August Blog Archives 2018

Gold last traded at $1,207 an ounce. Silver at $14.64 an ounce.

NEWS SUMMARY: Precious metal prices steadied Friday ahead of the Labor Day holiday. U.S. stocks dropped as the United States and Canada neared a key trade agreement deadline with no apparent resolution.

U.S., Canada Cast Doubt on Reaching a Nafta Deal by Friday -Wall Street Journal
"U.S. and Canadian officials cast doubts about their ability to complete a deal on a revised North American Free Trade Agreement by a Friday deadline set by the Trump administration, with Canada’s chief negotiator saying the sides 'are not there yet.' Following a roughly two-hour Friday morning meeting with U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland said the country was determined to 'stand up' for its national interests. 'We are looking for a good deal, not just any deal. We are not there yet.' Canadian Prime Minister Justin Trudeau reiterated this sentiment at an event in suburban Toronto. 'We have been very clear about where our red lines are. … This is something we take seriously as a renegotiation.'....The U.S. and Mexico reached a preliminary trade pact Monday, and the Trump administration gave Canada until Friday to resolve outstanding differences on a new continental trade pact. Both U.S. and Mexican officials have vowed to press on with their deal even if Canada can't resolve differences with the U.S."

Bulls could finally take a shine to gold in September -Marketwatch
"If you listen closely, you'll hear gold investors whispering that 'it's an ill wind that blows no good.' That’s because, while September may be the worst month of the calendar for stocks, it's the best month for gold. Since it began trading freely in the U.S. in the early 1970s, gold bullion has produced an average gain of 2.1% in September. The comparable monthly average for all non-September months is 0.6%....To the extent the future will be like the past, therefore, September may finally bring some good news to long-beleaguered gold bugs. Unlike the situation for stocks' September seasonalities, there does appear to be a plausible explanation for gold's September seasonality. Three, in fact. Hedging demand by investors in anticipation of the 'Halloween effect' in the stock market; wedding season gold jewelry demand in India, and negative investor sentiment due to shorter daylight time."

Don't Believe That GDP Number. Or Any Other Number. -Bloomberg
"Gross domestic product grew at an inflation-adjusted annual pace of 4.2 percent in the second quarter, we learned this week. Great, right? Not so fast: 'It appears that the economy in Q2 wasn't quite as strong as it looks after all. While the headline GDP growth was revised up to 4.2%, the growth of GDI was 1.8% (an alternative measure). Averaging says the best guess was 3.0% growth last quarter,' writes Jason Furmon, professor at Harvard's Kennedy School of Government. GDI is gross domestic income, yet another metric of economic activity produced by the GDP estimators at the Bureau of Economic Analysis that’s released with a little more lag time than GDP. That is, the 'advance' estimate of second-quarter GDP that was released in late July contained no information on second-quarter GDI. The 'second estimate' of GDP that came out Wednesday did....GDP and GDI are both estimates of the size of the economy, one focused on expenditure and the other on income. They should in theory add up to the same amount, but they apparently never do, even after multiple rounds of revisions....'Henceforth it will be impossible for macroeconomic analyses to proceed comfortably simply using GDP,' declared prominent University of Pennsylvania economist Francis X. Diebold, one of the commenters on the paper....Perhaps the most useful lesson to take from all this is that accounting for national income and output is an imprecise business, and that the economy was probably growing at an annual rate somewhere between 2.1 percent and 4.3 percent in the second quarter."

Trump: Google, Facebook, Amazon may be in a 'very antitrust situation' -The Hill
"President Trump in a new interview Thursday said that Facebook, Google and Amazon may be in a 'very antitrust situation,' but declined to elaborate on whether the companies should be broken up. 'I won't comment on the breaking up, of whether it's that or Amazon or Facebook,' Trump said in an with Bloomberg News. 'As you know, many people think it is a very antitrust situation, the three of them. But I just, I won't comment on that.'He charged the firms with exhibiting a bias against conservatives. He tweeted on Tuesday that Google News was biased against conservatives and said, 'This is a very serious situation-will be addressed!' He later said that Google, as well as Facebook and Twitter, were 'treading on very, very troubled territory.' Trump walked back his threats of regulation though on Wednesday. 'Not regulation. We want fairness,' Trump said....On Thursday, Senate Finance Committee Chairman Orrin Hatch (R-Utah) asked the Federal Trade Commission to investigate Google's search and advertising practices over antitrust concerns."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,205 an ounce. Silver at $14.59 an ounce.

NEWS SUMMARY: Precious metal prices dipped on Thursday on profit-taking and a firmer dollar. U.S. stocks traded lower as the Friday deadline for a U.S.-Canada trade deal drew closer with no apparent resolution.

What's The Path To The Gold Standard? -Forbes
"Outstanding public intellectuals, such as legendary economist Ludwig von Mises and numerous others, have long argued for a return to the gold standard, yet we don't seem to get any closer. The reason is simple: Even though people agree on the principle of a gold standard, they see no practical path to one. After spending five years testifying in Arizona to get a simple bill passed that repeals taxes on gold, I no longer believe legislation is the way forward. Currently, at the federal level is bill HR 5404, which defines the dollar as a fixed weight of gold. I wish it were otherwise, but Congress will not vote for gold. We need a catalyst. Let's consider three salient features of the classical gold standard. Gold was the unit of account...Gold was a medium of exchange...Gold was lent and borrowed.... If lending gold were profitable for both lenders and borrowers, then interest on gold would pull us forward....Investors would line up to buy a proper gold bond - denominated in ounces of gold, paying interest in ounces of gold and returning principal in ounces of gold....The path to the gold standard - the path to remonetizing gold - is to once again lend and borrow gold, i.e., to use gold to finance productive activity."

The World Is Ganging up Against the Dollar -Rickards/Daily Reckoning
"The U.S. has been highly successful at pursuing financial warfare, including sanctions. But for every action, there is an equal and opposite reaction. As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely. I've been warning for years about efforts of nations like Russia and China to escape what they call 'dollar hegemony' and create a new financial system that does not depend on the dollar and helps them get out from under dollar-based economic sanctions. These efforts are only increasing. In the past four months, Russia has reduced its ownership of U.S. Treasury securities by 84% and has acquired enough gold to surpass China on the list of major holders of gold as official reserves....Trump's Iran sanctions make it impossible for China to pay Iran in dollars. If U.S. sanctions prohibit dollar payments for Iranian oil, then Iran and China may have no choice but to transact in yuan....Europe is also showing signs it wants to escape dollar hegemony. German Foreign Minister Heiko Maas recently called for a new EU-based payments system independent of the U.S. and SWIFT that would not involve dollar payments....U.S. dollar dominance in global finance may end sooner than most expect. We are getting dangerously close to that point right now."

More Debt Won’t Make America Great Again -Bonner/Bonner And Partners
"The average American worker has gotten no increase in real earnings over the last 44 years, and now - as inflation rises - he is actually losing real income. But, lured by the Fed's low teaser rates, consumers have gone on a borrowing/spending spree. Households owed about $5 trillion in 1998. Now, it's about $15 trillion. And household debt now sits at 80% of GDP. With the exception of the heady years before the financial crisis, this is the highest level in American history. Adjusted for inflation, debt rose about twice as fast as income. Is that supposed to make Americans richer?....And what about government debt? While wages went nowhere, federal debt soared from $1.7 trillion in 1998 to $21 trillion today. Again, compared to economic output, we see that government debt is 105% of GDP. Even adjusted for inflation, Americans collectively owe about eight times as much today as they did 20 years ago....Our economy is said to be growing (spinning dollars) at a decent rate. And there are plenty of low-paying, part-time, pick-up jobs available for those who want them. But we (consumers) owe, individually, more money than ever. Thanks to government borrowing, we also owe more jointly than ever before. And our wages are slipping…The dollars fly around… but is anyone better off?"

What Next for the US Stock Market? -Feldstein/Project Syndicate
"August 22 marked the longest period of rising share prices in US history. But the stock market's nine-year bull run won't last much longer, as three factors drive up long-term interest rates, reducing the present value of future corporate profits and providing investors with an alternative to equities. Several forces contributed to this impressive nine-year run. The primary driver has been the extremely low interest rates maintained by the Federal Reserve. The Fed cut its short-term federal funds rate to near-zero in 2008 and did not begin to increase it above 1% until 2017. Even now, the federal funds rate is lower than the annual inflation rate. But even with rising profits, low interest rates have caused share prices to increase faster than profits. As a result, the S&P price-earnings ratio is now more than 50% higher than its historic average....But what of the future? Stock-market booms don't die of old age; they are generally killed by higher interest rates. That often happens when the Fed raises the short-term interest rate to stop or reverse rising inflation. Three factors will contribute to the rise in the long-term rate....The Fed’s projected increase in the federal funds rate will put upward pressure on the ten-year interest rate. With the unemployment rate at 3.9% and likely to decline further in the year ahead, the rate of inflation should continue to increase."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,211 an ounce. Silver at $14.69 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks rose with the tech sector leading the gains as sentiment was boosted by a resumption of U.S.-Canada trade talks.

Why The Gold Market Looks Poised For Reversal -Seeking Alpha
"This week, we welcome back to the podcast Brien Lundin, publisher of Gold Newsletter and producer of the New Orleans Investment Conference. Brien predicts that the brutal period for precious metals may soon be over. In fact, he now seeing a bullish alignment of factors he's seen before, which precursored a sharp move upwards in the prices of gold and silver: 'I think mainstream investment analysis, the mainstream research, that you get out of Wall Street is typically that gold is not where you want to be. They jumped on cryptos so quickly, and all you saw was analysis saying crypto was the new gold, and now gold actually is the barbarous relic because it's been supplanted by technology...I believe that everything has its turn, and at some point, we're going to see the gold market turn again, and we're going to see an appreciation for gold as insurance and really as a tool for protection from governments' inevitable mismanagement of the currency. We're going to see that at some point. It could be very soon, actually....I look at silver as a monetary metal, much like gold. Silver is a smaller market, it's more volatile...But my feeling is you analyze gold first, if you think gold is going to go up, then you buy silver. In short, if you like gold, you have to love silver. It's basically an option play on gold. It moves further than gold and in the same direction as gold, both up and down....at low prices like we have today, the smart investors look at gold and silver as being on sale right now."

We should all be worried about Google's power -New York Post
"Tuesday brought endless commentary and reporting on how President Trump was being utterly ridiculous and conspiratorial to accuse Google of bias in its search algorithms. Funny: Just over a year ago, in June 2017, the European Union fined the company $2.7 billion for … bias in its search algorithms...the EU verdict (after a seven-year investigation) was about the company 'systematically favoring' its own Google Shopping feature. As we write, the top headlines on Google News include two CNN stories: 'Trump slams Google search as 'rigged' - but it's not' and 'Debunking Donald Trump's latest conspiracy theory on Google.' How is the average web surfer to trust that Google isn't weighting those stories? The layman has plenty of reasons to worry about political bias to which the company could be blind: Silicon Valley is a notorious progressive place (except on issues that touch its own interests, anyway), and the internal Google discussion over 'dissident' engineer James Damore showed a shocking intolerance for the merest questioning of certain left-liberal pieties. On the commercial front, Google's power is obvious: Its algorithms can literally make or break a company - perhaps a whole industry. Google says, 'We respectfully disagree with' the EU ruling that it 'abused its market dominance,' but that's not exactly a rebuttal."

Why is Google obsessed with tracking everyone? "Google's theory of knowledge ('big data') assumes that the search for knowledge by human brains can be replaced if all of the data in the world can be compiled in one place and algorithms to analyze them can be developed." Read more in our book review of Life After Google.

A Green Light for Banks to Start 'Redlining' Again -New York Times
"The Community Reinvestment Act was passed in 1977 to end the practice of 'redlining,' by requiring banks to lend money in the communities where they are chartered to do business or receive deposits. Banks have made nearly $2 trillion in small-business and community development loans since 1996, according to our calculations, to meet the requirements of the law....On Tuesday, the Office of the Comptroller of the Currency announced it will review and revise the rules it sets for banks to comply with the Community Reinvestment Act. One of the proposed changes is the introduction of a mathematical formula, a ratio, that banks and regulators could use to measure a bank’s performance under the law....This seemingly small change could have sweeping consequences for millions of Americans and affect tens of billions of dollars annually in lending. A Federal Reserve Bank study in 2017 showed that after a change to the statistical definitions of the Philadelphia metropolitan area resulted in some parts of the area becoming ineligible for Community Reinvestment Act lending, bank loans in the newly ineligible sections fell by about 20 percent for borrowers with incomes between $44,000 and $61,000....To be sure, the Community Reinvestment Act, like most regulations, can be improved."

Pending home sales fall for seventh straight month in July -CNBC
"It may be hot in the nation's neighborhoods now, but the nation's housing market is cooling off. Signed contracts to buy existing homes fell 0.7 percent in July compared with June, according to the National Association of Realtors' pending home sales index. That is the seventh straight month of annual declines. Pending home sales are an indicator of future closed sales. 'It's evident in recent months that many of the most overheated real estate markets - especially those out West - are starting to see a slight decline in home sales and slower price growth,' Lawrence Yun, chief economist for the Realtors, said in a release....Buyers have been struggling to find affordable homes this year, as the supply of homes for sale has fallen annually for most of the year."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,214 an ounce. Silver at $14.77 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on a weaker dollar. U.S. stocks were lifted by an improved outlook on global trade after the U.S. and Mexico struck a deal.

Stocks are at all-time highs, but the toughest month for the market looms -CNBC
"Stocks have been on a tear lately, ripping to record highs, but investors could be in trouble as September starts off, if history is any indication.September has been the worst month for the Dow Jones Industrial Average and the broader S&P 500 since 1950, according to data from 'Stock Trader's Almanac.' The Dow averages a decline of 0.7 percent, while the S&P 500 falls 0.5 percent on average in September, the data show. 'September and October have some pretty bad reputations in the market, but especially September,' said Tim Courtney, chief investment officer at Exencial Wealth Advisors. 'You're always wary to say things are going to be cheery heading into historically tough parts of the year for markets.'....Investors could also experience added volatility in September as a U.S. midterm election looms."

Why risk it? Prudent investors are taking some of their stock profits off the table and moving them into assets which are proven safe havens. We believe the world's safest haven over thousands of years is gold, which just happens to be hovering near inflation-adjusted 300-year lows! (see chart). Call Swiss America at 800-289-2646 to discuss protecting your portfolio with physical precious metals - real wealth you can hold in your hands!

Fed Policy Is to Keep Hiking Until Something Breaks -Bloomberg
"Federal Reserve Chairman Jerome Powell took to the podium at the annual Jackson Hole monetary conference, delivering a message of support for the central bank’s policy of ongoing gradual interest-rate increases...Unfortunately, Powell left the unsettling feeling that monetary policy can be summarized as 'We plan to keep hiking until something breaks.' Central bankers center policy on the economic outcomes thought to occur in stable equilibriums. Currently, unemployment and policy interest rates are both below their natural values, while output growth exceeds potential growth....In short, Powell does not feel beholden to specific estimates of the natural rates of anything....The worst-case scenario is that something actually needs to break before the Fed stops tightening. This is a possibility because of the long and variable lags in the policy process. The Fed could keep on hiking well past when it should stop, or fail to reverse course quickly enough, because the data has yet to catch up with a slowdown already occurring under the surface. This is arguably how expansions end."

Gold gains as dollar dips after U.S.-Mexico trade deal -Reuters
"Gold edged higher on Tuesday, helped by weakness in the dollar after a trade deal was struck between the United States and Mexico but analysts said ongoing U.S.-China tensions would continue to weigh. The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA). The dollar was pinned at its lowest in nearly a month against a basket of major currencies, while riskier assets such as equities rose....'The main trade dispute, meaning U.S.-China conflict, is still going on so this NAFTA deal is just a small aspect,' said Commerzbank analyst Daniel Briesemann, adding that the effects on gold markets would be limited....The NAFTA deal, which includes new rules for the car industry, lifted platinum and palladium because of their use in auto catalysts."

Despite strong economy, many Americans struggling to get by -Associated Press
"Despite a strong economy, about 40 percent of American families struggled to meet at least one of their basic needs last year, including paying for food, health care, housing or utilities. That’s according to an Urban Institute survey of nearly 7,600 adults that found that the difficulties were most prevalent among adults with lower incomes or health issues. But it also revealed that people from all walks of life were running into similar hardships....'Economic growth and low unemployment alone do not ensure everyone can meet their basic needs,' the authors wrote. Food insecurity was the most common challenge: More than 23 percent of households struggled to feed their family at some point during the year. That was followed by problems paying a family medical bill, reported by about 18 percent....The Urban Institute survey comes at a time when lawmakers are considering cuts to some safety-net programs, such as Medicaid, SNAP and housing assistance."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,216 an ounce. Silver at $14.85 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday as investors bought the dip on a weakening dollar. U.S. stocks jumped on Monday as the United States and Mexico closed a new trade deal.

U.S.-Mexico Deal Clears Pathway for Nafta Rewrite -Wall Street Journal
"President Trump on Monday announced his administration had reached a deal with Mexico on issues that have held up renegotiation of the North American Free Trade Agreement for over a year. At the White House, the president said the bilateral trade deal between the U.S. and Mexico should be called the 'United States-Mexico Trade Agreement.' He said he wanted to get rid of the name Nafta, which he said had bad connotations. He said, 'we'll see' if Canada can also join a proposed trade deal between the U.S. and Mexico, the two other Nafta signatories, and said negotiations with Canada would resume soon. The conclusion of the bilateral talks with Mexico clears the stage for Canada to rejoin the negotiations and brings the president one step closer to his campaign goal of a new Nafta deal."

Gold Rallied 30% The Last Time This Happened -ETF Daily News
"This chart [above] looks at the current position of smart money hedgers from Sentimentrader.com and gold futures over the past couple of years. In late 2015, smart money hedgers established a big bet, believing that gold would trader higher. They were correct, as gold rallied nearly 30% in the next 6 months. Smart money hedgers have established a big bet that gold will rally (same size bet as 2015). This is taking place as bullish sentiment on gold is hitting one of the lowest levels in years (18% bulls). Will it be different this time? Did gold create a bullish reversal pattern last week?"

$174,000 per Ounce Gold Not Funny–Scary -USA Watchdog
"Renowned gold and financial expert Jim Sinclair and financial writer Bill Holter are sounding the alarm now on global financial markets starting to burn down and implode. Jim Sinclair explains, 'The system has been unwinding for a significant amount of time, but now is a point in time it is being recognized...The price of gold has to equal the liabilities...the mathematics [for the gold price] work out to be slightly under $20,000 an ounce.' Holter adds, 'The $20,000 per ounce number would be just the debt foreigners hold. If you used the total (federal) debt of $21 trillion, the number is $87,000 per ounce. If you add the number of 'missing money' (from HUD and DOD) that Catherine Austin Fitts and Professor Mark Skidmore came up with of another $21 trillion 'missing,' you double that gold price. So, you are at $174,000 per ounce.'....Holter says, 'Equity markets are levitated. Interest rates have been dropped to zero. Gold and silver have been suppressed....How bad is it going to get? Holter sums it all up when he says, 'The world is Venezuela.'"

Venezuela's Nightmare Is Rapidly Spreading to Neighbors -New York Post
"Venezuela, possessing some of the world's largest oil reserves, is bankrupt. History-making inflation rates are predicted to reach 1 million percent by year's end. Supermarket shelves are empty. Hospitals no longer can or will tend to the sick. Gangs roam the streets. Think 'Babylon Berlin' - with a sense that 'Mad Max' is where things are headed. Horrified Venezuelans - at least those who can - have fled for Colombian border towns and other neighboring countries. Nicolas Maduro, is digging deeper. Last Friday he announced new economic measures: shaving a few zeroes off the local currency, the Bolivar; sharply raising taxes; significantly upping the minimum wage. Expect further collapse of the remaining local businesses unable to afford the new dictated-from-above wages. Inflation will likely keep rising....Latin America is crying out for new thinking and fresh ideas. Yet, Mexicans just voted in a Chavez wannabe, Andres Manuel Lopez Obrador, hoping this old dog will teach them new tricks."

Inflation Nightmares: Present, Past & Future is a new Swiss America White Paper which examines how hyperinflation sneaks up on nations, then crushes their economy. Think it could not happen in America? Read this report and find out why, as Bill Holter puts it, "The world is Venezuela."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,213 an ounce. Silver at $14.79 an ounce.

NEWS SUMMARY: Precious metal prices shot upward Friday after Fedspeak weakened the dollar. U.S. stocks touched all-time highs after the Fed characterized the U.S. economy as "strong."

America's Real Economy: It Isn't Booming -Forbes
"All the official indicators say we're back in boom times, with a bull market, low unemployment and steady job growth. But there is an alternative set of data that depicts a different America, where the overlooked majority struggles from month to month....But about 12% of Americans (43 million) are considered poor, and yet they are employed. They earn an individual income below $12,140 per year, and slightly more than that for a family of two. If you include housing and medical expenses in the calculation, it raises the percentage of Americans living in poverty to 14%. That’s 45 million people. At that level of income, there's almost no way to pay for food and shelter in any sizeable American city. That means people now can both be employed and homeless....A third of the U.S. population has no savings and another third has saved less than $1,000. Two-thirds of American households are desperately scrambling to make ends meet from check to check....There are numerous ways in which our wealthiest companies could help change the course of our economy...Get involved in early education for children of employees....Fund higher education for existing employees....Businesses also should look to re-employ the long-term unemployed."

China Tariff Talks: Uptrend or Breakdown? -Fox Business
Swiss America Chairman Craig R. Smith joined analyst David Hoppe in discussing the latest on U.S. trade deals. Will positive steps toward trade reforms with the European Union, Mexico and Canada help the U.S. make progress on the stalled China tariff talks? Watch to find out.

Traders of the Lost Ark -Competitive Enterprise Institute
"'Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.' So wrote Lord Macaulay, the British poet, historian, and Member of Parliament, in 1824. His words were true then and are, if anything, even more true today. Which is bizarre when we consider the improvements that free trade has brought to the human condition during the intervening two centuries. The economic historian Deirdre McCloskey has chronicled, at vast length, how the past 200 years have seen a rise in living standards on a different scale from anything Homo sapiens had experienced up to that point...our species has increased wealth by an estimated 3,000 percent....What lies behind these fears? There are, I think, three explanations, one psychological, one aesthetic, and one political. First, the psychological objection. Free trade is counterintuitive. Our hunter-gatherer instinct is to provide against famine, to hoard....Second, the aesthetic objection...about nasty corporations exploiting textile workers in, say, Vietnam. Those stories lack any sense of context or perspective....It's the third objection, the political one, that seems to animate American protectionists. Free trade brings dispersed gains but concentrated losses."

Would Trump impeachment 'crash' stocks, as president says? -USA Today
"President Donald Trump, who has taken a lot of credit for the stock market boom since he took office, says a 'crash' would happen if he were impeached. But Wall Street begs to differ, arguing that the forces driving the nearly $30 trillion U.S. stock market are far bigger and stronger than the influence of one person, even one as powerful as the nation's commander in chief. 'One man does not move the market over the long term,' says Thorne Perkin, president of Papamarkou Wellner Asset Management in New York....The broad Standard & Poor's 500 stock index has climbed 25 percent since Trump took office, and the nation's economy grew 4.1 percent last quarter, its fastest pace since 2014. But money managers stress that the stock market's longer-term direction and health are less about political drama and more about the overall strength of America's economy Still, news of an impending push to impeach Trump could cause short-term market turbulence. Uncertainty would spike, something investors abhor."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,193 an ounce. Silver at $14.54 an ounce.

NEWS SUMMARY: Precious metal prices retreated Thursday on profit-taking and firmer dollar. U.S. stocks fell as worries about US-China trade and Trump legal issues dampened investor sentiment.

This Stock Market not as strong as you think economist David Rosenberg says -CNBC
"Don't be fooled. This market is weaker than it seems, according to David Rosenberg, chief economist and strategist at Gluskin Sheff. The S&P 500 is up more than 5 percent in 2018, recovering from a correction earlier in the year....However, Rosenberg notes that while momentum stocks are lifting the market, 'many subsectors are well off their highs: Homebuilders. Autos. Banks. Insurance. Consumer products. Telecom. Media. Transports. Utilities. Pharma. And many more. What has kept the market near record terrain are a mere six stocks - Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook,' Rosenberg said in a note to clients Wednesday. 'Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.' Rosenberg said such concentration in the stock market has not been seen since the late 1990s, just before the dot-com bubble burst. 'We know from history how these cycles typically end.'"

Venezuelan bolivar - what can it buy you? -BBC News
"On Monday, Venezuelan President Nicolas Maduro will issue a new currency to manage the country's runaway inflation, which the IMF predicts will hit 1,000,000% this year. The Venezuelan bolivar has become near-worthless, following a severe economic downturn. To show the extent to which hyperinflation has gripped the country, Reuters photographer Carlos Garcia Rawlins created images of everyday food and household items alongside the amount of money it costs to buy them. A 2.4kg chicken has been costing 14,600,000 bolivars (equivalent to $2.22) in the capital, Caracas. Last Thursday, a toilet roll cost 2,600,000 bolivars....Venezuelans have been stocking their homes with food before the measures take effect on Monday, amid concerns that confusion and overburdened banking systems could make trade impossible....Monday has been declared as a public holiday, the same day as internet banking operations are halted for several hours and a new set of notes with lower denominations are introduced."

As Central Bankers Meet, Economic Uncertainties Weigh on Sunny Outlook -Wall Street Journal
"Tariffs, emerging markets and U.S. discord are likely to be the focus of side conversations at the Fed’s annual mountain retreat. Global central bankers are navigating a new set of threats as they decide how aggressively to act in closing out an era of exceptionally easy money. Uncertainties include the prospect of disruptions to economic activity from tariffs imposed by the U.S. on China, Europe, Canada and others, and counter-tariffs imposed by those nations on the U.S. Emerging markets also look vulnerable if capital flight spreads beyond a handful of countries grappling with currency crises. Then there is the potential for discord between the Federal Reserve and President Trump, who has criticized the U.S. central bank in recent weeks for raising interest rates....The collapse of the Turkish lira this month, which followed an earlier rout in the Argentine peso, has investors worried financial turbulence could spread to other vulnerable emerging markets, even though both Argentina and Turkey have a unique assemblage of economic woes....Worries about Chinese growth have weighed on global commodity prices in recent months. Since June, oil prices are down 4%, aluminum is 6% lower and copper is down 9%."

52.1% of Kids Live in Households Getting Means-Tested Government Assistance -CNS News
"Will they be called The Welfare Generation? Today, they are Americans under 18 years of age growing up in a country where the majority of their peers live in households that take 'means-tested assistance' from the government. In 2016, according to the most recent data from the Census Bureau, there were approximately 73,586,000 people under 18 in the United States, and 38,365,000 of them - or 52.1 percent - resided in households in which one or more persons received benefits from a means-tested government program....Twenty years ago, in 1998, according to Census Bureau data, only 36.9 percent of Americans under 18 lived in a household receiving means-tested government assistance. In 2008, the percentage broke 40 percent for the first time. In 2013, it broke 50 percent for the first time. America has now seen four straight years - 2013, 2014, 2015 and 2016 - during which a majority of those under 18 lived in a household taking means-tested benefits....America's prosperity is ultimately and inextricably tied to America's culture. If we want to see the former flourish, the latter must also."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,203 an ounce. Silver at $14.75 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 1-week highs Wednesday on a weaker dollar. U.S. stocks traded mixed amid political worries surrounding President Trump as the bull market was set to become the longest on record.

Gold holds above $1,200 as dollar adds to weekly decline -Marketwatch
"Gold prices climbed Wednesday, holding above the closely watched $1,200 level as the leading dollar index looked to extend a loss for the week. Even with the greenback still in defensive mode, 'the dollar correction seems to have been stemmed for now,' said Richard Perry, analyst at Hantec Markets, noting gold's so far narrow range in response. Federal Reserve developments could provide catalysts for dollar and metals trading. The Fed will release the minutes of its most recent monetary policy decision at 2 p.m. Eastern, ahead of Thursday's start of the central bank's symposium in Jackson Hole, Wyo. Trump has criticized Fed policy, voicing his disappointment with higher interest rates under his own nominee, Fed Chairman Jerome Powell."

The Stock Market's Latest Sell Signal Has Happened Only 5 Previous Times Since 1895 -Zero Hedge
"Would you be interested in an indicator with more 100 years of history, an excellent record at calling multi-generational tops in the U.S. stock market, and which has just flashed only its sixth sell signal since 1895? Of course you would. That's because most of the indicators with solid long-term records - such as the Cyclically-Adjusted Price Earnings Ratio, or CAPE, made famous by Yale University professor and Nobel laureate Robert Shiller - have been in 'sell' mode for so long that many have stopped paying attention. For the first time since the late 1990s, and for only the sixth time since 1895, this indicator has risen above the 2.0 level that represents a major sell signal for equities. Investors should pay attention to Cardiff's indicator because he is one of the few advisers to have beaten the stock market over the long term."

The Fed May Be About to Make a Mistake -Bloomberg
"Markets are skeptical that inflation will rise enough to justify the need for several more rate hikes. The natural state of a capitalist economy is expansion. Recessions occur when 'something breaks' rather than an expansion simply dying of old age. Unfortunately, central banks have a history of pumping the brakes for too long and too hard when attempting to contain growth and inflation and are often the cause of a recession....While inflation is indeed accelerating, investors remain skeptical that higher prices are returning with the vengeance needed to justify the several more interest-rate hikes the Fed is talking about. We fear another Fed mistake is in the offing....If the Fed surveys are wrong - like they have been for two decades - and the Fed is worrying too much about something that doesn't materialize, then it risks 'breaking' the nine-year old expansion and becoming the catalyst for a recession."

US existing home sales fall for fourth straight month -CNBC
"U.S. home sales fell for a fourth straight month in July as a shortage of properties on the market pushed up house prices, likely sidelining some potential buyers. The National Association of Realtors said on Wednesday existing home sales fell 0.7 percent to a seasonally adjusted annual rate of 5.34 million units last month. July's drop marked the longest streak of monthly declines since 2013....Sales have been stymied by an acute shortages of homes on the market for several months, although the NAR said inventory showed signs of stabilizing last month....Rising building materials costs as well as shortages of land and labor have left builders unable to bridge the inventory gap, pushing up house prices. Supply constraints have largely accounted for the sluggish housing market, but there are growing concerns that the higher house prices together with rising mortgage rates will slow demand."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,200 an ounce. Silver at $14.76 an ounce.

NEWS SUMMARY: Precious metal prices steadied Tuesday on dollar weakness. U.S. stocks rose as the current bull market remained on track to become the longest in history.

Gold at 1-week high as Trump's Fed criticism weighs on dollar -Reuters
"Gold steadied after touching a one-week high on Tuesday as the dollar weakened after U.S President Donald Trump criticized the Federal Reserve for raising interest rates. A weaker dollar generally boosts the price of dollar-denominated gold. 'Trump's noises are helping gold demand at the margins but the root of that is largely through the dollar easing,' said ETF Securities analyst Nitesh Shah. Trump also said in the interview with Reuters that the U.S. central bank should do more to help him to boost the economy....The U.S. central bank has raised interest rates twice this year and is targeting two more hikes, with the next one seen in September....Meanwhile, investors looked ahead to the release of the Fed's August policy meeting minutes on Wednesday and the bank's annual symposium at Jackson Hole, Wyoming, later this week. Markets were also focused on a U.S.-China trade meeting this week, but Trump said on Monday he did not expect much progress from talks with Beijing."

We're about to see the final rise of history's longest bull market, technical analyst says -CNBC
"Stocks will continue to push upward before a final break in the next few months, serving as the last throes of what will be the longest bull market in history. That is according to forecasts by Roelof-Jan van den Akker, senior technical analysts at ING, commenting on the S&P 500 hitting record levels this week....On Tuesday, the S&P 500 will equal the longest U.S. bull market since World War II; on August 22, it will be the longest in history at nearly 3,500 days. 'This could be the final rise of this bull market, because it's already so long, so there's a lot of bearishness out there,' Akker said, adding that he wouldn't be surprised by a break above 2,875 in another short squeeze out of the markets. 'But that would possibly be the final move within this longer-term uptrend.'....Jim Paulsen, chief investment strategist at Leuthold Group, agrees. As certain market-moving metrics reach peak levels, Paulsen worries that there is no room left for them to grow....'I don't think that this price move will be very sustainable. We could see a rise for a couple of months, but again this market is in its final stages of completing a larger top formation.'"

Let's Retire the Phrase 'Privacy Policy' -New York Times
"True or false: 'When a website has a privacy policy, it means the site will not share my information with other websites or companies without my permission.' According to my research - a nationally representative phone survey conducted in January and February - a majority of Americans think this is true. It isn't. Not even close....The picture is consistent: When people see the phrase 'privacy policy,' most assume their information is kept private. To be clear, it is lawful - and common - for websites to trade most types of information about us without asking. The reason 'privacy policy' is a ubiquitous phrase is that since 1998, the Federal Trade Commission has strongly suggested that all websites (and, later, all apps) include a disclosure about what they do with visitor data and what choices visitors have regarding those uses....Our surveys consistently show that Americans dislike being tracked. Why, then, aren't Americans more angry and opposed to how often and extensively businesses track them? One reason: Most Americans don't read privacy policies, and so they aren't aware of what is going on....Fifteen years of research consistently shows that the label is deceptive - between 54 percent and 73 percent of Americans assume companies won't share their information without permission. One solution would be for the F.T.C., which is mandated to police deceptive corporate practices, to rule that only sites and apps that don't share people’s information without their permission can use that phrase. Otherwise, they should use a more accurate label, such as 'how we use your information.'"

A Generation of Americans Is Entering Old Age the Least Prepared in Decades -Wall Street Journal
"Low incomes, paltry savings, high debt burdens, failed insurance - the U.S. is upending decades of progress in securing life's final chapter. Americans are reaching retirement age in worse financial shape than the prior generation, for the first time since Harry Truman was president....They have high average debt, are often paying off children's educations and are dipping into savings to care for aging parents. Their paltry 401(k) retirement funds will bring in a median income of under $8,000 a year for a household of two. In total, more than 40% of households headed by people aged 55 through 70 lack sufficient resources to maintain their living standard in retirement, a Wall Street Journal analysis concluded....Individuals will find themselves staying on the job past 70 or taking menial jobs as senior citizens. They'll have to rely more on children for funding, pressuring younger generations, too."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,192 an ounce. Silver at $14.67 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain-hunting despite a firmer dollar. U.S. stocks rose as investors cheered corporate deal-making activity and China trade war fears eased.

George Washington gold coin sells for $1.7 million -Reuters
"An 18th century gold coin featuring the likeness of first U.S. President George Washington sold for $1.7 million at auction on Thursday, with the net proceeds going to charity, the auction house said. The 1792 Washington President gold eagle coin was never circulated as money but is instead thought to have been presented to Washington when post-Revolutionary War plans were being drawn up for the first U.S. Mint, according to Heritage Auctions. 'Numismatic researchers widely agree it is one of the most important coins in American history,' Heritage co-founder Jim Halperin said in statement announcing the sale....The U.S. Mint was authorized in 1792 and the first coins for public use were issued a year later in copper and silver, with images of lady Liberty on the front and a bald eagle on the back. The Washington President coin comes from the collection of the late Eric. P. Newman, who acquired it privately in 1942."

You too can own a genuine piece of American history minted in precious metal. Best of all, prices are at the best value in years right now! Watch Swiss America Chairman Craig R. Smith Explain 'The Classic Gold Double-Play'

The Perfect Investment -Michael Savage - LISTEN
"I want you to picture with me the 'perfect investment.' What would it look like? Is it an exciting high tech stock that's grown dramatically, like Goggle or Amazon? OR, something with steady growth, like real estate or bonds? Well, you'll have to decide for yourself, but I can tell you that for me and my family the perfect investment is GOLD! Why? Because gold offers the safety of real estate and the growth potential of stocks. In fact, over the last 20 years gold has outperformed the Dow and real estate. That's right. And, it offers the most valuable asset of all: peace-of-mind. Because if own it, you hold it in your hand. Call my friends at Swiss America today at 800-289-2646. Find out if GOLD could be your perfect investment too! Hold your future in your hands. In world of rising market volatility, Re-discover Gold!"

Buy Gold, Sell Small Caps - PIMCO Warns Late-Cycle Risks Are Rising -PIMCO
"There are ample signs of change in the wind for investors. The Federal Reserve is raising short-term interest rates, and U.S. inflation is at target for the first time since 2012. The global trade order that has existed for decades is being disrupted. Several economic indicators are running hot even as the current U.S. expansion has begun its tenth year....We believe investors should understand the inflation sensitivity, or 'inflation beta,' of their portfolios. Traditional stocks and bonds tend to respond negatively to inflation surprises, while real assets not surprisingly tend to respond positively....Market volatility has been increasing for a number of reasons...The potential for implicit portfolio hedges (such as bond overlays) to become less predictable amid greater inflation risk, leading many investors to de-risk by selling assets and reducing leverage....Gold is a real asset that not only serves as a store of value but also a medium of exchange, and that tends to outperform in risk-off episodes....Gold's properties as a metal and as a currency are causing it to drop amid trade tensions and the stronger U.S. dollar, dominating its properties as a long-term store of value. This leads, in our view, to an opportunity to add a risk-off hedge to portfolios at an attractive valuation."

America Is Overdue for Another Economic Disaster -Will/National Review
"Underneath the current economic boom, there are some truly worrying signs. This Wednesday, according to the Financial Times' Robin Wigglesworth and Nicole Bullock, 'the U.S. stock market will officially have enjoyed its longest-ever bull run'...And September 15 will be the tenth anniversary of the collapse of Lehman Bros., the fourth-largest U.S. investment bank. History's largest bankruptcy filing presaged the October 2008 evaporation of almost $10 trillion in global market capitalization. The durable market rise that began March 6, 2009, is as intoxicating as the Lehman anniversary should be sobering: Nothing lasts. Those who see no Lehman-like episode on the horizon did not see the last one. Economists debate, inconclusively, this question: Do economic expansions die of old age (the current one began in June 2009) or are they slain by big events or bad policies? What is known is that all expansions end....Publicly held U.S. government debt has tripled in a decade. Despite today's shrill discord between the parties, the political class is more united by class interest than it is divided by ideology. From left to right, this class has a permanent incentive to run enormous deficits - to charge, through taxation, current voters significantly less than the cost of the government goods and services they consume, and saddle future voters with the cost of servicing the resulting debt after the current crop of politicians has left the scene."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,184 an ounce. Silver at $14.63 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks drifted higher as Apple hit an all-time high, capping off a volatile week on Wall Street.

What is the price of gold and how low could it go? -The Week
"Gold has long been referred to as a 'safe haven' for investors during times of economic uncertainty, market volatility and high inflation. Yet 2018 has seen the metal lose some of its shine...The metal has now tumbled more than 10% since mid-April as a surge in the dollar has made US-priced bullion more expensive for buyers with other currencies....A survey of 35 analysts and traders conducted this month forecast an average gold price of $1,301 an ounce in 2018 and $1,325 in 2019....John Kosar, chief market strategist with Asbury Research, says he does not see an end in sight for the decline in gold prices....Daniel Ghali, commodities strategist at TD Securities, told Reuters: 'We think the dollar is set to weaken going forward, so we do see gold trading higher on the near term, two to three months outlook.' The Street says one of the lessons of these intra-year seasonal cycles is that 'massive washouts like the one we're experiencing in gold right now are the fathers of subsequent rallies'. The finance website went on to say that 'those who learn to view these situations as opportunities instead of catastrophes can make a lot of money in these cyclical markets'."

Hackers steal £10m from cash machines in global heist -Telegraph/Yahoo
"Cyber criminals have hacked cash machines in 28 countries to loot over £10 million from an Indian bank. Hackers infected the bank's credit card payment system with malware, which allowed them to approve transactions and access client accounts. Fake credit cards were then used to force ATMs around the world to dispense cash worth about $13 million until they were empty. The attack on Cosmos Bank, based in the Indian city of Pune, came just days after a warning of an imminent attack from the Federal Bureau of Investigation (FBI) last week. The FBI issued a warning to global banks that it feared there would be a global cyber attack of ATMs within days...The FBI said that it had intelligence that criminals were going to hack into a banking system using a highly choreographed fraud scheme known as ATM 'jackpotting', in which crooks hack a bank or payment card processor and use cloned cards at cash machines around the world to take out millions in just a few minutes....ATM jackpotting is increasingly common. In one incident in Thailand in 2016, thieves made off in minutes with 12 million baht or about £280,000 from cash machines by targeting ATMs run by Government Savings Bank, a state-owned Thai bank based in Bangkok."

Feels Like 1997 -Macro Monitor
"Just back home after a week-long road trip to many major U.S. cities. As an economist, I am always looking for anecdotal evidence of how the local economy is doing....Surprised at the poverty of seniors in New England. Most of the cashiers in retail were closer to 80 years old than 40 years old....Prices everywhere are absurd, such as $2.50 for coffee refills and rents in NYC....The timeline of what we are seeing feels much like how the 1997 Asian Financial Crisis unfolded....We were sitting on a trading desk at the time and experienced first hand how financial contagion spreads like a pandemic....We were market makers during the 1997 Asian Crisis. Where are the market makers today? Gone, gone, and gone. The liquidity for those looking to get out if a full-blown crisis does erupt will be horrendous. Just look to the recent events in Italy and lack of liquidity in one of the world’s largest bond markets. The conditions for a perfect storm are in place."

Book Review: On the Brink of Everything -Primelifers
"Reflecting upon his last eight decades as a writer, teacher and activist, Parker J. Palmer's latest book lives up to the title by helping readers discover his hard-won life lessons learned and how to age gracefully - which he describes in humorous prose and poetic beauty. Palmer shares a treasure chest of truisms encompassing the distilled common sense from many wisdom traditions. He paints his stories using colorful word pictures drawn from diverse palette of luminaries including; Thomas Merton, Rumi, Gandhi, George Orwell, Dickinson and Yeats, just to name a few....Here are a few my favorite 'Palmerism' quotes.'...Being human means being broken and yet whole. The word integrity comes from a root that means 'intact.'...being 'integral,' whole and undivided - which means embracing our brokenness as an integral part of life'....'Our lives leave a trail of words, even when we're not speaking or writing. With every move we make...we're dictating the next few lines of the text called our lives, composing it as we go.' ....'Sanctuary is wherever I find safe space to regain my bearings, reclaim my soul, heal my wounds, and return to the world as a wounded healer...I need sanctuary if I want to loosen the grip of our culture's violence on me...The one I need may not be a building, but silence, the woods, a friendship, a poem, or a song.'....'Heartbreak comes with the territory called being human...Suffering breaks our hearts, but the heart can break in two quite different ways. There's the brittle heart that breaks into shards...then there's the supple heart, the one that breaks open, not apart, the one that can grow into greater capacity for the many forms of love...Only the supple heart can hold suffering in a way that opens to new life. How can I make my heart more supple? The answer, I think, is to exercise my heart by stretching it, the way a runner stretches the leg muscles to avoid injury.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,184 an ounce. Silver at $14.71 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose on renewed hope that a resolution to a trade dispute with China may be on the horizon.

Why Gold Could Be Set For Seasonal Strength -Forbes
"Warren Buffett is not a fan of gold because he does not think a productive asset....But gold can be a useful alternative to cash, given its scarcity....Great investor Ray Dalio points to periods of extreme economic stress such as the 1930s and argues that gold can be a useful diversifier to portfolios. Based on the latest disclosures, some of his company's investments are in gold. Indeed, if you look across expert portfolios, Ivy League endowments allocate funds to commodities, including gold and Harry Browne's permanent portfolio features a significant role for gold, though other allocations tend to exclude it entirely....Nonetheless, if you have a moderately positive view on gold as an asset, two separate studies have observed that gold delivers strong returns around the third quarter of the year. Both studies published 3 years apart find that September and November are the only months with statistically significant changes in the gold price. The second more recent study produced in 2015 mirrors these findings....Therefore, this should be more of an opportune time to add gold to your portfolio if you were already leaning toward doing so."

Hard Assets Are About To Be Back In Vogue Once Again -King World News
"With the price of gold and silver holding near the key psychological levels of $1,200 and $15 respectively, it appears hard assets are about to be in vogue once again. What is really remarkable is the fact that the prices of commodities relative to the S&P 500 are now at their lowest level in history, breaking below the previous low set in the early 1970s. When you look at the 'Buy' and 'Sell' points on the chart, it illustrates the wealth transfers that take place as hard assets come into favor. Gold and silver also experience very large advances in coming years as each of the 'Buy' points trigger. For those of you that accumulate physical gold and silver on a regular basis, take advantage of this weakness to add to your physical holdings....We are seeing a major bottom in the gold market and patient investors will be extremely well-rewarded for their patience."

Tide about to turn for markets as easy-money decade ends -Reuters
"Swept along by super-easy money, investors have debated for years how world markets will react when this central bank largess inevitably ends. Now the liquidity tide is about to turn, and they have only a few months to adjust. The world's four biggest central banks - the U.S. Federal Reserve, European Central Bank, Bank of Japan and the Bank of England - have pumped around $13 trillion into the global economy since the crisis year of 2009, sharply expanding their own balance sheets of financial assets. While markets reached dizzying heights during the easy money era, that flood will dry up by the year-end. For the first time since 2011, the central banks are expected to suck out more cash in 2019 than they pump in. After a near decade of money-printing and zero interest rates, the shift for markets will be momentous...That makes 2019 a dangerous year for financial assets....Cracks are already appearing in markets, already stressed by a Turkish currency crisis and trade tensions between the United States and China. Emerging equities have plunged 20 percent since January and world stocks are set for the biggest monthly fall since March....What we are seeing in markets is slow strangulation rather than a sudden liquidity panic attack."

Turkey: A Glimpse of America’s Future -Bonner/Bonner And Partners
"We had never previously spent even two minutes thinking about Turkey or its finances. But then, after the president roused our curiosity, we saw what we think was a glimpse of the future. In it, we see huge defaults… stock crashes… chest-pounding… threats and counterthreats… populism… betrayal… trade wars… and currency wars… as the world reckons with $115 trillion in excess debt....Turkey has only 1% of the world's GDP, and less than 5% of America's. Small potatoes, in other words. But a great wall always develops a small crack before it falls down. The great wall we are looking at is one built by $250 trillion of debt, laid up, a billion here, a billion there, over the last 30 years. The foundation stones were put in place in 1971, when the final tether between gold and the U.S. dollar was severed… and the greenback was cut off from the real world of time and resources. The fake dollar distorted the connection between actions and consequences. People could reap what they had not sown. They could invest savings no one had ever earned. They could borrow - big time! - knowing the future (when they would have to pay it back) would never come. But in the real world, the future does show up… eventually. And it rolled into the ancient capital of the Eastern Empire last week....More to come on how Turkey… China… and the USA will reckon with unpayable debt."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,185 an ounce. Silver at $14.43 an ounce.

NEWS SUMMARY: Precious metal prices fell to 18-month lows as the dollar rallied on geopolitical worries. U.S. stock indexes fell below 50-day averages as concerns over Turkey's financial crisis weighed on investor sentiment.

Gold hits more than 18-month low as dollar gains on Turkey woes -Reuters
"Gold prices fell to a more than 18-month low on Wednesday as the dollar climbed towards its highest in over a year on concerns about global market contagion triggered by recent declines in the Turkish lira....'The story for gold is very much about dollar strength and emerging market weakness,' said Mitsubishi analyst Jonathan Butler. 'It's risk aversion, which is something that should be supportive of gold, but ... this is happening in an environment where the dollar is looking very strong relative to other major currencies and emerging market currencies.'....The dollar rose to its highest level since June 2017 on worries over President Tayyip Erdogan's calls for lower interest rates and fraying ties between the United States and Turkey, a NATO ally. The greenback, in which gold is priced, has also been bolstered by a fall in the euro, which has been dogged by concerns over the European banks' exposure to Turkey."

Turkey's Economy Is on a Collision Course With Reality -New York Magazine
"Turkey's currency, the lira, fell to a record low on Monday as investors panicked over a perfect storm of internal and external factors casting doubt on that country’s economic stability. The lira has fallen 40 percent against the dollar since the start of the year Turkey's economy has been on a collision course with reality for years, as President Recep Tayyip Erdogan bought his popularity with low interest rates and cheap credit, which has fueled several years of rapid growth in the country’s real GDP. Unfortunately, it has also fueled high inflation and a massive current account deficit: All that growth was greased with easily available loans in foreign currencies, and with the collapse of the lira, that debt has suddenly become unmanageable....Investors are wary of Turkey largely because they are wary of Erdogan: The strongman has run the country for the past 15 years (first as prime minister, and since 2014 as president) and in that time has grown increasingly paranoid and authoritarian....Erdogan also believes in voodoo economics: The purpose of his recent meddling with the central bank has been to prevent it from raising interest rates, which he believes to be the cause of inflation rather than a cure for it....A bigger concern is contagion: If Turkey is falling apart due to an exodus of foreign investors chasing a stronger dollar, other emerging markets with lots of dollar-denominated debt, such as South Africa and Argentina, could suffer the same fate. As financiers become nervous about emerging-market debt, credit dries up and outstanding loans are called in all at once, leading to defaults, bank failures, and financial panic that spreads like wildfire through the global banking system. This is a scenario the world has seen play out before."

U.S. Stocks Fall as Trade Tensions Persist -Wall Street Journal
"Investors widely sold risky assets from stocks to commodities Wednesday as the market continued to weigh whether trade tensions and an emerging-markets rout could slow the global economy. The Dow Jones Industrial Average dropped 286 points, or 1.1%, to 25014, while the S&P 500 slumped 1.1%. Both indexes were on track for a fifth decline in the past six sessions. The Nasdaq Composite fell 1.4%. Although U.S. stocks have largely shaken off fears of a weaker global economy, investors have recently grown anxious that a currency rout in Turkey and other emerging markets might spread. Adding to worries: Base metals like copper, widely used in construction and manufacturing, have plummeted, a bearish sign to analysts that use them as an economic indicator....'It drives people to say, 'I'm going to take some money off the table,'' said Mariann Montagne, senior portfolio manager at Gradient Investments. 'This is just a general malaise.'"

Indeed, now is the perfect time to 'take some money off the table' and put it into gold, which is currently the best value buy with prices at 18-month lows. Watch Swiss America Chairman Craig R. Smith explain how to take advantage of a rare Classic Gold Double-Play - Watch Now.

Free-Market Social Security -Stossel/YouTube
"Today is the 83rd anniversary of Social Security, and this year it went into the red. In the long run, it has a $32 trillion-dollar shortfall. John Stossel says that the program is unsustainable. Young people shouldn't expect it to cover their retirement. Romina Boccia explains the Heritage Foundation's plan to allow young people to contribute to their Social Security payments via private investment accounts. Those private accounts would likely grow faster than people's contributions to Social Security, and young people could invest in 'whatever floats your boat,' Boccia tells Stossel. Private investment accounts have been tried in other parts of the world. When Chile started them in 1981, it was poorer than most Latin American countries. Now it's the very richest....The good news is that this was the first time that when Stossel went to talk with people on the street, most people understood the problem. One man called it a 'Ponzi scheme' and asked, 'why not take it and invest it in the stock market and let it grow that way?' A woman summed it up well: 'the country's in a deficit; there's a point where you can't pay out and go in the negative forever.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,200 an ounce. Silver at $15.05 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Tuesday on bargain-hunting despite a stronger dollar. U.S. stocks rose as a rebound in the Turkish lira from an all-time low lifted investor sentiment.

Gold Abandoned By World's Top Mutual Fund; Frank Holmes Says Rebound Still Possible -Kitco
"In late July, Vanguard, one of the world's largest mutual fund managers, decided to drop 'Precious Metals,' from its name, changing its $2.3 billion Vanguard Precious Metals and Mining Fund to the 'Vanguard Global Capital Cycles Fund.' Frank Holmes, CEO of U.S. Global Investors, said that Vanguard's move, along with reducing its holdings of mining stocks from 80% of its 'Global Capital Cycles' fund to 25%, is part of a larger trend that makes it more difficult for investors to passively invest in gold. As gold heads below $1,200 an ounce, some analysts have called a bottom. Holmes said that a rebound for the bullion is still in the cards as the U.S. dollar remains the primary driver. 'The money is consistently in price reversals. We are now down 2-3 standard deviations, and many companies [have] great fundamentals. Bullion down, silver down, I think we're due, mathematically, for a great rally,' he said."

Facebook's crash is everybody's problem -Denning/Bonner And Partners
"A little over two weeks ago, Silicon Valley giant Facebook reported what one analyst described as 'nightmare guidance.' The social media giant reported that its user growth in the U.S. and Canada had flatlined… and that it was losing users in Europe....That's when Facebook shares took a historic dive...nearly 19%, from $217 to $176, in less than 24 hours. That move wiped more than $120 billion off the company’s market value – more than the entire market value of General Electric....The FAANGs, along with Microsoft, account for almost all of the gains in the S&P 500 for the year...crashing tech stocks can wipe you out even if you don't own them directly....We’re in the later stages of the third consecutive bubble in financial asset prices. The first was the dot-com bubble. Then came the housing bubble. And now, since 2009 and QE, we have this bubble in everything, led at the front by techs. All bubbles pop. So will this one. And the biggest and best overpriced tech stocks will crash. How can I be so sure? Because there are three specific threats facing Big Tech. The first threat to Big Tech is what we saw happen with Facebook a few weeks ago...Facebook forecast decelerating revenue growth for the remainder of the year...And everyone hit the sell button....many of the Big Techs could face their day of reckoning from blockchain technology. If you look beyond bitcoin, blockchain is the real force of creative destruction that should keep the Silicon Valley robber barons up at night....The second threat...The chance of more fines or a regulatory push to break up the Big Techs on antitrust grounds adds an element of risk to the stocks that hasn’t existed during this bull market....The last one is the simplest to understand. Folks could finally get sick of the products that these companies provide - especially when they realize the internet has become a massive surveillance machine, dominated by a few big companies that were either funded by the Intelligence Community or are now happy to do its bidding and spy on Americans, while trying to modify their behavior through algorithms....Protecting the wealth you already have is more important right now than putting your entire nest egg on the line in the stock market for another 10%, or even 20%, gain on the index....Put at least some of your wealth into tangible assets that you can physically own....we recommend an allocation to real estate, cash, and precious metals."

We agree with Dan Denning. Tech stocks will likely become the next major market bubble to pop. Economic and financial market bubbles are not precise, but they've become somewhat predictable, having burst at least once every decade over the last century, as we discuss in our FREE special report, THE CRASHLESS SOCIETY.

Hackers 'to steal MILLIONS from cash machines within days': FBI warns of imminent mass attack on world’s ATMs -Daily Mail
"America's intelligence chiefs have warned banks of a major hacking threat to cash machines worldwide in the next few days. The FBI sent out a confidential alert on Friday to warn that cyber criminals are planning a global 'cash-out scheme' using malware to take over ATMs and steal millions of dollars. Banks were warned that they could fall victim to an 'unlimited operation' in which millions of dollars could be withdrawn from cash machines. Smaller banks with less sophisticated security systems are thought to be most vulnerable to an attack using the 'jackpotting' technique, the Daily Telegraph reports. The warning said: 'The FBI has obtained unspecified reporting indicating cyber criminals are planning to conduct a global Automated Teller Machine (ATM) cash-out scheme in the coming days, likely associated with an unknown card issuer breach.' The FBI warned that 'at a pre-determined time, the co-conspirators withdraw account funds from ATMs using these cards.' Attacks could affect banks all over the world with British banks with large overseas interests including Barclays and HSBC thought to have been made aware of the danger from the 'jackpotting' technique. Earlier this year it was revealed that a co-ordinated group of hackers had stolen more than $1 million by hijacking cash machines in the U.S. The spate of attacks represented the first widespread jackpotting activity in the United States, officials said in January. The heists, which involved hacking ATMs to rapidly shoot out torrents of cash, were across the United States spanning from the Gulf Coast to New England."

Get our new 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, which explains how cyberattacks fit into a larger worldwide scheme to stop the private use of cash so every transaction can be controlled, tracked and taxed.

Bitcoin dips below $6,000 amid cryptocurrency sell-off -CNBC
"Bitcoin fell below $6,000 Monday for the first time since June as the majority of cryptocurrencies declined in value. The world's largest digital currency by market value tumbled as low as $5,900 and was down around 4 percent, according to CoinDesk index data, which tracks prices from several exchanges. The top 100 cryptocurrencies by market capitalization were all lower as of 9:00 a.m. ET, according to data from CoinMarketCap.com, and the total market capitalization of all cryptocurrencies fell by $21 billion in the last 24 hours....According to Charles Hayter, chief executive of digital comparison site CryptoCompare, the downward move in cryptocurrencies was on the back of the postponement of a bitcoin exchange-traded fund (ETF) proposed by VanEck and Solid X. If approved, that ETF would be the first to track cryptocurrency assets."

Is bitcoin the future of money? Find out today in our 2018 Real Money Perspectives newsletter The Future of Money.

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,200 an ounce. Silver at $15.00 an ounce.

NEWS SUMMARY: Precious metal prices fell to 17-month lows Monday as currency fears boosted the dollar. U.S. stocks fell as a financial crisis in Turkey worsened, dampening investor sentiment around the world.

Gold Tumbles Below $1200 In Welcome Sign For Global Contagion -Zero Hedge
"For the first time since March 2017, spot gold is trading back below $1,200 as a surge in the dollar seems to be overwhelming any potential safe-haven flows....Bloomberg believes this is a positive sign for global contagion fears as unlike in past crises, for instance Greece - gold and the dollar are not rising together. If the waves from Turkey's crisis really were expected to knock over dominoes in South Africa and Mexico, as well as banks in the euro zone, the yellow metal could easily have risen alongside the dollar, as it did when Greece nearly blew up back in 2010....Some desk chatter is that spot gold is weakening due to Turkey dumping the reserve asset to support its currency, but there is no news to confirm that."

Smart investors will seize this golden opportunity to buy gold at the best price in nearly a year and half. Owning solid wealth insurance in the form of physical gold is the best way to diversify assets against the next major financial crisis which is waiting in the wings. Call a Swiss America representative today at 800-289-2646.

Contagion Hits Latin America: Argentine Peso, Brazilian Real Plummet -Zero Hedge
"While the Turkish collapse has managed to stabilize for the time being, it appears Europe's close has refocused attention on South American EM as the peso and and real plunge. First, Argentina is attempting to force its banking system to shift away from short-term funding, has canceled the daily dollar auction and phased out its short term Lebacs (bills) program amid concerns of successful rolling over, offering 1-year notes and beyond instead. The peso reacted badly immediately. However, the central bank then stepped in and just unexpectedly hiked 7-day rates by 500bps to 45%. It's too early to tell if this is going to be enough....And then, souring the mood further, the Brazilian FinMin said he saw no need to intervene in FX markets and the real plunged to the day's lows. The Mexican, Chilean, and Colombian Pesos are all tumbling too."

Turkish lira plunges 15% versus dollar after Trump authorizes doubling metals tariffs on Turkey -CNBC
"The Turkish lira added to its steep losses on Friday, hitting a record low after President Donald Trump announced he was doubling metals tariffs on Turkey. The lira traded down 15 percent against the U.S. dollar at 6.42 after Trump made the comment in a tweet. The currency also fell 20 percent earlier in the day, reaching a record low. Trump's tweet and the White House comment came after Turkish President Recep Tayyip Erdogan asked citizens to convert their dollars and other foreign currencies as well as gold holdings to lira. 'Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle,' Erdogan said, according to an Associated Press translation. Erdogan said Turkey was facing an 'economic war' and noted the country would respond to those countries who had started it."

Google tracks your movements, like it or not -Associated Press
"Google wants to know where you go so badly that it records your movements even when you explicitly tell it not to. An Associated Press investigation found that many Google services on Android devices and iPhones store your location data even if you've used a privacy setting that says it will prevent Google from doing so....Google's support page on the subject states: 'You can turn off Location History at any time. With Location History off, the places you go are no longer stored.' That isn't true. Even with Location History paused, some Google apps automatically store time-stamped location data without asking....The privacy issue affects some two billion users of devices that run Google's Android operating software and hundreds of millions of worldwide iPhone users who rely on Google for maps or search. Storing location data in violation of a user's preferences is wrong, said Jonathan Mayer, a Princeton computer scientist and former chief technologist for the FTC’s enforcement bureau....To stop Google from saving these location markers, the company says, users can turn off another setting, one that does not specifically reference location information. Called 'Web and App Activity' and enabled by default, that setting stores a variety of information from Google apps and websites to your Google account."

Why is Google obsessed with tracking everyone? "Google's theory of knowledge ('big data') assumes that the search for knowledge by human brains can be replaced if all of the data in the world can be compiled in one place and algorithms to analyze them can be developed." Read more in our book review of Life After Google.

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,219 an ounce. Silver at $15.32 an ounce.

NEWS SUMMARY: Precious metal prices remained steady despite a sharply stronger dollar. U.S. stocks fell as geopolitical concerns and new tariffs pushed the Turkish lira to a record low against the dollar.

Prepare for an inflationary world -Moneyweek
"Quick quiz: which developed-market country this week reported annual wage growth that was nearly three percentage points above inflation? Believe it or not, it was Japan. Workers in the one country most synonymous with deflation saw their pay packets grow by 3.6% in June, compared with last year. Price inflation - as measured by the consumer price index (CPI) - was just 0.7% in the same month. So that's a real (after-inflation) pay rise of 2.9%. Not bad at all....Why should you care? First, it shows that, even in the apparently most stubbornly deflationary environments, price rises can take hold once the conditions are right....Second, it always takes a long time for investors to get over the last crisis....Recent decades saw several major changes that unleashed disinflation across the world, from China joining the global goods market to the internet's role in keeping prices down. But not only have those trends arguably already peaked, but the shift in the political picture is actively reversing them. Tariffs will make Chinese goods more expensive. Tech companies are prominent - that is, highly taxable - targets for angry voters. So it might be worth spending some time considering how a more inflationary world would affect your money. As Ward puts it: 'Government bonds are unlikely to be the asset that will protect portfolios.' We’d suggest owning at least a little gold."

The Big, Dangerous Bubble in Corporate Debt -New York Times
"The $30 trillion domestic stock market seems to get all the attention...But the larger domestic debt market - at around $41 trillion for the bond market alone - reveals more about our nation's financial health. And right now, the debt market is broadcasting a dangerous message: Investors, desperate for debt instruments that pay high interest, have been overpaying for riskier and riskier obligations. University endowments, pension funds, mutual funds and hedge funds have been pouring money into the bond market with little concern that bonds can be every bit as dangerous to own as stocks. Unlike buying a stock, which is a calculated gamble, buying a bond or a loan is a contractual obligation....For much of the last decade, risk has been mispriced to a staggering degree. In other words, the prices of bonds (and corporate loans) have not accurately reflected the riskiness of the underlying borrower's credit....We must inure ourselves to the inevitable. It may take yet another major financial crisis for things to change, or maybe things will never change. Either way, it's a lesson we never seem to learn until it's too late."

Gold - even at its lowest levels in 2018 - is behaving just as prescribed -Marketwatch
"Gold's sharp decline over the past month serves as little surprise to the investors who want the asset to perform in just this fashion - that is, as an alternative to assets perceived as risky, like stocks. They're betting that the opposite will be true as well, that gold will resume its role as protector and diversifier, even inflation hedge, when what they see as bloated price-to-earnings ratios, heavy debt-to-GDP ratios among major economies and hints of higher inflation finally catch up to the stock market. 'Sure, the opportunity cost of holding gold given where stocks are isn't great, but the long-term reasons to own gold are just as real as they were months ago, as a store of value with low correlation to stocks,' said Adam Strauss, CFA, with Appleseed Capital....'While gold's commodity function (jewelry) is not central to our monetary investment thesis, the fact remains that gold is a key component of most commodity indices,' said Trey Reik, senior portfolio manager with Sprott Asset Management. 'We view gold's early summer performance as incremental evidence of bullion's true portfolio utility,' Reik said. 'Gold is not a magical elixir, but it is a fiercely reliable store of value.'"

Your Future Revealed in George Gilder's 'Life After Google' -Benko/American Spectator
"Google and social media have been in the headlines. So has Bitcoin. Tech guru and conservative economist George Gilder now brings the two together in a fascinating and pertinent way....The blockchain - the virtual 'stuff' of which bitcoin was the pioneering is one of the hottest technologies in the world right now. It's also one of the most controversial....Gilder has seen the future, and it works. Forget the dotcoms. They are yesterday's news. So what are the dots to now connect, early, to survive the next revolution? Gilder steps forth to unravel the enigma of the blockchain, which he compellingly baptizes the 'Cryptocosm.'....Whether you are a veteran of or a newcomer to the blockchain space, Life After Google is likely to prove a revelation and a delight....Gilder meticulously documents how the lack of security is intrinsic to Google's priceless 'system of the world.' 'Pricelessness' may sound pretty wonderful...But it has an Achilles' heel...Gilder, in a personal email, instructs me, 'One of the key flaws of 'free' is it obviates security. No one needs to steal free stuff.' Then Gilder shows how the blockchain - the Cryptocosm - will cure the problem of insecurity baked into Google's System of the World....This is about giving power back to the people....In writing Life After Google, George Gilder has outdone himself. The author of the bible of the Reagan Revolution has now written the bible of the Cryptocosm."

Discover why the restoration of The Gold Standard is the shape of things to come in our detailed book review of Life After Google.

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,219 an ounce. Silver at $15.46 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Thursday despite a firmer dollar. U.S. stocks little changed with the S&P 500 was within striking distance of reaching an all-time high.

Valuing Gold In A World Awash With Dollars -Taylor/Seeking Alpha [Listen]
"History tells us that an ounce of gold has retained 100% of its purchasing power since the Roman Republic. But what price of gold in US dollars should we expect when the Fed responds to the next financial crisis by creating exponentially more dollars out of thin air than the trillions of fraudulent money it created in response to the past financial crisis? Alasdair Macleod opines on that topic, as well as why another financial crisis is inevitable. And he will provide some ideas about how you might protect yourself and your loved ones."

If This Chart Doesn't Scare You Out Of Stocks, Nothing Will -Zero Hedge
"A lot has changed since the stock market crash of 2000. Apple Inc. has gone from being just another computer brand to becoming the most valuable company in the world, Amazon.com Inc. went from being an e-book retailer to a byword for online shopping and Tesla’s Elon Musk has risen from obscurity to Twitter stardom. Yet some things never change and Doug Ramsey, chief investment officer at Leuthold Group, has been on a mini-campaign highlighting the parallels between 2000 and 2018....Price-to-sales ratio is one measure of a stocks value. It isn't as popular as the price-to-earnings ratio, or P/E, but is viewed as less susceptible to manipulation since it is based on revenue. He also shared a chart which he claims is 'unfit for a family-friendly publication' that shows how in terms of median price to sales ratio, the S&P 500 is twice as expensive as it was in 2000. Leuthold Group: 'Overvaluation in 2000 was highly concentrated; today it is pervasive, with the median S&P 500 Price/Sales ratio of 2.63 times more than double the 1.23 times prevailing in February 2000...upward trajectory of the market isn't sustainable,' he warns....On Aug. 22, the market will officially become the longest bull market in history. Coincidentally, the previous titleholder is the decade-long one that gave up the ghost when the tech bubble burst in 2000."

Investors Can't Ignore Gold As Market Is Seriously Undervalued - Murenbeeld & Co -Kitco
"Investors might be hesitant to buy gold in its current state, but one research firm recommends at least watching the asset as there is long-term value in the marketplace. In an interview with Kitco News, Chantelle Schieven, head of research at Murenbeeld & Co, said that her firm couldn't rule out further weakness in the near-term, but she added that the market is extremely oversold, which is unsustainable. Her comments come as the gold market has struggled to find momentum as it remains caught in a four-month downtrend with prices hovering near recent 12-month lows. 'Right now gold is the ultimate contrarian play. You may not want to buy it now, but it's a good time to look at it,' she said. 'We just feel that a turnaround in gold is coming soon.'"

The economy is booming, yet Americans are struggling. An award-winning author explains why -CNBC
"The unemployment rate fell below 4 percent in July, the lowest it's been in nearly two decades. The job market is booming and the economy seems strong. But millions of Americans are still struggling to make ends meet. That's in large part because wages are not keeping up as day-to-day costs continue to soar, according to Alissa Quart, executive director of the Economic Hardship Reporting Project and author of the recently released book, 'Squeezed: Why Our Families Can't Afford America.'....Middle class life is now 30 percent more expensive than it was 20 years ago, Quart writes - and Americans are feeling the squeeze. 'The cost of having kids can seem like Eric Carle's 'The Very Hungry Caterpillar': just like the caterpillar in the classic children's book, your child eats up every dollar you earn,' she writes. Desperation has forced many to take on more work to make ends meet. About four in 10 Americans hold some kind of second job, according to a July Bankrate survey of over 1,000 Americans. Among millennials, that rate is even higher, with over half (51 percent) engaged in some type of side hustle. And even that may not be enough."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,221 an ounce. Silver at $15.43 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on a flat dollar. U.S. stocks slipped as China imposed 25% tariffs on $16 billion worth of US goods.

Insure Your Wealth or Lose it All -Egon von Greyerz/GoldSwitzerland
"What should have been a normal cyclical high in the next year or two, is now going to be the most massive implosion of a bubble full of debts and inflated assets. The system has been 'successfully' manipulated for decades by central banks, certain commercial banks, the BIS in Basel and the IMF for the benefit of a small elite....I learned early in life to embrace uncertainty because from this moment on in anybody's life all is uncertain...But the uncertainty today stretches much further than various asset classes....But like many risks, it is fortunately possible to insure against the risk of a banking collapse, the crash of most asset classes and the final destruction of the currency system....Like most elegant solutions, it is so simple that over 99% of investors as well as ordinary people would not even think about it...I am talking about physical gold. It is such a simple and obvious solution to protect against the current risks but still less than 1% of people will consider it."

"Gold at $1,220, adjusted for real inflation, is almost as cheap as it was in 1999 at the $250 low. More importantly, inflation adjusted gold is now very near the 300 year low of 1999. So right now gold is again unloved and undervalued and therefore a bargain. On an inflation adjusted basis, the 1980 high of $850 would today be $16,650....Owning physical gold for wealth protection purposes is the best preserved secret in the West. In this part of the world, virtually nobody holds gold. At the same time, the wise people in the East continue to buy all the gold that is produced annually. China, India, Iran, Turkey, Russia and many more Eastern nations understand history and economics. That is why they are accumulating major gold reserves at these levels. If you understand the 5,000 year significance of gold as the only surviving money in history, you should follow the example of the East."

We'll Never Know How Bad the Federal Reserve Is -Wall Street Journal
"Sen. Rand Paul (R., Ky.) still hasn't persuaded his colleagues to audit the Federal Reserve's conduct of monetary policy. Perhaps lawmakers could simply agree that the Fed should stop destroying documents. 'Borrowed Time,' a history of Citigroup publishing today and co-authored by your humble correspondent and Vern McKinley, finds that the bank was in many ways healthier and more stable during the century when it was independent than during the roughly 100 years it has been supported by the federal government. But the government has been working hard to prevent such stories from being told....For decades now, the government's standard practice has been to warehouse individual examination reports for banks like Citi for 30 years while refusing to release them, citing exemptions under the Freedom of Information Act. After 30 years, the feds then destroy the reports....Citi's troubles in the years following the creation of the Federal Reserve in 1913 are especially intriguing. That's because, for nearly 80 years prior to the creation of a federal backstop, the bank had been rock-solid. Yet by an amazing coincidence the creation of a new government safety net was immediately followed by an era of reckless investment overseas. How will Americans ever fix problems in a federal bureaucracy if we’re never allowed to see them?"

China Retaliates With New Tariffs, Hunkering Down for a Long Trade Fight -Wall Street Journal
"As the U.S. moves forward with plans to impose new 25% tariffs on $16 billion in Chinese goods Aug. 23, Beijing said it will respond in kind on U.S. imports the same day. 'This is very unreasonable,' the Ministry of Commerce said in a statement Wednesday. 'In order to defend China's rightful interests and the multilateral trade system, China has to retaliate as necessary.'....The data came a day after the U.S. said it will start to expand tariffs on additional Chinese imports, including electronics and semiconductors, later this month - the latest salvo in the escalating trade battle between the world's two biggest economies....The Chinese economy faces strengthening headwinds from weakening consumption to slowed production and investment. The yuan has declined by around 6% against the dollar in the past two month - though that is helping some companies caught in the crosshairs of the trade battle....State-run tabloid Global Times, in an opinion piece last week, warned that American brands including Apple Inc. are positioned to become Beijing’s bargaining chips in the trade battle. 'The Chinese market is vital for many top U.S. brands, giving Beijing more leeway to play hardball in the trade conflict,' it said. 'If Apple wants to continue raking in enormous profits from the Chinese markets amid trade tensions, the company needs to do more to share the economic cake with local Chinese people.'"

Get Ready for a Massive Government Spending Spree -NextGov
"A combination of factors will see federal agencies trying to spend as much as 40 percent of their budgets in the final two months of the fiscal year. A government spending spree of potentially historic proportions will play out over the final seven weeks of fiscal 2018, as federal agencies look to spend $140 billion more than they thought they’d get before Congress signed the omnibus spending bill. Without a budget agreement in place, agencies spent cautiously through the first two quarters of fiscal 2018 before the omnibus - signed six months late in March - obligated an additional $80 billion for defense and $63 billion for civilian agencies. Federal agencies, now flush with cash, must obligate that money before the fiscal year ends on Sept. 30 or lose it to the Treasury Department. Analysts believe the federal market will see a monumental effort among procurement officials to spend as much on contracts as possible....Crunching government data from the past five fiscal years, The Pulse analysts determined agencies spent the most on professional, administrative and management support services, averaging around $70 billion in previous fourth quarters."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,218 an ounce. Silver at $15.35 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks rose as investors shrugged off global trade worries and focused on upbeat earnings.

Wait Until You See The Price Of Gold In Venezuela Right Now -Forbes
"Prices in Venezuela are doubling roughly every 18 days. The International Monetary Fund (IMF) now projects inflation to hit an astronomical 1 million percent by the end of this year. This puts the beleaguered Latin American country on the same slippery path as Zimbabwe a decade ago and Germany in the 1920s, when a wheelbarrow full of marks was barely enough to get you a loaf of bread. Venezuela’s socialist president Nicolas Maduro - who only this past weekend survived an assassination attempt involving several explosive-laden drones - announced recently that the country plans to rein in hyperinflation by lopping off five zeroes from its currency....So where does this put gold? At some point, hyperinflation gets so ludicrously out of control that discussing exchange rates becomes pointless. But as of July 30, an ounce of the yellow metal would have gone for 211 million bolivars - an increase of more than 3.1 million percent from just the beginning of the year....A Venezuelan family that had the prudence to store some of its wealth in gold would be in a much better position today to survive or escape President Maduro's corrupt, far-left regime. In extreme cases like this, gold could literally help save lives. Such was the case following the fall of Saigon in 1975. If not for gold, many South Vietnamese families might not have managed to escape the country....Gold was their passport. Thanks to the precious metal, tens of thousands of Vietnamese 'boat people,' as they’re now known, were able to start new lives in the U.S., Canada, Australia and other developed countries."

An Inflation Nightmare in Socialist Venezuela -Craig R. Smith/SATC
"Imagine watching your life savings of 1,000,000 bolivar notes instantly shrink to just 10 bolivars! The hyperinflation, collapse in economic activity, and lack of public goods and affordable food in socialist Venezuela are now causing a huge migration into neighboring countries. This government-created famine is occurring right now and the America media have mostly ignored the story....This is the exact same type of hyperinflation that hit Germany’s socialist Weimar Republic following World War I as the cost of goods was rising literally by the minute. Could the same thing happen here in America? As I explained in my book Money, Morality & The Machine, if a society's money loses value, that society will also lose its moral values. Socialism almost inevitably debases government paper money to maintain and expand its power. That debasement causes inflation which debases the fundamental work ethic and honesty of society. This same hyperinflation could happen in America because of the rapid socialist drift, but with the right preparation you can survive and even thrive when it happens. This is why people have relied on gold as a secure shelter for their earnings and savings around the world for thousands of years."

As Venezuela Dollarizes, Monetarism's Conceit Collapses -Tamny/Real Clear Markets
"No matter what economists tell you, money isn't wealth. Wealth can't be printed. It's in fact what we create. Money is just an agreement about value that producers use to facilitate the exchange of what they've produced for what they want and need....Which brings us to Venezuela...the dollar is replacing the bolivar. As the Washington Post's Rachelle Krygier reported last week, '[A]ccess to U.S. dollars' is increasingly the 'line between survival and starvation' thanks to the 'nearly worthless' bolivar. Even though the dollar is far from stable....Not only can central banks not control so-called 'money supply,' they shouldn't even if they could. Money supply is logically something set in the marketplace....Monetarists don't care about money's exchangeable value. They simply want central banks to centrally plan the supply of the currency without regard to its value. But as Venezuela reminds us, the stability of the unit of account is exponentially more important than the supply of money is....In Venezuela's case, those who escaped the socialist hell are working for the dollar in countries like Ecuador, and they're sending dollars home....So while news accounts indicate that Venezuela is in desperate shape, the creation of money for the sake of it will do nothing to fix what's wrong."

'Too little too late': Bankruptcy booms among older Americans -New York Times/CNBC
"For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy. The signs of potential trouble - vanishing pensions, soaring medical expenses, inadequate savings - have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers. Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks....And those who are carrying debt into retirement are carrying more than members of earlier generations, an analysis by the Employee Benefit Research Institute found. Perhaps not surprisingly, the lowest-income households led by individuals 55 or older carry the highest debt loads relative to their income."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,217 an ounce. Silver at $15.34 an ounce.

NEWS SUMMARY: Precious metal prices eased back on speculative selling and a firmer dollar. U.S. stocks rose slightly on reports that major companies will buyback $1 trillion worth of shares this year.

Why gold will remain one of the safest ports during the turbulent times ahead -The National
"Those who heeded my recent warning to sell their Faang stocks (Facebook, Amazon, Apple, Netflix and Google) will still be sitting comfortably. Meanwhile for those who ignored it – Facebook took a 20 per cent hit in one day, the worst loss for a single stock in the history of the US stock market. This sort of sudden volatility is an ill omen and seldom ends well for the wider market. The bigger macroeconomic picture is one of investment values inflated by a decade of ultra-low interest rates that are now just beginning to move in the opposite direction. What's been surprising is how long financial markets have held up under this gravitational force, and yet the sense of inevitability about higher interest rates ultimately means lower valuations have not gone away. Long periods of low interest rates are well known for distorting investment, supporting companies that would otherwise be dead and producing all sorts of Ponzi schemes and dodgy investment ideas. Too much credit floats all boats....In such volatile periods as the one we are heading into, there are few safe places to invest. Keeping cash in multiple major currencies, bonds and precious metals has never made more sense....The vaults of the world’s central banks are full of gold, not Bitcoin."

Are tech titans teetering atop the market? -AFP/Yahoo Finance
"Apple ended the formal trading week worth a history-making $1 trillion. Meanwhile, four other tech firms rounded out a list of the five most valuable companies based on share prices. Amazon was worth $889 billion; Google-parent Alphabet was valued at $856 billion; Microsoft weighed in at $828 billion, and Facebook was valued at $513 billion. Together, these companies account for about 20 percent of US GDP. Combined, the tech stocks account for more than 25 percent of the value of the Standard & Poor's 500, the index that includes the 500 largest companies listed in the United States....Tech titans such as Google and Facebook have become such formidable forces that they are prime targets for regulation or fines, which could slow growth or hurt profits. 'Every technology company remains vulnerable to being disrupted by a slightly more clever version of itself,' BlackRock Global Allocation Team portfolio manager Russ Koesterich said in a blog post."

Facebook to Banks: Give Us Your Data, We’ll Give You Our Users -Wall Street Journal
"Facebook Inc. wants your financial data. The social media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking account balances, as part of an effort to offer new services to users. Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and U.S. Bancorp to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter. Facebook has talked about a feature that would show its users their checking-account balances, the people said. It has also pitched fraud alerts, some of the people said. Data privacy is a sticking point in the banks' conversations with Facebook, according to people familiar with the matter....Investors shaved more than $120 billion from its market value in one day last month after it said its growth is starting to slow. Facebook said it wouldn't use the bank data for ad-targeting purposes or share it with third parties....Partnership with American Express Co. allows Facebook users to contact the card company's representatives. Last year, Facebook struck a deal with PayPal that allows users to send money through Messenger."

Is a Financial Crisis Inevitable? -Poulson/Merrifield/American Spectator
"Assuming the recent tax cuts and spending increases are maintained over the forecasted period, CBO estimates the amount of debt held by the public will equate to the national income over the next decade. Even more ominous, CBO predicts the national debt will eventually be more than double the national income, in just 30 years. This debt level would be unprecedented, exceeding heights reached during the Great Depression and World War II. It should come as no great revelation that CBO concludes this is not sustainable. Unless the United States implements fiscal austerity, reduced economic growth and a debt crisis are inevitable. Just as they always do, Washington, D.C. elites responded to this nightmarish CBO forecast with a collective yawn. The question is why politicians and policymakers are in denial, despite the growing evidence of a fast-approaching debt disaster....To avoid a debt calamity, Congress must abandon illusory Keynesian economics and implement commonsense budgeting principles. Like Ulysses in The Odyssey, we must tie politicians to the mast of fiscal rules to constrain spending. We have proposed a set of fiscal rules that have proven to be effective in constraining spending and reducing debt in other OECD countries. The Merrifield-Poulson fiscal rules would limit spending and impose a deficit/debt brake to prevent Congress from pursuing unsustainable fiscal policies. Without drastic action, America will surely find itself cascading off the fiscal cliff in the coming decades. It’s not a matter of 'if,' it's a matter of when."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,223 an ounce. Silver at $15.46 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors digested jobs data amid ongoing trade war fears.

Gold Surges on Weak U.S. Data -Investing
"Gold prices were higher on Friday after disappointing jobs data pushed the U.S. dollar lower. Meanwhile, the number of jobs added to the economy was less than expected in June, but still strong enough to keep the Federal Reserve on track to gradually increase interest rates. Nonfarm payrolls rose by 157,000 in July, according to official data released on Friday. The Fed left interest rates unchanged on Wednesday, as expected, but pointed to the potential for increased rate hikes due to strong U.S. economic data....The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slumped 0.13% to 94.88."

Inflation Drives Apple Market Cap To One Trillion Dollars -Global Macro Monitor
"Apple's market cap hit 10 to the 12th power today ($1 trillion). Impressive but no pom-poms here at Global Macro Monitor. We would be more impressed if Apple's main businesses were doing better and the company was more focused on electrical engineering rather than financial engineering....Almost all of Apple's revenue growth was driven by inflation, that is the price increase for iPhones. Unit sales growth for the company's three major products - iPhone, iPad, and Mac - were either flatish year over year or negative. This has been the case now for several years. If Apple were not able to significantly raise iPhone prices (mainly through the upgrade to the X) and only grow revenues by the device's unit sales growth of 0.67 percent, Apple's total revenues would have been about one third of what was posted, or 6.7 percent versus 17.3 percent. One thousand dollar smart phones are not a sustainable proposition, in our opinion, folks. China, or somebody, somewhere, will, or already is producing a quality equivalent smart phone for $250....Furthermore, Apple's inflation driven earnings may be an omen of a larger inflation coming to the overall economy....Finally, the limiting supply-induced surge in Apple price shares due to buybacks is endemic of today's asset markets, in general."

Goldman Sachs sees more price pain ahead for bitcoin -CNBC
"Goldman Sachs is not optimistic for the near-term fate of cryptocurrency. In its mid-year economic report, the bank's investment management group highlighted 'cryptocurrency mania' as one of six factors creating an unsteady undertow affecting markets for the remainder of 2018. 'We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency,' Sharmin Mossavar-Rahmani, Goldman's chief investment officer of the private wealth management group, said in the report published Friday....The cryptocurrency has lost roughly 60 percent of its value since that high in December, and was trading near $7,470 Friday, according to industry site CoinDesk. 'Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected.' Mossavar-Rahmani said....The investment bank is reportedly looking to launch a bitcoin trading desk this year and become the first Wall Street firm to make a market in cryptocurrencies."

The Platform Economy Can Change the World -CEI.org
"Platforms are an ancient way of doing business - think of matchmakers, city fairs, and town markets - that bring together two or more parties to make economic transactions. Today, digital platforms allow a far wider reach, bringing together people in a way that was unthinkable just a generation ago. Examples of platforms include: eBay, which brings together sellers and buyers like a traditional marketplace. YouTube, which brings together content creators, viewers, and advertisers. Uber and Lyft, which bring together owners of cars that would otherwise be left unused with people who need a ride....What's so important about these transactions that didn't happen before is that we create wealth by economic transactions, moving resources from a lower-valued use to a higher-valued use. That happens when we sell an unused good on eBay, give someone a ride via Uber, or share our commentaries on YouTube. Platforms facilitate these transactions, making us all better off....They did this through establishing their own trust system, based on reviews and ratings. Users - whether on the supply or demand side - who do not get good ratings are kicked off the platform. While abuse still occurs, these systems limit it....Platforms are changing the way we live, work, and get about. They have the potential to provide significant increases in wealth. We all use them and, in many cases, love them, so we should also defend them from needless regulation."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,223 an ounce. Silver at $15.40 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on a firmer dollar. U.S. stocks also traded mixed on renewed China trade war threat as Apple boosted the tech sector.

Warren Buffett Metric Tells Us a Stock Market Crash Could Be Coming -MSN
"Without question, Warren Buffett and the rest of Berkshire Hathaway's investment team incorporate many different metrics when evaluating prospective companies to acquire and stocks to buy. However, Buffett himself has mentioned one specific metric as the best indicator of stock valuations, and it has appropriately been nicknamed the 'Buffett Indicator' in the investing community. In fact, he described it as 'the best single measure of where valuations stand at any given moment' in a 2001 interview with Fortune Magazine. It's a fairly simple metric to calculate, too. Just divide the total market capitalization of all U.S. stocks by the latest gross domestic product (GDP). Where does the Buffett Indicator stand now? It may surprise you to learn that, at nearly 149%, the total market cap to GDP ratio has never been higher. It's even higher than the 145% peak we saw during the dot-com bubble."

Holding Gold Makes Me Happy - Robert Kiyosaki -Kitco
"Holding real gold is the best way to have steady income, says Robert Kiyosaki, best-selling author of 'Rich Dad Poor Dad' and his latest book 'Why The Rich Are Getting Richer.' Kiyosaki has been a self-proclaimed gold bug since 1972, and in his latest interview with Kitco News, he explained his journey with the yellow metal, from his first foray into gold when Nixon removed the dollar from the gold standard, to accumulating millions of dollars in gold today. 'People believe what they want to believe,' Kiyosaki said, 'some people believe that if you go to school you'll be happy, or if you get married you'll be happy….well, I don't know about that, but gold has made me very happy.'"

Apple Just Became The First Trillion Dollar Public Company -Zero Hedge
"Thanks in part to an incessantly shrinking float, Apple just became the first publicly-traded company to be worth more than $1 trillion...The line in the sand was $207.05 (based on Apple's most recently updated share count). And once it tagged $207.05, the sellers hit...And thanks to global ETF demand combined with a buyback-driven shrinking float and rising earnings...Tim Cook is now the CEO of a trillion-dollar company....Bloomberg's David Wilson writes, 'the decline in share count is responsible for 42% of the stock's gain from the end of 2013 through Tuesday'....To be sure, Apple is not alone: a study published by the National Employment Law Project and the Roosevelt Institute found that U.S. companies spent 60% of net income on repurchases, money that could have been used for pay increases, reinvesting in company growth or general R&D spending - between 2015 and 2017. Then again, Apple shareholders are certainly delighted that instead of doing any of those things, AAPL focused on what it does best, at least in recent years: rest on its laurels, borrow the best technology created by its competitors, and use the billions in cash this generates every quarter to buy back its own stock."

Housing demand sees biggest drop in more than 2 years -CNBC
"The long list of housing headwinds is finally taking its toll on potential buyers. Housing demand fell 9.6 percent in June, compared with June 2017, according to a monthly index from Redfin. That is the largest decline since April 2016. Red-hot home prices, rising mortgage interest rates, very few listings at the entry level and a high rate of student loan debt have weighed on buyers for a while, but a strong economy and growing employment had mitigated those factors. Now, however, a market stalemate is developing as rates and prices continue to rise, further weakening affordability. As a result, the number of people requesting home tours fell 6.1 percent annually in June, according to Redfin's index, which is seasonally adjusted and covers 15 large metropolitan housing markets. There were 15 percent fewer offers made on homes as well."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,227 an ounce. Silver at $15.45 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on a firmer dollar ahead of Fed statement. U.S. stocks traded mixed with Apple propelling tech higher and trade war fears dragging other major stock indexes down.

Is A Monster Gold Rally Just Around The Corner? Cramer’s Charts Show Bottoms Are In -Kitco
"With a floor in gold prices more or less set just above the $1,200 an ounce level, a monster rally could be on the horizon, according to Mad Money's Jim Cramer. The large speculators in the gold space are great markers of sentiment and direction, CNBC's Cramer said on Tuesday. And the latest weekly CFTC Commitments of Traders Report, which shows how speculators are positioned, reveals that the large players have reduced their gold futures to the lowest level in years. 'The big-money speculators are pretty darned negative,' Cramer said. 'And I think perhaps too negative on the yellow metal, which could be tinder for a big rally.' Indeed, the last time the CFTC numbers were this low - December 2015 - gold kicked off 'a monster rally,' Cramer pointed out....Cramer suggested buying gold to diversify any portfolio as the yellow metal is a great hedge against many market risks out there. 'Let me give you the bottom line here: for those of you who are genuinely worried about inflation and trade policy and rising rates, and let's throw in the budget deficit, you don't need to dump your stocks,' Cramer said. 'Instead, though, how about buying some gold as an insurance against economic chaos.'"

Is GOP Proposed $100B Tax Cut for Real ... or for the Rich? -Fox News
Swiss America Chairman Craig R. Smith addresses concern voiced by Democratic House Minority leader Nancy Pelosi that the proposed GOP $100B tax cut, which would index gains for rising inflation, is a scam that will only benefit the rich.

How Trump Could Be Like Reagan -Moore/Laffler/Forbes/New York Times
"Just as Ronald Reagan once pushed for abolishing nuclear weapons, President Trump should call for ending tariffs. President Trump won a victory for freer trade last week when he and the president of the European Commission, Jean-Claude Juncker, agreed to find ways to lower tariffs and other barriers to each other's exports....We were particularly heartened that Mr. Trump and the Europeans now have a handshake agreement to aim for zero tariffs on both sides of the Atlantic. This was Mr. Trump's idea. The night before the agreement, he proposed in a tweet that 'Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade!' Amen. This is a winning strategy that we've long endorsed with our friends at the White House because it is fully consistent with what Mr. Trump has often told us: his threat of tariffs is a negotiating tactic to get to lower trade barriers and a 'level playing field.' The next step should be to extend this zero tariff offer to other key allies, including Britain, Canada, Mexico and South Korea....By putting zero tariffs on the table, Mr. Trump will also be able to determine which nations are genuinely committed to freer trade and which prefer to keep their protectionist barriers in place. We've often reminded politicians that free trade is a pillar of prosperity and a win-win for trading partners."

Save Low Interest for a Rainy Day -Feldstein/Wall Street Journal
"Controlling inflation isn't the primary reason for the Fed to keep raising the short-term interest rate. Rather, raising the rate when the economy is strong will give the Fed room to respond to the next economic downturn with a significant reduction. That downturn is almost surely on its way. The likeliest cause would be a collapse in the high asset prices that have been created by the exceptionally relaxed monetary policy of the past decade. It's too late to avoid an asset bubble: Equity prices already have risen far above the historical trend. The price/earnings ratio of the S&P 500 is now more than 50% higher than the all-time average, sitting at a level reached only three times in the past century. Commercial real-estate prices also are extremely high by historical standards. The inevitable return of these asset prices to their historical norms is likely to cause a sharp decline in household wealth and in the rate of investment in commercial real estate. If the P/E ratio returns to its historical average, the fall in share prices will amount to a $9 trillion loss across all U.S. households....Raising rates does increase the risk of bursting the asset bubble sooner than investors and consumers might hope."

RealMoneyBlog - Free daily/weekly email