August Blog Archives 2017

Gold last traded at $1,322 an ounce. Silver at $17.57 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a flat dollar. Gold is on track to end August 3.5% higher with a 15% gain YTD. U.S. stocks inched higher as investors digested economic data with the major indexes ending the month flat.

Gold Is Winning New Fans -Bloomberg
"After nosing above $1,300, gold is winning new fans as tepid U.S. inflation anchors Federal Reserve policy and President Donald Trump’s growth agenda risks running into the sand. The metal should trade above that level in 2018 as the dollar weakens and the Fed sticks to just two rate hikes, in December 2017 and then March, according to Luc Luyet, a currency strategist at Pictet Wealth Management, a unit of the Pictet Group, which managed $500 billion as of the end of June. 'The dollar should be penalized next year by the weaker growth outlook and by the less active Fed, so we would expect the dollar to gradually weaken and that should support gold,' Geneva-based Luyet said in an interview this week....Other bulls include billionaire Ray Dalio, who leads the world’s largest hedge fund at Bridgewater Associates, recommends investors place as much as 10 percent of their assets in gold as a hedge against political and economic risks. Bullion could rise to $1,400 by early next year, buoyed by lower long-term U.S. interest rates and lack of progress by Trump in delivering economic reform, according to Bank of America Merrill Lynch."

Yes, gold is gaining new fans daily as the reality of life's uncertainties dominates the daily news. Highly respected market analyst Louise Yamada told Bloomberg news this week she believes gold is headed to $1,400 an ounce this year. We agree. Watch AMTV host Christopher Greene explain why personal preparedness for both natural and financial disasters is so vital right now.

The return of the high-risk mortgage -Financial Times/CNBC
"As a veteran underwriter of subprime mortgages, Dan Perl had seen enough by April 2007 to know that there was serious trouble ahead....But now he is back in the game, leading a small band of lenders making subprime loans once more. Or 'nonprime', as they prefer to call it these days. For every comfortably off professional who could walk into a branch of Chase or Wells Fargo and get a home loan without any fuss, they argue, there are many more who would struggle. People who are self-employed or on variable incomes, for example, may not check all the boxes a big bank needs. Ditto new immigrants with thin credit histories, or people with a few scratches and dents in their files. 'Making credit available to borrowers who are subprime is national policy and it is an important part of economic growth,' says Julian Hebron, head of sales at RPM Mortgage in Alamo, California. But what's worrying some economists is a feeling that we're on a slippery slope; that the same forces which fed the crisis last time round - rampant demand for yield among investors, skewed incentives on Wall Street and a government determined to relax regulatory restraints - could feed another....Fitch, the credit rating agency, expects $3bn of issuance of nonprime mortgage-backed securities (MBS) this year, up from about $1bn over the previous 18 months."

Buyers 'fight over scraps' in ever-pricier housing -CNBC
"Not only are home prices continuing to rise, but the gains are accelerating. Couple that with record-low supply of homes for sale, and you would think demand would fall off. So far, it has not. Bidding wars are to be expected with most offers, especially in larger metropolitan areas and their suburbs. 'It's a new normal in the housing market,' wrote Cheryl Young, senior economist at Trulia, in a response to new price reports. 'Ever rising prices being met by insatiable demand.' The supply of homes for sale at the end of July was 9 percent lower compared with July of 2016, according to the National Association of Realtors. Homes are selling faster and faster each month, especially those on the lower end of the market where supply is lowest and where demand from first-time buyers is very high....New single-family homes priced between $200,000 and $250,000 were the fastest-growing segment for homebuilders in the second quarter of this year...Existing home sales were down 1.3% in July."

A Decade of Central Bank Collusion -NomiPrins
"Since the global financial crisis, the biggest G7 winners have been the Big Six US banks that profited from access to cheap money. They benefited from central bank purchases of their securities that exaggerated the value of the remaining securities on their books. They used 'printed' or electronically crafted money to stockpile cash and fund buybacks of their own shares and pay themselves dividends on those shares. By producing and distributing artificial money, central bankers distorted reality in global markets. Multi-national banks were co-conspirators in that maneuver....As we approach the ninth anniversary of the collapse of one of my former employers, Lehman Brothers, and the 10th anniversary of the beginning of central bank collusion into the financial crisis, there has been - no change - in global G7 central bank monetary policy....Big US banks are bigger than before the crisis. They float atop a life-raft, among other things, of $4.5 trillion Fed asset book, as part of a total $14 trillion G7 central bank asset book....Take the composite of all that and what are you left with? Ongoing G7 central bank monetary policy collusion, zero percent interest rates globally, unlimited QE potential, and major asset bubbles."

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Gold last traded at $1,314 an ounce. Silver at $17.50 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on mild profit-taking and a firmer dollar. U.S. stocks rose on upbeat GDP and jobs data as tech giant Apple's stock hit a record high.

US revised second-quarter GDP up 3.0% vs 2.7% rise expected -CNBC
"Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment. Growth last quarter was the strongest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that second-quarter GDP growth would be raised to a 2.7 percent rate....With GDP quickening in the second quarter, the economy grew 2.1 percent in the first half of 2017. That was up from the 1.9 percent reported last month. Republican President Donald Trump has set an ambitious 3.0 percent growth target for 2017, to be achieved through a mix of tax cuts, deregulation and infrastructure spending....Consumer spending, which makes up more than two-thirds of the U.S. economy, grew at a 3.3 percent rate, but stronger consumer spending came at the expense of saving amid sluggish wage gains. The saving rate slipped to 3.7 percent from 3.9 percent in the first quarter."

Did North Korea Just Trigger $1,900 Gold Prices? -The Street
"Gold enjoyed its best day of the year Monday, gaining more than $27 and moving decisively over the $1,300 mark. This impressive advance over the $1,300 level should signal a major breakout to the upside as the gold market heads into the seasonally favorable fall months. Market consensus for the climb is the latest missile launch by North Korea over Japan. While this may explain the short-term catalyst, gold's fundamentals have been in place for some time to support a move of this sort. There are several fundamental factors in place, which will continue to support gold's move substantially higher. The first is uncertainty. Gold's value as sound money comes into focus most clearly in times of political and economic uncertainty....Gold is also moving higher as the dollar continues to weaken. This trend has been in place for almost a year now and shows no signs of abating....Global monetary moves away from the dollar by major trading blocs, from the Chinese and Russians to the European Central Bank, also support gold and diminish the dollar....Finally, interest rates are always a major driver of gold prices. Low real rates support gold as investors choose to leave riskier monetary instruments when they are not being paid to hold them through higher rates....Enjoy the ride. It should be a long and fruitful one."

From Stocks to Bonds, the Bear-Market Signals Are Multiplying -Bloomberg
"Risks are stacking up for markets attempting to recover from the latest provocation by North Korea and the mounting damage of Tropical Storm Harvey. Citigroup Inc. strategists including Jeremy Hale cite 'worrying developments' that may signal the approach of a correction in stocks, while Commerzbank AG finds growing evidence of bearish sentiment in bond funds. Here are some of the red flags: The pairwise correlations between the S&P 500 and its industry sectors have fallen near levels that preceded the last two bear markets, according to the Citigroup strategists....Underperforming transport stocks are another concern....Fund flows show bond investors are also shunning risk."

In our free CRISIS TIMELINE report we explain why a growing number of bear-market signals and cyclical economic risk factors are all converging within the next 24 months. Don't wait to prepare; prepare and then wait.

Will the Dollar Stay Dominant? -New Yorker
"'Banknotes depend on confidence,' Larry Felix, the former director of the Bureau of Engraving and Printing, told me. (Our paper bills are called banknotes because they are, technically, promissory notes - formal I.O.U.s - issued by the Federal Reserve.) 'You accept a banknote because you figure the person you will hand it to will also accept it.' This is the essential circular mystery of money: its value comes from each of us believing that everybody else will continue to believe in its value....This basic faith in currency has collapsed in other countries, most famously in Weimar Germany and, more recently, in Zimbabwe, Iraq, and Brazil....Yet the dollar emerged dominant, showing that a currency doesn’t have to be great to be trusted - it just has to be the least bad. (Wall Street traders refer to the dollar as 'the cleanest dirty shirt.')"

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Gold last traded at $1,318 an ounce. Silver at $17.51 an ounce.

NEWS SUMMARY: Precious metal prices spiked near 10-month highs Tuesday on safe-haven buying amid rising geopolitical fears. U.S. stocks traded mixed as investors digest the North Korea threat and financial impact of Hurricane Harvey.

Most Harvey flood victims uninsured, face big bills alone -Associated Press
"Homeowners suffering flood damage from Harvey are more likely to be on the hook for losses than victims of prior storms - a potentially crushing blow to personal finances and neighborhoods along the Gulf Coast. Insurance experts say only a small fraction of homeowners in Harvey's path of destruction have flood insurance. That means families with flooded basements, soaked furniture and water-damaged walls will have to dig deep into their pockets or take on more debt to fix up their homes. Some may be forced to sell, if they can, and leave their communities. 'All these people taken out in boats, they have a second problem: They have no insurance,' said Robert Hunter, director of insurance at the Consumer Federation of America....With Harvey, only two of 10 homeowners have coverage, Hunter estimates....'There's going to be a huge uninsured economic loss here,' said Pete Mills, a senior vice president at the Mortgage Bankers Association."

Three Financial Lessons from Hurricane Harvey -Daily Reckoning
"As our nation sits riveted to the massive storm Mother Nature has served up, I’m reminded of the danger of an economic storm on the horizon. Today, I want to share three key takeaways from Hurricane Harvey… takeaways that could go a long way towards protecting your wealth from a stock market hurricane…Takeaway #1: Research & Understand the Risks....Traditional investors are infatuated with stocks like the FANG group (Facebook, Amazon, Netflix and Google), and they’re also willing to put massive amounts of capital into index funds - regardless of the price. This leaves many popular stocks over-priced and vulnerable to a sharp decline. If you understand these risks, you’re much more likely to have a plan to avoid losing money when the next economic storm hits....Takeaway #2: Have a Plan, and EXECUTE that Plan...It takes a lot of discipline to sell overpriced stocks even when they continue to move higher… or to buy precious metals and other 'safe' investments even when they are out of favor....Over the past few months, we’ve been talking a lot about avoiding inflated stocks, and investing in resources like gold and silver. Hopefully you’ve already taken action. Takeaway #3: Selling Insurance is Most Profitable AFTER a Storm....After a storm has hit, people are more likely to recognize the need for insurance, and make the decision to buy protection....If gold prices spike sharply higher, you can sell some of your gold to lock in an excellent profit."

Gold Extends Rally to 2017 High -Bloomberg
"Gold rose to the highest this year after North Korea fired a ballistic missile over Japan, boosting haven demand and extending a rally fueled by declines in the dollar. An index of precious-metals mining stocks touched a four-month high. The greenback fell for a third day to its lowest since January 2015 and stocks slumped around the world as North Korea’s ballistic missile test rattled markets. 'Gold prices have rallied to their highest level since U.S. elections' in November, analysts at Goldman Sachs Group Inc. including Abhinandan Agarwal said in a note to clients. 'Expect precious-metal stocks to outperform today.'....Gold has surged 15 percent this year...as investors weigh the possibility of conflict in Asia, with Kim Jong Un’s regime pushing on with missile tests....Prices have also climbed as the Federal Reserve is expected to go slow on further interest-rate increases. Low rates are a boon to non-interest-bearing precious metals....Demand for haven assets also rose as Wall Street and Washington braced for the repercussions of Tropical Storm Harvey in Houston, expected to be the costliest U.S. natural disaster since Hurricane Sandy in 2012."

Money Isn't a Gift from the State -White/FEE
"I’ve begun working on a new book on the gold standard. In the first chapter I plan to discuss the origin of money, as a preliminary to discussing how silver and gold became the world’s dominant commodity monies. The topic of the origin of money has become controversial in recent years. The dominant view among economists (for good reason), suggested by Adam Smith in the eighteenth century and fleshed out by Carl Menger in the nineteenth, is that money is a market-born institution....But this view has lately been challenged by a resurgence of the 'state theory of money,' also known as Cartalism, which argues that governments played an essential role in the establishment of money....As textbooks during the nineteenth century emphasized, the precious metals have a number of properties that make them superior media of exchange...silver and gold score high on (1) portability or preciousness, allowing you to carry around high purchasing power with little bulk; (2) durability, not spoiling between the date of acquisition and a later date of spending; (3) divisible and fusible, like any metal, allowing pieces to be made in a range of sizes to suit a range of transactions, and allowing small change to be given; (4) stable in value across the seasons, unlike foodstuffs that are cheap right after the harvest but dear six months later. These properties enhance their widespread acceptance....Once sovereigns monopolized the mints they took advantage of the propaganda value of stamping their own faces on the coins, of course. But as far as we know coins were already in use among merchants before that happened."

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Gold last traded at $1,315. Silver at $17.52 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday, with gold prices touching 10-month highs, on safe haven buying and a weaker dollar. U.S. stocks fell on rising economic uncertainty after Hurricane Harvey devastated the greater Houston area.

Gold hits $1,300/oz. after central bankers' comments -Reuters
"Gold rose to its highest in more than a week on Monday as the dollar weakened and the euro powered ahead after the head of the European Central Bank refrained from talking down the single currency at a meeting of central bankers. At the meeting in Jackson Hole, Wyoming, the ECB's Mario Draghi said the bank's ultra-loose monetary policy was working and the euro zone's economic recovery had taken hold, refraining from commenting on the euro's recent strength. That pushed the euro to its highest in more than 2-1/2 years against the U.S. dollar, while the dollar index fell to its lowest since May 2016....At Jackson Hole, U.S. Federal Reserve Chair Janet Yellen made no reference to U.S. monetary policy but instead focused on financial regulations, leading traders to expect interest rates to be raised more slowly."

Buy Gold As Washington "Stumbles" Advise Blackrock -Zero Hedge
"Not for the first time this year, Blackrock's Koesterich has spoken about his faith in gold during times of both financial and political instability. Those times are now, the world's largest money manager believes. Since the beginning of the year Koestrich has been adding to the gold position of the $39bn Global Allocation Fund. Gold is now the fund's second-largest position. Koesterich said earlier this month, 'There has been a Pavlovian response by investors to disregard any piece of bad news or any spike in volatility, and that has been a very profitable strategy but we do think that there are risks in the world that are not being priced in.' Currently there is heightened geopolitical risk across the world, with a focus on how the US will manage....Koesterich does not claim to 'have any special insight into the Greek drama that is modern day Washington.' But he is clear in his conviction that a 'bet on gold’s diversifying properties rather than political stability' is the way to trade right now."

Tax Reform: ‘Keep It Simple, Stupid’ -Moore/Washington Times
"One of the most enduring lessons from the Obamacare fiasco, is that to win a political battle it is best to keep the message simple. If there are too many moving parts to a plan, if Americans don’t understand what the politicians are doing, or if there are parts of a bill they don’t like, it probably will go down in flames. Most people don’t like Obamacare, but when they couldn’t understand the Republican alternative, they chose the devil they knew versus the devil they didn’t. Which brings us to the tax cut fight. Larry Kudlow, Steve Forbes and I have been pleading with Congress to keep the debate focused on three simple reforms: 1) cut tax rates for large and small businesses to 15 percent to make America competitive and create jobs. 2) repatriate $2.5 trillion of money held by American companies back to the United States at a 10 percent tax rate. 3) double the standard deduction for every family and individual tax filer. And that’s it. Hard stop. No border tax. No carbon tax. No surtax on rich people. No end of popular tax deductions. You can’t get the tax base broadened without a single Democratic vote helping you do it, so don’t try to roll this boulder up the hill."

The Uprising of the Global Middle Class -The Atlantic
"Economic progress and increased prosperity do not always buy more political stability. What might a farmer in Iowa, a graphic designer in Chile, a pensioner in the U.K., and an assembly-line worker in China have in common? They are members of a socioeconomic class that includes people whose supposed frustrations have helped fuel dramatic political events in some places - whether it’s the election of Donald Trump, violent protests, or Brexit - and could well do the same even in closed societies like China. The conventional wisdom is that, in many places across the developed world, members of the middle class are railing against a stagnation or even decline in their standards of living. According to this view, a toxic mix of globalization, immigration, automation, inequality, nationalism, and racism can fuel the frustrations that encourage voters to punish 'establishment' ideas and politicians. The 'middle class' is, of course, a category encompassing billions of people worldwide, many of whom do not consider themselves frustrated or aggrieved....What’s in store for the future? It is clear that we will continue to see dramatic, and, at times, radical change being pushed by members of the middle class...the revolt of the middle classes in rich countries, and the furies of middle class in poor and middle-income countries are also boiling, with unpredictable consequences."

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Gold last traded at $1,297. Silver at $17.04 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on dollar weakness following Fed Chairman Janet Yellen's speech. U.S. stocks were lifted by rising investor confidence in Fed hopes and tax reform dreams.

Are Central Banks Nationalizing the Economy? -Mises
"The Financial Times recently ran an article that states that 'leading central banks now own a fifth of their governments’ total debt.' The figures are staggering. Without any recession or crisis, major central banks are purchasing more than $200 billion a month in government and private debt, led by the ECB and the Bank of Japan. The Federal Reserve owns more than 14% of the US total public debt. The ECB and BOJ balance sheets exceed 35% and 70% of their GDP. The Bank of Japan is now a top 10 shareholder in 90% of the Nikkei. The ECB owns 9.2% of the European corporate bond market and more than 10% of the main European countries’ total sovereign debt. The Bank of England owns between 25% and 30% of the UK’s sovereign debt. A recent report by Nick Smith, an analyst at CLSA, warns of what he calls 'the nationalization of the secondary market.'....It is called financial repression for a reason, and citizens will always try to escape from theft....It is a clever Machiavellian system to end free markets and disproportionately benefit governments through the most unfair of competitions: having unlimited access to money and credit and none of the risks. And passing the bill to everyone else."

Central Bankers Know Nothing About Modern Money -Snyder/Real Clear Markets
"It is late August and for central bankers it means Jackson Hole on the itinerary....Before the 2007 conclave, practically no one outside of the political class of Economists paid much attention. One reason is simply that much of what is said there is forgettable....The ultimate result would have to be where the US dollar, as that nation, would become too much for a global reserve to meet its gold obligation. This is what happened, generally speaking, when in August 1971 the Nixon administration defaulted by ending dollar convertibility. For many people, that was the end of the story, the beginning of the era of floating rate currencies 'freed' from the chains of gold (from the perspective of economists and policymakers)....Interest in especially international monetary arrangements withered in a new age of monetarism without money....The dollar did not replace gold in 1971. The eurodollar did long before 1971....The topic of this year’s Jackson Hole congregation is predictably absurd and offensive: Fostering a Dynamic Global Economy. A better topic would be, How Can We Explain A Lost Decade? That would have saved everyone the trouble of traveling so far out West and from far-flung corners of the globe, obviating any need for any conference at all. The answer to such a question is for the world’s monetary authorities exceedingly simple; they know nothing about modern money and it shows."

Yellen: System is safer now, though 'all-too-familiar' risks remain -CNBC
"Federal Reserve Chair Janet Yellen, looking back a decade after the onset of the financial crisis, said Friday the financial system is safer now than it was then though some adjustments to regulations may be needed. The central bank chief spoke at the Fed's annual conference in Jackson Hole, Wyoming. Though the speech is closely watched in financial markets, Yellen offered no clues about the future of monetary policy, instead focusing on the history of the crisis and what regulators have done in response....Her review came less than six months before her term ends in February. President Donald Trump has been circumspect about whether he will reappoint her, and Yellen has refused to speculate about her future....Yellen cited the likelihood of 'the all-too-familiar risks of excessive optimism, leverage and maturity transformation re-emerging in new ways that require policy responses.'"

Gold climbs as Yellen’s speech offered no clues on monetary policy -Marketwatch
"Gold prices moved higher Friday, buoyed by a weaker dollar that came on the heels of a speech by U.S. Federal Reserve Chairwoman Janet Yellen that didn’t offer clues on the central bank’s monetary policy investors hoped for. In a speech at the much-anticipated Kansas City Federal Reserve Bank’s symposium in Jackson Hole, Wyo., Yellen steered clear from questions about current interest-rate policy....Following Yellen’s speech, the dollar weakened. The greenback, as measured by the ICE U.S. Dollar Index was trading down 0.5% at 92.83, after touching a three-week low....For now, 'the rebound in gold prices likely reflect speculators testing the highest price levels for this year and focusing on continued policy uncertainty and risks of a debt ceiling showdown for the U.S. government,' said Rob Haworth, senior investment strategist of U.S. Bank Wealth Management."

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Gold last traded at $1,292. Silver at $16.96 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday ahead of statements from meeting in Jackson Hole on Friday. U.S. stocks inched higher on retail earnings which beat very low investor expectations.

Gold price waits for rates clues from Jackson Hole -TheWeek
"The gold price is trading in a tight range but is within touching distance of recent highs, as attention turns to the meeting of central bankers at Jackson Hole, which begins today. Last week the metal moved into the low $1,290s an ounce in the wake of the stock market sell-off following terror attacks in Spain and ongoing political turmoil in the US....Naeem Aslam, chief market analyst at Think Markets, told Reuters the political unrest in Washington, resulting from Donald Trump's threat to shut down the government if he is not granted funds to build a wall on the Mexican border, is generally positive for gold....If Yellen offers a more dovish tone on the impact on financial stability of ultra-low rates, gold could break higher and set a new high for the year so far, said Reuters analyst Wang Tao."

Why We'll Face A Recession In 12–18 Months -Maulden/MauldenEconomics
"Total debt is close to where it was at the beginning of the last recession....Real value added is the inflation-adjusted version of gross-value added. Here’s how Michael Lebowitz explains it: 'GVA is a measure of economic activity, like GDP, but formulated from the production side of the economy. It measures the dollar value of all goods and services produced less all the costs required to produce those goods or services. For example, if 720Global buys $100 worth of wood, $20 worth of other materials, and employs $30 worth of labor to build a chair, we have produced a good for $150. If that good is sold for $200, 720Global has created $50 of economic value. Over time, GVA tracks nominal GDP closely, but they can diverge in the short run. That is happening right now. Three of the last four quarters brought Real GDP growth - albeit not much - while RVA was negative. RVA below zero, as plotted below, is closely associated with the onset of recessions.'"

"Maybe this time is different, but we know from all kinds of other data that a recession should strike soon - by which I mean that one is quite possible in the next 12–18 months."

John Maulden is yet another independent and credible voice suggesting a financial recession and market correction is imminent. In our free CRISIS TIMELINE Report we explain similar, cyclical economic risk factors converging within the next 24 months: "Prof. William R. Thompson from Indiana University has studied 1,000 years of how one cyclic pattern affects society; he sees us moving from a 'recession' to a' depression' in an 'economic winter' that could last until approximately 2020."

Debt Ceiling ‘Brinksmanship’ Could Test U.S. Top-Notch Credit Rating -Wall Street Journal
"Fitch Ratings said Wednesday that a failure to raise the U.S. debt limit in a 'timely manner' would prompt a review of the country’s credit rating, which is currently at AAA - the highest possible. The ability of lawmakers to meet two key fiscal deadlines next month will serve as a litmus test for 'coherent fiscal policy making and cooperation,' according to the bond-rating firm. 'Brinkmanship over the debt limit could ultimately have rating consequences, as failure to raise it would jeopardize the Treasury’s ability to meet debt service and other obligations,' wrote Charles Seville, James McCormack and Mark Brown on Fitch’s sovereign rating group. The Treasury Department has employed extraordinary measures to pay its bills since March, when the previous suspension of the debt limit expired and the new ceiling was set at nearly $20 trillion. If Congress doesn’t raise the debt ceiling to allow new borrowing, the U.S. could default on its debt or miss payments of benefits and salaries....S&P Global Ratings removed the U.S.'s triple-A credit rating in 2011, on the heels over raising the debt-ceiling fight on Capitol Hill, an action that roiled financial markets."

The Truth About the Fort Knox Gold -Rickards/Daily Reckoning
"What about the gold in Fort Knox? Is it actually there? There is a lot of confusion on this subject. First off, Fort Knox was built in 1937 partly to house gold that the Treasury was scooping up after the Gold Reserve Act took effect....Many gold bugs and conspiracy theorists say there is no actual gold in Fort Knox. They say the reason the government will not audit the gold, for example, is because the gold is not there. But the truth is quite the opposite....Yes, the gold is there. I actually have some evidence that the gold is there from military sources. Incidentally, most people think all the Treasury gold is in Fort Knox. But that is not correct. A little more than half the gold is at Fort Knox, but the rest is stored at West Point on the Hudson River in New York....Now, some people like billionaire precious metals trader Eric Sprott argue that the gold could very well be at Fort Knox, but it’s been leased out to commercial banks....Now, that’s not a problem unless all 100 parties show up at once and ask for their gold. The first person may get the gold, but the other 99 people are going get their contracts terminated....A lot of the gold could very well be leased out, and that leads to confusion about whether or not the government actually has the gold. But all the evidence tells me that the gold is in Fort Knox and at West Point."

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Gold last traded at $1,294. Silver at $17.04 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks fell amid downbeat housing data and government shutdown worries.

Wall Street Banks Warn Downturn Is Coming -Bloomberg
"HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle. Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop....Just like they did in the run-up to the 2007 crisis, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers, such as the latest release of manufacturing data, the model shows. As traders look for excuses to stay bullish, traditional relationships within and between asset classes tend to break down....Citigroup analysts also say markets are on the cusp of entering a late-cycle peak before a recession that pushes stocks and bonds into a bear market....'Bubbles are common in these aging equity bull markets,' Citigroup analysts led by Robert Buckland said in a note Friday."

When There is Blood in the Streets -OfDollarsAndData
"There is a famous quote by the 18th century banker Baron Rothschild: 'The time to buy is when there’s blood in the streets.' Rothschild made a lot of money in the panic that followed the Battle of Waterloo using this exact motto. However, his advice is far easier said than done....Imagine being 1 year into the Great Depression. By our definition, there was 'blood in the streets' as there had already been a 30% drawdown in the U.S. stock market. However, the market would continue to decline for another 2 years, with a 64% decline in the last year! Though you might start buying when there is blood in the streets, you may soon realize that a lot of that blood is your own. This is the fundamental problem with buying big during a crash. It’s incredibly difficult to call the bottom....If there is any advice I would follow during a panic, it would be to not react to it. By reacting you are far more likely to make a decision that loses you money than one that will help you."

"Never buy or sell in a panic," has been Swiss America founder Craig Smith's motto since launching the firm 35 years ago. "To resist this temptation it is necessary to prepare wisely BEFORE a panic strikes," says Mr. Smith. Every day another major warning signal of an impending stock market decline comes to light. To get prepared early we suggest watching Mr. Smith's latest Crisis Timeline video discussing what to do right now.

Gold edges higher as focus shifts to central banker meeting -Reuters
"Gold prices edged up on Wednesday, drawing some support from political uncertainty in the United States before a major central banking conference there this week....'Gold's kind of hanging in there before this Jackson Hole meeting. It is in a wait-and-see mode but we should have a better idea of direction by the end of this week,' Fawad Razaqzada, a technical analyst at FOREX.com, said....Markets are focused on a meeting of central bankers in Jackson Hole, Wyoming, starting Thursday. Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on Friday, on the outlook for monetary policy and interest rates."

Wal-Mart and Google Partner to Challenge Amazon -Fox Business
"Google and Wal-Mart Stores Inc. are joining forces in a partnership that includes enabling voice-ordered purchases from the retail giant on Google's virtual assistant, challenging rival Amazon.com Inc.'s grip on the next wave of e-commerce....Consumers will be able to order Wal-Mart goods from the retailer's stores by speaking to Google's virtual assistant, which sits in phones, Google's voice-controlled speakers and soon other devices. Wal-Mart said it will share consumers' purchase history with Google to enable users to quickly reorder items, a primary function of voice-controlled orders for commodity shopping....The increasing importance of voice shopping suggests Wal-Mart and Google, part of Alphabet Inc., need each other to compete against Amazon. Voice-controlled ordering is a small but rapidly growing share of online sales, analysts say, and one of the top uses of Amazon's virtual assistant Alexa and its Echo speakers....The battle between Wal-Mart and Amazon has recently taken on new intensity, most notably with Amazon's planned acquisition of Whole Foods, which heightens their competition in groceries."

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Gold last traded at $1,291. Silver at $16.98 an ounce.

NEWS SUMMARY: Precious metal prices eased back Tuesday on profit-taking and a firmer dollar. U.S. stocks rose amid upbeat Boeing earnings and tax reform hopes.

Speculators haven’t been this bullish on gold since October -Marketwatch
"Gold remained a hot commodity last week, with speculative investors such as hedge funds and money managers increasing their holdings in the haven metal for a fifth straight week. According to the weekly Commitments of Traders report from the Commodity Futures Trading Commission, net long positions in gold soared 30% for the week ended Tuesday to 179,537 contracts from 138,566 the week before. That marks the highest level of net longs among speculators since October....Gold on Friday briefly jumped above $1,300 an ounce for the first time since November, boosted by haven demand following a week of continued White House turmoil and a terror attack in Barcelona, Spain....The Dow Jones Industrial Average lost 1.9% over the past two weeks, while the CBOE Volatility Index has soared after trading around historic lows. That in turn spurred a flight to haven assets, such as gold."

Our Inner Investing World Doesn't Reflect Reality -Ritholtz/Bloomberg
"If the events of recent weeks (or years) have you asking yourself, What is wrong with these people?, the answer is: not very much. They simply suffer from a small but crucial error in the way their brains create models of the world around them. That is the conclusion of 'The Unpersuadables: Adventures with the Enemies of Science.' The insights of author Will Storr are applicable not only to the current political mayhem but to traders and investors....Storr quotes Jonathan Haidt, the New York University professor of ethical leadership, who notes that the world is 'not really one made of rocks, trees, and physical objects; it is a world of insults, opportunities, status symbols, betrayals, saints and sinners.' In other words, beliefs. You can see this in the investing debates that take place every day. It is how people rationalize their current holdings. They 'talk their book' because portfolios reflect their mental models. Whether you are a value investor or an active trader, you believe you have an understanding of how markets and economies function, and deploy your capital accordingly....Regardless of where you fall in the Federal Reserve debate, or if you think stocks are cheap or expensive, or if this market is too old or has room to run, your mental models are at work. Be aware of how their imperfections might be driving your investing decisions."

Offensive Valuations Totally Divorced from Reality -Hussman/Hussman Funds
"Over the next several years, investors are likely to face a profound and unpleasant downward adjustment in their assumptions about growth; GDP growth, revenue growth, earnings growth, and growth in their own investments. Given that the most historically reliable measures of market valuation we identify already range between 140% and 170% above their historical norms, this adjustment in growth assumptions is likely to be accompanied by one of the most violent market declines in U.S. history, even if interest rates remain depressed....Given current valuation extremes, both for the S&P 500 Index itself and across every decile of stocks; given the repeated emergence of the most extreme 'overvalued, overbought, overbullish' syndromes we define; and given clearly deteriorating market internals, we estimate extreme downside risk across virtually every corner of the stock market over the completion of the current speculative market cycle. Investors have responded to low interest rates by driving stocks to obscene valuations, with little recognition of their implicit (and incorrect) assumption that economic and corporate growth rates remain unchanged from post-war norms...Given current valuation extremes, the associated market losses are likely to be predictably brutal."

Are We Fiddling While Rome Burns? -Smith/ZeroHedge
"It turns out Nero wasn't fiddling as Rome burned - he was 60 km away at the time. The story has become short-hand for making light of a catastrophe, either out of self-interest or out of a mad detachment from reality....Are we fiddling while Rome burns? I would say yes - because we're not solving any of the structural problems that are dooming the status quo....Here's a short list of structural problems we should be tackling: 1. Soaring inequality and the institutionalization of economic privilege....2. The central state (government) has one default setting: endless expansion into every nook and cranny of daily life...democracy is reduced to an auction that excludes the bottom 99.9%....3. Finance has detached from the real-world economy, distorting every function via financialization, which concentrates income and wealth in the hands of the few....4. Our educational system is obsolete but the the current system is incapable of transformation for structural reasons....Solutions abound, but they require the retirement of obsolete systems that defend entrenched interests and soul-crushing inequalities....The status quo is coughing up blood, and the situation is dire. Denial won't fix what's broken, and neither will magical thinking (the economy is 'recovering,' symbolic gestures and virtue-signaling will fix everything, etc.)"

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Gold last traded at $1,296. Silver at $17.01 an ounce.

NEWS SUMMARY: Precious metal prices rose to 2-month highs Monday amid ongoing geopolitical worries. U.S. stocks traded near flat line as financial and technology stocks declined.

Stars Are Aligning for Gold Bugs -Wall Street Journal
"Gold looks poised to run the table. The precious metal has crept higher for the past month and a growing number of bulls say a late-summer market ruction will push gold to new highs....Analysts say that topping $1,300 could spark the momentum-based buying that has recently eluded the metal. Gold is up 12% in 2017, all but recouping losses from late last year. As is often the case, gold has benefited from geopolitical turmoil this year, most recently saber-rattling between the U.S. and North Korea....Meanwhile, persistently low inflation readings in the U.S. have left the timing of the next interest-rate hike by the Federal Reserve in doubt. That’s another plus for gold, since investors sacrifice less yield by owning the metal in lieu of government bonds....With both stocks and bonds looking richly priced, and the political landscape highly uncertain, now looks like a decent time to up the ante on gold."

Will President Trump Go for Broke? -PontificationBlog
"On his Inauguration Day, Donald Trump may have become the richest President in American history. Only seven months later, he may be the poorest – not in personal wealth but in shrinking political capital. As Republican lawmakers and fellow business executives distance themselves from him, and as just-departed senior advisor Steve Bannon tells the press that 'this presidency is over,' President Trump appears weakened. But President Trump, if he stays in office, could have a huge impact on our politics....Three surprising Trump options could change the game, however, and greatly affect your money, investments, and future. President Trump could: (1) Become more of a RINO Republican who supports open borders for cheap labor, globalism, and ever-bigger government — a hybrid that is half-Trump, half-Jeb Bush – a 'Trush.'....(2) Make Democratic lawmakers offers too good to refuse about trillions for infrastructure and social spending, more jobs, higher taxes on the rich, and pro-immigration reform....(3) Launch a third party, a Populist-Nationalist party, with himself as its head....By 'Trumpangulation,' the incumbent President could make both major parties compete to support him. He could make and take credit for positive economic and social policies. He could, with luck, win re-election. Full story

Ron Paul: 50% stock market plunge 'conceivable' -CNBC
"The former Republican Congressman from Texas believes escalating dysfunction in Washington will create even more pain for Wall Street. 'A 50 percent pullback is conceivable,' Paul said on 'Futures Now' recently. 'I don't believe it's ten years off. I don't even believe it's a year off.' According to his calculations, it would cut the S&P 500 Index in half, to 1212, and the blue-chip Dow Jones Industrial Average would collapse to 10,837. Paul noted that there's a lot of chaos in Washington right now, with an "unpredictable president" and those who are inclined to "tear him apart" but if the market takes that big of a tumble, he doesn't see it as Trump's fault. 'It's all man-made. It's not the fault of Donald Trump in the last week. If the market crashes tomorrow and we have a great depression, he didn't do it in six months. It took more like six or ten years to cause all these problems that we're facing' he said....'I see the foundation of our system built on sand, and a big wind comes along to blow it down,' Paul said."

Wells Fargo troubles shift from phony bank accounts to real ones -Reuters
"A Reuters review of the regulator's complaints database found several instances of customers reporting financial hardship in recent years after Wells Fargo unexpectedly froze or closed their accounts. Some of the complaints described fraudulent deposits of unknown origin. Others said they were victims of identity theft and Wells Fargo closed their accounts and refused to reopen them or open new ones....The complaints had consistent themes of confusion about why accounts were frozen or closed, and reflected desperation over being unable to access money, as well as frustration over not getting help from Wells Fargo's customer service. 'I moved money from my mother's savings account into her checking account the day before she passed away,' one Wells Fargo customer wrote. 'This checking account has been 'locked' by the fraud department for almost 3 months ... Now her debts are delinquent and mortgage about to go into foreclosure.'"

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Gold last traded at $1,291. Silver at $17.00 an ounce.

NEWS SUMMARY: Precious metal prices touched 2017 highs Friday amid political turmoil. U.S. stocks fell then rebounded on news that President Trump has decided to remove White House chief strategist Steve Bannon, White House chief strategist.

Gold tests $1,300 level for first time in 9 months -Marketwatch
"Gold prices on Friday traded above $1,300 for the first time in 2017, though it is off its highest levels, as precious metals drew haven demand, sparked by selling in global equities, a terrorist attack in Barcelona and concerns about President Donald Trump’s pro-business agenda....A flight to assets perceived as safe has been underpinned by Thursday’s selloff in equities, highlighted by the worst downdraft for the Dow Jones Industrial Average and S&P 500 index since May 17....'The terror attacks in Spain are reminding investors of the need to hedge their portfolios against geopolitical risk,' said Maxwell Gold, director of investment strategy at ETF Securities....Weakness in the U.S. dollar, buffeted by the trove of risk factors, including concerns that the Federal Reserve will be hesitant to lift interest rates further this year, also has helped to elevate gold."

After 10 years, policy makers still haven't learned the right lessons from the financial crisis -Market Watch
“'Ten years ago this month, the French bank BNP Paribas decided to limit investors’ access to the money they had deposited in three funds. It was the first loud signal of the financial stress that would, a year later, send the global economy into a tailspin. Yet the massive economic and financial dislocations that would come to a boil in late 2008 and continue through early 2009 — which brought the world to the brink of a devastating multi-year depression — took policy makers in advanced economies completely by surprise. They had clearly not paid enough attention to the lessons of crises in the emerging world....Unfortunately, these problems are yet to be fully resolved. In fact, there is a growing risk that politicians — many of whom are distracted and sidestepping their economic-governance responsibilities — may be missing the biggest historical insight of all: the importance of an economy’s underlying growth model. Indeed, advanced-country politicians today still seem to be ignoring the limitations of an economic model that relies excessively on finance to create sustainable, inclusive growth. Though those limitations have been laid bare over the last ten years, policy makers did not strengthen adequately the growth model on which their economies depend."

7 signs the stock market is ready to run smack into a wall -Marketwatch
"The stock market’s relentless rally to records may soon be facing a key test. A number of indicators point to a steady, halting deterioration of some of the factors that have helped Wall Street equities score a steady stream of all-time highs. Peek beneath the hood of the action, and market technicians point to some unsightly problems within the market’s machinery. Here are a few: 1). Russell 2000 falls into downtrend....2). Correlation breakdowns....3). Wall Street’s volatility gauge, the VIX....4). Gold rally....5). Dow transports break down....6). Bad market breadth....7). Trump agenda."

Stability concerns focus at Fed ahead of Yellen speech -Reuters
"Minutes of the July Federal Open Market Committee meeting released this week flagged a division among policymakers focused on weak inflation as a reason to stall further rate increases and those who feel still loose financial conditions pose a risk the Fed needs to counter. Two officials this week, including vice chair William Dudley who has in the past taken a more dovish approach to policymaking, said the fact that financial conditions have recently eased despite Fed rate increases is a reason to keep plans to tighten policy in place. When the Fed said Thursday that Yellen next week would use a keynote speech at Jackson Hole to address 'financial stability,' it was a clue to some that she may agree."

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Gold last traded at $1,292. Silver at $17.05 an ounce.

NEWS SUMMARY: Gold rose on safe-haven buying despite a firmer dollar. U.S. stocks fell sharply on concerns President Trump's recent controversies will limit passage of anticipated business-friendly legislation.

The Investment Bank Tipping Gold to Hit $1,400 -Bloomberg
"Gold prices are set to jump to a four-year high of $1,400 an ounce by the end of the year over mounting tensions between North Korea and the U.S., and surging demand in the world’s biggest consumers, according to the head of precious metals at a Russian investment bank. Bullion could rise to $1,360 within three months before climbing higher, fueled by global political risks and buying from China and India, said Evgeny Ananiev at VTB Capital JSC, the investment-banking unit of Russia’s second-largest lender VTB Group....Prices have climbed 12 percent this year, driven by worries over a potential nuclear conflict between the U.S. and North Korea, and subdued inflation in the U.S., which is cooling chances of a further increase in interest rates. President Donald Trump has intensified warnings to North Korea, promising a massive response to any strike against the U.S. or its allies. Hedge fund billionaire Ray Dalio recommends investors place 5 to 10 percent of their assets in gold."

The Great Disconnect: Markets Vs. Economy -Zero Hedge
"Looking at the current economic backdrop as compared to asset prices we find a very large disconnect. Since Jan 1st of 2009, through the end of June, the stock market has risen by an astounding 130.51%. However, if we measure from the March 9, 2009 lows, the percentage gain explodes to more than 200%. With such a large gain in the financial markets we should see a commensurate indication of economic growth - right? The reality is that after 3-massive Federal Reserve driven 'Quantitative Easing' programs, a maturity extension program, bailouts of TARP, TGLP, TGLF, etc., HAMP, HARP, direct bailouts of Bear Stearns, AIG, GM, bank supports, etc., all of which total more than $33 Trillion, the economy grew by just $2.64 Trillion, or a whopping 16.7% since the beginning of 2009....Unfortunately, while Wall Street has benefited greatly from the Fed’s interventions, Main Street has not....So, while the markets have surged to 'all-time highs,' for the majority of Americans who have little, or no, vested interest in the financial markets their view is markedly different....Eventually, the current disconnect between the economy and the markets will merge. My bet is that such a convergence is not likely to be a pleasant one."

Why Cryptocurrencies Will Never Be Safe Havens -Mises
"Every further new high in the price of Bitcoin brings ever more claims that it is destined to become the preeminent safe haven investment of the modern age - the new gold. But there’s no getting around the fact that Bitcoin is essentially a speculative investment in a new technology, specifically the blockchain. Bitcoin and each new initial coin offering (ICO) should be thought of as software infrastructure innovation tools, not competing currencies....Cryptocurrencies are a very significant value-added technological innovation that calls directly into question the government monopoly over money....However, unlike physical assets such as gold and silver that have unique physical attributes endowing them with monetary importance for millennia, the problem is that there is no barrier to entry for cryptocurrencies; as each new competing cryptocurrency finds success, it dilutes or inflates the universe of the others. The store-of-value component of cryptocurrencies - which is, at a bare-minimum, a fundamental requirement for safe haven status - is a minuscule part of its value and appreciation....Cryptocurrencies are a very important development, and an enormous step in the direction toward the decentralization of monetary power. This has enormously positive potential, and I am a big cheerleader for their success. But caveat emptor - thinking that we are magically creating new stores-of-value and thus a new safe haven is a profound mistake."

Is Trump Killing the Dollar? -Cohen/Project-Syndicate
"For nearly a century, the US dollar has been viewed as the financial world’s ultimate safe haven. No other currency has promised the same degree of security and liquidity for accumulated wealth. In past times of trouble, skittish investors and prudent central banks have all piled into dollar-denominated assets, not least US Treasury bonds. This may no longer be the case. US President Donald Trump’s chaotic administration has severely undermined confidence in the greenback....The dollar is about to face a serious test. Will global investors continue to put their money in a country whose leader loudly provokes the Hermit Kingdom with threats of 'fire and fury,' or will they find financial refuge elsewhere? Not since World War II has the safety of the dollar been in such doubt....The dollar’s popularity as a store of value confers an 'exorbitant privilege' to the US....There will be nothing 'great' about an America that has sacrificed its dominant position in the global financial system."

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Gold last traded at $1,282. Silver at $16.94 an ounce.

News Summary: Precious metal ended higher Wednesday as President Trump disbanded business advisory groups. U.S. stocks struggle after release of Fed minutes.

In The Age Of Cyber-Terrorism, Every Investor Must Own Gold - Forbes
"Take it from 'Dr. Doom': own some physical gold and keep it out of the banking system....In a recent Metal Masters interview... he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the U.S. power grid. In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today....The Fed largely ignores gold as an asset, he says, because 'gold is an embarrassment to central banks.' Regarding a possible war, Faber believes it’s unlikely that anyone will ever invade China or the United States. He thinks the true vulnerability lies in 'wars that are fought not with tanks—they are fought by, say, somebody could switch off the light in New York, or the electricity, or the Internet. If you switched off the Internet, what would happen?' This is where the merits of gold bullion become obvious, he says: 'In these times, you actually want to have access to something physical that is a recognized medium of exchange.'"

Central banks hold a fifth of their governments' debt - Financial Times
"Leading central banks now own a fifth of their governments’ total debt, a sign of the scale of the challenge they will face in unwinding unprecedented stimulus measures deployed over the past decade. Since the financial crisis emerged, the world’s biggest central banks have carried out large-scale purchases of bonds and other securities in a bid to boost the global economy by driving down borrowing costs for households and businesses. In total, the six central banks that have embarked on quantitative easing over the past decade — the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England, along with the Swiss and Swedish central banks — now hold more than $15tn of assets, according to analysis by the FT of IMF and central bank figures, more than four times the pre-crisis level. Of this, more than $9tn is government bonds — one dollar in every five of the $46tn total outstanding debt owed by their governments."

Trump abruptly ends manufacturing council after CEOs disband strategic and policy forum - CNBC
"In a private phone call Wednesday afternoon, CEOs who were part of a strategic council to Trump agreed to disband the group and condemn Trump's confrontational response to a violent white supremacist rally in Charlottesville, Virginia. Shortly after CNBC and other broke the news that the council was disbanding, Trump took to Twitter to say he was ending that forum and another featuring manufacturing leaders. By the time Trump made his statement, several executives had left the manufacturing group this week....The events mark the biggest falling out yet between Trump and corporate America, which largely cheered his pro-business stances when he took office....In a statement, the Strategic and Policy Forum members said they 'believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans'"

Is Historically Low Volatility About To Surge? - Zero Hedge
"You have probably noticed it already: stock market volatility has recently all but disappeared. This raises an important question for every investor: Has the market established a permanent plateau of low volatility, or is the current period of low volatility just the calm before the storm?...Many investors are currently betting on a further decline in volatility. In view of its already very low level and the negligible additional downside potential it offers relative to the substantial upside potential, this is probably not the best idea ever. Moreover, as shown above, October is the month in which volatility typically reaches a seasonal peak. Taking both of these facts into account, it seems far more sensible to expect an expansion in volatility."

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Gold last traded at $1,279. Silver at $16.71 an ounce.

News Summary: Precious metal prices eased back Tuesday on normal profit-taking following recent gains. U.S. stocks struggled as investors scaled back buying on retailer wreck.

Americans' debt level notches a news record high - Reuters
"Americans' debt level notched another record high in the second quarter, after having earlier in the year surpassed its pre-crisis peak, on the back of modest rises in mortgage, auto and credit card debt, where delinquencies jumped. Total U.S. household debt was $12.84 trillion in the three months to June, up $552 billion from a year ago, according to a Federal Reserve Bank of New York report published on Tuesday. The proportion of overall debt that was delinquent, at 4.8 percent, was on par with the previous quarter. However a red flag was raised over the transitions of credit card balances into delinquency, which the New York Fed said 'ticked up notably.' Loosening lending standards have allowed borrowers with lower credit scores to access credit cards, Andrew Haughwout, an in-house economist, said in the report. 'The current state of credit card delinquency flows can be an early indicator of future trends and we will closely monitor the degree to which this uptick is predictive of further consumer distress,' he said."

China's debt boom could lead to financial crisis, IMF warns - The Telegraph
"China’s economy is reliant on too much debt and the enormous boom in credit risks leading to a new financial crisis, the International Monetary Fund (IMF) has warned. GDP in the world’s second largest economy is set to grow by 6.7pc this year and 6.4pc next year, better than the 6.6pc and 6.2pc growth rates that the IMF forecast earlier this year. Stronger global growth has given China a lift, as has extra government spending. But in the years ahead, risks will grow as China’s extraordinary debt bubble keeps on building. Growth in China has been propped up by rapid increases in debt in recent years. 'Nominal credit to the nonfinancial sector more than doubled in the last five years, and the total domestic nonfinancial credit-to-GDP ratio increased by 60 percentage points to about 230pc in 2016,' the IMF found. Those debts are expected to rise to almost 300pc of GDP in 2022.... 'International experience suggests that China’s current credit trajectory is dangerous with increasing risks of a disruptive adjustment and/or a marked growth slowdown,' the report said. Its analysts studied 43 large credit booms and found that almost every single one resulted in a sharp slowdown or a financial crisis."

The Investment Bank Tipping Gold to Hit $1,400 - Bloomberg
"Gold prices are set to jump to a four-year high of $1,400 an ounce by the end of the year over mounting tensions between North Korea and the U.S., and surging demand in the world’s biggest consumers, according to the head of precious metals at a Russian investment bank. Bullion could rise to $1,360 within three months before climbing higher, fueled by global political risks and buying from China and India, said Evgeny Ananiev at VTB Capital JSC, the investment-banking unit of Russia’s second-largest lender VTB Group. 'We may see some correction, but I don’t think gold will drop below $1,200 as it’s well supported,' he said in a weekend interview in Goa.....'Fundamentally, we have been very bullish on the market,' said Chirag Sheth, an analyst at Metals Focus Ltd., an independent precious-metals research firm based in London....Sheth expects prices to advance to $1,400 in six to nine months as the situation in North Korea sees investors coming back to the market in search of a haven. The U.S. Federal Reserve, which was hawkish on interest rates, has now softened its stance, providing further support to bullion, he said."

Housing Bubble 2.0: Number Of Homebuyers Putting Less Than 10% Down Soars to 7-Year High - Zero Hedge
"A really long, long time ago.... the entire international financial system almost collapsed courtesy of a mortgage lending bubble that allowed anyone with a pulse to finance over 100% of a home's purchase price...with pretty much no questions asked.... As Black Knight Financial Services points out, down payments, the very thing that is supposed to deter rampant housing speculation by forcing buyers to have 'skin in the game', are once again disappearing from the mortgage market. In fact, just in the last 12 months, 1.5 million borrowers have purchased a home with less than 10% down, a 7-year high.....On the bright side, at least Yellen's interest rate bubble means that today's housing speculators don't even have to rely on introductory teaser rates to finance their McMansions...Yellen just artificially set the 30-year fixed rate at the 2007 ARM teaser rate...it's just much easier this way."

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8.14.17 - Investment Advice During Turmoil

NEWS SUMMARY: Gold surge ebbs as North Korea tensions ease, silver sustains. Stocks regain as fear subsides.

DALIO: Risks are rising, and everybody should put 5% to 10% of their assets in gold -BusinessInsider
"Geopolitical risks are rising, and everyone needs to consider an allocation to gold. That's according to a Bridgewater Associates note to clients released on Wednesday, penned by founder Ray Dalio and staffers Bob Elliott, Steven Kryger, and Neil Hannan. Bridgewater, based in Bridgeport, Connecticut, is the world's largest hedge fund firm, managing about $160 billion firmwide across strategies. 'When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don't have a unique insight that we'd choose to bet on ... We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don't have 5-10% of your assets in gold as a hedge, we'd suggest you relook at this. Don't let traditional biases, rather than an excellent analysis, stand in the way of you doing this (and if you do have an excellent analysis of why you shouldn't have such an allocation to gold, we'd appreciate you sharing it with us.)' Dalio has long been of the view that investors should have at least some allocation to gold, saying as much in an interview with Business Insider's Henry Blodget earlier this year."

You will get chipped – eventually -CNBC
"You will get chipped. It's just a matter of time. In the aftermath of a Wisconsin firm embedding microchips in employees last week to ditch company badges and corporate logons, the Internet has entered into full-throated debate. Religious activists are so appalled, they've been penning nasty 1-star reviews of the company, Three Square Market, on Google, Glassdoor and social media. On the flip side, seemingly everyone else wants to know: Is this what real life is going to be like soon at work? Will I be chipped? 'It will happen to everybody,' says Noelle Chesley, 49, associate professor of sociology at the University of Wisconsin-Milwaukee. "'But not this year, and not in 2018. Maybe not my generation, but certainly that of my kids.'....This would go beyond paying with your smartphone. Instead, chipped customers would simply wave their hands in lieu of Apple Pay and other mobile-payment systems. The benefits don't stop there. In the future, consumers could zip through airport scanners sans passport or drivers license; open doors; start cars; and operate home automation systems. All of it, if the technology pans out, with the simple wave of a hand....Be it wearable technology or an embedded chip, the always on-always connected chip is going to be part of our lives."

Advice for investing during turmoil: 'Do less' -CNBC
"Michael Batnick of Ritholtz Wealth Management believes investors should 'do less' and focus on the long term to achieve success, especially during times of geopolitical crisis and high volatility like we've seen this week....'The important thing is to just do less, make less decisions. Never change a portfolio because of what happened yesterday,' Batnick said. 'Everybody tries to beat the market. Some people: it takes them a lifetime to figure out that they can't do it. Some people never figure it out. Some people figure it out really quickly. I was on the quicker side.' Batnick is the director of research at Ritholtz, which oversees around $550 million in assets and was founded in 2013 by Barry Ritholtz and Josh Brown."

When Cash Is King -SilverlightInvest
"Investor cash levels are near an all-time low. Meanwhile, Warren Buffett is sitting on a record amount of cash. How much cash do you have on the sidelines? How much should you have? Cash competes with other asset classes for investor wallet share. Right now, it's losing that battle. In the latest weekly survey of Bank of America Merrill Lynch high net worth clients, cash allocation fell to an all-time low of 10.4%. The previous low of 11% was recorded in April 2007. Cash does not appear to be an attractive asset if you know how to apply The Rule of 72—a math shortcut that allows you to figure out how long it will take to double your money at a specified level of return. Once upon a time, cash paid 5%. Really, it did. Back then, you could park in cash and double your money in 14.4 years (72/5 = 14.4). Presently, cash yields very little. You can get 1% or so. That's 72 years to double your money!....And yet the all-time ‘King of Investing,’ Warren Buffett, is compiling the biggest cash war chest in Berkshire Hathaway history....Cash becomes a progressively more appealing option as a cycle ages....The best investment opportunities are when others are scrambling to raise cash, when everyone else is selling and you are in the rare position to buy. That’s when cash is at its peak value as an asset—that's when cash is king."

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NEWS SUMMARY: Precious metal prices trended higher on Friday, with gold gaining on safe haven buying and a weaker dollar. U.S. stocks rose as investors focused on tame inflation data rather than ongoing North Korea worries.

'Gold is about break out on the upside strongly,' -Gartman/CNBC
"The runup in gold prices is far from over, commodities expert Dennis Gartman told CNBC on Thursday. With tensions mounting between the United States and North Korea, investors have been moving into the precious metal and other safe haven trades. On Thursday, gold futures hit their highest level in two months, jumping about 1 percent. 'Gold is about to break out on the upside strongly,' the editor and publisher of The Gartman Letter said in an interview with 'Power Lunch.' Gartman has liked the commodity for years and believes right now investors should have about 10 to 15 percent of their portfolios allocated to gold. 'One never knows when geopolitical risks will arise. One never knows when something untoward will happen economically,' he said. 'The stock market looks a little vulnerable. The geopolitical circumstances are getting worse and worse.' Gartman added."

Final Currency Debasement to Zero Has Started -GoldSwitzerland
"Fake money has created a totally uneven playing field for most ordinary people. Money used to represent a medium of exchange that would facilitate bartering. Instead of exchanging goods or services, people would receive a piece of paper that was equal to the value of their goods or services....Eventually bankers started to cheat and issued a lot more money/paper than the counter value produced in kind. And that was the beginning of money printing....The problem with money printing is not just that it destroys the value of paper money, as creating money out of thin air also creates a totally uneven playing field. To produce goods or services requires a lot of hard labor for ordinary people. But governments and bankers have the upper hand because they just need some electricity which allows them to press a button to produce money....We are now not far from the point when the bubbles in stocks, credit and property will collapse. This will lead to a final futile attempt by governments to save the world by printing unlimited amounts of money. At that point, normal people will finally realize that the money they are holding is totally worthless. This will lead to protests, attack on government and bankers as well as social unrest....During the autumn of 2017, gold is likely to resume its uptrend to eventually much higher levels."

In the Age of Trump, the Dollar No Longer Seems a Sure Thing -NewYorkTimes
"When trouble flares and anxiety mounts, people who manage money traditionally entrust it to a seemingly indomitable refuge, the American dollar. Yet on Wednesday, in the hours after President’s Trump’s threat to unleash 'fire and fury' on North Korea if it continued to menace the United States, global investors sold the dollar. The same dynamic played out in June, as Saudi Arabia and other Arab nations imposed an embargo on Qatar, delivering a fraught crisis to the oil-rich Persian Gulf....Since the beginning of the year, the dollar has surrendered nearly 8 percent against a basket of major currencies....The dollar has in some sense become an international medium of expression about the American political environment. Its value offers a gauge of sentiment for Mr. Trump's prospects in achieving his economic goals, as well as worries about his potentially impulsive declarations....The fate of the dollar is now subject to the influences of a presidential administration that has given markets an expectation for the unexpected."

Americans are saving less as income lags spending -USAToday
"As average wage hikes across the U.S. continue to lag increases in spending, Americans are saving less or dipping into bank accounts to fuel their outlays. Some economists say that's an unsustainable dynamic that portends a downturn in consumer spending, which has been driving economic growth. From the second quarter of 2015 to the second quarter of 2017, personal disposable income increased an average of 2.8% a year while consumer outlays rose about 4% a year, BEA figures show. The gap between income and spending is pulled from savings. 'If you're relying on your savings to finance your spending, at some point you’re going to run dry,' says Gregory Daco, chief U.S. economist of Oxford Economics....So far, pay increases have been tempered, contributing to the lion's share of the sluggish income growth, says BEA economist Kurt Kunze....'When everything else is going up and your paycheck isn't, it's not even keeping pace with the cost of living,' he says."

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Gold last traded at $1,290. Silver at $17.06 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on rising safe-haven demand amid ongoing geopolitical fears. U.S. stocks traded broadly lower as tensions with North Korea escalated.

Gold Prices Hit 2-Month Highs, Defensive Demand Continues -EconomicCalendar
"Gold prices have maintained a firm tone with a push to 2-month highs on Thursday as underlying demand for defensive assets remained an important feature. There were further tensions surrounding North Korea on Thursday with the Pyongyang regime claiming that missiles which could be used to target the Pacific island of Guam would be ready to launch by mid-August....Markets remained concerned over the risk of a US first-strike against North Korean nuclear facilities. Equity markets continued to lose ground on Thursday which provided further net support to gold, especially with bond yields tending to drift lower....The dollar overall drifted weaker which provided further support to gold prices."

Beneath Markets’ Calm Are Signs of Growing Investor Caution -NewYorkTimes
"President Trump threatened nuclear war with North Korea, and the markets yawned....But beneath the calm there were signs that investors...are becoming more cautious. The price of gold, a traditional safe haven investment, has been rising, and on Wednesday it continued its march, increasing more than 1 percent on the day. Gold’s strong move pushed it just barely ahead of the Standard & Poor’s 500-stock index for the year - up 10.47 percent, compared with 10.43 percent for the S.&P....Gold tends to outperform stocks when the markets are sliding, so it is unusual for such a conservative investment to beat equities when they have been on a tear as has been the case this year. What is driving this anomaly, some say, is a recognition that eventually investors will no longer be able to ignore recent headline risks - be it nuclear tensions with North Korea, a trade war with China or a debt ceiling crisis in Washington....Once investors return from vacation, the theory goes, and with no good earnings news to inspire them, they will be more sensitive to headline events. That could result in sharper moves downward in stock market indexes."

Financial Martial Law Is Coming -BonnerAndPartners
"JPMorgan Chase - the country’s biggest bank - has banned cash payments for credit card debt, mortgages, and car loans. It has also banned the storage of 'any cash or coins' in safe deposit boxes. And all U.S. banks now view large cash withdrawals as suspicious. Under the Bank Secrecy Act, if you withdraw $10,000 or more in a day, your bank is required to file something called a Currency Transaction Report with the Financial Crimes Enforcement Network (FinCEN)....And your bank is required to file something called a Suspicious Activity Report with FinCEN if it believes you are trying to avoid triggering a Currency Transaction Report by withdrawing smaller cash amounts. This puts all cash withdrawals under the microscope....And even if you manage to get your cash out of your bank, having it on your person also makes you a target of the authorities. Under civil asset forfeiture laws, police and federal agents can confiscate any cash you might have on you if they merely suspect it was involved in a crime."

Tax Reform: Republicans Too Often Are Cowardly And Incompetent -Steve Forbes/Forbes
"When Democrats hurl the charge that Republican tax-reduction proposals 'favor the rich,' too many GOPers quiver and quake and run for cover...Without investment, we don't progress, and living standards stagnate, then decline. Yet Republican senators decided to retain these anti-growth levies, lest they be accused of 'favoring the rich.'....All this is a sad commentary on a party that tells us it still admires Ronald Reagan. The Gipper would have gagged at such populist posturing. He understood - as too many Republicans these days do not - that voters want a growing economy and wages that grow right along with it....Republicans are fools to play the class-envy game. They will lose to the Bernie Sanders and Elizabeth Warren types every time. Voters want results, not a GOP version of socialism lite....The formula for prosperity isn't a new one: low tax rates and sound money....As for a big overhaul of the federal income tax code, forget it. It's too late now....Make simple cuts now, and go for major tax reform after next year's elections."

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Gold last traded at $1,279 an ounce. Silver at $16.86 an ounce.

NEWS SUMMARY: Precious metal price rose sharply Wednesday on safe haven buying and rising geopolitical worries. U.S. stocks fell as tensions with North Korea heat up and Disney stock drags Dow down.

Gold near two-month peak on North Korean tensions -Reuters
"Gold hit a near two-month peak on Wednesday, after North Korea said it is considering an attack on the U.S. Pacific territory of Guam and U.S. president Donald Trump boasted of the strength of the American nuclear arsenal. The tensions rattled global markets, sending investors out of equities and into the safety of the Swiss franc and government debt. The VIX 'fear gauge' of expected volatility on the S&P 500 hit a one-month high. 'The market hates uncertainty and that's certainly what we have now,' said Ole Hansen, head of commodity strategy at Saxo Bank....'We believe continued sabre-rattling ... could take gold prices higher still,' said Nitesh Shah, director at ETF Securities. 'There is genuine concern, hence the fall in the dollar, (but) as ever with Trump, it’s unclear how quickly the rest of the U.S. machinery will calm him, so rises are not yet huge.'"

Financial crash warning: 10 years on from 2007 crisis experts warn debt bubble could burst -Express
"A DECADE since the financial crisis brought the world to its knees, experts fear a repeat could again shatter the global economy. The start of the sub-prime housing crash that obliterated banks and financial markets across the world is pin-pointed to August 9 2007. On this day, banking giant BNP Paribas Investment Partners announced it had suspended the valuation for three of its funds exposed to the US sub-prime housing market because of 'the complete evaporation of liquidity in certain market segments of the US securitization market'. The subsequent collapse in US house prices triggered the worst economic recession since the Great Depression, with banks and entire countries needing bail-outs. Worryingly, the US economy and housing market has many similarities today to 10 years ago."

Free CRISIS TIMELINE Report: "Based originally on the cycle analysis of Austrian economist Joseph Schumpeter, the U.K Independent reported, a negative convergence of just three cycles, 'came together in 2008, a rare occurrence leading to that disaster' that cost the average American 40 percent or his or her net worth. The bad news now comes from a diversity of sources. Prof. William R. Thompson from Indiana University has studied 1,000 years of how one cyclic pattern affects society; he sees us moving from a 'recession' to a' depression' in an 'economic winter' that could last until approximately 2020." Watch - Craig R. Smith explains what to do now...

Billionaires worry about stock-market correction -Marketwatch
"Yes, there are tremendous benefits to passive, low-risk, long-term investing strategies. And obviously, some of the 'best' investors on Wall Street often get things painfully wrong. But when some of the biggest and most respected hedge funds are pumping the brakes as the Dow Jones Industrial Average and the S&P 500 have hit new all-time highs this week (and the Nasdaq Composite isn’t far off) ... well, it seems plain irresponsible to simply write that off. Here are what seven of Wall Street’s most iconic investors have to say about the market and the potential for a correction in the next several months....Jeff Gundlach advises 'moving toward the exits'....Carl Icahn warns stocks are overvalued....Howard Marks warns clients of 'too-bullish territory'....Warren Buffett has nowhere to go....George Soros gets bearish in a big way....David Tepper is 'on guard'....Paul Singer warns of an ETF crisis."

Corruption Rises as Economic Freedom Falls -FEE
"Today, high levels of political corruption remain one of the major problems people confront around the world. While most of us think of such corruption as primarily impacting the hundreds of millions who live in the underdeveloped and developing parts of the globe, it touches those of us fortunate enough to live in the industrially developed Western democracies....According to Transparency International many of the least corrupt nations around the world are in the European Union and North America. In fact, Denmark ranks the least corrupt worldwide, followed by New Zealand. Among the remaining top ten of least corrupt countries are: Finland, Sweden, Switzerland, Norway, Singapore, the Netherlands, Canada and Germany. All of them have scores of 80 or better on TI’s scale of 100 having zero corruption. The United States, however, is only ranked 18 with a score of 74....The most corrupt nations of the EU, perhaps not surprisingly, are in Eastern Europe, in those countries that had been part of the former Soviet bloc. Poland only scored 62, followed by Slovenia (61), Lithuania (59), Latvia (57), Czech Republic (55), Slovakia (51), and Hungary and Romania (58)....The most corrupt countries on the planet, according to TI, are Somalia (10), South Sudan (11), North Korea (12), Syria (13), Yemen (14), Sudan (14), Libya (14), and Afghanistan (15)....The smaller the range of government activities, the smaller the incentive for citizens to bribe government officials."

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Gold last traded at $1,262 an ounce. Silver at $16.38 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid upbeat jobs data which boosted the buck. U.S. stocks traded near flat-line despite upbeat earnings and economic data.

Gold prices lifted as dollar softens -Marketwatch
"Gold futures rose on Tuesday as the U.S. dollar retreated, giving dollar-pegged commodities a modest lift in early trade....Although the dollar has climbed 0.5% so far this month, the currency gauge is down 2.8% over the past 30 days, underscoring the greenback’s recent downtrend amid doubts about the pace of economic growth in the U.S., including signs of weaker-than-hoped-for inflation. The uncertain economic picture leaves financial markets wondering if the Federal Reserve will raise interest rates again this year. A softening dollar can make assets linked to the currency more attractive to buyers using weaker currencies. Tuesday’s rise for metals also comes amid heightened geopolitical risk, headlined by rising tensions between the U.S. and North Korea and its nuclear aspirations."

The Debt-Ceiling Crisis Is Real -NewYorkTimes
"Sometime in October, the United States is likely to default on its obligation to pay its bills as they come due, having failed to raise the federal debt ceiling. This will cost the Treasury tens of billions of dollars every year for decades to come in higher interest charges and probably trigger a severe recession. The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political. It’s something America has avoided in the past. This time, though, will be different....What’s different in 2017? First, the administration is confounded by inexperience, incompetence and infighting....The second problem: Without a firm signal from the White House that the debt ceiling should not be held hostage to political agendas, it will be hard to get Congress to do the right thing....If Treasury hits the ceiling, it has only two realistic responses. Treasury can pay the government’s bills on a first-in, first-out basis, with the wait for payment growing every month, or it can prioritize bills....As a result, the once unassailable credit of the United States will become a perennial hostage to politics, and in response the debt markets will demand much higher interest rates."

Credit Card Debt Just Hit a Disturbing Record of $1.02 Trillion -TheStreet
"Americans' outstanding credit card debt just hit a new record at $1.0217 trillion, the Federal Reserve disclosed Monday. The previous record was set about a decade ago, according to Bankrate. 'This record should serve as a wake-up call to Americans to focus on their credit card debt. Even if you feel your debt is manageable right now, know that you could be one unexpected emergency away from real trouble. Get that debt paid down while things are good so you can be better prepared if things turn for the worse,' said Matt Schulz, CreditCards.com's senior industry analyst. 'We simply can't keep taking on credit card debt forever without it causing major problems. This record probably won't be a major tipping point, but it likely isn't too far off.' So much for lessons learned from the Great Recession."

Baby Boomers Who Refuse to Sell Are Dominating the Housing Market -Bloomberg
"Millennials are finding themselves out in the cold because building has slowed, and longer-living baby boomers are staying put, setting up a simmering conflict between the two biggest generations in U.S. history. To succeed, buyers and real estate brokers must show uncommon persistence and, at times, diplomacy....People 55 and older own 53 percent of U.S. owner-occupied houses, the biggest share since the government started collecting data in 1900, according to real estate website Trulia. That’s up from 43 percent a decade ago. Those ages 18 to 34 possess just 11 percent....'The system is gridlocked,' says Dowell Myers, a professor of urban planning and demography at the University of Southern California. 'The seniors aren’t turning over homes as fast as they used to, so there are very few existing homes coming online. To turn it over, they’ll have to have a landing place.'"

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Gold last traded at $1,264 an ounce. Silver at $16.25 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Monday on mixed signals and a flat dollar. U.S. stocks reached fresh highs on upbeat earnings despite political gridlock and rising geopolitical uncertainty.

China Gold reserves to surpass 4,000 tons -GlobalTimes
"China's burgeoning gold reserves, which some analysts estimated to have surpassed 4,000 tons as of June, reflects the nation's plan to diversify its reserves away from US dollars at a time when the dollar's value has plummeted, as well as to strengthen the country's standing in the global financial market, experts said. Although the People's Bank of China (PBC), the country's central bank, has not publicly disclosed plans to increase gold reserves since October 2016, some market analysts, based on calculations on domestic gold output and imports in recent years, estimated that the country's above-ground gold reserves totaled 20,193 tons as of June, according to a report published by domestic industry website cnfol.com over the weekend....Chinese investors' enthusiasm for purchasing gold remains unabated, as downward pressure on the yuan continues and the property market in first- and second-tier cities cools, said another report published by the World Gold Council in July....China has in its rapid economic growth accumulated enough dollars to maintain its trade account, and the country is now looking to diversify its portfolio to avoid potential risks, such as the devaluation of US dollar, the largest reserve currency in the domestic market, experts noted."

Are You Prepared for an “Economic Eclipse”? -PontificationBlog
"The nights of August 10-13 will show that our calendar is actually a map, and that these dates are places in Earth’s annual orbit where we splash through a river of stardust left by the comet Swift-Tuttle. You should be able to see at least one shooting star per minute during these nights. Ancient peoples believed that these heavenly messengers passed through a window that opened in heaven, and that a prayer or wish said at that moment could reach heaven before that window closed....As noted in Craig R. Smith’s new free study of recent economic cycles, Crisis Timeline, our lives are influenced by more than the cycles of day and night, and of summer and winter. Scientists and analysts have discovered many such cycles that invisibly shape our world, from climate change to the rise and fall of economic markets. To see the future, look for the cycles....'This is one of the worst convergences of negative forces in centuries! It could potentially batter the United States socially and economically. For the unprepared, it could be a disaster. For those who are prepared, it could be a huge opportunity,' Smith’s study warns." -Full story

Can China or UN Sanctions Stop North Korea? -FoxBusiness
Swiss America Chairman Craig R. Smith and D.R. Barton of Money Map Press discuss with Coast to Coast guest host Connell McShane whether or not China signing onto UN sanctions against North Korea will be able to stop "madman" Kim Jong-un's vow to strike the U.S. with "thousands-fold" revenge following proposed new economic sanctions. Watch video

The Transformation of the ‘American Dream’ -Schiller/NewYorkTimes
“'The American Dream is back.' President Trump made that claim in a speech in January. They are ringing words, but what do they mean? Consider that the phrase, the American Dream, has changed radically through the years....Conflating the American dream with expensive housing has had dangerous consequences: It may have even contributed to the last housing bubble, the one that led to the financial crisis of 2008-9....But that wasn’t what the American Dream entailed when the writer James Truslow Adams popularized it in 1931, in his book 'The Epic of America.' Mr. Adams emphasized ideals rather than material goods, a 'dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement.' And he clarified, 'It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and recognized by others for what they are.'....In the 1970s and ’80s, home builders used it extensively in advertisements...many people came to associate the American Dream with homeownership, with some unfortunate results....The last decade has shown that with a little encouragement, many can easily become excessively lustful about homeownership and wealth, to the detriment of our economy and society."

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Gold last traded at $1,264 an ounce. Silver at $16.63 an ounce.

NEWS SUMMARY: Precious metal prices fell back Friday on profit-taking and a firmer dollar. U.S. stocks touched fresh record highs after jobs data beat expectations.

Central Bank Fear Of Gold Is In The Air -InvestmentResearchDynamics
"Wednesday evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a 'motivated' seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes. There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution. Rather, the selling was the act of an entity looking to push the price of gold a lot lower in 'shock and awe' fashion....The 'flash crash' and 'open interest inflation' are two of the obvious signals that the western Central Banks/bullion banks are worried about the rising price of gold. The recent degree of blatant manipulation reflects outright fear. I suspect the fear is derived from two sources. First is a growing shortage of physical gold that is available to deliver into the eastern hemisphere’s voracious import appetite....The second reason for the banks to fear a rising price of gold: the inevitable collapse of the largest financial bubble in history inflated by Central Bank money printing and credit creation. The trading action in the gold and silver markets resembles the trading activity in 2008 leading up to the collapse of Lehman and the de facto collapse of Goldman Sachs."

Melting Venezuela Is The Real Shock Risk For Global Markets -Forbes
"Venezuela is in a humanitarian, political and economic crisis - led by what the U.S. administration has officially called a dictator. Trump recently slapped sanctions on the Venezuelan President (freezing his U.S assets) and is said to be considering oil sanctions. Ninety-five percent of export revenues in Venezuela come from oil. The country is already on default watch (with the probability of default in the next 12 months running better than 60%). And oil sanctions would almost certainly trigger default....The thing is, sovereign debt defaults tend to be contagious. When you get a default of what was, at one time, the richest country in South America, there will be collateral damage....And then we have exposures to Venezuelan sovereign debt to be concerned about - that would include other sovereigns, hedge funds, banks and oil companies. All of this as the VIX (implied volatility on stocks) sits at pre-crisis levels. Something to keep a close eye on."

Greenspan's new bond bubble warning -CNBC
"As he's warning about a current bond bubble, former Federal Reserve Chairman Alan Greenspan told CNBC on Friday that it's fair to characterize it as an 'irrational exuberance' type forecast. The reference to 'irrational exuberance' - the two words Greenspan is most famous for - hearkens back to remarks he delivered at a 1996 American Enterprise Institute dinner....In December 2008, hoping to boost the economy, Fed officials also embarked on a series of bond-buying programs, which eventually swelled the Fed's balance sheet to the current $4.5 trillion. Only now is the Fed talking about how to wind down its portfolio of assets. In making his forecast on bonds, Greenspan said Friday he's learned from the past. 'It's a disturbing process because you have to be terribly careful with your words,' he added, stressing he's not putting any time frame on it."

A Dim Outlook for Trumponomics -Roubini/ProjectSyndicate
"Now that US President Donald Trump has been in office for six months, we can more confidently assess the prospects for the US economy and economic policymaking under his administration. And, like Trump’s presidency more generally, paradoxes abound. The main puzzle is the disconnect between the performance of financial markets and the real. While stock markets continue to reach new highs, the US economy grew at an average rate of just 2% in the first half of 2017 – slower growth than under President Barack Obama – and is not expected to perform much better for the rest of the year. Stock-market investors continue to hold out hope that Trump can push through policies to stimulate growth and increase corporate profits....The administration’s inability to execute on the economic-policy front is unlikely to change....It is little wonder that actual and potential growth is stuck at around 2%. Yes, inflation is low, and corporate profits and stock markets are soaring. But the gap between Wall Street and Main Street is widening. High market valuations that are fueled by liquidity and irrational exuberance do not reflect fundamental economic realities. An eventual market correction is inevitable."

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Gold last traded at $1,274 an ounce. Silver at $16.63 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded mostly lower as the Dow hovered ominously around the 22,000 level.

Gold: Who Was Buying in 2Q? -Barrons
"The World Gold Council's second quarter Global Demand Trends is out and shows ongoing interest from European and U.S. ETF investors, while Chinese fund investors' love affair with the precious metal appears to have dulled for the moment....Gold-backed ETFs enjoyed a 56 ton increase in assets under management in the quarter, with holdings of ETFs reaching 2,313 tons in June - the highest level since October last year....Chinese demand for bars and coins was strong in the second quarter, rising 56% from the same time last year....Indian coin and bar demand rose 46% year-on-year in the second quarter, while demand in Turkey rose to the highest level since 2013....Central banks were active, increasing their purchases by 20% year-on-year to 94.5 tons. Russia's central bank continued to be an active buyer."

Craig R. Smith Explains Classic Gold Double-Play - SwissAmericaVideo
Swiss America founder Craig R. Smith explains why he feels strongly that early American $20 gold pieces represent the best value in the gold market today. Mr. Smith refers to this two-fold opportunity as a "classic double-play". Watch now to find out why. To discuss this limited-time opportunity in detail, please call a Swiss America representative at 800-289-2646 or register here.

Why Dow 22,000 is not good news for most Americans -Nutting/Marketwatch
"The U.S. stock market hit another record Wednesday, with the Dow Jones Industrial Average surpassing 22,000 for the first time. The media acted like Dow 22,000 is a good thing. The cheerleaders in the anchor desks are wearing goofy hats and high-fiving each other like their team just won the Super Bowl. But record-high stock prices are not inherently a good thing. Whether it’s good for you individually depends on whether you own lots of shares or not....About half of all equity is owned by the richest 1 million or so families, and another 41% is owned by the rest of the top 10%. The bottom 90% of families own about 9% of outstanding shares....For the bottom 50% of families by income, only about a quarter had any equities....High prices are good for the people who are selling, and not good for the people who are buying. If you are trying to save for your retirement, high prices are terrible. Your dreams just got further away. High stock prices are particularly bad for young people....So spare me your celebrations of another milestone on Wall Street."

Trump Budget Full of Spending Increases -Stossel/Reason
"Proponents of government spending warned of a budget full of cuts, but that's not what happened. Remember President Trump's 'terrible' budget cuts? 'Promises Little but Pain,' warned The New York Times. 'Harsh and shortsighted,' cried The Washington Post. Then Congress passed a budget. President Trump signed it. Do you notice the 'pain'?....Trump called for a $4.7 billion dollar cut to the Agriculture Department. Congress increased the department's appropriation by $12.8 billion. He called for a $15 billion cut to Health and Human Services. Congress instead gave them $2.8 billion more. Trump wanted a $6.2 billion cut to Housing and Urban Development. Congress gave HUD a half-billion-dollar increase. Trump wanted the Commerce Department's budget cut by $1.4 billion. Congress made no cut. And so on. Why wasn't that news? Because in Washington, and in the media's eyes, spending increases are expected. And cuts are always 'terrible.' America continues on its road to bankruptcy."

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Gold last traded at $1,278 an ounce. Silver at $16.73 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 6-week highs Wednesday on a slightly firmer dollar. U.S. stocks traded mixed as the DJIA touched 22,000 amid upbeat Apple earnings.

Is now the time to get back into gold? -CNBC
"In a technical sign of strength, gold is now trading well above its 50- and 200-day moving averages. 'We see a little bit of a wake-up in risk,' said Max Wolff, market strategist at 55 Institutional, who believes the yellow metal will see more of a bid going forward....DoubleLine Capital CEO Jeffrey Gundlach told Reuters that he has exposure to gold, and forecast that gold would rise as 'gold looks cheap compared to markets that have rallied a lot, including bitcoin and including Amazon.'....The yellow metal has 'a lot to go on the upside' if relative weakness in the U.S. dollar persists, wrote Pete Boockvar, chief market analyst at The Lindsey Group."

What Does Dow 22,000 Even Mean? -Barrons
"Barely six months after it crossed the 20,000 mark, the Dow hit 22,000 on Wednesday morning, before pulling back slightly. It’s another milestone that might not mean much for your portfolio, but it is symbolic of the enormous bull run the market has enjoyed since 2009....The DJIA is a 'price-weighted' index, which means that it is calculated by adding up the 30 companies’ stock prices and then dividing them by a magic number called the Dow Divisor....Because it is price-weighted, stocks with a higher price carry a greater weight in the index. For example, A 10% change in 3M’s $204 stock will add more points to the Dow than a 10% change in Cisco’s $31 stock. Why did the Dow just smash through another record? Promise of regulatory and tax reform: President Trump and the Republican party have campaigned on business-friendly policies such as a lower corporate tax rate and softer regulations. If successfully implemented, investors believe that corporate earnings will increase....The number 22,000 itself is a relatively meaningless milestone and isn’t technically any different than the DJIA hitting 21,756 or 22,011."

Amazon is the New Tech Crash -Stockman/DailyReckoning
"During the last 31 months the stock market mania has rapidly narrowed to just a handful of shooting stars. At the forefront has been Amazon.com, Inc., which saw its stock price double from $285 per share in January 2015 to $575 by October of that year. It then doubled again to about $1,000 in the 21 months since. By contrast, much of the stock market has remained in flat-earth land. For instance, those sections of the stock market that are tethered to the floundering real world economy have posted flat-lining earnings, or even sharp declines, as in the case of oil and gas....At the March 2000 peak, Microsoft’s PE multiple was 60X, Intel’s was 50X and Cisco’s hit 200X. Those nosebleed valuations were really not much different than Facebook today at 40X, Amazon at 190X and Netflix at 217X. The truth is, even great companies do not escape drastic over-valuation during the blow-off stage of bubble peaks. Accordingly, two years later the Four Horseman as a group had shed $1.25 trillion or 75% of their valuation....Needless to say, I do not think AMZN is a freakish outlier. It’s actually the lens through which the entire stock market should be viewed because the whole enchilada is now in the grips of a pure mania."

2017's Dollar Collapse Is The Worst Start Since 1985 -Zero Hedge
"The USD is off to its worst start since 1985, down about 9%...Of course, 1985 was the worst year for the USD in almost 40 years, so if we stay on the current path, expect the USD to drop another 10% from here. The weak USD is setting up a possibly profitable rotation out of US equities into longer dated US Treasuries....If the USD falls back into the 80s, shorter dated TIPS yields could easily fall back into negative territory. This could be what gold is sniffing out. Since 2003, gold has exhibited a -87% correlation to 10-year TIPS yields."

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Gold last traded at $1,279 an ounce. Silver at $16.76 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying amid downbeat economic data. U.S. stocks touched fresh highs with utilities and financials leading.

Gold shows solid performance in July -Mining
"A struggling dollar and serious doubts about whether or not the U.S. Federal Reserve will raise interest rates again this year sent gold to its highest point in almost seven weeks....This means that the precious metal showed a strong performance in July, as it is on course for a 2.1 per cent rise this month....Quoted by Reuters, Commerzbank analyst Eugen Weinberg explained that geopolitical tensions and internal uncertainty could mean a stronger demand for gold as the U.S. currency falls into its lowest in 16 months against a basket of currencies."

Gold prices started the year at $1,150/oz. Today gold prices are near $1,275, an 11% rise. The S&P stock index is currently up 10.4%. So gold is performing at the same level as most stocks in 2017, without much fanfare. Bottom line: Now is the time to take some profit out of the risky Wall Street casino and move it into the safety of physical gold coins - an asset you can hold firmly in your own two hands.

The first US coin could have been held by Alexander Hamilton -CNBC
"Old inns along the Revolutionary War trails boast of George Washington sleeping there. But coin experts say they have found the first silver piece minted by the United States - one likely held by the most en vogue of Founding Fathers, Alexander Hamilton. David McCarthy figured the silver coin had to be one-of-a-kind after spotting it in the auction catalogue....McCarthy staked his company's money to buy the coin for $1.18 million at the 2013 auction. After nearly four years of late nights sifting through the papers of the Founding Fathers and studying the beading on the coin's edges, he is now making an exhaustive case that this silver piece is indeed the first American coin, the precursor of what ultimately would circulate a decade later as the U.S dollar. The coin is on display this week at the World's Fair of Money in Denver....In terms of the coin's possible value, Jeff Garrett, president of the American Numismatic Association, said the closest comparison was a 1794 silver dollar that sold for more than $10 million four years ago. But the allure of coins isn't just their rarity or metal content but the history that comes embedded to them as they pass through the ages. 'People always ask, how could a coin be worth a $1 million or $5 million?' Garrett said. 'I always say it's because of the stories.'"

Should stock investors pocket gains and run? -USAToday
"It has been a good year for large-company U.S. stocks. So good in fact that investors could exit the market now and still pocket gains that are bigger than the average historical gains for an entire year. The Standard & Poor’s 500 stock index is up 10.4% so far this year. And that is a bigger return than the average gain of 8.9% since 1950, according to LPL Financial, citing FactSet data....In fact, from 1928 to 2016, the S&P 500 finished a year with positive returns of 5% to 10% only six times, according to an analysis by LPL Financial....The often-cited average annual gain of around 9% makes the market look like a predictable beast. The reality is its performance is difficult to predict."

Political Drama Is Hitting the Dollar Hard -Bloomberg
"President Donald Trump loves to trumpet the record run in U.S. stocks....But he’s hardly tweeted a word about another, less rosy measure of Trump’s America: the U.S. dollar. The greenback has fallen hard on his watch and currency traders are now betting on even more declines....More and more, it’s the political drama in Washington that is taking center stage. And there’s no better place for investors to express their views about how a nation is managing its affairs than the $5.1 trillion-a-day global market for foreign exchange....To be fair, the dollar has also come under pressure from lackluster economic data, which weakened the case for higher interest rates in the U.S. as central banks elsewhere move to tighten. And Trump, on more than one occasion, has talked about wanting a weaker dollar and complained that its strength is a negative for U.S. manufacturing - a key part of his 'America First' agenda....The dollar has slumped more than 8 percent, wiping out the post-election bump and then some. To many, it reflects deepening worries the turmoil embroiling Washington....'We’re going to see continued weakness in the dollar,'” said Kristina Hooper, the global market strategist at Invesco. 'It is very much a vote of confidence, or lack of confidence, in the U.S. economy.'"

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