October Blog Archives 2017

Gold last traded at $1,2703 an ounce. Silver at $16.69 an ounce.

NEWS SUMMARY: Precious metal prices were pressured Tuesday by a firmer dollar and Fed uncertainty. U.S. stocks traded marginally higher on mixed earnings reports despite rising consumer confidence.

Teddy Roosevelt attacked at Museum of Natural History -New York Post
"Red paint was splashed at the statue of Theodore Roosevelt on the steps of the American Museum of Natural History early last Thursday, according to cops. Someone was seen around the statue before it was vandalized on Central Park West between 3 and 7 a.m., law enforcement sources said. The bronze statue by James Earle Fraser, which was erected in 1939, depicts the former president on horseback flanked by an indigenous African and an American Indian....The vandalism comes amid a national debate over statues dedicated to controversial historical figures....Roosevelt - the first president to invite and dine with an African-American, Booker T. Washington, in the White House - espoused a gradual approach to improving the country's stark racial inequality."

A Monumental Assault Upon America's Heritage! -Craig R. Smith video
In 2017, radicals first tore down the statues of Confederate generals, then attacked statues of Thomas Jefferson, Christopher Columbus and Theodore Roosevelt. Will the statues of George Washington and Abraham Lincoln be their next target? If they re-write our history, we can still remember the truth. If they tear down our community statues, we can each keep the images of an earlier, freer America in our homes and pockets. How? Find out in this latest video by Mr. Smith. (Watch video)

US Government Quietly Adds $200 Billion To National Debt This Month Alone -Zero Hedge
"In the month of October alone, the US national debt has soared by nearly a quarter of a trillion dollars. This is pretty astonishing given that October is supposed to be a ‘good’ month for the US Treasury Department. The tax extension deadline means that October is usually quite strong for federal tax receipts. Yet despite being flush with tax revenue, the US government still managed to pile almost a quarter of a trillion dollars more on top of its already enormous mountain of debt. It's always surprising to me how a story this monumental never receives any coverage. The government of the largest, most important economy in the world is completely, woefully bankrupt. And its rate of decline is accelerating. You’d think this would be on the front page of every major newspaper in the world. But it's not. It’s shrugged off as par for the course, as if accumulating historic levels of debt is somehow consequence-free. And this complacency is what I find the MOST bizarre."

Republicans Fall Into Dems' Same Old Deficit Trap -American Spectator
"Recently liberals defined fiscal chutzpah by arguing high federal debt precluded tax cuts. This amazing new debt concern conveniently overlooks Barack Obama's culpability in the calamity they now belatedly bemoan. It also implicitly sets a fiscal trap where liberals keep increasing spending and debt and conservatives can never cut taxes....Liberals' new debt dodge is a clever trap for conservatives. Having dug spending and debt holes in the budget, they want conservatives' tax cuts to fall into them. In power, liberals increase taxes, spending, and debt. Once out, they re-benchmark tax levels to the spending and debt levels they hiked. Such a course results in spending and taxes only rising....For the last eight years, America has seen the results of liberals’ fiscal approach of higher taxes, higher spending, and higher debt....Now after eight years of subpar economic performance, when Republicans seek to aid the economy by reducing taxes that are moving well ahead of historic averages - this is precluded by liberals’ deficits? Liberals’ concern for debt and spending is new, but their shameless cynicism is as transparent as it is consistent."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,277 an ounce. Silver at $16.84 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain hunting and a weaker dollar. U.S. stocks retreated on reports that proposed corporate tax cuts could be gradual.

When gold prices will hit $1,450 an ounce -Gulf News
"Dubai: The days of cheaper gold rates for jewelery buyers in the UAE may probably end soon as the recent price correction, which saw the precious metal falling to $1,260 an ounce this month, is over. The bullion looks set to revisit the previous high of $1,300 an ounce by the end of the year, with further rallies expected in the coming 2018, according to the latest analysis by ABN Amro, which regularly tracks commodity price performance....The price of the yellow metal is forecast to climb further to $1,350 an ounce between January and March 2018, and end the year with a more positive performance, as rates are expected to average at $1,450 an ounce....'The longer-term trend in gold prices is positive, mainly because we are negative on the US dollar,' Georgette Boele, senior precious metals and diamond analyst at ABN Amro wrote. 'Our forecast for the end of 2018 is $1,450 per ounce.'"

Civil Asset Forfeiture Abuses Rage On -Forbes
"A tiny memory lapse cost a man his Ford F-250 pickup truck and it took more than two years and a strong legal team for him to get it back. The reason why the truck was seized, naturally, was civil asset forfeiture....Once the property has been forfeited, the owner has to undertake a lengthy and difficult legal battle to get it back. Many unfortunate people can't do that and just give up....Civil asset forfeiture has been roundly attacked by liberals and conservatives and yet, with the exception of a few states, those laws remain a terrible source of abuse. In IJ's analysis of state civil asset forfeiture laws, only seven earn grades of B or better, while the majority earn Ds. Reform efforts are often blocked or greatly diluted by law enforcement groups claiming that they must have civil asset forfeiture in order to deprive criminals of their profits. But it's perfectly possible to make proven criminals pay without these laws that usually harm innocent people."

Tax overhaul under intensifying fire as Congress readies bill -Reuters
"Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change that could affect the use of home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments....House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump's desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year. The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes....Republicans warned that the tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks. 'When groups start rallying against things and they succeed, everything starts unraveling,' Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation."

China is Winning the “Opium War” behind America’s “New Stoned Age” -Pontification Blog
"President Donald Trump this week begins an Asia trip to Japan, South Korea, China, Vietnam and the Philippines, a major topic of which will be the risk of war with North Korea. But will he also acknowledge that the U.S. is already in a deadly undeclared war with Communist China? Days ago, Mr. Trump declared a 'public health emergency' over the worst drug epidemic in American history. In 2015, 92 million Americans - 38 percent of the U.S. population - were prescribed opioids....In 2016, a tsunami of prescription and illegal opiates caused at least 64,000 drug overdoses - killing more Americans than died during the entire Vietnam War….The journal Science reports that 'the United States consumes 85% of all the world's natural and synthetic opiates,' and that many health professionals blame opiates for America's declining life expectancy....As users craving heavier doses turn to the criminal black market, illicit Chinese dealers have been supplying Fentanyl and its precursor exports to the United States, Canada and Mexico. Fentanyl, which users often mix with heroin or Vicodin or Percocet, is a synthetic opiate roughly 100 times more potent than morphine, reports Science. One victim killed by fentanyl overdose was the musician Prince. A 2017 federal report found fentanyl in 56 percent of opioid deaths in 10 states. Two milligrams - equivalent to a few grains of salt - of the drug can be lethal by depressing breathing. 'Underground labs in China,' writes Science, 'are devising potent new opiates faster than authorities can respond.' One such opioid from China is carfentanil, 100 times stronger than fentanyl and about 10,000 times more potent than morphine. One website makes it available by mail, reports Science, 'for $361 for 50 grams: tens of thousands of lethal doses.' ....Karl Marx called religion 'the opiate of the masses.' For Xi Jinping's Communist China connection, the weaponized opiates now being targeted on America's masses are opioids."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,271 an ounce. Silver at $16.75 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Friday with gold rising on safe haven buying amid geopolitical worry, despite a firmer dollar. U.S. stocks rose sharply led by strong earnings from tech giants Amazon, Microsoft and Alphabet.

Trump's Tax Plan Could Boost Gold and Silver -Bloomberg
"Politicians can keep arguing whether President Donald Trump's tax plan will benefit the middle-income families and U.S. businesses, but there's one sector that could be a clear winner: precious metals. The tax plan being considered in Congress would inflate the nation’s budget deficit and expand the debt, Bart Melek, head of global commodity strategy at TD Securities in Toronto, said at the Silver Industrial Conference in Washington. That deterioration in the nation's fiscal standing is a recipe for higher silver and gold prices, he said....Based on Thursday's closing price, gold prices may advance more than 7 percent by the end of next year to $1,360 an ounce, as investors seek precious metals as a hedge against uncertainties from 'U.S. political drama and geopolitical tensions with North Korea,' Melek said in an interview before his presentation at the conference. Silver will outperform gold, surging as much as 19 percent to $20 an ounce by the end of next year, as global growth boosts industrial demand for the white metal just as mine supply slows, he said."

Robotic Machines Learning the Market -FT Alphaville
"SocGen has a fun note out this morning looking at how machine learning algorithms perform against more basic stock picking strategies.Spoiler: they mostly win, but then lose badly over the past two years. 'It is not possible to visualize many of the steps involved in the calculation, and hence interpreting the results can be very challenging,' write Georgios Oikonomou and Andrew Lapthorne in the note. 'This is obviously a key disadvantage when using it to design investment strategies.' The machine learning algorithms do pretty well in general, and then stumble in 2016 and 2017....'2016 was a kind of a tricky year,' says Oikonomou, noting that the algorithms 'didn't handle sharp changes in the market'. 'Even this year you could argue that the market is not driven by fundamentals,' he adds, which is maybe not the best environment for a model trained to detect historical patterns in fundamentals. In other words, past performance is not indicative of future returns."

Data Breaches Rose By 164% in First Half Of 2017 -MediaPost
"Data protection systems were a sieve in the first half of this year, according to a study by Gemalto, a digital security firm based in Europe. Gemalto's Breach Level Index shows there were 918 data breaches during this period, resulting in 1.9 billion data records being exposed - a 'staggering' 164% increase over the last six months of 2016. This presumably included email addresses. A large portion of these losses resulted from the 22 largest data breaches - each one of those involved more than one million compromised records, Gemalto says....Identity theft was the leading type of breach, accounting for 74% of all data breaches - an increase of 49%. The number of compromised records in this area increased by 255%....North America was the hardest-hit area, suffering 86% of the breaches - an increase of 23%. The number of affected records jumped by 201%."

A new free Swiss America Research Report, AMERICA'S CYBER-HIT LIST, reveals how and why your money is more vulnerable to cyberattack right now than ever before - and what to do about it.

Rising home prices, stagnant wages squeeze home buyers -CNBC
"Home ownership remains elusive for many Americans a decade after the collapse of the real estate market sent the U.S. economy into a tailspin. More than one-third of Americans ages 18 to 34 said they are likely to opt out of home ownership over the next decade, according to an annual survey conducted by the U.K.-based consumer credit reporting agency Experian. About a quarter of Americans of any age also said they were likely to opt out of home ownership in that period. The price of buying a home has accelerated since about 2011, after tanking in the wake of the 2007 financial crisis. The median home price last month was about $320,000, according to government data, more than 20 percent higher than the pre-crisis peak set in March 2007. Meanwhile, real wages have grown less than 10 percent in that period, even for those employed full time. 'There's a mismatch,' said Lawrence Yun, the chief economist at the National Association of Realtors. 'Even over the last five years, home prices have easily exceeded income and wage growth.'.....'For-sale housing inventory, especially of starter homes, is currently at its lowest level in over ten years,' say researchers at Freddie Mac."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,269 an ounce. Silver at $16.81 an ounce.

NEWS SUMMARY: Precious metal prices drifted lower Thursday as upbeat political news and a weaker euro boosted the dollar. U.S. stocks rose on better-than-expected earnings reports and U.S. tax reform hopes.

6 Reasons Cryptocurrencies Will Never Replace Gold As Your Financial Hedge -Forbes
"It seems that more and more people justify investing in cryptocurrencies - even at current record prices - by claiming that they're an effective hedge against the instability of fiat currencies. But is it true? Despite what the crypto-evangelists will tell you, digital tokens will never and can never replace gold as your financial hedge. Here are six reasons why. #1: Cryptocurrencies Are More Similar To A Fiat Money System Than You Think. The definition of 'fiat money' is a currency that is legal tender but not backed by a physical commodity....#2: Gold Has Always Had And Will Always Have An Accessible Liquid Market. The same cannot be said about cryptocurrencies....#3: The Majority Of Cryptocurrencies Will Be Wiped Out....#4: Lack of Security Undermines Cryptocurrencies’ Effectiveness....#5: Hype and Speculation Continue to Drive Cryptocurrencies' Value....#6: Cryptocurrencies Do Not Have Gold's History As A Store Of Value."

Pending Home Sales Plunge In September To Lowest Since Jan 2015 -Zero Hedge
"Following September's modest bounce in existing home sales, and explosion in new home sales (biggest jump in 25 years), today's pending home sales was a huge disappointment, blowing the bounce back narrative. Pending Home Sales tumbled 5.4% YoY...Economists consider pending sales a leading indicator because they track contract signings. Outside of the storms' effects, the housing market is being hindered by a lack of properties that has driven up prices. Sales of homes listed for less than $250,000 are down from last year, while those at the upper end of the bracket are 'up solidly,' the NAR said. Nonetheless, steady hiring, easier credit availability and borrowing costs still near historically low levels remain sources of support for the housing recovery."

The apocalypse North Korea wants to unleash -News.com.au
"DAY Zero: the lights go out, planes fall from the sky. Year One: 90 per cent of the US population is dead. This could be the nightmare of a North Korean attack. It wouldn’t happen overnight. But it could happen. A new report to the US Congress warns one or two nuclear weapons detonated high in the atmosphere above the country would - within a few months and years - lead to the death of 90 per cent of the country’s population....Nuclear weapons analyst Dr Peter Pry, who testified before a US Homeland Security committee earlier this month, says his work validates past warnings that an EMP (electromagnetic pulse) attack could immediately wreak nationwide havoc....A gamma-ray pulse, produced by a nuclear blast, causes the ionosphere to 'short-circuit' with the ground below. And this - like a solar-flare - can bring entire economies to their knees in a few hundred nanoseconds. The more advanced the economy, the more dramatic the effect. The nuclear blast itself isn't likely to kill anybody, or irradiate anything. But up to 500,000 people would be dead within minutes. That's how many people are in commercial airliners in US skies at any one time....'Rogue states or terrorists can blackout national electric grids and other life-sustaining critical infrastructures, topple electronic civilization, and kill millions from sea to shining sea, with a single high-altitude nuclear detonation, generating an EMP field covering North America,' Dr Pry says in a commentary published by The Washington Times."

House narrowly passes 2018 federal budget -CNBC
"The House on Thursday narrowly approved a Senate version of the 2018 federal budget, clearing the way for the GOP-controlled Senate to pass a massive set of tax cuts later this year. The vote was a nail-biter, with the final tally 216 in favor and 212 opposed. House Speaker Paul Ryan, R-Wisc., who typically does not vote on legislation, took the unusual step of voting for the budget....Yet signs of the fight looming on Capitol Hill over how to pay for the $1.5 trillion in tax cuts were already visible Thursday, when a number of Republicans from states with high state taxes voted against the budget bill, as did a handful of fiscal archconservatives....With the budget vote out of the way, Republicans must now move on to the brass tacks phase of reforming the tax code."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,279 an ounce. Silver at $16.92 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain hunting, a weaker dollar and rising market volatility. U.S. stocks slid on fears of new tax reform changes impacting 401(k) retirement plans.

The Importance Of Owning 5-10% Of Your Portfolio In Gold -Seeking Alpha
"There are many reasons to allocate a portion of a portfolio in gold, including the constant fiat currency debasement by all governments around the world. In this article we will concentrate on gold’s utility as a protection against market crashes or adverse geopolitical crises. In August 2017, Ray Dalio of Bridgewater Associates LP, the biggest hedge fund in the world, recommended investors hold 5 to 10% of their portfolios in gold to hedge against political risks....The superior performance of a portfolio including gold brings us to conclude that the notion of gold as a hedge against serious risk aversion episodes is true. The statistics appear to show a relationship between volatility episodes and gold gains. Indeed, the anecdotal historical evidence supports the hypothesis that gold offers solid protection from asset market dislocations in recent times. I hence recommend allocating 5-10% of your portfolio in gold."

Stocks Slide On Report House Considering Capping 401(k) Plans -Zero Hedge
"Republicans are still weighing adjustments the 401(k) program, according to the chief of the House tax writing committee...Speaking at a Christian Science Monitor breakfast with reporters, House Ways and Means Chairman Kevin Brady, R-Texas, declined to rule out changes...'We think in tax reform we can create incentives for Americans to save more and save sooner which can help,' Brady said. 'We are exploring a number of ideas in those areas.'....That could be a signal that Republicans might pinch pretax savings for high-income households and use the money to beef up an underused tax break known as the saver’s credit. It would also be very market negative: considering that the roughly 86% reduction in 401(k) contributions would prove dire for stocks should the original proposal pass, it is easy to see why some have speculated that this is the catalyst for the recent market drop....For now, stocks are getting nervous that with tax reform once again up in the air."

The Longest Streak Ever Without a 3% Correction -LPL Research
"2017 continues to break records, as the S&P 500 Index makes new highs amid historically low volatility: The index has now gone 33 consecutive sessions without a 0.5% daily decline, which is the longest streak since 1995. The index's average daily change on an absolute basis so far this year has been only 0.30%, the smallest since 1965....One other amazing streak toke place at Monday's close: The S&P 500 officially has gone 242 trading days (about 11.5 months) without a 3% correction, topping the record of 241 days set in 1995....What can we say about 2017 that hasn't already been said? What we've seen so far this year is like nothing we've seen for decades. Just remember that markets aren't always this calm; and a perfectly normal correction of 3-5% could happen at any time, if for no other reason than it has been more than 11 months since the last 3% correction."

It's time to reinvent the Federal Reserve -The Guardian
"In the endless swirl of noise and controversy emanating from Washington these days, it is easy to overlook a more mundane but significant challenge facing the US government: its institutions are getting old. The Federal Reserve was created in 1913, and over the century, it has acquired massive powers over the nation's financial system. But like anything that has aged, the Fed has become brittle and weathered....The Fed is an intensely conservative institution, not in the partisan sense, but in how it hews to past patterns and traditions....Instead of just nominating a new chair, Trump could do something genuinely groundbreaking and ask that the entire mandate of the Fed be reviewed with an eye towards the needs of the present and the future and not the legacies of the past....What would this remade Fed look like? We would be left with a nimble and innovative crisis management agency, with immense powers in times of financial crisis to stem the tide in a way that legislatures cannot."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,278 an ounce. Silver at $16.96 an ounce.

NEWS SUMMARY: Precious metal prices eased back Tuesday amid new Federal Reserve leadership speculation and a firmer dollar. U.S. stocks rose after Caterpillar and 3M earnings beat Wall Street estimates.

Gold Is Going To Go Way Up, Not Down -Schiff/Seeking Alpha
"There's a lot of things that Harry Dent says that I agree with, but his price target on gold is not one of them. I think he has too much confidence in the US dollar and doesn't understand the nature of fiat money, and the fact that if all the things that Harry believes are going to happen happen - that is very bearish for the dollar, because the Federal Reserve is going to print a lot of money....If you think there's going to be more inflation, you buy gold....These tax cuts are very bearish for the dollar and they are bullish for gold. Because all that's happening is the government will be replacing tax revenue with debt. See, we're not cutting the size of government. Government's going to keep getting bigger, and bigger, and bigger. But what we're going to do is pay for that bigger government by issuing more debt, and that means more money printing; it means more inflation...If we get these tax cuts, the dollar is going down, no up. And gold is going to go way up, not down."

Markets Being Driven By Fundamentals? -Roberts/Real Investment Advice
"The current rally since the election has been based on 'hopes' for tax cuts and tax reforms as there was little evidence currently to suggest it was based on fundamental underpinnings. Since 2014, the stock market has risen by 35% while reported earnings growth has risen by a whopping 2%....The chart below is an expansion of the real, inflation-adjusted, profits after-tax versus the cumulative change to the S&P 500. Here is the important point - when markets grow faster than profitability, which it can do for a while, eventually a reversion occurs. This is simply the case that all excesses must eventually be cleared before the next growth cycle can occur."

"Once again, we find that when the price to profits ratio is trading ABOVE the long-term linear trend, markets have struggled and ultimately experienced a more severe mean reverting event. While none of this suggests the market will 'crash' tomorrow, it is supportive of the idea that future returns will substantially weaker than in recent years. Are we in a strongly trending 'cyclical' bull market currently? Absolutely. Are we in a long-term 'secular' bull market as witnessed in the 80-90’s? Absolutely not....Of course, with the virtual entirety of Wall Street being extremely bullish on the markets and economy going into the end of the year, along with bullish sentiment at extremely high levels, it certainly brings to mind Bob Farrell’s Rule #9 which states: 'When all experts agree - something else is bound to happen.'"

Let's End the Pretense, the Republicans Are Not Cutting Taxes -Tamney/Real Clear Markets
"As House Speaker Paul Ryan explained it about the GOP's proposed tax plan to Roll Call last week, 'We'll introduce the bill, which will have that fourth bracket designed to make sure that we don't have a big drop in income tax rates for high-income people - their bracket is 39.6 [percent] right now - and then we have a middle-class tax cut.'...Getting right to the point, the Republicans have told the innovators along with the investors in those innovators to drop dead. What this means for the Republican tax plan is that there is no tax cut....How do we know this is true?...Since the rich pay nearly all the taxes, a tax plan that, per Ryan 'won't be as significant for high earners,' is surely not a significant tax cut....The trick now is for Republicans to change their brand. As opposed to being the tax cutting Party, let's say they were put on this earth to ensure that nothing of legislative importance happens in Washington....gridlock that will look, act and feel like growth, but that could have been so much more."

Americans Agree More Than They Realize -Hinkle/Reason
"Some days, it can seem as if half the country has come down with rabies. A lot of people seem willing to tear your head off over the smallest thing. Part of it probably comes from the disinhibiting effect of social media - where the lack of filters or personal contact makes it easy to fire off a nasty personal attack in the heat of the moment...which only encourages people to respond in kind. Part of it probably comes from the fact that Americans increasingly sort themselves into like-minded communities....But this exaggerated emphasis on differences obscures the degree to which Americans still agree. And on some topics, the public is of one mind, or as close to that as you can get. A few examples: Universal background checks. Nine out of 10 Americans think a background check should be required for every firearm purchase. Dreamers. These are undocumented immigrants who were brought to the U.S. as young children, grew up here, and have little or no connection to their countries of origin. Eighty-five percent of Americans agree that they should not be deported. Civil asset forfeiture. This practice allows the police to confiscate property - cash, cars, homes - from people they suspect might be involved in criminal activity, even if the individual is never even charged with a crime, let alone convicted. Across the ideological spectrum, 84 percent of Americans disapprove of the practice....For people tired of constant snark and contrived controversy, it might be comforting to know that in many ways America is not nearly so divided as it's sometimes made out to be."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,284 an ounce. Silver at $17.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain hunting despite a firmer dollar. U.S. stocks traded mixed as investors await earnings reports and remain hopeful about tax reform proposals.

What Goldbugs Have Been Waiting For: Goldman's New Primer On Gold -Zero Hedge
"The good news is that Goldman believes 'precious metals remain a relevant asset class in modern portfolios, despite their lack of yield' and disagrees with Ben Bernanke and the naysayers 'They are neither a historic accident or a relic. Indeed, by looking at each of the physical properties of an ideal long-term store of value…we can clearly see why precious metals were initially adopted and why they remain relevant today.'....'Gold tends to preserve its real purchasing power over the very long run (albeit with substantial short-term deviations). Since Roman times, the real value of gold has remained more or less unchanged in the face of wars and political, social and technological shocks.'....The report goes on to compare gold and cryptos, asking if cryptocurrencies are the 'new gold' and concluding 'We think not, gold wins out over cryptocurrencies in a majority of the key characteristics of money.'....The Goldman report touches on one critical feature of the gold market, noting that 'Investors have become more conscious of the physical vs. futures market distinction in the post-2008 crisis period. As such, the fear drivers have likely tilted demand more in favor of physical gold (or physically-backed ETFs) as a hedge against black-swan events vs. using futures.'"

The Future of Banking Probably Isn't Banking -FEE
"I spent over 10 years working for a bank and I loved it. I think their days are numbered though, probably; mainly as I believe the services and products they provide will be gradually replaced by large tech companies who have better relationships with consumers. It's a much-written-about fact that companies don't want to become the next Blockbuster or HMV - video and music stores replaced or heavily impacted by digital competitors like Netflix, iTunes and internet file-sharing. Most banks are embracing 'digital' - with cutting-edge apps, new payments methods, trying new technologies like blockchain or wearables and getting funky with cool new social media campaigns - all in an effort to stay current; but I still think they will be replaced. Why? Because they are mainly just banks - they provide credit or debit and digital services to access that money and not much else....Phone payment systems are training their customers not to need bank cards, i.e. not to need banks....removing the mental association consumers currently have between buying things and their bank."

The future of banking and money is changing fast. As we cover in our newly updated free Special Report, DON'T BANK ON IT!, "Your bank account no longer exists in paper ledgers or as actual physical dollars in a local bank vault. Your account exists only as electronic blips in a computer, which a power outage, malfunction or hacker could garble, steal, or erase." When a power blackout hit Puerto Rico in September 2017 because of Hurricane Maria, people found themselves unable to get money from an ATM or use credit cards; the Federal Reserve had to fly an airplane crammed with cash to the small island to prevent disaster. “In a cashless world, you’d better pray the power never goes out,” says Ryan McMaken of the Mises Institute.

Americans Are Retiring Later, Dying Sooner and Sicker In-Between -Bloomberg
"The U.S. retirement age is rising, as the government pushes it higher and workers stay in careers longer....Data released last week suggest Americans' health is declining and millions of middle-age workers face the prospect of shorter, and less active, retirements than their parents enjoyed. Here are the stats: The U.S. age-adjusted mortality rate - a measure of the number of deaths per year - rose 1.2 percent from 2014 to 2015, according to the Society of Actuaries. That's the first year-over-year increase since 2005, and only the second rise greater than 1 percent since 1980....Almost one in three Americans age 65 to 69 is still working, along with almost one in five in their early 70s. Postponing retirement can make financial sense, because extended careers can make it possible to afford retirements that last past age 90 or even 100....An epidemic of suicide, drug overdoses and alcohol abuse have caused a spike in death rates among middle-age whites. Higher rates of obesity may also be taking their toll....Declining health and life expectancy are good news for one constituency: Pension plans."

Did U.S. Troops Die in Niger Protecting French and Chinese Uranium? -Pontification Blog
"America was surprised when U.S. troops in Niger were ambushed, and four were killed, on October 4. Why are more than 1,000 U.S. soldiers in this desolate region of Western Africa, and in one of the world’s least developed nations? According to Defense Secretary James Mattis, America’s mission there is 'supporting the French-led and the African troops in the campaign to throw ISIS and the terrorists, the radicals, those who foment instability and murder and mayhem, off their stride.' He speaks truth - but not the whole truth....Eighty percent of Niger citizens do not know that their country's northern desert has uranium, which Business Insider described in 2015 as 'the world's fifth-largest recoverable uranium reserves, some 7% of the global total.' A handful of uranium mines account for roughly a third of all of Niger's exports and supply a third of France's reactor fuel (and possibly the key ingredients for French nuclear weapons as well). No wonder France and its American allies are willing to pay a price to keep these radioactive isotopes flowing, avoid terrorist disruptions, and prevent Islamists from seizing this potential source of A-bomb material....President Barack Obama sent U.S. military forces to Niger in 2013, apparently to support the French buildup to protect their vital uranium mines from Islamists. In October 2017, this cost four American lives. But did these courageous soldiers implicitly also die to defend a Communist Chinese uranium mine, a potential source of China's nuclear weapons?"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,280 an ounce. Silver at $17.07 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday as optimism over tax reform boosted the buck. U.S. stocks rallied after the Republicans took a step forward toward achieving tax reform.

The psychology of gold and why it has that allure -CNN
"For millennia, the metal has adorned crowns and hilts of swords. It has been used to enhance paintings and ornaments to increase their value. In some cultures, gold is a predominant feature of festivals and celebrations. In Eastern cultures, the metal is an integral part of auspicious occasions like marriages and festivals by way of gifts and sacred rituals. Humans' fascination with gold is as old as time itself....The incorruptible nature of gold has an otherworldly allure to it and the reflective quality of the metal gives the impression that it glows from the inside. When viewed by candlelight, gilded medieval manuscripts, statues and icons in the Eastern Orthodox Church exuded a transcendental quality, glowing as if they were illuminated from the inside. Golden trophies like Olympic medals, the Nobel Prize, Oscars and Emmys are presented to people who display a unique talent....Psychologically, this results in gold being a color of motivation."

WHAT NOW? -Craig R. Smith, Chairman, Swiss America
"We seem to live in a very upside down world to say the least and it’s quickly spinning out of control. World politics and economics are so removed from any sense of normalcy that the average person is holding their breath and wincing at the future. Geopolitically and economically we are one headline away from a serious moment in history....We see all this before us. Debt, deficits, a dying dollar, resurgence of inflation, crypto-currencies and great global threats of war. Any one of which could pick your pockets or break your legs, to paraphrase Thomas Jefferson. So what is a wise person to do? Acknowledge the threat and prepare for it. Do not act out of emotion, fear or greed, but act with an informed, well-planned strategy so all you have worked and saved is not lost in the next crisis. Oh yes, you can be assured there will be another crisis. Not if, just when. And if you are one minute too late, it’s over. The potential losses are just not worth the risk you take in hesitating. A wise man sees danger and avoids it. Full story

Government Backed Student Loans - A Deal With The Devil -Miller On The Money
"OK Millennials, listen up! When you took out a student loan, you entered into a contract, borrowing money to complete your education. You felt your education would lead to a better job and you could repay the debt from your earnings. The government was a co-signer, guaranteeing repayment of the loan. By doing so, the banks offered YOU very low interest rates. Today, paying off your debt is an inconvenient challenge....The Wall Street Journal reports, 'Revised Education Department numbers shows that … at least half of students defaulted or failed to pay down debt within 7 years.'....If you have student loan debt, sacrifice and do what it takes to get the loans paid off as quickly as you can. If you are in college, or headed in that direction, get a good education in four years with minimal student loan debt. Work your tail off so you can easily transition to your next step in life. Decisions and behavior have consequences. Welcome to the adult world!"

How Money Became the Measure of Everything -The Atlantic
"Money and markets have been around for thousands of years. Yet as central as currency has been to so many civilizations, people in societies as different as ancient Greece, imperial China, medieval Europe, and colonial America did not measure residents’ well-being in terms of monetary earnings or economic output. In the mid-19th century, the United States - and to a lesser extent other industrializing nations such as England and Germany - departed from this historical pattern. It was then that American businesspeople and policymakers started to measure progress in dollar amounts, tabulating social welfare based on people's capacity to generate income. This fundamental shift, in time, transformed the way Americans appraised not only investments and businesses but also their communities, their environment, and even themselves....Many working-class Americans, though, were not as enthusiastic about the rise of economic indicators. This was largely because they believed the human experience to be 'priceless' and because they (astutely) viewed such figures as tools that could be used to justify increased production quotas, more control over workers, or reduced wages....The true prosperity and abiding good of the commonwealth can only be learned, by placing money [on] one scale, and man [on another]....By the early 21st century, American society’s top priority became its bottom line, net worth became synonymous with self-worth..."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,290 an ounce. Silver at $17.25 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Thursday on bargain-hunting and a weaker dollar. U.S. stocks fell led by declining tech stock giants such as; Apple, Facebook, Google, Netflix and Amazon.

Gold Will Reveal The Economic Truth - von Greyerz/Gold Switzerland
"The dollar is dead but the world doesn't know it. It has been a slow death and the final stages will be very painful for the US and for the rest of the world....The dollar is likely to fall before the Euro as they both compete in the race to the bottom. Just think about it, here we have the two richest regions in the World, North America and Europe, both on the verge of collapse, economically, financially, politically and morally. How can anyone ever believe that all the bubble assets can survive under those circumstances....For investors who don't worry about risk, the current period is absolute heaven. Stocks, bonds, property and bitcoin just goes up and up and up. You just can't lose! Whatever investors touch today turns into gold. But it isn't real gold. The winnings today are fake gold in the form of inflated and heavily leveraged paper assets. Like all bubbles this can continue further. But whenever it turns, and we are not far from that point, the move in the opposite direction will be so fast that it will be impossible to get out....Most investors will laugh at this in disbelief. We will see who has the last laugh....To avoid total wealth destruction, buy insurance in the form of physical gold and silver while there is still time."

A Stock Market Panic Like 1987 Could Happen Again -Shiller/New York Times
"Oct. 19, 1987, was one of the worst days in stock market history. Thirty years later, it would be comforting to believe it couldn’t happen again....We are still at risk because fundamentally, that market crash was a mass stampede set off through viral contagion. That kind of panic can certainly happen again. I base this sobering conclusion on my own research. (I won a Nobel Memorial Prize in Economic Sciences in 2013, partly for my work on the market impact of social psychology.)....As I've said in a previous column, markets move when other investors believe they know what other investors are thinking. In short, my survey indicated that Oct. 19, 1987, was a climax of disturbing narratives. It became a day of fast reactions amid a mood of extreme crisis in which it seemed that no one knew what was going on and that you had to trust your own gut feelings....In response to the 1987 crash and the Brady Commission report, the New York Stock Exchange instituted Rule 80B, a 'circuit breaker' that, in its current amended form, shuts down trading for the day if the Standard & Poor’s 500-stock index falls 20 percent from the previous close....But 20 percent would still be a big drop. Many people believe that stock prices are already very high and if the right kinds of human interactions build in a crescendo, we could have another monumental one-day decline. One-day market drops are not the greatest danger, of course. The bear market that started during the financial crisis in 2007 was a far more consequential downturn, and it took months to wend its way toward a market bottom in March 2009."

Market pros think Black Monday can't happen again -CNBC
"Behavior in the market today has stoked comparisons to what happened on Black Monday. Rising valuations, a seemingly never-ending bull market run, a tightening Fed, rising bond yields - both eras certainly have similar components....In short, there's little fear on Wall Street now that a Black Monday-type event is coming to a market near you. 'We believe that the stock market stands on a much stronger fundamental and technical foundation today than it did in October 1987, with less euphoric sentiment, making another crash like 1987 appear unlikely,' LPL Financial said in a note....One of the principal causes of the crash was 'portfolio insurance,' which sought to protect investors by selling during market tumult. 'Stocks don't go up in a straight line. Market events don't repeat themselves, but they sometimes rhyme,' LPL's analysis said."

Are markets on the verge of another tumble? -Telegraph
"On October 19, US stocks fell more than 22pc - the biggest one-day crash ever recorded, with London's FTSE 100 plunging 11pc in a day now infamously known as Black Monday. With the worst storm to hit the UK since 1703 also battering through the country that week, it was a time few have forgotten....The exact reason for the dive has never been identified...though the finger has often been pointed at newly introduced computer trading, which is thought to have exacerbated selling and drove prices lower. Thirty years on, and market observers are scouring the landscape for red flags. Vanguard chairman Bill McNabb sounded a warning on Tuesday after US stocks closed at a new high, days after the FTSE 100 smashed another record, telling the BBC's Today program that he expects 'a decent-sized correction at some point'....'While I wouldn't predict a massive downturn I would say the risk of value bleeding over time is heightened, so people need to be more cautious.' Although there are controls in place that weren't there in 1987, many who look back on Black Monday point to the sense of blind panic that rippled through the markets. 'As long as human emotion has some place to play in setting prices there will be violent corrections in the future,' said IG Group's head of UK Ian Peacock."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,283 an ounce. Silver at $16.99 an ounce.

NEWS SUMMARY: Precious metal prices steadied Wednesday on a flat dollar and Fed uncertainty. U.S. stocks rallied after IBM reported better-than-expected quarterly results.

Gold: Higher Highs and Lower Lows -Rickards/Daily Reckoning
"Gold could be in a long-term trend right now that spells dramatically higher prices in the years ahead. To understand why, let's first look at the long decline in gold prices from 2011 to 2015. The best explanation I’ve heard came from legendary commodities investor Jim Rogers. He personally believes that gold will end up in the $10,000 per ounce range, which I have also predicted. But Rogers makes the point that no commodity ever goes from a secular bottom to top without a 50% retracement along the way. Gold bottomed at $255 per ounce in August 1999. From there, it turned decisively higher and rose 650% until it peaked near $1,900 in September 2011....A 50% retracement of that rally put gold at $1,077 when the retracement finished. That’s almost exactly where gold ended up on Nov. 27, 2015 ($1,058 per ounce). This means the 50% retracement is behind us and gold is set for new all-time highs in the years ahead....I look for a powerful surge toward $1,400 by the end of this year based on Fed ease, geopolitical tensions and a weaker dollar. The gold rally that began on Dec. 15, 2016, looks like one that will finally break the bear pattern of lower highs and lower lows and turn it into the bullish pattern of higher highs and higher lows."

Three reasons the next crash may be worse than 1987’s -Gold/Marketwatch
"Thirty years ago Thursday, the U.S. stock market had its worst day ever. On Oct. 19, 1987, the Dow Jones Industrial Average lost 508 points, 22.6% of its value.... 'A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History,' by Diana B. Henriques, makes a strong case that 1987 wasn’t just a temporary crash but a painful bear market that lasted three months and included a nearly 1,000-point, or 35% loss, in the Dow. It was also a near-systemic crisis that was a precursor for much that came later....In an interview, Henriques told me not much has fundamentally changed since the 1987 crash, and some things have gotten worse. So here are three reasons I think the next crash, whenever it comes, could be worse than 1987's. 1. The market is much more fragmented now....Coordinating everybody now would be like herding cats....2. Regulators are still living in their own worlds....The SEC and CFTC are like tugboats passing in the fog....3. Computerized trading is more pervasive than ever....J.P. Morgan estimates, passive and quantitative investing accounts for 60% of stock trading, double its share a decade ago....Henriques speculates that this time around, the 24/7 news cycle and social media could spread panic further and faster than in 1987. 'I think we're on a knife’s edge,' she told me."

Treasury secretary: Pass a tax bill or markets will tank -Politico
"Steven Mnuchin has a stern warning for Congress: You could blow up the stock market if you fail to cut taxes. The Treasury secretary, in the first episode of the 'POLITICO Money' podcast, said Wall Street's big runup following the election of President Donald Trump is largely based on expectations of Congress passing a major tax-relief bill, and failure to do so could have significant consequences. The Dow is now up about 25 percent since the election, a fact Trump tweets about frequently. 'There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,' Mnuchin said in the interview. 'To the extent we get the tax deal done, the stock market will go up higher. But there's no question in my mind that if we don't get it done you're going to see a reversal of a significant amount of these gains.' If that sounds like a threat to Republicans - and perhaps some Democrats - to pass a tax bill, that's because it is. In fact, some analysts on Wall Street say that if a tax overhaul falters, a big correction on Wall Street could help push the legislative process back on track....Mnuchin also gave an 'absolute guarantee' that Trump would sign a major tax bill by the end of the year. The comments came before the president suggested on Monday that he might not, in fact, be able to sign a tax bill by year’s end."

North Korean Cyberpower: No Laughing Matter -New York Times
"When North Korean hackers tried to steal $1 billion from the New York Federal Reserve last year, only a spelling error stopped them. They were digitally looting an account of the Bangladesh Central Bank, when bankers grew suspicious about a withdrawal request that had misspelled 'foundation' as 'fandation.' Even so, Kim Jong-un's minions still got away with $81 million in that heist. Then only sheer luck enabled a 22-year-old British hacker to defuse the biggest North Korean cyberattack to date, a ransomware attack last May that failed to generate much cash but brought down hundreds of thousands of computers across dozens of countries - and briefly crippled Britain's National Health Service....'Cyber is a tailor-made instrument of power for them,' said Chris Inglis, a former deputy director of the National Security Agency, who now teaches about security at the United States Naval Academy....The big question is whether Mr. Kim, fearful that his nuclear program is becoming too large and obvious a target, is focusing instead on how to shut down the United States without ever lighting off a missile."

A new Swiss America Research Report reveals how and why your money is more vulnerable since the SEC cyberattack than ever before. Read this urgent Free Report: AMERICA'S CYBER-HIT LIST

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,287 an ounce. Silver at $17.06 an ounce.

NEWS SUMMARY: Precious metal prices eased back Tuesday amid hawkish Fed chair replacement speculation. U.S. stocks traded mixed as the DJIA crested 23,000 level for the first time ever.

Goldman Sachs Says Gold Is Better Than Bitcoin -Bloomberg
"Gold wins out over cryptocurrencies when assessed on the majority of the key characteristics of money, according to Goldman Sachs Group Inc., which adds that fear and wealth are the core drivers of bullion. 'Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,' analysts including Jeffrey Currie and Michael Hinds wrote. 'They are neither a historic accident or a relic.' Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies, they said. Investors boost the amount of gold in their portfolio as uncertainty increases, making fear the key medium to short-run driver....There's a limited supply of gold and other precious metals in the Earth's crust, whereas in the case of cryptocurrencies, it's easy to create alternatives, meaning there's effectively no control over supply at a macroeconomic level and no intrinsic value due to rarity. Gold is better at holding its purchasing power, and has much lower daily volatility. Bitcoin/dollar volatility has averaged almost seven times that of gold in 2017, the bank said."

This is how bull markets end, Bank of America strategist says -CNBC
"As investors get more confident about the latest leg of the stock market rally, one Wall Street strategist is growing more concerned. 'This is kind of how bull markets end,' Savita Subramanian, equity and quant strategist at Bank of America Merrill Lynch, told CNBC during an interview Tuesday. 'What we're in right now is this sort of euphoria around stocks that's been missing for this entire bull market.' Indeed, the run that began in March 2009 often has been declared 'the most hated bull market in history,' due largely to the lack of investor participation....'There has been no reward for earnings beats, which is a little bit weird,' Subramanian said. 'The bar's getting higher. Investors are expecting good news. When they got good news, it's already in the stocks.'....Bulls in the latest Investors Intelligence survey are up to 60.4 percent, which editor John Gray considers the 'danger zone.' Moreover, he said current patterns are starting to look a lot like 1987 as the market nears the 30th anniversary of Black Monday."

Taylor Impresses Trump for Fed Chairman -Bloomberg
"Stanford University economist John Taylor, a candidate for Federal Reserve chairman, made a favorable impression on President Donald Trump after an hour-long interview at the White House last week, several people familiar with the matter said. Former Fed board governor Kevin Warsh has meanwhile seen his star fade within the White House, three of the people said....The president has always been prone to hiring people with whom he has a good relationship. However, he told the Wall Street Journal in July that he would 'like to see rates stay low,' and Taylor is the namesake of a well-known monetary policy rule that would generally advocate higher interest rates....The Bloomberg dollar index reached its strongest point of the day, gaining as much as 0.33 percent on the report of Trump's interview with Taylor, while 10-year Treasury note prices touched the day’s weakest levels....Yellen’s first term expires in February. Trump has complimented her work and could reappoint her, but many of his aides are recommending against it."

Nobel Board Foolishly Awards Micromanaging Fake ‘Libertarian’ Its Economics Prize -The Federalist
"Last Monday, the Swedish socialists who decide who gets the Nobel Prize in economics chose another proponent of 'behavioral economics,' the University of Chicago’s Richard Thaler. It was a poor choice. Thaler might be very smart and even clever, but his contribution to economics was largely, as he put it himself, to 'make a career stealing ideas from psychologists.' Thaler and other 'behavioral economists' observe that many people do not seem to act purely rationally all the time....Sometimes we need to be 'nudged' - Thaler's most influential book, coauthored with Obama official Cass Sunstein, was titled 'Nudge'....Of course, some of this is true. Yet the core problems with behavioral economics are two-fold. First, Thaler and others stole their ideas from the wrong psychologists. Like many other academic disciplines, psychology was invaded by liberals and socialists in the 1960s and today is dominated by people who self-identify as liberals or far-left....The second problem with behavioral economics arises when its proponents claim their findings undermine or contradict the 'assumption of rationality' that 'provides the foundations for economic theories, predictions, and recommendations'....In 'Nudge,' Thaler and Sunstein called for something they labeled 'libertarian paternalism.'....Here's what they overlooked: You can't choose objectives for people and leave them free to choose among paths to reach them while considering yourself a 'libertarian.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,303 an ounce. Silver at $17.36 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs Monday on a flat dollar. U.S. stocks hit fresh highs amid upbeat earnings expectations.

Ben Bernanke Is Worried, Maybe We Should Be -Samuelson/Real Clear Markets
"Ben Bernanke is worried - and perhaps we should be, too. As chairman of the Federal Reserve from 2006 to 2014, it was Bernanke, along with others, who prevented the worst recession since World War II from becoming the Great Depression 2.0. Now he fears that, should another sharp recession occur, the Fed won’t be able to contain it. Bernanke - while Fed chairman - adopted what’s called 'unconventional monetary policy.' First, the Fed flooded the economy with money by buying an estimated $3.7 trillion worth of mortgage bonds and U.S. Treasury securities...And second, the Fed gave 'forward guidance' that short-term interest rates would stay low for a long period. In a paper presented recently at the Peterson Institute for International Economics, a Washington think tank, Bernanke judged that these policies - to some extent - had helped end the Great Recession and sustain the recovery. What troubles him now is the possibility that the same policies won’t work in a severe recession or financial crisis in the future....In his paper, Bernanke makes a proposal to allow the Fed to escape this predicament. His plan is complicated and, in practice, would involve the Fed throwing more money at a faltering economy in the hope that it would recover and be stabilized....We may be reaching the limits of the Fed’s power over the economy."

Scientists discover neutron star collisions produce gold -CNBC
"Scientists have detected the collision of two neutron stars for the first time in history, yielding new insights into physics, the structure of the universe, and the origin of elements such as gold and platinum. Researchers from several institutions detected the evidence 130 million light years away on Aug. 17. They announced the discovery Monday....This is the first time researchers have detected light along with gravitational waves. This allowed them to conclude that light and gravitational waves travel at the same speed, something Albert Einstein predicted about a century ago....'This is like a cosmic-scale atom smasher of energies far beyond what humans will ever be capable of building,' said Andy Howell, a staff scientist at Las Cumbres Observatory/UC Santa Barbara. The discovery also showed that the collisions of neutron stars produce neutron-rich heavy elements, something astronomers had suspected. 'This result provides definitive evidence for the first time that elements such as platinum, gold, and uranium are actually produced in these collisions,' Reitze said. Holding up his grandfather's pocket watch, Reitze said the gold in the watch was 'very likely' produced by the collision of two neutron stars."

Obama's Nobel Prize for "Mind Control" -Pontification Blog
"Former President Barack Obama has just 'won' a second Nobel Prize, this time for the chief 'mind control' researcher whose ideas helped him get elected and reelected. Yet most people do not even know that Mr. Obama had a kind of 'Office of Thought Control' and team of mind-manipulation experts in his White House...Journalists said nothing of this when they reported in October that Richard Thaler of the University of Chicago has been awarded the Nobel Prize for his research creating the field of 'behavioral economics.'....Thaler found that most people make decisions irrationally, but predictably, and that such decisions can be 'nudged' in certain directions by outside influences....Thaler explains how to use such influences in 'Nudge,' a book he co-authored with legal scholar Cass Sunstein. Craig R. Smith and I lay out these disturbing techniques and document how the Obama Administration used them in our book The Great Withdrawal....In 2008, Sunstein and Thaler assembled a team of behavioral scientists to help elect Obama. Sunstein headed Obama’s Office of Information and Regulatory Affairs from 2009 until August 2012...Sunstein has sought to make taxpaying a 'celebration,' writing that 'You cannot be for rights and against government….There is no liberty without dependency.' This is the kind of mind-twisting Double-Think found in Big Brother’s propaganda in George Orwell’s novel Nineteen Eighty-Four." Full story

Will Dow 23,000 inspire retreat or rally on Wall St? -USA Today
"If Wall Street bulls are right, traders on the floor of the New York Stock Exchange will soon be wearing 'Dow 23,000' rally caps. Dow 23,000 - which is just 128 points away - would be more than just another impressive number. It would be a fresh reminder that U.S. stocks are at yet another all-time high. And that approaching milestone poses an age-old dilemma for investors: Is getting into the market at lofty levels a good or bad idea?....As of Friday, the Dow has appreciated 15.7% in 2017 to 22,872 - blowing past 20,000, 21,000 and 22,000 along the way....Some Wall Street pros say hold off on buying a souvenir 'Dow 23,000' cap because it likely will be out of style soon, and replaced by 'Dow 24,000' or 'Dow 25,000' hats....But not everyone is calling for the Dow to run away to the upside. 'It would be hard for me to get wildly bullish at Dow 23K,' says Bill Hornbarger, chief investment officer at St. Louis-based money-management firm Moneta Group....'This is when investors have to be on guard,' Hornbarger says, noting that stocks tend to produce lower returns when valuations are at lofty starting levels as they are now. For investors with a cautious streak, Chris Rupkey, chief financial economist at MUFG in New York, offers this advice: 'You might want to take some chips off the table. The Dow is up more than 15%, so you might want to consider locking that gain in.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,304 an ounce. Silver at $17.41 an ounce.

NEWS SUMMARY: Precious metal prices rose 2% this week, with gold prices cresting $1,300 an ounce Friday on dollar weakness. U.S. stocks cheered upbeat economic data as investors bet on a strong earnings season.

Five things to do when every investment is too expensive -Marketwatch
"This week’s cover story in The Economist, 'The bull market in everything,' summed up the state of global markets pretty well. OK, so after eight and a half years of a bull market, what do you do now? Here are five ideas: 1. Stay in stocks, but keep a sharp eye on your allocation. 2. Move away from overheated sectors like the FAANG stocks toward unloved areas. 3. Don’t bet on bonds. Unless there’s a recession or a huge international crisis. 4. Cash is a growth opportunity...start taking profits in stocks and begin building up a cash position. 5. Own some gold. For years, I’ve been negative on gold...but gold has made some impressive gains...With cataclysmic risk even remotely on the horizon, buying insurance by putting 5% of your money in gold is the least you can do."

Biggest Crisis of a Lifetime Coming... -Green/AMTV
What if you had the power to predict the next economic crisis? What if you knew when the next Great Recession, Great Depression, or Black Swan event was going to happen? Would that change the way you protect your savings? In this new AMTV video produced by Christopher Green, he explores the recurring patterns in the economy, society, and nature to foresee what soon could be coming. Ominously, many economists are giving the same dire warning - that within the next 1-2 years a convergence of negative patterns will hit us all at once. Chris offers viewers a free copy of Swiss America's Crisis Timeline Special Report.

Central bankers face a crisis of confidence as models fail -CNBC/Financial Times
"Central bankers usurped the titans of Wall Street as the masters of the universe almost a decade ago. They rescued the global economy from the financial crisis, flooding the world with cheap money....Financial markets and populations hang on their words. But never have they been so vulnerable. As they gather in Washington for the annual meetings of the International Monetary Fund, there is a crisis of confidence in central banking. Their economic models are failing and there are doubts whether they understand the effects of interest rates and other monetary policies on the economy. In short, the new masters of the universe might not understand what makes a modern economy tick and their well-intentioned actions could prove harmful....With central bankers credited for keeping the economic show on the road over the past decade, it will come as a shock to many to hear how little confidence they have in their models, their policies and their tools. One question posed by Richard Barwell, a senior economist at BNP Paribas, is whether they should let on about how little they know. 'It's rather like Daddy is driving the car down a hill, turning round to the family and saying, 'I'm not sure the brakes work, but trust me anyway',' he says."

Nothing Makes Sense -Bonner/BonnerAndPartners
"The Dow, the S&P 500, and the Nasdaq are all making record highs. And global stocks have never been more valuable. Meanwhile, investor complacency, as measured by Wall Street’s 'fear gauge,' the VIX, is at record lows. Everyone knows stock prices must come down. But no one knows when...or even why....Nothing is solid. Nothing is true. Nothing really makes sense. Companies’ profits are fake. They goose them with accounting tricks. The government’s statistics are fake, too - unemployment, inflation, GDP. If they were done properly, they would show that at least half the country has been in a depression for the entire 21st century. Stock prices are fake - driven up by ultra-low interest rates...QE... and share buybacks. And interest rates themselves are fake - the Fed has pushed them down to a 5,000-year low. They no longer reflect how much capital (savings) is available relative to the demand for loans... and therefore how much credit should really cost. And at the bottom of it, the money itself is fake."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,296 an ounce. Silver at $17.26 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Thursday despite a firmer dollar. U.S. stocks traded mixed as investors digested earnings reports.

Four Major Catalysts for Gold -Rickards/Daily Reckoning
"The Fed, North Korea, China and gold shortages could all send gold soaring. The Federal Reserve would like to continue 'normalizing' interest rates. But the most recent economic data simply does not justify it....Once the market wakes up to the real state of play, probably in late November or early December, the current trends will suddenly reverse. You’ll see the dollar down and gold, euros and bond prices up. On that score, one of the largest and most conservative wealth managers in the world, Pictet Group, based in Geneva, Switzerland, offers a very constructive view on gold. Pictet’s strategist, Luc Luyet, says that the Fed will be on hold for the rest of 2017 and most of 2018 because of U.S. disinflation and the failure of President Trump to deliver on his growth agenda. I agree. This all makes the next few weeks an excellent entry point for gold...You have a chance to take advantage of weakness and position ahead of the rally to come when reality sets in. Another tailwind for gold is the continuing nuclear standoff with North Korea..."

How To Make The Dollar - Once Again - The Source Of Great American Prosperity -Forbes/Forbes
"HERE'S A BOOK for the ages. With Gold: The Final Standard - and his two previous volumes- Nathan Lewis has established himself as one of history's most formidable and correct-thinking economic writers, joining the ranks of Friedrich von Hayek, Ludwig von Mises, Henry Hazlitt and a handful of others....The key to unlocking a great boom (along with a low-tax regime) is stable currencies. Without sound money we will be hurt by more dangerous and unnecessary crises a la 2008-2009 and subsequent limp recoveries....Unstable currencies are like viruses in your computer - they corrupt those 'bits' of information. Destructive bubbles result, such as the housing frenzy preceding the 2008-2009 crisis...The misinformation conveyed by prices resulted in hundreds of billions of dollars being misinvested, particularly in the building of houses....Just as we use a scale to measure something's weight, we use money to measure the value of products and services. If the measuring rod itself becomes unstable, the smooth functioning of an economy is disrupted, just as our lives would be if the number of minutes in an hour constantly fluctuated. What's the best way to achieve a stable currency? By linking the currency to gold...gold has maintained its intrinsic monetary value better than anything else for 5,000 years....Policymakers here and everywhere still adhere to the fallacy that central banks can give us lasting prosperity. A read of this book would cure them of that fakery forever."

FDIC hit with more than 50 security breaches over two years -ZDNet
"The Federal Deposit Insurance Corp. (FDIC) is facing another wave of cybersecurity woes this week following a new report from the Office of Inspector General. The report says the FDIC may have suffered more than 50 security breaches in 2015 and 2016 that compromised personal information on hundreds of thousands of US citizens. What's equally concerning is the FDIC's seemingly lackluster response to some 54 suspected or confirmed breaches over those two years. The report concludes that the FDIC took an average of 288 days - or more than 9 months - to notify individuals potentially affected by the hacks....The delayed response is problematic, according to the report, because 'the longer it takes to complete breach investigation activities and notify potentially affected individuals, the greater the risk of harm that may come to individuals because they cannot quickly take proactive actions to protect themselves.'....The FDIC has been under fire for more than a year regarding a bevy of security incidents that were not reported to the proper congressional committees until months after they were discovered."

Goldman's sees market top, but says investors shouldn't worry -CNBC
"Goldman Sachs has sought to reassure investors after seeing warning signals of a market peak. Goldman's September strategy paper said the indicator currently points to a 'high risk' of a bear market, but chief global equity strategist Peter Oppenheimer said Thursday that long-investors should be reassured....Oppenheimer did, however, concede that the era of easy money has pushed investors into riskier assets and therefore any correction could be sharp. 'In a sense, what we have seen over the last eight years is an environment of disinflation in the real economy but significant inflation in financial assets,' he said. 'Much of that is reflective of near-zero rates and QE (quantitative easing) and it has pushed investors up the risk curve, paying a lot more for assets.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,295 an ounce. Silver at $17.24 an ounce.

NEWS SUMMARY: Precious metal prices consolidated recent gains as investors attempt to decipher Fed minutes. U.S. stocks inched higher in hopes the Fed will offer clues about extending cheap credit and postponing rate hikes.

Is Gold Really a Good Hedge? -Bloomberg
"Gold bugs point to a myriad of reasons to own their favorite metal, from fiat currency debasement to gold’s history as a monetary unit...I’m a macro strategist who writes Bloomberg’s Macro Man column, and I found myself wondering: Is gold really an effective hedge in periods of risk? I decided to take a Mythbusters-style approach to find the answer. My first step was to search for evidence of a statistical relationship between risk aversion and the gold price....The answer, somewhat to my surprise, appears to be yes. I used monthly data from 1990 to 2015 and modeled the level of the gold price....But what if we drill down into specific episodes? I identified 10 notable episodes of risk aversion over the past three decades...Again, on this metric, gold looks pretty good as a risk-aversion hedge...rising almost 7 percent per episode, with gains in 8 of the 10 periods....Given the solid performance of a portfolio including gold and the chance that the comfort of owning some might prevent investors from panicking at the height of a crisis, I have to conclude that the notion of gold as a hedge against serious risk aversion is true."

Janet Yellen has finally come to her senses — somewhat -Crudele/New York Post
"Fed Chair Janet Yellen has conceded that federal data can act like a fun house mirror in the way they fail to depict the actual state of the economy. Yellen, speaking before the National Association of Business Economics on Sept. 26, said, 'My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective or even the fundamental forces driving inflation.'.... It means that the Fed has been screwing up in thinking that the US economy was, as Yellen has often said, near full employment. But here’s the kicker - Yellen has been overestimating the strength of the job market and underestimating the amount of inflation in the economy....People who live in the real world know not only how weak the job market still is but also that annual inflation is higher than the less-than-2- percent the government asserts....We are probably going to find that the US is having a modern version of stagflation - that is, economic stagnation with inflation. That’s the worst of both worlds. Let’s hope that when the next Fed boss is chosen, he or she will dig deep into the data, wipe the slate clean of what the last three Fed chiefs have done and be honest with the public."

Nobel Laureate Richard Thaler: "We Seem To Be Living In The Riskiest Market Of Our Lives" -Zero Hedge
"Robert Shiller isn’t the only Nobel Laureate who’s worried the US stock market is sleepwalking toward disaster. In an interview with Bloomberg’s Jeanna Smialek, Thaler, who was awarded the Nobel Memorial Prize in Economic Sciences on Monday for his pioneering work in establishing that humans are 'predictably irrational', said that the stock market’s complacency in the face of the North Korean nuclear threat and political uncertainty at home is disconcerting. 'We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,' Thaler said, speaking by phone on Bloomberg TV. 'I admit to not understanding it.'"

Dow Jones error spreads fake news of Google acquiring Apple -9to5mac
"The Dow Jones newswires had a 'technical error' which caused the portal to report several spurious stories including several headlines claiming Google was acquiring Apple for $9 billion, and that the deal was pre-arranged with Steve Jobs in his will. Obviously, every element of the story is made up, but it’s pretty funny to see the temporal blip on Apple’s stock price, which briefly spiked up to $158. The fake stories have now been removed by DJ. Whilst the contents of the story make it obvious that the news is completely fake, the existence of real-time high-speed trading means the jump to $158 was almost certainly caused by automatic computer algorithms rather than real people....Dow Jones provided the following statement on the matter. 'Please disregard the headlines that ran on Dow Jones Newswires between 9:34 a.m. ET and 9:36 a.m. ET. Due to a technical error, the headlines were published. All of those headlines are being removed from the wires. We apologize for the error.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,293 an ounce. Silver at $17.20 an ounce.

NEWS SUMMARY: Precious metal prices rose for a third day Tuesday on safe haven buying and a sharply weaker dollar. U.S. stocks traded mixed despite retail giant Wal-Mart announcing a $20 billion buyback.

Gold climbs closer to $1,300 -Marketwatch
"Gold prices climbed closer to $1,300 an ounce on Tuesday, on pace to record a third gain in a row as the U.S. dollar continued to weaken. 'The weaker dollar has been the main reason why buck-denominated gold has rallied, with the greenback still reeling from Friday’s release of weaker U.S. jobs report,' said Fawad Razaqzada, technical analyst at Forex.com. 'Gold has benefited from the U.S. dollar’s fall, along with geopolitical tensions. For the remainder of this year, we believe that gold is likely to mirror the dollar and follow fear,' wrote Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, in a Monday research note. Tensions between the U.S. and North Korea - which investors fear could flare up into nuclear war - have been among the main drivers for buying in haven gold, which tends to benefit during periods of global uncertainty."

Crypto-Fool’s Gold? -Rogoff/Project-Syndicate
"The price of Bitcoin is up 600% over the past 12 months, and 1,600% in the past 24 months. But the long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates - and there is no reason to expect virtual currency to avoid a similar fate. Is the cryptocurrency Bitcoin the biggest bubble in the world today, or a great investment bet on the cutting edge of new-age financial technology? My best guess is that in the long run, the technology will thrive, but that the price of Bitcoin will collapse....What happens from here will depend a lot on how governments react. Will they tolerate anonymous payment systems that facilitate tax evasion and crime? Will they create digital currencies of their own? Another key question is how successfully Bitcoin’s numerous 'alt-coin' competitors can penetrate the market....The United States is taking tentative steps to follow Japan in regulating fintech, though the endgame is far from clear....But it is folly to think that Bitcoin will ever be allowed to supplant central-bank-issued money....Were Bitcoin stripped of its near-anonymity, it would be hard to justify its current price....Finally, it is hard to see what would stop central banks from creating their own digital currencies and using regulation to tilt the playing field until they win."

The 5 Biggest Bubbles In Markets Today -Mauldin Economics
"We never used to get a giant speculative bubble every 7–8 years. But that has been the case since the new millennia. In 2000, we had the dot-com bubble. In 2007, we had the housing bubble. In 2017, we have the everything bubble. Let’s look at some of them. 1) Real Estate: You can spot real estate bubbles all around the world now. Canada, Australia, Sweden, Hong Kong, China—and California—to name a few. 2) Cryptocurrencies: You have probably heard about the madness in cryptocurrencies, like Bitcoin, Ethereum, and ripple. Ethereum is up about 3,600% this year. 3) Stocks: It’s also hard to get excited about companies that are generating cash flows. I hate to pick on FAANG stocks - at least they more or less make money - but these five stocks account for 30% of the market gains. 4) Credit Bubble: Likewise, corporate bonds - particularly high yield, and especially European high yield - are a bubble. 5) Indexing: When equity index fund flows reverse - and they will - it will end very badly....We have all the classic warning signs of a big market top...And yet people are mostly ignoring them."

The Many Virtues of Simplicity -AlephBlog
"There are at least eight reasons why taking a simple approach to investing is a wise thing to do. 1) Understandable: Understand how bad things can get before you start an investment program. Make changes if needed when things are calm, not in the midst of terror. 2) Explainable: You should be able to explain your investment strategy at a basic level, enough that you can convey it to a friend of equal intelligence. 3) Reduced 'Too smart for your own good risk': If you have simple investments, you will tend not to get unexpected surprises. 4) Clearer risk management: With simple asset allocations, you don’t tend to get negative surprises...Cash and commodities can help as well. 5) Less trading: Simplicity in asset allocation means you can sleep at night. 6) Taxes are likely easier: If you don’t trade a lot, taxes from your accounts are relatively easy. 7) Not Trendy: You won’t get caught in fads that eventually blow up if you keep things simple. 8) Cheap: Simple investment strategies tend to have lower management fees because they don’t trade as much."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,285 an ounce. Silver at $16.97 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying and a weaker dollar. U.S. stocks drifted lower as Wall Street pauses before earnings season begins this week.

Gold prices rise on renewed U.S.-North Korea anxiety -Marketwatch
"Gold prices kicked off the new week with gains on Monday, as the perceived haven asset appeared to get a boost from worries over a flare-up in tensions between the U.S. and North Korea. In a speech to North Korea’s Central Committee of the ruling Workers’ Party, the country’s leader Kim Jong Un referred to his nuclear weapons program as a 'treasured sword' protecting the country’s independence, state media reported. The comments were reportedly made hours before Trump’s North-Korea related remarks on social media. 'If the U.S. goes to war with North Korea, it will be alone, because no other country is backing the move yet. This would trigger a risk-off trade,' said Naeem Aslam, chief market analyst at Think Markets. 'This has pushed the price of gold well above from its recent low of $1,260.' Some dollar sluggishness aided gold futures as well."

The Economy Is Humming. Bankers Are Cheering. What Could Go Wrong? -New York Times
"As central bankers, finance ministers and money managers descend on Washington this week for the fall meetings of the International Monetary Fund, they will confront an unusual reality: global markets and economies rising in unison. Never mind political turmoil, populist uprisings and threats of nuclear war....'The meetings will celebrate this period of synchronized economic growth and calm financial markets,' said Mohamed A. El-Erian, chief economic adviser to the fund giant Allianz....'We are in a boom today, but we should not forget that the financial system is still relatively unstable,' said Jim Reid, a credit strategist at Deutsche Bank....His overriding worry, though, is that investors and policy makers aren’t prepared for what will happen when global central banks put a halt to their easy-money policies. Since the 2008 crisis, Mr. Reid noted, central banks have accumulated more than $14 trillion in assets...What happens when the central banks all start to sell? 'This is unprecedented,' Mr. Reid said. 'And no one knows what the outcome will be.'"

Cash is already pretty much dead in China -CNBC
"Mainland Chinese stores and services are increasingly centered around mobile pay apps like WeChat Pay and Alipay. Chinese mobile payment volume more than doubled to $5 trillion in 2016, according to Analysys data cited by Hillhouse Capital. Mobile pay is growing so rapidly in mainland China that as a foreigner, I sometimes found it difficult to complete basic transactions without it. The dominance of mobile transactions lends itself to greater data collection by the Chinese government....But unless privacy issues have immediate negative consequences, convenience may trump all. A smartphone is increasingly the only thing someone in China needs to carry when going out."

Now is the time to declare financial independence from the growing international Secret War on Cash, which continues to escalate daily in the U.S. and abroad. Now is the time to take action and protect your future!

THE DEMOCRAT TAX PLAN: Dishonest Secret Taxes on You -Pontification Blog
"According to the media, the Republican tax plan would cut taxes for the wealthy and business. But, oddly, the media have not honestly told you about the Democrat tax plan, which supposedly is to increase taxes on the rich and companies until they are paying their 'fair share,' a term that neither Democrats nor the media ever define....The left-liberal answer is always the same - no top limit on taxation of any kind. The left does not want capitalists to keep anything. The government should take, and control, it all….all earnings, all property, all 'wealth.'....The Democrat tax plan turns businesses and business owners into the government’s unpaid tax collectors, squeezing money out of you and your family. Democrats then condemn capitalists for being 'greedy' by charging you higher prices - even though the price increases are merely passed-on taxes that enrich the government, not private businesses. The proposed GOP tax package has threatened to end this cynical con game by lowering, not raising, business taxes. If he succeeds, the economy will prosper, and you will pay less for the goods and services you buy." Full story

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,274 an ounce. Silver at $16.79 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks fell after the latest employment report which showed a loss of 33,000 jobs last month disappointing investors.

Low Volatility Trap Is Inflating Market Bubbles -Bloomberg
"Investors face a conundrum: The world is experiencing a record synchronous growth phase, but an increasing number of assets are becoming overvalued just as fundamental risks lurk in the background. Should investors continue to dance to the tune of central bank stimulus and low volatility, or prepare to exit? What appears to be a Goldilocks economy could in actuality conceal a low-volatility trap, a situation where excessive monetary stimulus keeps asset prices rising and volatility low across markets even though real-economy risks are rising....A number of markets show not only elevated valuations, but also irrational behavior on the part of investors, including a suspension of traditional valuation models, an increase in trading volumes or 'flipping' in the hopes of quick gains, and financial engineering. Potential bubbles can be found in emerging-market debt, technology stocks, U.S. high yield bonds, some sovereign debt, cryptocurrencies and properties....Navigating this environment is no easy challenge. First, investors should avoid the most overvalued assets, where irrational behavior is evident. Second, they should focus on what’s unloved and still relatively inexpensive."

10 Factors to Propel Gold Tenfold -von Greyerz/Gold Switzerland
"Markets are expressing no fear and seem very comfortable at or near all-time tops....So with rising stocks, rising interest rates and a falling dollar how will gold do? There are a number of factors that will fuel gold’s rise to levels that very few can imagine today. 10 reasons why gold will surge: 1) Failure of the financial system, with massive money printing. 2) Gold will follow increasing inflation, leading to hyperinflation. 3) Real interest rates will be negative which favors gold. 4) The death of the Petrodollar and the dollar. 5) China’s accumulation of gold and gold for oil payment system. 6) CB’s have leased or covertly sold a major part of their gold. 7) Government and bullion bank manipulation of gold will fail. 8) The paper gold market will collapse. 9) Institutional gold buying will rise from 0.4% to 1% or 1 1/2%. 10) Falling gold production won't meet the coming upturn in demand. The above 10 factors are neither based on hope, nor fantasy. It is not a question if they will happen but only WHEN. In my view, these events will take place within the next 5 years and most probably faster than that. The compound effect of these 10 factors should push gold up at least 10-fold."

Russian Hackers Stole NSA Data on U.S. Cyber Defense -Wall Street Journal
"Hackers working for the Russian government stole details of how the U.S. penetrates foreign computer networks and defends against cyberattacks after a National Security Agency contractor removed the highly classified material and put it on his home computer, according to multiple people with knowledge of the matter. The hackers appear to have targeted the contractor after identifying the files through the contractor’s use of a popular antivirus software made by Russia-based Kaspersky Lab, these people said. The theft, which hasn’t been disclosed, is considered by experts to be one of the most significant security breaches in recent years. It offers a rare glimpse into how the intelligence community thinks Russian intelligence exploits a widely available commercial software product to spy on the U.S. The incident occurred in 2015 but wasn’t discovered until spring of last year."

6 Fresh Horrors From the Equifax -Wired
"The initial drama over Equifax's September data breach has mostly subsided, but the actual damage will play out for years. And indeed, there turns out to be plenty of spectacle and public controversy left. It was all on display at a Tuesday Congressional hearing, in which lawmakers questioned Equifax's former CEO Richard Smith in an attempt to make sense of how things went so wrong. And there's a lot more where that came from. Here are six important (and astonishing, disappointing, you name it) tidbits that came out of Tuesday's hearing. 1. The timeline of when executives knew what about the breach is both disheartening and suspect. 2. Equifax's patching process was wholly inadequate. 3. Equifax stored sensitive consumer information in plaintext rather than encrypt it. 4. The recently resigned Equifax CEO only mandated security reviews every quarter. 5. Equifax won't comment on, or rule out, nation-state attackers. 6. Equifax made its breach notification site a separate domain because its main site wasn't up to the task."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,273 an ounce. Silver at $16.63 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Thursday on mild profit-taking and a firmer dollar. U.S. stocks extended gains to record highs as upbeat economic data boosted confidence.

Asset prices are high across the board. Is it time to worry? -The Economist
"With ultra-loose monetary policy coming to an end, it is best to tread carefully. In his classic, 'The Intelligent Investor', first published in 1949, Benjamin Graham, a Wall Street sage, distilled what he called his secret of sound investment into three words: 'margin of safety'. The price paid for a stock or a bond should allow for human error, bad luck or, indeed, many things going wrong at once. In a troubled world of trade tiffs and nuclear braggadocio, such advice should be especially worth heeding. Yet rarely have so many asset classes - from stocks to bonds to property to bitcoins - exhibited such a sense of invulnerability....Rarely have creditors demanded so little insurance against default, even on the riskiest 'junk' bonds. And rarely have property prices around the world towered so high. American house prices have bounced back since the financial crisis and are above their long-term average relative to rents. Those in Britain are well above it. And in Canada and Australia, they are in the stratosphere. Add to this the craze for exotica, such as cryptocurrencies, and the world is in the throes of a bull market in everything....In the end, however, there may be no escape for investors from the low future returns and even losses that high asset prices imply. They and regulators should take a leaf out of 'The intelligent Investor', and make sure that they have a margin of safety."

SEC security failed to raise alarm over cyber attack -Financial Times
"Jay Clayton, chairman of the Securities and Exchange Commission, said he could not explain the apparent failure of security officials at the agency to inform then-chair Mary Jo White of a 2016 cyber attack on its Edgar online filing system. Appearing before the House Financial Services Committee, he also answered 'yes' when asked if it worried him that he only learnt of the incident in August, three months after taking office....Mr Clayton, a former securities lawyer for Sullivan & Cromwell in New York, also cast doubt on the scheduled debut next month of a massive new financial markets database called the Consolidated Audit Trail (CAT), the first sign that the Edgar hack is prompting a broader rethinking of commission plans....Likewise, SEC officials also are rethinking a rule adopted last year that requires mutual funds, exchange traded funds and other registered investment funds to provide monthly portfolio data, Mr Clayton said."

A new Swiss America Research Report reveals how and why your money is more vulnerable since the SEC cyberattack announcement than ever before. Read this urgent Free Report: AMERICA'S CYBER-HIT LIST

The Catalonia vote is a bigger threat to the EU project than Brexit -Evans-Pritchard/Gulf News
"While the EU watches in disbelief, a remote threat has mushroomed suddenly into an existential crisis. It is even more intractable than Brexit, and certainly more dangerous. The volcanic events unfolding by the day in Catalonia threaten the EU project within its core. They pose a direct threat to the integrity of monetary union....Markets have yet react to this showdown even though the Spanish finance minister, Luis de Guindos, has openly warned that Catalonia will suffer a 'brutal pauperization' if it presses ahead. He said the region would suffer a collapse in GDP of 25% to 30%, a doubling of unemployment, and a devaluation of up to 50% once it had been thrown out of the euro....The EU is in a bind. It faces a rule of law crisis in Hungary and Poland. It faces an East European revolt over migrant quotas. Its relations with Turkey have turned hostile. Now Spain is threatening to break up the euro unless the Catalans come to heel. Brexit is the least of their problems, and one that can be solved so easily with an ounce of common sense."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,276 an ounce. Silver at $16.62 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain hunting as talk of growing Fed dovishness knocked the dollar lower. U.S. stocks inched higher propelled by heath care stocks and tax reform hopes.

Homebuyers rush to riskier mortgages as home prices heat up -CNBC
"Home prices are heating up yet again, and that is sending more potential buyers looking for ways to afford a monthly mortgage payment. The number of adjustable-rate mortgage originations jumped just over 40 percent from the first quarter of this year to the second, according to analysis by Inside Mortgage Finance. While mortgage rates remain very low, historically speaking, they have been inching up. The vast majority of homebuyers favored the safety of the 30-year-fixed rate mortgage since the housing crash, but weakening affordability is now changing that."

Tax Reform: Implications for Gold -Merk/Merk Investments
"Last week, I got several calls asking me how U.S. tax reform will impact the price of gold....If you were to analyze the impact of any tax changes on any asset, you have two sets of dynamics to consider: those of the tax reform and those of the asset. What makes the comparison to gold unique is that gold is, if I may call it such, the purest of all assets because it doesn’t change. It is the world around it that changes. This chart shows the purchasing power of the U.S. dollar since December 1970, that is, the purchasing power of your hundred-dollar bill when sitting in your pocket. This illustrates why the price of gold has appreciated: at the end of 1970, an ounce of gold cost less than $40; currently, it costs over $1,200 an ounce. The gold never changed, but the purchasing power of the dollar has eroded....My own assessment is that we might get a few tweaks in the tax code, but odds are low that it will be a structural transformation causing real growth to substantially change....In other words: don’t expect much from the tax reform, consider holding gold as a diversifier in your portfolio and buckle up, the unwinding of the Fed’s balance sheet may cause some sparks."

What Few Expect: Inflation Will Surge, Destabilizing the Status Quo -Smith/OfTwoMinds
"Few seem to ponder what global shortages in key commodities might do to prices. If there is any economic truism that is accepted by virtually everyone, it's that inflation is low and will stay low into the foreseeable future....Let's look at healthcare, almost 20% of America's entire economy, as an example of low inflation forever. If being up over 200% in the 21st century is low inflation, I'd hate to see high inflation....The charts suggest real-world inflation is about to take off in the next 5 years, surprising everyone who expected more of the same....The leadership of the Status Quo has a simple choice: continue with more of the same, enriching the top .5% at the expense of everyone else, and face a political firestorm of upheaval, instability and insurrection, or start funneling the trillions of dollars, yen, yuan and euros that have been channeled into the hands of the few into the hands of the many....The funny thing about inflation is that it's not a problem that can be solved by creating trillions more dollars, yuan, yen and euros out of thin air. Issuing mountains of new currency actually increases inflation. Oops. Our only 'fix' is to issue trillions more in new currency and credit. If that doesn't fix the problem, the toolbox is empty."

Catalonia moves to declare independence from Spain on Monday -Reuters
"Catalonia will move on Monday to declare independence from Spain following Oct. 1's banned referendum as the European Union nation nears a rupture that threatens the foundations of its young democracy. Mireia Boya, a Catalan lawmaker from the pro-independence Popular Unity Candidacy (CUP) party, said on Twitter that a declaration of independence would follow a parliamentary session on Monday to evaluate the results of the vote to break away. 'We know that there may be disbarments, arrests ... But we are prepared, and in no case will it be stopped,' she said....The constitutional crisis in Spain, the euro zone's fourth-biggest economy, has shaken the common currency and hit Spanish stocks and bonds, sharply raising Madrid's borrowing costs. The cost of insuring against potential losses on Spanish bank debt and Spanish, Italian and Portuguese sovereign debt has also jumped, suggesting an impact on the wider euro zone."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,274 an ounce. Silver at $16.65 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Tuesday on bargain hunting and a weaker dollar. U.S. stocks managed to extend gains led by the financial and airline sectors.

Blissful Delusion -Hussman/Hussman Funds
"The present moment of blissful delusion is remarkable to witness. Take it in....The argument that U.S. taxes on corporate profits are somehow oppressive relative to other countries is an apples-to-oranges comparison. It wholly ignores that the U.S. levies no value-added tax on corporations at all, whereas the value-added tax is the principal revenue source for most other countries. The rhetoric on corporate taxes here is unfiltered effluvium. Actual taxes paid by U.S. companies, as a share of pre-tax profits, have never been lower, outside of the depths of the global financial crisis....Put simply, it seems misguided to imagine that 'tax reform' will somehow make the most obscene speculative bubble in U.S. history something other than the most obscene speculative bubble in U.S. history. Corporations are already enjoying strikingly light tax burdens from a historical perspective, and investors are already paying extreme valuation multiples on elevated earnings....Just like the two closest analogs, the 1929 high and the tech bubble, I expect that future investors will shake their heads in wonder at the stark raving madness of it all, and ask what Wall Street could possibly have been thinking."

Former Equifax CEO Faces Congressional "Public Shaming" -Zero Hedge
"Former Equifax CEO Richard Smith (now retired) can expect a serious grilling as he faces a congressional hearing into the utter farce surrounding the company's gross mishandling (and potential insider trading) of a cyber-security breach which has left almost 150 million people at risk. The hearings, which begin Tuesday and are expected to stretch for three days across the House and Senate, will be a fact-finding mission - one peppered with public reprimands and calls for sweeping improvements. Lawmakers said that they want to hold Equifax accountable for what they've described as glaring security lapses, a limp response to widespread outrage and possible insider trading. 'Certainly Equifax deserves public shaming,' said Rep. Jan Schakowsky (Ill.), the top Democrat on the Digital Commerce and Consumer Protection subcommittee, the House panel holding the first hearing....In prepared testimony published Monday former Equifax chief executive Richard Smith said he 'was ultimately responsible for what happened' on his watch and that the company let consumers down."

2017 is shaping up to be the "Year of the Cyber-Hack" - with the CIA, FBI, and NSA secrets hacked; "Wannacry" ransom hacks; and most recently, the Equifax and SEC breaches. What's next? A trillion-dollar cyber-heist from banks requiring everyone's account to be frozen? A Swiss America Research Report reveals how and why your money is more vulnerable today than ever before following the hacking of hundreds of the biggest U.S. firms in recent years. Read this urgent Free Report: AMERICA'S CYBER-HIT LIST

The Fed Stares Reality in the Face -Rickards/Daily Reckoning
"Janet Yellen maintains a persistent belief in the Phillips curve, which assumes an inverse relationship between unemployment and inflation....The only problem with the Phillips curve is that it has no empirical support. In a recent speech, Fed governor Lael Brainard, an ally of Yellen, said the Phillips curve today is 'flat.' That’s a polite way of saying there is no curve....Yellen dismisses the weak inflation data as 'transitory' and clings to her forward-looking Phillips curve fears as a reason to raise rates in December. So what did the one inflation metric the Fed focuses on, core PCE, come in at last Friday? The number was 1.3% - the lowest so far this year and below the minimal 1.4% that could possibly justify a December rate hike. There will be no December rate hike. Yellen only has a few months left as chair. She would like to show that she 'normalized' rates and the Fed’s balance sheet as much as she could before she leaves. On the other hand, she does not want her legacy to be that of the Fed chair who caused a recession by tightening into weakness, as happened in 1937."

Fedcoin: The U.S. Will Issue E-Currency That You Will Use -Bitcoin
"The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it. That’s the prediction of currency guru Doug Casey who has an uncanny record of being correct about economic and political trends. His latest book, Surviving Fedcoin: How to Protect Yourself (and Profit) from America’s Coming Currency Change, is a public bet that the U.S. government will issue its own bitcoin which Casey views as 'the last arrow' in its money quiver. How will the dynamic play out? He speculates, 'To start with, I suspect it’s going to be a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today…I think it’s a near certainty that they’re going to do something like this and soon.' Fedcoin refers to cryptocurrency and/or protocol established by a central bank. National banks could forge their own ‘bitcoin’ with comparative ease and bitcoin consultants have sketched possible scenarios on how."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,275 an ounce. Silver at $16.65 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday as EU worries boosted the buck. U.S. stocks rallied as Wall Street kicked off the fourth quarter on a high note.

Gold and cash reign as U.S. fund investors pare stocks: Lipper -Reuters
"U.S. fund investors gorged on gold and traded stocks for cash during the latest week, showing caution even as markets trend higher, Lipper data showed on Thursday. More than $16 billion took shelter in low-risk, U.S.-based money-market funds during the seven days through Sept. 27, the research service’s data showed. Precious metals commodities funds, which invest in gold and similar assets, took in $977 million, the most since July 2016....'People were taking risk off from the high-flying stocks,' said Tom Roseen, head of research services for Thomson Reuters’ Lipper unit. The U.S. Federal Reserve last week signaled it still expects one more rate hike by the end of the year despite a bout of low inflation that Fed Chair Janet Yellen called 'a mystery.' Aggressive rate rises could dent stock valuations."

The Holy Grail of Investing -Macro-Ops
"Here’s an excerpt from Ray Dalio’s recent book Principles recounting his biggest aha! moment in investing. 'From my earlier failures, I knew that no matter how confident I was in making anyone bet I could still be wrong - and that proper diversification was the key to reducing risks without reducing returns. If I could build properly diversified (they zigged and zagged in ways that balanced each other out), I could offer clients an overall portfolio return much more consistent and reliable than what they could get elsewhere.'....The correlation has to do with the fundamental drivers of each asset class (ie, what are the economics that drive investors to buy and sell each asset class). At its most basic, this idea can be boiled down to two inputs of growth and inflation which when combined give you four stages. Different asset classes will perform well in some stages and less well in others, as the graph to the right shows."

According to Ray Dalio's model, Gold must be an integral part of any balanced portfolio. Swiss America has advocated having between 10-25% of a portfolio diversified into gold as "wealth insurance" since the firm opened in 1982. Learn more about the wisdom of owning gold and silver today by reading our free 2017 Gold and Silver Research Reports.

TAXING OUR PATIENCE: Business Taxes Are Hidden Taxes On You -Pontification Blog
"President Trump has said that lowering the U.S. corporate tax rate to 20 percent, from today’s world high among advanced nations of 35 percent, is 'non-negotiable.' Politicians, however, have a scam. They impose heavy taxes on businesses, which pass the cost on to you as higher prices. You pay these taxes - while the politicians denounce the 'greed' of companies selling you expensive products, perhaps half the cost of which is really hidden taxes. 'Tax the rich,' they demand. Do they think we forgot that the income tax was sold as a tax 'only on the rich' that now robs us? Who is the greediest of all? Big Government. Are the politicians willing to reduce their 'invisible taxation' by lowering business taxes, as President Trump wants? Or the inflation 'tax' Craig R. Smith and I explain in The Inflation Deception? (When government prints trillions of dollars out of thin air, you are robbed of the full purchasing power of the paper dollars you earned and saved; it is no accident that parts of the Congressional plan do not adjust for inflation, thereby letting lawmakers tax you twice.) Will greedy politicians keep taxing our patience by deceiving us and looting our money?" Full story

Stressed retail industry plunging deeper into junk territory, S&P says -CNBC
"Eighteen percent of U.S. retail ratings are in the CCC range, as the industry continues to grapple with increased competition, changing shopping patterns and steep discounts to attract shoppers. A CCC rating indicates that an obligation is vulnerable to nonpayment, and that the ability to pay the obligation could hinge on whether business conditions are favorable. The bankruptcy filing of iconic Toys R Us last month, which took many insiders by surprise, further spooked an already rattled industry. BCBG, Radioshack and Payless Shoesource are among the many retailers that have also filed for bankruptcy this year....Among those with upcoming maturities are Guitar Center, which Moody's recently downgraded on risk of refinancing its maturities. Names on the S&P's CCC credit list include The Neiman Marcus Group and Bi-Lo Finance, the owner of supermarket chain Winn-Dixie Stores. Challenging debt conditions for retailers are also having ramifications on the equity market, as lenders have become skittish financing attempts to take retailers private."

RealMoneyBlog - Free daily/weekly email