes to its dominance of other countries’ official international reserves. In relative terms, governments and central banks are less and less interested in the ballooning U.S. debt. U.S. debt, of course, is growing faster than global international reserves, and that partly explains the declining role of foreign countries in keeping the U.S. government solvent."

social security The next bear market in stocks will spark a retirement crisis- Market Watch
"Almost lost amid the torrent of recent news was a sobering item that will surely have far-reaching consequences. The U.S. government announced that for the first time since 1982, it is tapping into Social Security trust funds to pay current benefits to recipients and it is dipping into Medicare’s reserves to cover the costs of that program. The trustees also projected that the trust fund will run out of money by 2034 and that Medicare's fund for paying costly hospital bills will be depleted by 2026. That may ultimately force a cowardly Congress to cut benefits, raise taxes, increase the eligibility age, or some combination of the three. For the 52% of Americans who rely on Social Security for more than half their retirement income and the 25% of retirees who get more than 90% of their income from the program, that would be a disaster. But the 10,000 baby boomers who will turn 65 every single day from now until 2029 face an even broader retirement crisis that could cause big social and political fallout. Over the next few years, we will almost surely confront a bear market and recession that could decimate even substantial retirement portfolios, not to mention financially dicey state and local pension plans and the federal government itself. And those governments will have few tools to fight it."

Fed's Rosengren warns against running U.S. economy above capacity - Reuters
"The best way for the U.S. Federal Reserve to prolong the nation’s economic expansion is to pursue a monetary policy path where the economy does not run above capacity, Boston Fed President Eric Rosengren said on Wednesday....There is uncertainty within the Fed about how far and fast to further raise rates. Most policymakers back a policy of gradual rate hikes and the median forecast for the so-called neutral rate - the level that neither boosts nor contracts the economy - is 2.9 percent. That gives the Fed less room to maneuver than in the past in terms of cutting rates when another economic downturn occurs."

Hedge Fund Managers See Echo of Past Crashes in Markets- Bloomberg
"The ranks of hedge fund managers expecting impending market chaos are growing. Greg Coffey, the former star manager at Moore Capital Management who started trading at his own firm this year, is comparing the turmoil in May to the end of dotcom bubble in 2000. Horseman Capital Management’s Russell Clark, one of the most bearish hedge fund managers in Europe, invoked memories of the financial crisis of 2008 in a letter to clients. The two managers, among the best-known in Europe, join a growing chorus of investors predicting an end to the decade-old rally in asset prices, as central banks move to normalize policies and the rise of populism threatens trade across the globe. Billionaire George Soros in May warned of a looming financial crisis and an existential threat to the European Union....'The ghosts of 2000 are upon us,' Coffey wrote in a May investors letter for his Kirkoswald Capital Partners. 'Make no mistake, this is the current investment environment we are in, and will be through 2018.'"

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6.26.18 - The Dow's newest member

Gold last traded at $1,259 an ounce. Silver at $16.26 an ounce.

News Summary: Precious metal prices end lower on stronger U.S. dollar. U.S. stocks fell sharply, with Dow down more than 300 points, as new tariff threats rattled investors.

Now Even Swedes Are Questioning the Welfare State - Bloomberg
"Paying some of the world’s highest income-tax rates has been the cornerstone of Scandinavia’s social contract, with the political consensus in Sweden to save money for when the economy is less healthy. Yet the country is showing strains all too familiar in other parts of Europe with nationalists gaining support and Swedes increasingly questioning the sustainability of their fabled cradle-to-grave welfare system....There are also soaring crime rates, gang violence, complaints about education and pregnant mothers even being turned away from maternity wards due to a lack of capacity. The number of people waiting longer than 90 days for an operation or specialist treatment has tripled over the past four years."

market Meet Walgreens: The Dow's newest member - CNN Money
"It's the end of an era. General Electric, as of Tuesday morning, is no longer in the Dow. There have been tons of funereal stories about GE getting kicked out of the Dow after 111 years. But there haven't been as many about the "new kid" in the Dow -- Walgreens Boots Alliance....With GE getting shown the Dow door, drug maker Pfizer, with a price just above $36 a share, inherits the title of the Dow member with the smallest weighting....The Dow includes banking giants JPMorgan Chase and Goldman Sachs in it, not to mention Pfizer competitors Merck and Johnson & Johnson. It includes Microsoft and Apple, too."

GE, a cornerstone of the Dow which prided itself on bringing "good ideas to light," has fallen into the bad idea of over-extended debt. As Craig Smith points out in his latest video, GE now brings the total to 12 Dow components which have been delisted since 2000 (that's 40%!).

Rising concerns over hackers using satellites to target US- The Hill
"The rapidly expanding number of satellites transmitting GPS locations, cellphone signals and other sensitive information is creating new opportunities for hackers. It's a risk exacerbated by the growing number of aging satellite systems in circulation. While it is cheaper to leave old satellites in orbit rather than pulling them from space, the outdated systems are even easier targets for hacking. Just last week, security researchers at Symantec warned that a China-based cyber espionage group known as Thrip targeted satellite, telecom and defense companies in the United States and Southeast Asia....Thrip used malware to infect computers linked to the satellites in an attempt to seize control of them — efforts that suggest the group’s motivations could extend beyond spying and include 'disruption,' according to Symantec."

Stock market inches up after trade-driven selloff; Dow still below key technical level - Market Watch
"U.S. stocks were slightly higher on Tuesday, with major indexes moving between slight gains and breakeven levels as investors digested the previous session’s sharp selloff, which was spurred by uncertainty over trade policy, a factor that remains unresolved...Investors remain worried that trade tensions between the U.S. and major trading partners such as China and the European Union could develop into a big drag on the global economy."

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6.25.18 - Three Warning Signs Of A Bear Market

Gold last traded at $1,268 an ounce. Silver at $16.39 an ounce

News Summary: Precious metal prices ease back despite weaker U.S. dollar. U.S. stocks fell sharply, with Dow down more than 300 points, as new tariff threats rattled investors.

The machines warn of ‘significant’ downside risks facing the stock market- Market Watch
"Blue chips on Friday managed to avoid their longest losing streak since 1978, putting an end to eight-straight down days with a triple-digit pop...But the trade tensions won’t be going away anytime soon...There’s no shortage of worst-case scenarios to contemplate with regards to what happens to the global economy should the U.S. keep heading down this path. But what are the machines telling us? To find out, Barron's asked Wolfe Research's Tin Luo, former star quant at Deutsche Bank and longtime artificial-intelligence evangelist. He doesn’t see robots replacing money managers anytime soon, but he’s a big believer in the edge that machine learning can give investors. And those machines are firing off 'trade war risk' signals...Couple political risks with rising interest rates and you probably don’t need a robot to tell you there are clouds hanging over this market"

gold ‘Significant Risk Of Recession In 2020’; What Does This Mean For Gold?- Kitco
"Despite stronger economic growth in 2018, Capital Economics is warning investors of a looming slowdown, estimating a 1.3% GDP growth in 2020 and a reversal of Federal Reserve’s tightening cycle....What this means is that there is a 'significant risk of a recession' in 2020, the firm’s economists wrote...Short-term economic growth that the U.S. is seeing this year will encourage the Fed to raise rates at least four times over the next 12 months, Capital Economics added. But, rising interest rates will eventually start to hurt the economy, bringing about an economic slowdown and reversal of the Fed’s monetary policy tightening... Capital Economics is neutral on gold prices in the short-term, projecting for the yellow metal to end the year around $1,300 an ounce. But, economic slowdown and a risk of a looming recession, could boost gold prices towards $1,400 an ounce within just two years, the firm's commodities economist Simona Gambarini said earlier in June. 'We are more positive on the prospects for prices in 2019 and 2020 when a cyclical slowdown in the U.S. economy will force the Fed to end this tightening cycle sooner than it anticipates and to start cutting rates in 2020,' Gambarini said. 'Our end-2019 and end-2020 forecasts for prices are $1,350 and $1,400 per ounce, respectively.'"

The Week Ahead: Three Warning Signs Of A Bear Market -Forbes
"The Dow Industrials managed to close higher on Friday, avoiding the longest daily losing streak since 1978. Then, the Dow closed lower for eight days in a row, and a losing day on Friday would have been nine days in a row. Again, this kind of streak has not happened since February 1978....Even though the first tariffs are scheduled to take effect July 6, there is uncertainty over which tariffs will actually be enforced. Therefore, it is difficult to determine what impact they will have on the economy and the stock market. As the rhetoric continues between the U.S., China, Canada and the Eurozone markets, more economists are expressing their views on what these tariffs might mean...Some economists are concerned that the trade conflict could offset the economic benefit of the growing U.S. economy and the tax cuts. If the threatened tariffs on China are implemented, then economists like Moody’s Mark Zandi fear that 'the nine-year economic expansion would veer into recession.'"

Dow drops 400 points as Trump reportedly plans to curb Chinese investments in US tech - CNBC
"Stocks kicked off the week trading lower on Monday as the Trump administration is reportedly preparing to restrict investment in U.S. technology by Chinese companies....The Wall Street Journal reported Sunday that President Donald Trump plans to bar several Chinese companies from making investments in U.S. tech. The newspaper also reported that the administration wants to block additional technology exports to China. Both measures are expected to be announced by the end of the week....Increasing trade tensions between the U.S. and its key trade partners, including China, have kept Wall Street on edge. The major indexes finished last week lower after Trump asked the U.S. trade representative to target $200 billion worth of Chinese products for tariffs. Trump also raised the possibility of slapping a 20 percent charge on European cars."

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6.22.18 - China Threatens To Go After Dow Index

Gold last traded at $1,270 an ounce. Silver at $16.45 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors tried to shake off jitters about escalating China trade war tensions.

Gold prices edge up as dollar retreats from 11-mth peak -Reuters
"Gold prices inched higher on Friday after hitting a six-month trough in the previous session, as the U.S. dollar pulled back from a 11-month peak on profit-booking....Gold has rebounded a little bit from the lower side due to the weakness in the dollar, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies....Meanwhile, the ongoing trade war between the world's two largest economies has now claimed another victim - Germany's auto sector."

stop China China threatens to go after Dow index giants next in trade war -Fox Business
"Dow members Boeing, Apple and Nike may be targeted by the Chinese as the trade war with the U.S. rages on, according to The Global Times a state-controlled tabloid. China may need to adopt a 'hard-line approach' targeting U.S. firms listed on the Dow Jones Industrial Average, if President Donald Trump keeps up with his trade threat antics, the paper reported. 'China does not want a trade war, but if Chinese companies suffer great losses due to Trump's protectionist trade policies, China will have no choice but to fight back in a bid to safeguard the interests of Chinese investors,' The Global Times said on Thursday. The 30 companies that comprise the weighted Dow Jones Industrial Average are among the world's biggest and storied companies and may be some of the first to bear the brunt of China's countermeasures,' the outlet added....'China is in full combat mode and prepared to strongly respond to any probable threat or economic assault from Trump,' the Global Times reiterated in its report."

Supreme Court Opens The Door To Internet Taxes - What Comes Next Could Be A Lot Worse -Investors
"Whatever you think about the issue of taxing internet sales, the simple fact is that the Supreme Court has just guaranteed that people across the country will now be paying more in state taxes. It's hard for us to see how this is good news. In its 5-4 decision on South Dakota v. Wayfair, the court overturned two previous rulings that prevented states from taxing sales of out-of-state companies. That meant a catalog company based in Maine didn't have to navigate 45 state sales-tax laws to figure out how much each customer owed, and then remit that money to the right states. Brick-and-mortar stores have been trying to lift this ban for decades, because, they say, it unfairly tilts the playing field in favor of catalog and online retailers. According to the Government Accountability Office, this break cost states up to $13.4 billion in lost revenue last year alone. And, retailers say it cost jobs and hurt local economies. Not surprisingly, Amazon.com, Shopify, Etsy, Wayfair and other e-commerce stocks dropped on Thursday....Whatever the merits of the decision, the Court's ruling means not only higher taxes for consumers, but higher prices."

EU retaliatory tariffs on raft of US goods go into force -ABC News/Associated Press
"The European Union started enforcing tariffs Friday on American imports like bourbon, peanut butter and orange juice, part of a growing global trade rift that's likely to intensify over the next few weeks. The EU tariffs on $3.4 billion worth of U.S. products are in retaliation for duties the Trump administration has imposed on European steel and aluminum. The EU trade commissioner has acknowledged that the EU targeted some iconic American items to put political pressure on U.S. President Donald Trump and senior U.S. politicians. European Commission spokesman Alexander Winterstein said the EU's response is proportionate and reasonable....Trump imposed tariffs of 25 percent on EU steel and 10 percent on aluminum on June 1. Europeans claim that breaks global trade rules. The spat is part of a wider tussle over global trade. In two weeks, the United States will start taxing $34 billion in Chinese goods."

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6.21.18 - Supreme Court Rules States Can Tax Web

Gold last traded at $1,270 an ounce. Silver at $16.32 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Thursday on bargain-hunting despite a firm dollar. U.S. stocks fell for an 8th day on trade war worry as internet tax dragged tech stocks down.

Gold prices inch up, but firm dollar limits gains -Reuters
"Gold prices edged up on Thursday, but hovered close to a six-month low touched in the previous session as a firm U.S. dollar curbed gains....The dollar index, which measures the greenback against a basket of six major currencies, stood at 95.102 after rising to 95.299 overnight, its highest since mid-July 2017....A developing trade war between the world's biggest economies is weighing on business confidence and could force central banks to downgrade their outlook, the world's most powerful policymakers argued on Wednesday. It is too early to assess the monetary policy impact of an escalation in trade tariffs between the United States and its partners but there is no reason for optimism, the head of the European Central Bank said on Wednesday....The European Union will begin charging import duties of 25 percent on a range of U.S. products on Friday, in response to U.S tariffs imposed on EU steel and aluminum early this month, the European Commission said on Wednesday."

Supreme Court rules states can force online shoppers to pay sales tax -CNBC
"States have broad authority to force online retailers to collect potentially billions of dollars worth of sales taxes, the U.S. Supreme Court ruled on Thursday, siding with South Dakota in its high-profile fight with e-commerce companies. The justices, in a 5-4 ruling against Wayfair, Overstock.com and Newegg, overturned a 1992 Supreme Court precedent that had barred states from requiring businesses with no 'physical presence' in that state, like out-of-state online retailers, to collect sales taxes."

web surfing

"The ruling is likely to lead other states to try to collect sales tax on purchases from out-of-state online businesses more aggressively. It also likely will lead to many consumers paying more at the online checkout....Most states would need to pass legislation before seeking to collect the additional taxes, although some have already enacted laws or regulations similar to South Dakota's. The ruling opens the door to a new revenue stream to fill state coffers - up to $13 billion annually, according to a federal report - while imperiling a competitive advantage that e-commerce companies had over brick-and-mortar rivals that already must collect sales tax."

The Meaninglessness of the Stock Market Index in a Digital World -The Atlantic
"General Electric, which has been a component of the Dow Jones Industrial Average since Teddy Roosevelt was president in 1907, will be pulled out of the basket of 30 stocks next week. It'll be replaced by... Walgreens. Why'd GE get bounced? While it still generates a tremendous amount of revenue - $120 billion in 2017 - its margins have fallen, and it swung into the red in each of the past two quarters. As a result, GE's shares have fallen roughly 60 percent, from highs close to $32 per share at the end of 2016 down to today's close at $12.88. Its shares performed the worst of any in the Dow last year. The index is supposed to represent the country's 30 biggest, best companies out of the more than 3,500 publicly listed corporations....There is a nostalgic comfort in thinking that the same single number, composed of a potpourri of well-known companies nominally headquartered in this country, represent the American role in the massively complex, globalized economy. However: The index probably can't include the really high-priced stocks like Google and Amazon. Back in 2012, Adam Davidson argued that the index isn't even a good measure of the companies that it contains, because the price of an individual share of a company is not the best measure of its value to investors....'The stock market might actually be our worst option. Rather than being a useful indicator, it's an anxiety-amplification device. It reflects investors' own reactions, and often hysterical overreactions, as they progress through the turmoil,' Davidson wrote."

A Modest Proposal for Making America, and the World, Great Again -Benko/American Spectator
"Time to think Big by thinking Small. Hello, Tim Draper. Break California up into three States? High time! What might be the larger implications of tugging on a loose thread of the sweater that is the Megastates that dominate the world?....Let us place Draper's scheme to divide California in three into the Grand Scheme of Things: the decline and fall of the Megastate....Yes, back in the Days of Yore the 13 colonies and their successor states - and their first attempted union - were weak. Small, and vulnerable, America was at risk of being a plaything of foreign Emperors....President William Jefferson Clinton famously said in his 1996 State of the Union address, 'the era of big government is over.' This was prophetic. And yet...The conservative movement has long been thwarted in its noble efforts to seriously downsize the federal government. Why? I contend that this failure was because conservatives failed to think Big - meaning Small - enough....Make America (and the world) Great Again by restoring nations to loose but loyal confederations of small states. Let's think small so that the natural power of affection for our families and our neighbors will work as a force to keep our governments good."

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6.19.18 - Gold: The Best Kept Secret on Wall Street

Gold last traded at $1,278 an ounce. Silver at $16.33 an ounce.

NEWS SUMMARY: Precious metal prices remained steady despite trade war fears and a stronger dollar. U.S. and global stocks fell sharply as new U.S.-China tariffs rattled investors.

Dow tumbles 300 points, wiping out gain for year -CNBC
"Stocks fell sharply on Tuesday after President Donald Trump's latest threat to China increased fears of an impending trade war between the world's largest economies. The Dow Jones industrial average fell 306 points, with Boeing, DowDuPont and Caterpillar as the worst-performing stocks in the index. The 30-stock index also erased all of its gains for the year....Trump asked the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs, at a rate of 10 percent. If China 'refuses to change its practices' and insists on continuing with the new tariffs it recently declared, then the additional levies would be imposed on Beijing, Trump said Monday night. Soon after, the Chinese Commerce Ministry issued a response, stating that the latest threat of more tariffs violates previous negotiations and consensus reached between both the U.S. and China. 'The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends,' the ministry said."

dowvsgold Gold: The Best Kept Secret on Wall Street -Craig R. Smith
"Gold remains the natural, constant standard of real money that it was in year 2000, and that it was 2000 years ago....Since 2000, the Dow 30 has increased by 109%, from $11,722 to $25,517 – on average, about 6% per year...Gold, by comparison, since 2000 has increased 400% -- from $257 to $1,300 today – an average of 22.2% per year….or about 3.7 times more than stocks....Advertisers try to sell us what sparkles and can be given a temporary shine, from stocks to mysterious digital currencies with no proven track record....All the natural gold ever mined or gathered as nuggets would fit into a cube only 66 feet on a side, or would fit into one Olympic-sized swimming pool. Gold’s scarcity, incorruptibility, and beauty explain why gold remains precious while things based on paper and politics, from stocks and bonds to government fiat money, have been valuable for a brief moment and then been 'delisted,' often suddenly, by history. With the steady, reliable glow of gold lighting your path, you never need worry that a company or its stock are being mismanaged, or that government or banks are manipulating values." Full story: Watch 5-minute Craig Smith video

Only A Stock Market Rout Can Avert A Trump Trade War -Investors
"The U.S. economy is cruising along so well right now that it might take a stock-market rout to avert a Trump trade war....Now that verbal bombs aimed at Europe, Canada, Mexico, China and others are being followed by live tariffs and retaliatory action, the prospect for talks have never looked so dim. The trade conflict seems likely to get worse before it gets better. Meanwhile, Republicans in Congress have largely ruled out trying to wrest control of trade policy back from the White House. The only thing that might stop a trade war in its tracks - before the costs escalate - would be a suddenly lousy stock market that begins to put Trump's economic record and GOP control of Congress in jeopardy....Ed Yardeni, chief investment strategist of Yardeni Research, wrote that his bullish stock-market outlook requires Trump's 'benevolent Dr. Jekyll persona' of tax-cutter and deregulator to triumph over his protectionist Mr. Hyde. 'If his tariffs trigger widespread retaliation and an outright global trade war, then earnings will take a dive,' Yardeni wrote. 'We continue to expect that it will all end peaceably. But it isn't heading in that direction right now.'"

Mergers Would Make AT&T, Comcast World’s Most Indebted Companies -Wall Street Journal
"A wave of expected big media mergers would transform AT&T Inc. and Comcast Corp. into the two most indebted companies in the world, a standing that carries uncharted risks for investors in the firms' bonds. AT&T has bought Time Warner Inc., and Comcast hopes to purchase most of 21st Century Fox Inc. The companies would carry a combined $350 billion of bonds and loans, according to data from Dealogic and Moody’s Investors Service. 'It's a very big number,' said Mike Collins, a bond fund manager at PGIM Fixed Income, which manages $329 billion of corporate debt investments. 'It has fixed-income investors a little nervous and rightfully so.'....Global corporate debt excluding financial institutions now stands at $11 trillion, and the median leverage for such companies rated investment grade has jumped 30% since the eve of the financial crisis in 2007, according to Moody’s research....'The risk is that everyone wants to get out of the debt at the same time,' Mr. Collins said. 'That's when it gets ugly.'"

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6.18.18 - Five Reasons to Buy Gold Price Dips

Gold last traded at $1,280 an ounce. Silver at $16.44 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on rising uncertainty and a flat dollar. U.S. stocks fell for a 5th day as a potential trade war between the U.S. and China left Wall Street rattled.

5 Reasons The Drop In Gold Prices Shouldn't Worry Investors -Forbes
"Gold prices took a hit at the end of last week, and it has some observers concerned. But the truth is it shouldn't be worrying. Here's why gold investors shouldn't worry. 1. A 2% move in a day isn't much....2. Gold prices mostly move down when the dollar gains strength....3. When gold prices do poorly, then other investments tend to do well....4. Gold is still useful to own during times of market stress....5. The fact that gold prices move up and down is one of its attractions for investors....All these points remain true despite Friday's pullback. If you own gold and are worried that prices may drop then think about why you purchased it in the first place. Most veteran investors say that they own it for one of the following three reasons: To help with portfolio diversification, or as a hedge against the declining value of paper money, or as insurance that you'll always be able to raise cash by selling some of the metal."

bubble The greatest asset inflation bubble in 20 years, fund manager warns -CNBC
"Nobody wants to use the 'B' word, but a bubble is upon us, a growing number of market watchers are warning. And it could pop sooner than many expect, Centricus Asset Management Fund Manager Ralph Jainz said Monday, joining a long list of financial players casting doubt on the strength of the market's current bull run. 'Nobody wants to talk about this being a bubble. It's the greatest asset inflation bubble we have seen in 20 years,' Jainz said during an appearance on CNBC's 'Squawk Box Europe.'...'Dispersion levels have been rising, people have been selling the losers to buy the winners,' the fund manager said, describing stocks that were already expensive becoming more expensive - like those in tech - as buyers rush to those out-performers and in turn sell the underperformers....Tech stocks have become so expensive, according to some investors, that many believe they no longer have room to grow."

The ominous new politics of trade - Ponte/WND
"Last Friday, markets were shaken by President Donald Trump's levy of $50 billion in tariffs via a 25 percent duty on 1,102 Chinese products involving industries such as aerospace, communications and information technology, and robotics....Mr. Trump's 'necessary' actions, says CPA Chairman Dan DiMicco, were 'to hold China accountable for its hostile actions and to ensure the future viability of key U.S. high-tech sectors.' 'China steals American technology by any possible means, then sells it back to the U.S. at a profit,' says CPA CEO Michael Stumo. 'In doing so, Beijing is not only directing the erosion of America's competitiveness in high-tech industries, but ensuring that domestic U.S. companies go out of business at the same time.'....Nations are starting to use targeted tariffs and other trade manipulations, wrote journalist Monica Showalter, 'to change our politics and force us [to] vote differently.' If you thought 'Russian collusion' was manipulating American politics, then what does it mean when foreign nations target their trade policies to harm one political party and thereby help elect its rival party? How long before one political party colludes with foreign powers to politicize trade?" Full story

Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt -CNBC
"Foreign governments pulled back their purchases of longer-term U.S. debt as trade tensions escalated around the world....'We need all the help we can get in the search for buyers of US Treasuries due to the enormous supply coming our way in the next few years,' Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. 'Our stance on trade with our trading partners could very well play into this in coming months and quarters, especially with China, the largest owner of US Treasuries.' President Donald Trump's administration has been in a tit-for-tat battle of tariff threats with multiple U.S. trading partners, particularly China....One of the most glaring declines has come from Russia, which sliced its holdings of U.S. debt nearly in half from March to April, from $96.1 billion to $48.7 billion....With the budget deficit expected to rise in coming years - passing $1 trillion in 2020, according to Congressional Budget Office estimates - the government has been issuing debt heavily."

Goldman Co-Head Of Trading: I Am Worried The Market May "Break" And Not Snap Back -Zero Hedge
"Several weeks ago, Goldman's Chief Markets Economist Charlie Himmelberg became the latest Wall Street strategist to admit the threat to the market posed by High-Frequency Trading (HFT). The Goldman strategist warned that HFTs - due to their inability to process nuanced fundamental information - may trigger surprisingly large drops in liquidity that exacerbate price declines, and result in flash crashes....There will come a day 'with actual bad news' when the selling onslaught is so broad, not even BTFD HFTs will be able to resist the sudden avalanche of selling. That's the day when the increasingly fragile market, one in which 'liquidity is the new leverage' will officially break and stocks will 'trade outside of the NBBO constituting a genuine flash crash' in a 'negative feedback loop that causes more volatility.' A selloff from which there will be no 'snap back.'....And, more ominously, as of this moment - for the first time in the past decade - central banks, that ultimate backstop of every market crash, are once again draining liquidity...which, as we and Deutsche Bank explained previously, together with central bank tightening has been the catalyst for every major 'market event', whether economic recession or market crash or both in the post-Fed era."

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6.15.18 - Could Bitcoin Crash Hit Stocks?

Gold last traded at $1,287 an ounce. Silver at $16.76 an ounce.

NEWS SUMMARY: Precious metal prices fell Friday on short-term profit taking and trade war fears. U.S. stocks fell after the Trump administration said it will impose a 25 percent charge on up to $50 billion in Chinese goods.

As trade war with China looms, U.S. readies second wave of duties -Reuters
"The United States has nearly completed a second list of tariffs on $100 billion in Chinese goods, as President Donald Trump prepares to enact an initial round of duties that is expected to trigger an in-kind response from Beijing, several sources said. The second wave of products has been cued up as Washington prepares to announce on Friday a list of about $50 billion of goods to be targeted. They are part of Trump's decision to go forward with 'pretty significant' tariffs, an administration official said on Thursday. The $100 billion list will be subject to the same public comment and hearing process as the $50 billion list, so it could take 60 days or more to put into effect, three sources familiar with the Trump administration’s thinking on tariff plans told Reuters. The list is intended to minimize the impact on U.S. consumers and businesses by selecting goods where there are ample alternative supplies from other countries. Eliminating any impact may be impossible."

CRS Did You Know That Gold Outshines Stocks? -Craig R. Smith
"If the stock market is a great investment, why do Madison Avenue executives get paid tens of billions of dollars each year to promote it? Gold puts real, reliable value in your hands, and gold companies spend comparatively little on advertising. I looked into both. Since 2000, the Dow 30 has increased by 109%, from $11,722 to $25,517 - on average, about 6% per year. But is this a giant shell game? The Dow during those years changed, delisting 11 of its 30 benchmark companies and replacing 37% of them since 2000. They just keep replacing the numbers. Gold, by comparison, since 2000 has increased 400% - from $257 to $1,300 today - an average of 22.2% per year…or about 3.7 times more than stocks. And nothing has been 'delisted' from gold. It remains the natural, constant standard of real money that it was in year 2000, and that it was 2000 years ago....Gold's scarcity, incorruptibility, and beauty explain why gold remains precious while things based on paper and politics, from stocks and bonds to government fiat money, have been valuable for a brief moment and then been 'delisted,' often suddenly, by history." Full story: Watch 5-minute Craig Smith video

Is Mr. Trump's "madness" really leading to the Gold Standard? -Price/Plata
"Way back in 1995, when Mexico was in the throes of another financial crisis, I figured out the problem of the existing world's monetary system, based on the paper dollar as the fundamental currency of the world. The problem is really very simple: If the dollar - such as it is - is going to be the basis of the world's monetary system, and therefore required by all Central Banks as Reserves, there is only one way that these CBs can obtain those Reserves: their countries are forced to undersell all US producers, in order to be able to sell more to the US, than they buy from the US. The difference between the dollars they get from sales, is more, than the dollars they spend to buy from the US. That difference - known as the US Trade Deficit - flows to the CBs of the world and swells their Reserves. So if Mr. Trump wants to cut down, or even ideally abolish the Trade Deficit, that would mean that foreign CBs would have to find it much harder to obtain dollars for their Reserves....There is one way, and only one way, to do away with the Trade Deficit and renew the productivity of the US: abandon the present International Monetary System return to the gold standard. There are no 'Trade Deficits' under the Gold Standard, because all countries have to pay Cash Gold for their imports, and collect Cash Gold for their exports. Result: Balanced Trade. No Trade Deficits....Is Mr. Trump's 'madness' really leading to the Gold Standard? Is that what he really wants? Because if he continues to undermine the present US Dollar as the World's Reserve Currency, by making it impossible for CBs to obtain Dollars through the US Trade Deficit, that would appear to be the likely final outcome."

Bitcoin is crashing. Here’s what it could mean for stocks -CNBC
"Bitcoin is now nearly a third of its record high of nearly $20,000 reached last December. To investors worried bitcoin's bursting bubble could spill over into equities, one market watcher says the crisis is contained. 'There are things to be concerned about in terms of the stock market here with emerging markets and other issues, but I don't think bitcoin is going to be one of them,' Matt Maley, equity strategist at Miller Tabak, told CNBC's 'Trading Nation' on Wednesday....Bitcoin 'attracted a huge amount of speculative capital early and that capital is getting bled out,' Schlossberg said on Wednesday's 'Trading Nation.' 'You're going to see even a further divergence between the price of bitcoin and the price of stocks going forward. The $5,000 area is going to be the line between the diehards and the fair-weather fans in bitcoin. If the currency basically drops below that level I think you're going to see forced liquidation from all ends,' he said."

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6.14.18 - Cashless Society Leading to Chaos?

Gold last traded at $1,308 an ounce. Silver at $17.26 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying despite a sharply higher dollar. U.S. stocks rose as media and tech stocks jumped on deal-making.

Two Banks See Post-FOMC Upside Potential For Gold Prices -Kitco
"Gold is poised to climb in the months ahead despite another U.S. interest-rate hike on Wednesday and prospects for further monetary tightening, said two banks in research notes Thursday. 'Following the seventh U.S. rate hike this cycle and with the promise of two more before year-end, I see the potential for the gold focus turning more supportive,' said Ole Hansen, head of commodity strategy with Saxo Bank. Suki Cooper, precious-metals analyst with Standard Chartered, was also upbeat on gold. She commented that the upgrade to inflation projections were modest, and Standard Chartered strategists noted the Fed is deep into a tightening cycle, with limited scope for U.S. rates to move higher relative to the euro zone. 'Gold price risks are skewed to the upside, in our view, despite the hawkish FOMC meeting yesterday,' Cooper said. 'FOMC meetings have marked the cycle lows for gold, as prices have softened in the weeks before the meeting, but have tended to recover thereafter,' Cooper said. 'We continue to expect gold prices to test five-year highs in Q4 2018.'"

cashless Will a cashless society lead to chaos? -Independent
"Recent payment tech and bank problems show how our digital future could have consequences. Technology is great when it works, goes the adage. Yet the past few weeks have seen some stunning examples of how bad things can get when it doesn't. First there were the multiple problems at TSB, with some customers still claiming to have issues more than a month on from their disastrous IT switchover. The initial chaos left millions of customers unable to access online or mobile banking, while some were even mistakenly given access to other people's accounts....Then at the end of last week there was a Europe-wide Visa outage, leaving many customers unable to make card payments. Some of those cardholders found that their attempted transactions meant funds in their accounts were ringfenced, leaving them unable to even withdraw cash for use. Different issues, different outcomes but one unifying problem: the tech failed and left many people with no alternative. Many bank branches are closed; many people no longer routinely carry cash. When problems arose, people were stuck. It's possible to view this as a cautionary tale for our potential future as a cashless society. The more we rely on technological advancements, the more we will struggle when they fail."

To discover the latest developments in the ongoing 'war on cash', request a FREE copy of our 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction.

Can the Euro Be Saved? -Stiglitz/Project-Syndicate
"The euro may be approaching another crisis. Italy, the eurozone's third largest economy, has chosen what can at best be described as a Euroskeptic government. This should surprise no one. The backlash in Italy is another predictable (and predicted) episode in the long saga of a poorly designed currency arrangement, in which the dominant power, Germany, impedes the necessary reforms and insists on policies that exacerbate the inherent problems, using rhetoric seemingly intended to inflame passions. Italy has been performing poorly since the euro's launch. Its real (inflation-adjusted) GDP in 2016 was the same as it was in 2001. But the eurozone as a whole has not been doing well, either. From 2008 to 2016, its real GDP increased by just 3% in total....If one country does poorly, blame the country; if many countries are doing poorly, blame the system. And as I put it in my book The Euro: How a Common Currency Threatens the Future of Europe, the euro was a system almost designed to fail....Across the eurozone, political leaders are moving into a state of paralysis: citizens want to remain in the EU, but also want an end to austerity and the return of prosperity....Germany and other countries in northern Europe can save the euro by showing more humanity and more flexibility. But, having watched the first acts of this play so many times, I am not counting on them to change the plot."

Social Security & Medicare are slowly dying, but no one in Washington will lift a finger -USA Today
"During the 2012 presidential campaign, an infamous TV ad portrayed vice presidential candidate Paul Ryan murdering a grandmother...Being called a murderer was Ryan's reward for trying to keep Medicare solvent....Without any changes, the CBO projected that spending on those programs would grow to an unsustainable 12 1/4% of GDP by 2050....The Romney-Ryan defeat in 2012 killed the political viability of entitlement reform. Five years later, the CBO projected that without changes to stem runaway federal health care spending, major health care programs 'would account for 40% of federal noninterest spending in 2047, compared with 28% today.'....It's a similar story for the federal debt. In 2010, federal debt held by the public was 62% of GDP. At the end of 2017, it was 76.5% of GDP. This April, the CBO projected that it would reach 96.2% in 2028....We delayed dealing with these crises in the hope that they would fall to some future suckers. But we're the suckers. We believed the lies. All our delays bought us was a bigger crisis - one that's just a few years away."

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6.13.18 - Food Stamps Hit 8-Year Low

Gold last traded at $1,303 an ounce. Silver at $17.11 an ounce.

NEWS SUMMARY: Precious metal prices were steady Wednesday on dollar weakness after the Fed lifted rates 0.25%. U.S. stocks traded lower following the Fed rate hike, despite upbeat tech news.

Gold steady as investors brace for expected Fed rate rise -Reuters
"Gold prices traded just below $1,300 an ounce on Wednesday ahead of a U.S. Federal Reserve policy announcement that could trigger a sharp move in prices. Investors expect the Fed to raise interest rates but want to know if it intends to tighten policy four times in 2018 or three times, as it indicated earlier this year....Gold prices have tended to fall before recent U.S. interest rate rises, as investors anticipate the change, but rally afterwards. 'It might be different this time,' said Robin Bhar, head of metals research at Societe Generale. 'Forward guidance will be crucial ... That will dictate direction in the short term.'....The dollar weakened slightly against a basket of major currencies, giving gold some support."

Fox Business Fed Lifts Interest Rates: Good or Bad? -Fox Business
Is the Federal Reserve helping or hurting the economy by raising interest rates at least four times this year? Will the flattening interest rate yield curve signal a recession is coming; as it has in the past? Watch now to find out.

Trump's Creative Destruction of the International Order -Foreign Policy
"Apparently, according to multiple reports, U.S. President Donald Trump blew up the post-Cold War world order during brief, contentious meetings at the G-7 summit in Ottawa this weekend. His summit with North Korea, of course, promises more of the same, though at least in a manner that most support....Trump has indeed torpedoed decades of assiduous work to build a global economic and political alliance among the world’s largest economies. Even then, the result might not be as bad as one might think. First, there's nothing inherently objectionable about trying to alter a given international order. Such systems are fluid; they should not be fetishized or treated a permanent just because they have served purposes in the past....For the moment, we are in the realm of angry words, not structural changes. The minor tariffs on steel and aluminum, along with the retaliatory actions of Canada, Mexico, the EU, and China for the moment amount to a few billion dollars in a global trade system in the trillions....To be fair, something is changing. China is easing its way into its identity as an economic superpower, and another dozen or so of the world's most affluent nations, including the G-7 members, are less and less willing to take a back seat to the United States....Trump supporters cheer because so many are up in arms...Trump did what Trump does: he stirred the pot, poked the hornet's nest. As for the rest, the world is evolving in ways that have nothing to do with him, began before him, and will long outlast this particular tempest."

Food Stamp Enrollment Dips to Lowest Level in 8 Years -Breitbart
"Overall enrollment in the nation's food stamp program has dipped to its lowest level in eight years, according to the latest statistics released by the U.S. Department of Agriculture (USDA). The latest USDA data reveals that enrollment in the Supplemental Nutrition Assistance Program (SNAP) - the federal government program that administers food stamps - dropped to 40,083,954 in March 2018. The last time enrollment in the food stamp program reached that level was February 2010, when 39,588,993 people participated in the nation's food stamp program. Although overall enrollment has reached its lowest point in eight years, food stamp enrollment has been declining steadily since 2013 and has only continued throughout President Trump's first year in office. Under Trump, 2.2 million fewer people have discontinued their participation in SNAP, mainly due to the Trump administration's attempts to reform SNAP by controlling program costs at the federal and state levels."

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6.12.18 - G7 Summit: Outlived Usefulness?

Gold last traded at $1,299 an ounce. Silver at $16.89 an ounce.

NEWS SUMMARY: Precious metal prices were steady Tuesday ahead of tomorrow's expected Fed rate hike. U.S. stocks traded flat as investors digested the potential outcome of the historic Trump-Kim summit.

Will the Fed Set Off a Recession Alarm? -Wall Street Journal
"The chairman of the Federal Reserve, just four months into his term, could be in the uncomfortable situation this week of signaling that a recession is coming. The Fed seems all but certain to raise its target range on overnight rates by a quarter point for the second time this year on Wednesday. There is a good chance it lifts its estimate for total rate increases for 2018 from three to four....The difference between three and four rate increases may not matter much to investors, who expect rates to keep rising next year. But it matters a lot for the yield curve, which is edging closer toward inverting, the situation in which short-term rates are higher than long-term rates. That is a longstanding signal that a recession is coming....The yield curve last was inverted in 2007, just before a recession. It also inverted in 2000. Federal Reserve Chairman Jerome Powell, when he holds his news conference on Wednesday, may be asked to explain why a recession won’t follow if the curve inverts again."

trumpkim Trump's bluster may just pay off with North Korea -Marketwatch
"Let's not award any Nobel Peace Prize just yet, but as a longtime - and often harsh - Trump critic, I think he deserves credit for taking a new approach in dealing with one of the most dangerous problems on the planet: North Korea and its deadly arsenal of nuclear weapons. Since the Eisenhower administration, North Korea has been an enemy. Eleven presidents have worked to contain it, but that's not the same as actually eliminating the problem. And while there are no guarantees Trump will succeed where his many predecessors have failed, talking, in and of itself, isn't a bad thing. 'Let us never negotiate out of fear,' John F Kennedy said in 1961, 'but let us never fear to negotiate.'....Trump has played the buildup to the summit well, downplaying its prospects - 'We'll see what happens' - while focusing on the long-term potential of a more docile North Korean regime...So, what else can Trump do on the global stage with his unorthodox out-of-the-box bluster? Not much."

U.S. Inflation Accelerates to Six-Year High, Eroding Wages -Bloomberg
"U.S. inflation accelerated in May to the fastest pace in more than six years, reinforcing the Federal Reserve’s outlook for gradual interest-rate hikes while eroding wage gains that remain relatively tepid despite an 18-year low in unemployment. The consumer price index rose 0.2 percent from the previous month and 2.8 percent from a year earlier, matching estimates, a Labor Department report showed Tuesday. The annual gain was the biggest since February 2012 and follows a 2.5 percent increase in April. The pickup in headline inflation partly reflects gains in fuel prices, though the annual gain in the core measure - seen by officials as a better gauge of underlying inflation trends - was the most since February 2017....A separate Labor Department report on Tuesday illustrated how higher prices are pinching wallets: average hourly wages, adjusted for inflation, were unchanged in May from a year earlier."

President Trump Didn't Sign G7's Leftist Agenda - Smart Move -Investors
"President Trump created a quite a stir among the other Western leaders by refusing to sign the 'communique' that capped the G7 summit. But he was right to do so. This is once again being styled as the crude, unnuanced American president refusing to accommodate himself to the much wiser leaders of Europe. In fact, he wisely refrained from signing what was an empty, far-left political document, which is typical of the G7 'consensus' that American presidents have gone along with for decades....All told, the communique contains 27 points made in five major sections. All of them enlighten citizens around the world about how to think about everything, from gender and jobs to peace and climate change....The leadership of the nations allied with the U.S. come up short. They've ridden the anti-Trump wave of the so-called Progressives, rolling their eyes at his comments and acting as if he, not they, are the problem....Based on its recent performances, the G7 summit has outlived its usefulness. It has become an opportunity for troubled European leaders to preen and pose for cameras, speak progressive platitudes, engage in a little anti-Americanism, but do little if anything of substance."

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6.11.18 - Social Security Crisis is Here

Gold last traded at $1,303 an ounce. Silver at $16.95 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on geopolitical uncertainty and a flat dollar. U.S. stocks inched higher following a turbulent G-7 meeting, ahead of key North Korea summit and Fed rate decision.

Gold Prices Edge Higher with Central Banks, U.S.-North Korea Summit in Focus -UK Investing
"Gold prices started the week higher in midmorning trade Monday while investors returned to their desks to digest the trade tension over the weekend at the G7 summit and looked ahead to the summit between the U.S. and North Korea as well as key policy decisions from the Federal Reserve and European Central Bank....In a session with no major U.S. economic reports, market participants were busy digesting the increased trade tensions that came out of the G7 summit over the weekend. U.S. President Donald Trump refused to endorse a G7 declaration calling for a reduction of tariffs, as he continued to lash out at traditionally close allies for allegedly treating the U.S. unfairly. Markets seemed unfazed by the outcome, with equities trading mostly higher on Monday, as attention turned to Singapore where Trump prepares for a historic summit with North Korean Leader Kim Jong Un to take place on Tuesday at 9:30AM local time....Meanwhile, markets were also prepping for a key week for central banks. The Fed’s two-day meeting will kick off on Tuesday with almost certain to raise interest rates by a quarter point for a second time this year at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday."

G7 Summit 3 key foreign meetings, not just Singapore -Ponte/WND
"The June 12 meeting between President Donald Trump and North Korean Communist dictator Kim Jong-Un could be momentous, but so too could the seeds of two other June meetings. Days ago Kim fired several senior staffers, reducing his fear of a coup d'etat while he is away. If he does not move to eliminate his nuclear weapons, President Trump will likely respond by encouraging parity on the peninsula through South Korean nukes. Mr. Trump might also encourage Japan to flex its secret nukes and their accompanying space and weather rockets, which have long had the specs of ballistic missiles. Ever since the 'Three Arrows Affair' of the 1960s, it has been clear Japan would regard an attack on South Korea - whose city Busan/Pusan is only about 30 miles away from Nagasaki Prefecture's Tsushima Island, scarcely farther than the distance from Catalina Island to the California mainland - as an attack on the Japanese homeland....But while media's eyes turn to Asia, the Bilderberg gathering has been underway in Italy's Turin, shrouded in mystery....President Trump is fighting to defeat globalist Progressivism. In the G-7 and Bilderberg meetings, he faces private and public enemies of Great American nationalism. Keep your eye not only on Singapore, but on all three meetings." Full story

Sweden Tries to Halt Total Cashlessness -Bloomberg Quint
"A key committee of Swedish lawmakers wants to force the country's biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament's Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts....The lawmakers said there needs to be 'reasonable access to those services in all of Sweden,' and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That's led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed....'We also want to see a proposal that all players must accept cash as well. It's a legal means of payment and should be accepted by all. It's like that in most countries, but not in Sweden.'"

Don't Wait For Social Security's Crisis - It's Here -Investors
"Entitlements: Social Security is like the classic children's tale, 'The Boy Who Cried Wolf.' So many warnings have been made, no one listens anymore. Well guess what? The wolf's now at the door. Are you listening now? For the first time in 36 years, Social Security will take money out of its 'trust fund' - an accounting fiction that would get you jailed for fraud in the private sector - to pay retirees. The truth is, Social Security is for all intents and purposes bankrupt. Since 2010, Social Security has been spending more than it took in, making up the difference by tapping into the interest paid on a $2.9 trillion government bond fund....By 2034, the entire pile of IOUs will disappear. Everything. It will require slashing benefits by at least 21%, or raising payroll taxes by 31%....So our financial Armageddon is coming earlier than expected. Putting an end to this latter-day Ponzi scheme won't be easy. It's time for all of us, politicians and citizens alike, to consider real, workable alternatives to fix the problem."

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6.8.18 - Inflationary Tariffs May Supercharge Gold

Gold last traded at $1,302 an ounce. Silver at $16.74 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a flat dollar. U.S. stocks trades slightly higher as tensions between the U.S. and key trade partners rises as the G-7 summit kicked off.

At G-7 Summit, Trade Tensions Expected to Take Center Stage -Wall Street Journal
"Leaders from the Group of Seven industrialized countries gather in Quebec's Charlevoix region starting Friday for two days of meetings that is sure to include some blunt talk on trade - given the dissension in the ranks after U.S. tariffs on steel and aluminum products. Here are five things to keep an eye on over the next two days: TRADE TRUMPS ALL: Canadian Prime Minister Justin Trudeau wanted the summit in Charlevoix to focus on themes he has championed, such as gender equality, artificial intelligence and the environment....COMMUNIQUE BREAKDOWN: G-7 finance officials issued a rebuke of the U.S. in a closing statement of their meeting last week - a departure from tradition that G-7 and Group of 20 gatherings conclude with a communique in which all participants sign on....G-6 DYNAMIC: While attendees have been at odds with the U.S. over trade, the so-called G-6 may not necessarily present a united front at the summit....SOME SECURITY CONSENSUS: The G-7 won't be entirely at loggerheads. Officials are likely to rally around Mr. Trump and his pending summit with North Korean leader Kim Jong Un....TRUDEAU ON THE SPOT: According to University of Toronto's John Kirton, head of the school's G-7 research program, 'Trudeau seems to have replaced Merkel as public enemy No. 1 in Trump's mind' among the group of industrialized countries."

tariffs GO GOLD! Inflationary Tariffs Could Supercharge the Yellow Metal -Holmes/US Funds
"Ready for inflation? Just days after Treasury Secretary Steven Mnuchin reassured markets that a trade war between the U.S. and China was 'on hold,' the Trump administration announced that it would be moving forward with plans to impose 25 percent tariffs on as much as $50 billion worth of Chinese exports to the U.S. Beijing has already suggested that it will retaliate in kind. The White House also reinstated tariffs on imports of steel and aluminum from Canada, Mexico and the European Union (EU) after allowing earlier exemptions to expire. Again, there's a big chance the U.S. will see some sort of tit-for-tat response. Steel prices are already up 45 percent from a year ago....Next up, the U.S. government could slap steep tariffs on imported automobiles - and possibly even ban German luxury vehicles outright. These decisions, if fully implemented, will have a multitude of implications on the U.S. and world economies. What I can say with full confidence, though, is that prices will rise - for producers and consumers alike - which is good for gold but a headwind for continued economic growth....In the years when inflation was 3 percent or higher, annual gold returns were 15 percent on average, according to the World Gold Council (WGC)."

Ben Bernanke: The US Economy Is Going To Go Off The Cliff In 2020 -Zero Hedge
"While Ray Dalio's co-Chief Investment Officer listed several specific reasons for his unprecedented bearishness, noting that 'markets are already vulnerable as the Fed is pulling back liquidity and raising rates, making cash scarcer and more attractive'....The result was the hedge fund's now infamous conclusion: 'We are bearish on financial assets as the US economy progresses toward the late cycle, liquidity has been removed, and the markets are pricing in a continuation of recent conditions despite the changing backdrop.' Today, none other than former Fed Chair Ben Bernanke repeated the same assessment almost verbatim in explaining his own suddenly quite dire outlook on the economy....Speaking at the American Enterprise Institute, Bernanke echoed Bridgewater's biggest concern about the sugar high facing the US economy for the next 18 months....Stealing further from the Bridgewater note, Bernanke said that while the stimulus 'is going to hit the economy in a big way this year and next year and then in 2020 Wile E. Coyote is going to go off the cliff, and it's going to look down' just when the US economy collides head on with what Bridgewater called 'an unsustainable set of conditions.'"

Home flipping activity reaches six-year high -Marketwatch
"Home flippers in today's market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment. Homes flipped during the first quarter represented 6.9% of all sales, up from 5.9% in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions. As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago....'The 2018 housing market is a double-edged sword for home flippers,' Daren Blomquist, senior vice president at ATTOM Data Solutions, said in the report. They earn more when they sell the properties, but high prices mean that 'flippers to pay more to acquire homes to flip.'....FHA loans are especially popular among first-time buyers. And the first-quarter figure represented the lowest share of FHA buyers in a decade - suggesting that recent house-flipping activity has not benefited first-time buyers."

Thinking About Retirement? Consider Working a Little Longer -New York Times
"Saving and investing for retirement are important. But at a certain stage for most people, another strategy is far more powerful: working a little longer. That is the message of an academic study stuffed with provocative nuggets...The study, 'The Power of Working Longer,' is eye opening. It acknowledges the validity of trimming investment costs, investing through workplace retirement plans and saving as long and as much as you can....As pensions vanish and the stock market gyrates, Social Security remains the most stable pillar in most people's retirement. Increasing annual Social Security income by working longer - optimally, until at least age 70 - will improve financial security more than anything else most people can safely accomplish....Do everything that you can to prepare, the paper says, but don't forget the power of working longer."

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6.7.18 - "A Cashless Society Is Very, Very Dangerous"

Gold last traded at $1,303 an ounce. Silver at $16.81 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on trade uncertainty and a weaker dollar. U.S. stocks traded mixed as Facebook and other major tech names pushed the sector lower.

Texas just opened the nation's first state-run gold depository -Texas Tribune
"Texans can now store their precious metals in a publicly backed secure vault close to home, as the United States' first state-run gold depository opens for business in Austin. A 23,000-square-foot building - operated by the private storage company Lone Star Tangible Assets - will serve as Texas' precious metals depository until 2019, when Lone Star is scheduled to open a facility double that size in Leander. Texas Comptroller Glenn Hegar became the first person to take advantage of the fully insured Texas Bullion Depository when he deposited his own gold and silver in the Austin vault earlier this week, according to his office. 'By having state oversight, if you deposit your precious metals, you know that we’re constantly over there, making sure the security is top-notch,' Hegar said....The University of Texas Investment Management Company, which oversees the assets of the University of Texas and Texas A&M systems, holds $1 billion worth of gold bullion at the HSBC Bank in New York City, according to Karen Adler, a spokeswoman for the organization. When Abbott signed the gold depository bill into law in June 2015, he declared that the opening of a state-run facility would allow Texas to 'repatriate' the nonprofit's gold supply."

fox business U.S. Jobs Outnumber Unemployed! -Fox Business
Swiss America Chairman Craig R. Smith discusses the latest upbeat employment news and explains how and why president Trump is successfully restoring confidence back to American citizens. Mr. Smith also weighs in on a possible 'Tax Cut 2.0' and what needs to be done to save Social Security from its potential demise. Watch video

FAANG Bubble Statistics -Econ Matters
"Everyone has piled into the same trade for long enough that we have an acronym for this herd mentality in FANG, then expanded to FAANG, and other derivatives to include hot stocks like Microsoft and Nvidia. The lack of imagination on behalf of investors, that they think these are still fairly priced stocks that represent good value in the market after everyone and their uncle has crowded into the same stupid trade is beyond stupidity. So is your strategy: Be the last in, and the last out of this trade - the the ultimate bagholder!....At this rate, we should just scrap the indexes, since the entire market is basically 10 stocks, and just label them Apple, Facebook and Amazon....In short when we look at some of the recent gains in these stocks after already being pushed up to ridiculous bubble levels for years, it is quite staggering just how many bagholders there are who are going to lose a lot of money on the downside in the unwinding/crash of this trade....Amazon could fall $350 in a flash crash day, Apple could gap down $50 easily with a miss at these nosebleed levels as investors all run for the exits at the same time."

Ron Paul: "A Cashless Society Is Very, Very Dangerous" -Zero Hedge
"As the global war on cash continues to accelerate, outspoken libertarian Ron Paul summarizes the effort to eliminate cash perfectly - as an 'attack on individual freedom.' Restricting and discouraging the use of cash, suggests Paul, has always been a goal of statists as a means to reduce individuals’ independence. 'A cashless society is very, very dangerous,' continues Paul....Consider just who is gaining from this war on cash. 'The banks, of course, are charging as many fees as they can think of. More importantly, your cash card leaves a wide data trail detailing your buying preferences, used by merchants and advertisers to entice you into more buying. How convenient. These thoughtful companies even offer reward points every time you use the card. Cash offers the ultimate in privacy. Your cash card might as well be a walking billboard. The government, of course, is extremely interested in your spending habits. The taxing authorities use an electronic money trail to monitor your spending and ensure against tax evasion. In addition, cards save the government the cost and trouble of printing and storing additional currency.'"

For the latest developments in the ongoing 'war on cash' request a FREE copy of our 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction. Discover the secrets behind the larger worldwide scheme to stop the private use of cash so that every single transaction can be controlled, tracked and taxed.

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6.6.18 - State Collects $4M in Illegal Taxes

Gold last traded at $1,306 an ounce. Silver at $16.69 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks rose as bank shares rallied on higher interest rates, while Boeing climbed up.

Gold steady, weaker dollar provides support -Reuters
"Gold steadied on Wednesday, supported by a weaker dollar and trade tensions as the market looked ahead to an expected U.S. rate hike next week when the Federal Reserve meets....'Investors are sitting on the fence, they only want to be involved when we break out of the range,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen....The case for hiking U.S. interest rates next week was bolstered on Tuesday when data showed U.S. services sector activity accelerated in May and job openings rose to a record high in April....Once the rate decision has been taken, gold is likely to move higher, Hansen said. 'There is potential for gold to follow the same pattern it's taken after recent rate hikes: defensive before, only to rally afterwards.'"

social Security Social Security Expected to Dip Into Its Reserves This Year -Wall Street Journal
"The Social Security program's costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits. This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday....The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program's finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues. The report also said that Medicare's hospital insurance fund would be depleted in 2026, three years earlier than anticipated in last year's report. Absent changes, the program then would be able to handle 91% of costs. The nation's aging population is boosting the costs of Social Security and Medicare, while revenue gains lag due to slower growth in the economy and the labor force. About 61.5 million people receive retirement or disability benefits from Social Security and 58.4 million receive Medicare....Congress has debated ways of bolstering the programs' finances, but hasn't agreed on what to do."

State collects $4 million in illegal taxes, won't give it back -WorldNetDaily
"Barack Obama's weaponization of the Internal Revenue Service, which admitted it targeted non-profits based on their conservative and Christian beliefs, only increased feelings of antipathy toward the federal agency. But there also are state tax agencies across the United States, and Pennsylvania's has given its citizens another reason to despise tax collectors. After all, they collected taxes that weren't due. Then they kept them. And even went to court to get an order saying they didn't have to be returned. The case now is before the U.S. Supreme Court, where Nextel Communications of the Mid-Atlantic is pointing out that 'the Supreme Court of Pennsylvania agreed with a taxpayer that a collection of state taxes violated a long-settled understanding of the state constitution.' Yet, it 'expressly refused to grant the taxpayer any relief,' in apparent violation of the U.S. Constitution's Due Process clause....The company says the state's failure to address due process alone merits review by the Supreme Court."

David Stockman: Stocks will plunge 50% in this 'daredevil market' -CNBC
"President Ronald Reagan's Office of Management and Budget director blames a bull market that's getting longer in the tooth - paired with headwinds ranging from President Donald Trump's leadership to fiscal policy decisions to questionable earnings. 'I call this a daredevil market. It's all risk and very little reward in the path ahead,' David Stockman said Tuesday on CNBC's 'Futures Now.' 'This market is just way, way over-priced for reality. The S&P 500 could easily drop to 1,600 because earnings could drop to $75 a share the next time we have a recession,' Stockman warned. 'We're about eight or nine years into this expansion. Everything is crazily priced. I mean the S&P 500 at 24 times at the end, tippy top of a business cycle.' One of his biggest gripes with the bulls is the notion that President Donald Trump's tax cuts are providing a fundamental lift to stocks. 'These tax cuts are going to add to the deficit in the 10th year of an expansion. It's just irresponsible crazy,' he said. 'It's all going to stock buybacks and M&A deals anyway. That doesn't cause the economy to grow. It's just a short-term boost to the stock market that doesn't last.'....'When the catalyst finally comes, it's hard to say,' Stockman said. 'No one can ever define what the black swan is because that is why it's called a black swan.'"

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6.5.18 - Smart Money's Bailing Out of Markets

Gold last traded at $1,302 an ounce. Silver at $16.54 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker dollar. U.S. stocks declined as worries about U.S. trade relations and tariffs on steel lingered.

Gold rebounds and approaches $1300 -FX Street
"Gold bounced to the upside, despite USD strength and climbed to $1,297/oz hitting a fresh daily high. The yellow metal rose from $1,290 supported by a decline in equity prices and yields. In Wall Street the DOW JONES failed to hold to gains and was down 0.31%. Despite upbeat data, US yields were modestly lower, favoring the upside in gold. After losing ground for three consecutive days, gold is up on Tuesday. It is approaching the $1,300 area where the 20-day moving average stands. A daily close above could signal more gains ahead for the metal."

shareholders Hallmark of an Economic Ponzi Scheme -Hussman/Hussman Funds
"Consider two economic systems. In one, consumers work for employers to produce products and services. The employees are paid wages and salaries, and business owners earn profits. They use much of that income to purchase the goods and services produced by the economy. They save the remainder. A certain portion of the output represents 'investment' goods, which are not consumed, and the portion of income not used for consumption - what we call 'saving' - is used to directly or indirectly purchase those investment goods....The second economic system is dysfunctional. Consumers work for employers to produce goods and services, but because of past labor market slack, weak bargaining power, and other factors, they are paid meaningfully less than they actually need to meet their consumption plans....Meanwhile, lopsided corporate profits generate a great deal of saving for individuals at high incomes, who use these savings to finance government and household deficits through loans....The first of these economic systems is self-sustaining: income from productive activity is used to purchase the output of that productive activity in a circular flow....The second of these economic systems is effectively a Ponzi scheme: the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy....The hallmark of an economic Ponzi scheme is that the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy. The debt burdens, speculation, and skewed valuations most responsible for today's lopsided prosperity are exactly the seeds from which the next crisis will spring."

The Smart Money's Bailing As Market Complacency Surges -Zero Hedge
"The turbulence throughout the markets last week - thanks to Italy - has given investors their first taste of a frothy summer. Especially the 'smart money'- they’re bolting for the exits...The Smart Money Flow Index (SMFI) is a leading-indicator in markets. That means when the SMFI drops sharply, usually the equity markets are right behind it. And we haven’t seen the SMFI drop this much since the Great Recession of 2008 and the 2001 Recession. Last week I wrote about the forgotten economist - Hyman Minsky - and his excellent work about the Financial Instability Hypothesis (FIH), which details how an economy shifts through three stages. From lowest risk to highest risk the stages are: hedged, speculative, and ponzi. But probably the most important takeaway from the FIH is this simple sentence...'The periods of low volatility and market calm are the seeds for high volatility and market chaos in the future; then back the other way around.'"

Will slow wage growth create another consumer debt crisis? -NBC News
"Although the labor market added a better-than-expected 223,000 jobs in May, robust wage growth again proved elusive with an increase of just 2.7 percent on an annualized rate. An accumulation of recent data indicates that some Americans are starting to struggle financially, suggesting that workers may have added debt to their household balance sheets because they expected to be earning more by now. Delinquencies have ticked up in retail credit cards, which typically have a lower bar for acceptance than general-purpose cards, and in car loans to people with subprime credit scores. The percentage of private-label retail credit card bills unpaid for 60 days or more is 4.65 percent, a seven-year high, according to credit bureau Equifax, and the amount of outstanding auto loan debt unpaid for 60 days or more has risen by more than 5 percent year on year. Consumers added $63 billion in debt in the first quarter of this year and owed a collective $13.21 trillion as of March 31, according to the Federal Reserve, and more of them appear to be having trouble servicing that debt: According to a separate Fed report, the number of people who have fallen behind on their credit card payments for 90 days or more has increased 'notably' from a year ago, and car loan payments overdue by 90 days or more have been on the rise for more than five years....The problem is that the recovery's economic gains haven’t been equally shared among Americans, said Mark Hamrick, senior economic analyst for Bankrate.com. Six months into a historic tax cut for businesses, workers aren't seeing the kinds of pay increases its political backers said would follow. A Morgan Stanley survey found that just 13 percent of this corporate windfall is going to worker pay, benefits or other compensation."

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6.4.18 - Customs Seizes $58,000 Cash, Without Cause!

Gold last traded at $1,297 an ounce. Silver at $16.43 an ounce.

NEWS SUMMARY: Precious metal prices were steady Monday amid dollar weakness and lingering trade war concerns. U.S. stocks traded higher as Apple led the technology sector to a record high.

Gold May Hit $1,400 in '19 on 'Powerful Fuel' of Weak Dollar -Bloomberg
"Gold may have posted two straight months of declines, but is set to shrug off the blues and rise in 2019 as the dollar weakens. The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, said Bart Melek, global head of commodity strategy at TD Securities in Toronto. That's a level last seen in 2013....'As time moves on, there'll be less and less reasons to get into the U.S. dollar, which will likely reverse some of the flows,' said Melek, who's among speakers at a precious metals conference in Singapore this week. 'We do ultimately think that as we move into 2019, the U.S. dollar will weaken, which is a very powerful fuel for the gold complex.'....'Looking forward, the conditions for the gold market look more positive as the dollar rally becomes more stale and fiscal factors start to erode the dollar’s strength,' he said, also adding that the Fed's tightening cycle may be coming to an end next year."

takaway A 64-year-old put his life savings in his carry-on. U.S. Customs took it without charging him with a crime. -Washington Post
"A 64-year-old Cleveland man is suing U.S. Customs and Border Protection after agents strip-searched him at an airport in October and took more than $58,000 in cash from him without charging him with any crime, according to a federal lawsuit filed this week in Ohio....Customs agents seized the money through a process known as civil asset forfeiture, a law enforcement technique that allows authorities to take cash and property from people who are never convicted or even charged with a crime. The practice is widespread at the federal level. In 2017, federal authorities seized more than $2 billion in assets from people, a net loss similar in size to annual losses from residential burglaries in the United States. Customs says it suspects that the petitioner in the case, Rustem Kazazi, was involved in smuggling, drug trafficking or money laundering. Kazazi denies those allegations and says that the agency is violating federal law by keeping his money without filing any formal complaint against him. Kazazi is a retired officer with the Albanian police who relocated with his family to the United States in 2005 after receiving visas through the State Department's lottery program. They became U.S. citizens in 2010. After several years away, Kazazi planned a trip to Albania last fall to visit relatives, make repairs on a family property and potentially purchase a vacation home."

News stories like this (both above and below) will come as no surprise to our regular readers. Starting in 2014 in our book, Don't Bank On It!, we have been exposing similar stories of civil asset forfeiture abuse. Our newest 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, explains how they fit into a larger worldwide scheme to stop the private use of cash so every transaction can be controlled, tracked and taxed.

Australia Bans Cash For All Purchases Over $7,500 Starting July of 2019 -MSN
"Australia's Liberal Party government has announced that it will soon be illegal to purchase anything over $10,000 AU ($7,500 USD.) The government said it's, 'encouraging the transition to digital society,' and cracking down on tax evasion. The ban starts on July 1, 2019 and any payment over $10,000 will have to be made by check or credit/debit card. The goal is to drum up about $3 billion in new tax revenue over the next four years. One of the biggest targets will be the illicit tobacco trade."

Media Giants Are Becoming Leftist Tax Targets -Pontification Blog
"'The Revolution devours its children,' wrote journalist Jacques Mallet du Pan, who lived during the French Revolution. Its terror began by beheading the king and queen, then those accused of plotting against the Revolutionary leader Maximilien Robespierre, and near its end the mobilized mob hysteria guillotined Robespierre himself. In the fanatic hate of today’s 'Resistance' mobilized against President Donald Trump, which has included simulated beheadings, that same 'fearful symmetry' is now emerging. Veteran Democratic politicians know it is time to move to the political center and offer realistic compromise solutions, but their core voters were mobilized by hatred against Trump and will accept no compromises. The Democratic Party's own hate-filled demagoguery has made rational democracy impossible. The Democrats' comrades in the new media want leftist candidates to win, but, with delicious irony, starting on the local level such politicians now seem bent on devouring these rich media giants. Google and its company YouTube gave massive help to Barack Obama's reelection in 2012 and to Hillary Clinton's failed campaign in 2016. It has relentlessly biased its media information to the left, most recently this May by identifying the 'ideology' of the California Republican Party as 'Nazism.'....Such leftist media giants ignore our cries for fairness and balance as they push global socialist Revolution and try to behead elected conservatives. But now greedy leftist politicians are turning against them to feed the angry mob of welfare recipients who demand more free goodies."

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6.1.18 - How Gold Has Outperformed Stocks

Gold last traded at $1,293 an ounce. Silver at $16.41 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday as upbeat job data boosted the dollar. U.S. stocks rose as a stronger-than-expected employment report showed an increase of 223,000 jobs in May.

Where The Jobs Were In May: Who's Hiring And Who Isn't -Zero Hedge
"After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, today's May jobs report was not only impressive in its top-line beat and which was the record 92nd straight month of US job growth, coupled with the strong wage growth, which at 2.7% came in higher than expectations, not to mention the record surge in full-time jobs, it also showed surprising strength in most components even if some negative surprises were also present....In May we saw a continuation of many of the trends observed last month: Continued strength in Goods Production: Mining (+5.5K), Construction (+25K) & Manufacturing (+18K). Trade & Transportation Rebounded: Wholesale (+4.2 after a big drop last month), Retail (+31.1K), and Truck Transportation (+6.6K). Here the surprise was that just 6.6K trucking jobs were added, following complaints from the major trucking employers, all of whom have noted they can't find enough people to hire, which suggests there may be an upward revision next month."

How Gold Has Outperformed Stocks In The Last Few Decades -WallStreet.com
"Gold has been considered a safe investment for years. For that reason people have been buying gold for decades; it's considered one of the best storehouses of value. When the 'investment craze' hit the market, stocks were most investors' first preferred option. This has more to do with the fact that the stock market back then was something new and investors were interested in knowing more about its capabilities. However, over the years they realized gold is a better and safer investment option with higher potential. Physical gold and stocks have been pitched against each other for decades, and there seems to be a connection between the two. However, the trend keeps on changing and largely depends on the time period we are considering. For example, if we look at the past 45 years, we'll see that the yellow metal has outperformed stocks and even bonds; however, the past 30 years show that stocks did better than gold. But, looking at the numbers from past 15 years it can be safely concluded that gold has outperformed both stocks and bonds....Gold has increased +669% in the last 40 years (gross), doing better than inflation (328%), cash (535%), and housing (598%). Gold has consistently ranked in the top 3 best assets since 2000."

NOTE: Most investors today are convinced by Madison Avenue ads that stocks are a better place to have their money than physical gold. However, over the long-term, this has not always been true. The Yahoo chart below compares the DJIA with Gold between 1/10/2005 and 6/1/2018. Gold prices are up 278% vs. DJIA at 225%. This means that over the last 13 1/2 years gold owners would have beat Dow stock holders by 23% - without the stress of market volatility.

GoldvsDow

Italy's Establishment Runs Out of Tricks -Weekly Standard
"A political establishment of long standing always suffers from a kind of mental illness. No matter how unambiguously it is repudiated or how joyously it is driven from office, its members will continue to remember the episode as accidental, temporary, and unjust. This week in Italy such arrogance nearly provoked a financial panic and an international crisis. In elections in March, two parties relatively new to the national scene had blown away all their establishment rivals and taken a majority of the seats in the national assembly. Because one of them, the League, was a nationalist party of the sort associated with France's Marine Le Pen, while the other, the Five Star Movement (M5S), was founded by a madcap comedian, observers snickered at how entertaining it would be to watch these two collections of losers try to cobble together a coalition. They wound up doing fine, though, because they have one big thing in common. They both hate the multinational European Union, which has hamstrung most of the continent's economies and stripped its member states of much of their sovereignty....On Monday, May 28, there was the beginning of a run on Italy's bonds. The market was more nervous about the 'responsible' Cottarelli than it had been about the 'irresponsible' Salvini and Di Maio. The reason is not far to seek. Once Salvini and Di Maio's majority had been denied the right to form a government on the grounds that one of its ministers was a europhobe, the impending election appeared to be a referendum on the common European currency. It would be like Brexit: Exitaly was the snappy portmanteau making the rounds....The problem is not that parties have been getting more obstreperous but that Europe is getting harder to govern."

How the Government Became a Deep State Puppet -Bonner/Bonner And Partners
"The difference between the next crash and the last two is that this time, the feds have less room to maneuver. At the end of an expansion cycle, like the one America has had for almost ten years, the federal government should be running a surplus....Meanwhile, over at the Fed, another knuckleheaded experiment is going on. It has left real rates (adjusted for inflation) below zero for nearly a decade, even though a recovery, such as it was, began in 2009. This, too, is unprecedented… and almost surely disastrous....In a small government, citizens can run the show. They know what is going on, and have a say in what happens next. In a global Deep State Empire, on the other hand, citizens play largely symbolic roles. They vote, but their votes don't really matter. They voice their opinions, but no one really cares what they think....The federal government is going broke. The welfare state can't be cut back (too many retiring voters). The warfare state won't be cut back (too many powerful cronies). Together, they will bankrupt the nation. But in Congress, the subject never even comes up....The elite insiders - in business, government, academia, religion, and media… left and right… whether it is the centralized government of Louis XVI or the post-World War I USA… Republican or Democrat - become parasites."

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