September Blog Archives 2019

Gold last traded at $1,472 an ounce. Silver at $16.99 an ounce.

NEWS SUMMARY: Precious metal prices dipped Monday on short-term profit-taking and a firmer dollar. U.S. stocks traded higher as investors kept an eye on the latest trade developments between the U.S. and China.

Gold dips as U.S.-China trade woes support dollar -Reuters
"Gold prices fell on Monday as uncertainties around the U.S.-China trade war drove some investors to the safety of the dollar, pressuring assets priced in the U.S. currency. Autocatalyst metal palladium however rallied to another record high, with expectations for a deficit this year helping it to breach the $1,700 an ounce level for the first time....The dollar index held near its highest in a week. 'In the short term, investors are sliding towards a dollar-denominated safe-haven appeal,' said AxiTrader market strategist Stephen Innes. European and Asian stock markets, including China's, were little changed on Monday, shrugging off news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges....'Gold remains on the uptrend for the long term but in the short term, there is some confusion considering the contradicting headlines we are getting on the trade war,' Innes added."

It pays to prepare now for the end of the bull market -Marketwatch
"You might start reducing your exposure to stocks now, even if you think the bull market has room to run. That's because stock returns in the last months of a bull market tend to be mediocre at best. So don't try to hang on for that last penny of profit. I reached these conclusions after analyzing the bull market returns of the several hundred investment newsletter model portfolios tracked by my Hulbert Financial Digest. I focused on bull markets since 1990 in the calendar maintained by Ned Davis Research...On average, the newsletters' return in the last 12 months of those bull markets was less than half their annualized bull market gains up until then. And their average annualized return in the last three months of those bull markets was even lower still....Bull markets gradually fizzle out rather than end in a bang...That's why the benefits of hanging on to a bull market's bitter end are low, relative to the risks. We gain relatively little even if we're right, and can lose big if we fail to get out at the very top....Planning for a bear market is a matter of probabilities rather than an all-or-nothing proposition. While conceding that it's difficult to predict recessions, we can also acknowledge that recession risks are higher at some times than at others. Now would certainly appear to be one such time."

'Retail Apocalypse' Continues: Forever 21 Files For Bankruptcy -Zero Hedge
"Forever 21 filed for Chapter 11 protection in Delaware Sunday night, becoming the latest brick-and-mortar retailer to succumb to the Amazon-driven 'retail apocalypse', Bloomberg reports. In addition to the competition from e-commerce retailers, BBG said Forever 21 struggled with high rents and heavy competition from other fast-fashion rivals (like H&M and Zara)...Thanks to Chapter 11 protection, Forever 21 will continue operating as it works out a plan to pay back all of its creditors....Nearly half of the chain's 30,000 employees could lose their jobs. Even before the Forever 21 bankruptcy, the 11,000 announced and completed store closures in the US were already on track to exceed to the totals from the past few years....Goldman Sachs believes the shift to e-commerce will continue: 'We believe e-commerce growth will likely accelerate over the course of the second half as a record number of retail store closures, initiatives around fulfillment such as Amazon's $800 million investment in same-day delivery and Etsy’s move to free shipping...will drive more consumers to shift purchases online.'....Since the start of 2017, more than 20 US retailers - including former giants like Sears and Toys 'R' Us, as well as discount brands like Payless Shoes - have filed for bankruptcy, as the sector has struggled with massive debt loads and a migrating consumer base."

'Stop scaring the children' -Washington Times
"A friend of mine's third-grade daughter came home from school a few weeks ago with tears streaming down her cheeks. 'My teacher say we only have 10 years before the oceans rise, and we are under water,' she moaned. 'Are we all going to die?' That's a heavy burden to place on the shoulders of a 9-year-old. Gloomy stories of the coming apocolypse have become commonplace in schools, textbooks, churches, movies and even children's bedtime stories. The Wicked Witch of the West and Darth Vader have been replaced by the oil companies and auto company CEOs. This over-the-top campaign of doom is clearly affecting the psyche of the young. We saw an example just last week, when Greta Thunberg, the 16-year-old Swedish girl, gained international publicity by passionately telling a United Nations panel that 'we are at the beginning of a mass extinction with entire ecosystems collapsing' and 'we have only eight-and-a-half years left.'....Then there is Rep. Alexandria Ocasio-Cortez of New York, the 29-year-old voice of the millennials in Congress whose message is that the baby boomers have ruined the planet for her generation. She says we have 10 years left to head off planetary destruction....To fill the young with false fears of 'mass extinction' and so on is to ignore the true state of the planet. It isn't dying. The young should be celebrating what every objective measure shows; they are living at the greatest moment in the history of the globe. For those under the age of 30, listen up: You will live longer, healthier lives with more material wealth than any previous generation. You will inherit a world with less poverty, less disease, more leisure time, less pollution, and more material wealth, less discrimination, and more opportunity to achieve your dreams and aspirations than any other generation - except for that of your children's and grandchildren's....What the young lack today is perspective....America's millennials will inherit from my generation some $100 trillion of wealth - a bigger treasure chest of knowledge and resources than all of the other generations that have gone before, combined. How about some gratitude?"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,506 an ounce. Silver at $17.65 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday as investors digested economic data. U.S. stocks fell after reports that the White House is considering limits on U.S. investment into China.

U.S. Consumer Spending Slowed Sharply in August -Wall Street Journal
"U.S. consumer spending slowed more than expected in August, signaling a key pillar of the economy could be losing momentum as the global economy wobbles and trade tensions remain high. Personal-consumption expenditures, or household spending, nudged up a seasonally adjusted 0.1% in August from July, the Commerce Department said Friday. The modest growth marked a sharp pullback from July, when spending rose 0.5%, and was the weakest performance since February. Consumer spending is the driving force behind the U.S. economy, accounting for more than two-thirds of total economic output. With other sectors of the economy, such as manufacturing and business investment, buffeted by external headwinds, the slowdown in spending doesn’t bode well for third-quarter economic growth....American consumers have generally been a bright spot for the economy in recent months, but signs are emerging of a weakening outlook. Retail sales excluding motor vehicles were flat in August, and consumer confidence has fallen recently."

Shocking New Survey Finds Most Americans Are Completely Unprepared For The Next Recession -Zero Hedge
"Just like in 2008, most Americans are living right on the edge financially, and so any sort of an economic downturn is going to be extremely painful for tens of millions of American families. When you have not built up a financial cushion, any sort of a setback can be absolutely disastrous. During the last recession, millions of Americans suddenly lost their jobs, and because most of them were living paycheck to paycheck a lot of them suddenly couldn't pay their mortgages. In the end, millions of Americans lost their homes during the 'subprime mortgage meltdown', and today the housing bubble is even larger than it was back then. Sadly, the reality of the matter is that many of us are just barely scraping by from month to month, and that is a very dangerous position to be in. A new survey that was just released shows just how vulnerable American consumers have become at this point in time. According to the survey, the top financial priority for 38 percent of all Americans is just trying to pay the bills, and for 19 percent of all Americans it is dealing with credit card debt....If you are struggling to pay the bills each month or you are drowning in credit card debt, the truth is that you are definitely not ready for the next recession....We have a small group of people at the top of the pyramid doing really, really well, but meanwhile most of the rest of us are deeply struggling."

Why Dow Jones Isn't Sweating Trump Impeachment - Yet -Investors Business Daily
"The sudden race to impeach President Donald Trump has yet to have much of an impact on the Dow Jones or broader stock market. But it's premature to conclude that won't change as the public learns details of Trump's effort to get Ukraine to investigate potential 2020 election rival Joe Biden. If the president's approval rating takes a beating from Trump impeachment developments while odds soar that Elizabeth Warren wins the Democratic nomination, political risk will grow and stocks could suffer. At the moment, Trump's job approval rating is close to a two-and-a-half year high. RealClearPolitics puts the Trump approval rating at 44.9%, while FiveThirtyEight, which adjusts polls based on methodology and reliability, has it at 42.9%. If either of those numbers falls to 40% or below, that is likely to begin to shake investor confidence in Trump's reelection prospects. Wall Street has a love-hate relationship with Trump. Investors hate his China tariffs. Yet the China trade war may not come to a neat end if Trump loses in 2020. Investors tend to like the positive earnings impact from his big spending and anti-regulation policies. And they love his tax cuts - particularly his corporate tax cut, which shrunk the effective tax rate for S&P 500 companies by one-third....Suddenly, betting markets see Elizabeth Warren as a huge favorite to win the Democratic nomination. Odds of a Biden victory are crumbling, at least according to political betting markets."

The Driving Force of Free Markets Is Empathy, Not Greed -FEE.org
"Both capitalists and anti-capitalists frequently accuse capitalism of being a system driven by selfishness and greed. But are greed and unbridled selfishness really the driving forces of capitalism? Human self-interest is one - not the only - driving force of all human action. But this has nothing to do with a particular economic system. In capitalism, however, this self-interest is curbed by the fact that only the entrepreneur who prioritizes other people's needs can be successful. There is overwhelming evidence to suggest that empathy, rather than greed, is the true driving force of capitalism. Empathy is the ability to recognize and understand another person's feelings and motives, and this is the most important characteristic of successful entrepreneurs....Like all successful entrepreneurs, it was consumers who made Steve Jobs and Mark Zuckerberg so rich...This was the same recipe for success followed by Sam Walton, the founder of Walmart, who was consistently one of the richest people in the United States....In socialist systems, on the other hand, consumers are powerless and at the mercy of state-owned companies. If a state enterprise acts with no regard for the needs of consumers, they have no alternative under socialism because there is no competition. Under capitalism, consumers can (and do) punish companies that behave selfishly and lose sight of the needs of their customers. Every day, customers vote on the company with their wallets - by buying its products or not....Empathy, the ability to recognize the desires and needs of others, is the true basis of capitalism - not unbridled greed and selfishness."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,515 an ounce. Silver at $17.91 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying amid rising political uncertainty. U.S. stocks fell amid trade war fears as traders assessed a whistleblower complaint against President Donald Trump.

Gold Gets Another Boost as U.S. Risks Strengthen Case for Havens -Bloomberg
"Gold steadied after posting its longest rally in three months as investors weighed growing political tensions in the U.S., which reinforced demand for havens. Bullion, which has already benefited from central bank easing, slowing growth and the trade war, gained an additional support after an announcement that the U.S. House of Representatives is opening a formal impeachment inquiry of President Donald Trump. Gold is heading for a fifth monthly advance as the Federal Reserve and central banks globally cut interest rates to prop up economies hurt by the prolonged trade war. Weakening U.S. consumer confidence also dented sentiment. The possibility Trump will face impeachment is adding to the raft of concerns weighing on markets. 'The move in gold looks convincing enough to warrant some attention as it's unlikely the political storm clouds over Washington are about to dissipate any time soon,' Stephen Innes, Asia-Pacific market strategist at AxiTrader, said in a note. This 'might continue to weigh on equity market sentiment, possibly send U.S. yields lower and could undermine confidence in the U.S. dollar.'"

Pelosi's Bad Impeachment Call -New York Times
"Once upon a time, prominent Democrats called for the impeachment of a powerful conservative officeholder, only to be embarrassed into silence when it turned out that the basis for their calls was arguable and incomplete, handing their Republican opponents a P.R. coup. That conservative was Brett Kavanaugh, and the time was two weeks ago. How well did that work out for liberals? Now prominent Democrats have begun an impeachment process against Donald Trump, based on information that, while potentially devastating, remains arguable and even more incomplete. They do so because they appear to be certain that the full set of facts will vindicate their belief that the president is manifestly guilty of treason, bribery or other high crimes and misdemeanors. But what if the facts don’t vindicate that belief?....Maybe the whistle-blower complaint will be every bit as damningly dispositive about Trump's conduct as his detractors expect. But right now we have no way of knowing. As for the phone call, the document released on Wednesday shows that Trump asked his Ukrainian counterpart to help 'find out about' Joe Biden's alleged role in stopping a 'prosecution' of a company on whose board Hunter Biden served....The upshot is that Democrats have fired a salvo - their largest and potentially their last - in the near-dark, in an uncertain hope that it will find its target....Disgraceful behavior is not the same thing as criminal behavior. Democrats may now find themselves in the curious position of trying to convince the country that Trump should be booted from the office to which he was lawfully elected for behavior that, whatever else might be said about it, was not unlawful. That will be a tough sell."

Washington plunges into Trump impeachment investigation -Associated Press
"President Donald Trump pressed the leader of Ukraine to 'look into' Joe Biden, Trump's potential 2020 reelection rival, as well as the president's lingering grievances from the 2016 election, according to a rough transcript of a summer phone call that is now at the center of Democrats' impeachment probe....Trump spent Wednesday meeting with world leaders at the United Nations, a remarkable TV split screen even for the turbulence of the Trump era. Included on his schedule: a meeting with Zelenskiy. In a light-hearted appearance before reporters, Zelenskiy said he didn't want to get involved in American elections, but added, 'Nobody pushed me.' Trump chimed in, 'In other words, no pressure.' The next steps in the impeachment inquiry were quickly developing a day after House Speaker Nancy Pelosi launched the probe. A rush of lawmakers, notably moderate Democrats from districts where Trump remains popular, set aside political concerns and urged action....The burden will probably now shift to Democrats to make the case to a scandal-weary public. In a highly polarized Congress, an impeachment inquiry could simply showcase how clearly two sides can disagree when shown the same evidence rather than approach consensus."

Four Collision Courses for the Global Economy -Roubini/Project Syndicate
"Between US President Donald Trump's zero-sum disputes with China and Iran, UK Prime Minister Boris Johnson's brinkmanship with Parliament and the European Union, and Argentina's likely return to Peronist populism, the fate of the global economy is balancing on a knife edge. Any of these scenarios could lead to a crisis with rapid spillover effects. There are now several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis. The first and most important contest is between the United States and China over trade and technology. The second is the brewing dispute between the US and Iran. In the first case, a full-scale trade, currency, tech, and cold war between the US and China would push the current downturn in manufacturing, trade, and capital spending into services and private consumption, tipping the US and global economies into a severe recession. Similarly, a military conflict between the US and Iran would drive oil prices above $100 per barrel, triggering stagflation (a recession with rising inflation). That, after all, is what happened in 1973 during the Yom Kippur War, in 1979 following the Iranian Revolution, and in 1990 after Iraq’s invasion of Kuwait....US President Donald Trump wants a deal with China, in order to stabilize the economy and markets before his re-election bid in 2020; Chinese President Xi Jinping also wants a deal to halt China's slowdown. But neither wants to be the 'chicken,' because that would undermine their domestic political standing and empower the other side. Still, without a deal by year's end, a collision will become likely. As the clock ticks down, a bad outcome becomes more likely....There are big egos in the mix, some of whom might prefer to crash than be perceived as a chicken. The future of the global economy thus hinges on four games of daring that could go either way."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,512 an ounce. Silver at $18.07 an ounce.

NEWS SUMMARY: Precious metal prices pulled back Wednesday on profit-taking and a firmer dollar. U.S. stocks rose after President Donald Trump said a U.S.-China trade deal could arrive sooner than expected.

Gold remains supported on Trump impeachment bid -CNBC
"Gold prices inched lower on Wednesday as some investors booked profit, but the metal remained supported below a three-week peak hit in the prior session as the launch of a formal impeachment inquiry into President Donald Trump stoked political worries. Democrats in the U.S. House of Representatives on Tuesday launched a formal impeachment inquiry into Trump, accusing him of seeking foreign help to smear Democratic rival Joe Biden ahead of next year's election....'Compounding into the macro weakness we have the tumult in political landscape brought about by the impeachment process,' said AxiTrader market strategist Stephen Innes. 'The risk could lead to lower equity market and undermine the U.S. dollar and that could be good for gold.' Also, supporting the yellow metal was weak U.S. consumer confidence data that ratcheted up concerns over the global economy. 'It stoked Fed rate-cut speculation, driving down yields and thereby boosting the relative appeal of non-interest-bearing assets epitomised by gold,' said Ilya Spivak, a senior currency strategist at DailyFx."

The World's Wealthiest Families Are Stockpiling Cash as Recession Fears Grow -Yahoo Finance
"Rick Stone, a former partner at Cadwalader, Wickersham & Taft, sees treacherous times ahead for family offices trying to deploy cash. The head of Stone Family Office said he doubts the bond market will provide any real return over the next decade, that equity markets will suffer a substantial drop and then be flat, and that too much venture capital and private equity money will continue to chase too few opportunities....A majority expect the global economy to enter a recession by 2020, with the highest percentage of gloomy respondents in emerging markets....'There's more caution and fear of the public equity markets among ultra-high-net-worth investors,' said Timothy O'Hara, president of Rockefeller Global Family Office. 'That has more people thinking about private investments, alternative investments or cash.' Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said this month he thinks there's a 75% chance of a U.S recession before the November 2020 presidential election, while the World Bank cut its 2019 global forecast to the slowest since the financial crisis a decade ago."

Insider Selling Hits 20 Year High As Stock Buybacks Soar -Zero Hedge
"When it comes to the 'fair value' of stocks, nobody knows it better than insiders, who tend to aggressively offload shares any time they see the price of their equity holdings as generously high. This, however, may be a problem for the broader market because according to research from Smart Insider, the market is now the most overbought since the first dotcom bubble, as 'executives across the US are shedding stock in their own companies at the fastest pace in two decades, amid concerns that the long bull market in equities is reaching its final stages.' As the FT reports, corporate insiders - typically CEOs, CFOs, and board members, but also venture capital and other early state investors - sold a combined $19BN of stock in their companies through to mid-September. Annualized, this puts them on track to hit $26BN for the year, which would mark the most active year since 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble. That 2019 total would also set a post-crisis high, eclipsing the $25bn of stock sold in 2017....The reason investors care about insider stock sales is that it has traditionally been a handy marker for the confidence of executives in their own companies' prospects, and the broader valuation of the market. Spikes in selling indicate that top figures in boardrooms around the country are taking advantage of high valuations in the US stock market....But if the insiders are selling who is buying? The answer will come as a surprise to exactly no one. As Bank of America explains, 'despite what is usually a seasonally weak time for buybacks, corporate buybacks remained strong last week, driven by Tech for the fourth week in a row.'"

The Deep State Runs the American Empire -Bonner/Bonner And Partners
"The concept of the 'Deep State' was first applied to countries such as Turkey and Egypt. These were places where military-police-security insiders put screws to your thumbs, forcing you to do as you were told. Elections changed ruling parties and their leaders. But the real power was elsewhere. America first took the road to empire around the same time that its GDP became the world's largest – in the 1890s. Empires follow paths of their own – dictated neither by voters nor by elected leaders. People don't necessarily want to have an empire. They don't necessarily believe you when you tell them they have one, either. Most Americans – even today – believe they live in a republic governed by the Constitution. Empires love wars. But America's foreign wars – like so much else in our current monetary-government system – are fake. There is no real danger from the enemy. None of America's enemies from the past half century were capable of invading the U.S., stealing our money, ravaging our women, or defeating our armies. These fake wars were simply a way of transferring money – from the people who earn it to the foxes in the war-fighting sector, including the Pentagon. Like financial bubbles and love affairs, empires are unstable. Typically, an empire expands until it is either defeated or bankrupted – often both. As more and more of the economy is put on a war footing, less and less is available to produce real wealth. Growth slows. Debts increase. Eventually, the debts implode… and the empire is out of business. Alternatively, or often in parallel, as the empire reaches farther and farther from its homeland, it creates more and more enemies. Eventually, it is 'overstretched' and is ready for a comeuppance – usually delivered as a mortal blow by the empire next in line."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,531 an ounce. Silver at $18.71 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks fell as a drop in Netflix shares and consumer confidence offset U.S.-China trade talk optimism.

U.S. consumer confidence plunges in September -Reuters
"U.S. consumer confidence fell by the most in nine months in September, far more than expected, as Americans’ economic outlooks darkened in the face of the U.S.-China trade war, according to a private sector report released on Tuesday....September's reading marked the largest shortfall relative to Wall Street's expectations since 2010. 'The escalation in trade and tariff tensions in late August appears to have rattled consumers,' Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said in a statement. The expectations index - based on consumers' short-term outlook for income, business and labor market conditions - declined to 95.8 in September from 106.4 last month."

Capitalism Is the Key to Fixing Climate Change -Reason
"Slowing or stopping economic growth will only delay solving the problems caused by man-made warming. Climate Strike protests are supposed to bring attention to the science showing that human-made global warming is becoming a problem. Fair enough. But some participants see climate change as pretext for destroying a market system that they have always hated. Naomi Klein made this point crystal clear in her 2014 book, This Changes Everything: Capitalism vs. the Climate...The science, insists Klein, 'says our future is radical. The present is pretty radical too. The idea that there is some sort of gradual, incremental, let's-split-the-difference pathway to respond to this crisis is silly at this point.' A headline in The Guardian put it even more forthrightly: 'Ending climate change requires ending capitalism.'....Economic growth initially hurts the environment, but after a point it makes things cleaner. By then, slowing or stopping economic growth will delay environmental improvement, including efforts to mitigate the problem of man-made global warming. The MIT economist Andrew McAfee explains the process in a forthcoming book, More from Less...'America, in short, is post-peak in its exploitation of the earth. The situation is similar in many other rich countries, and even developing countries such as China are now taking better care of the planet in important ways.' How did this happen? Through more capitalism, not less...'The strangest aspect of the story is that we didn't make any radical course changes to eliminate the trade-off between human prosperity and planetary health...We got better at combining technological progress with capitalism to satisfy human wants and needs.'....The upshot is that Klein, The Guardian, and many of the climate strikers have it exactly backwards. Properly incentivized capitalism is the key to solving the problems caused by climate change."

A recession is less than 12 months away -Rosenberg/CNBC
"The Gluskin Sheff chief economist and strategist predicts economic growth in the U.S. will turn negative sooner than most investors anticipate - setting the stage for a painful market pullback. 'There's a recession coming in the next 12 months,' he said last Thursday on CNBC's 'Futures Now.'....Fed Chairman Jerome Powell signaled rates would only be cut again if there's new evidence the economy is softening. However, Powell said he didn't expect that to happen. 'The only reason that he said that he's optimistic on the outlook is because of exactly what the Fed is doing which is breathing stimulus back into the economy,' said Rosenberg....According to Rosenberg, it's just a matter of time until economic data sours and Powell is forced to resume easing in the coming months. 'I think that they'll go in October and December and through 2020,' he added. Whether the Fed cuts all the way to zero or not, Rosenberg speculates the outcome will be the same: Recession."

Don't Rule Out War With Iran -Wall Street Journal
"Jacksonian America is certainly tired of 'endless wars.' The president understands and shares that concern. America's steady move toward energy independence also reduces public concern about the Middle East. But Jacksonian America is neither patient nor pacifist, and there are provocations that would transform opinion overnight....Mr. Trump's restraint so far is a sign of America's wider geopolitical strength. Thanks to American fracking, Iran's troublemaking in the Gulf hasn't affected American motorists at the pump....Another incident on the scale of the Abqaiq attack might be impossible to ignore. Last Friday Defense Secretary Mark Esper announced the deployment of U.S. troops to Saudi Arabia. This is a political as well as a military measure. Like the troops in Berlin during the Cold War, those American forces will serve as a tripwire. If Iran launches an unprovoked attack against Americans who are conducting a necessary and lawful defensive mission, Washington's calculus could change in a heartbeat. The mix of military restraint and sanctions resolve has worked well for Washington so far. Even Iran hawks are happy with the impact the sanctions are having. But the chances of a military confrontation between Iran and the U.S. are rising, not falling. Strategic patience in Washington matched by strategic realism in Tehran is the world's best hope for peace."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,531 an ounce. Silver at $18.71 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying amid rising global risks. U.S. stocks treaded water as weak economic data out of Europe stoked worries over the state of the global economy.

New Gold Bull Sees Price Reaching $1,700 -CCN
"Marc Chandler believes that the price of gold will continue moving higher. He believes that bullion will hit $1,700 this year, which implies a 10% upside from the current price. Chandler is one of the best-known foreign exchange strategists in the world. He is the chief market strategist for Bannockburn Global Forex, which is a capital markets firm that specializes in advisory, analytics and transaction processing for companies. Chandler first unveiled his bullish call on gold in an interview with Bloomberg in June this year...He continues to believe that negative interest rates, geopolitical constraints and technical factors mean that the price of gold could keep moving higher. He said: 'Negative interest rates mean that the opportunity cost of holding a non-yielding asset has fallen.' Just last week, the Federal Reserve slashed interest rates by 25 basis points. This was the second consecutive interest-rate cut in as many meetings. Some analysts believe that the Fed could have another 25 basis point cut this year. Others, like Ron Paul, think that rates could go negative in 2020. The situation is not improving around the world. On September 12, the European Central Bank pushed rates further negative and pledged to do more. In Japan, the BOJ announced that it might cut rates as the economy continues to weaken....On the technicals, Chandler said that: 'My reading of the charts suggests a target of around $1700 when it moved above $1400.'"

The Coming Currency War: Digital Money vs. the Dollar -Wall Street Journal
"The future of money might be a digital version of the cash that'’s already in people's wallets - potentially upending the currency system that the world has known for many decades. Such a future, of course, might be a disappointment to many libertarians and tech-savvy investors who are pinning their hopes (and in some cases their money) on private cryptocurrencies such as bitcoin. Instead, central bankers and governments - the entities that cryptocurrencies' backers hoped to render obsolete - are increasingly warming to the idea of 'digitizing' their own national currencies. That is, they would issue money that would exist only virtually, without a paper or coin equivalent, and be universally accepted as a form of payment. Central banks such as the Federal Reserve in essence already issue digital money, via the commercial banks that have accounts with them...Instead of working only through commercial banks, central banks might issue digital currency directly to the public that could be used as legal tender in the same way cash is today...And the implications could be profound for everything from commerce to interest rates to privacy....In addition, national digital currencies could make it harder for private cryptocurrencies to catch on. Because government e-cash would be operated, backed and controlled directly by central banks, it likely would be viewed as more reliable than privately created cryptocurrencies, which operate on decentralized networks of users and fluctuate wildly in value....If national digital currencies allow for faster, cheaper money transfers across borders, viable alternatives to the U.S. dollar could emerge....Whatever happens, it could be chaotic, the Bank of England's Mr. Carney warned in Jackson Hole...'History teaches that the transition to a new global reserve currency may not proceed smoothly,' he said."

Negative Interest Rates Are The Price We Pay For De-Civilization -Zero Hedge
"Do central bankers really think negative interest rates are rational? Both Europe and Asia are now awash in $17 trillion worth of negative-yielding sovereign and corporate bonds, and Alan Greenspan suggests negative interest rates soon will arrive in the US. Negative interest rates are just the latest front in the post-2008 era of 'extraordinary' monetary policy. They represent a Hail Mary pass from central bankers to stimulate more borrowing and more debt, though there is far more global debt today than in 2007....Under what scenario would anyone lend $1,000 to receive $900 in return at some point in the future? Only when the alternative is to receive $800 back instead, due to the predicted interventions of central banks and governments. Only then would locking in a set rate of capital loss make sense....It should be noted that rational purchasers of negative-yield bonds hope to sell them before maturity, i.e., they hope bond prices rise as interest rates drop even lower. They hope to sell their bonds to a greater fool and generate a capital gain. Negative interest rates are the price we pay for central banks. The destruction of capital, economic and otherwise, is contrary to every human impulse. Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce. No society in human history previously entertained the idea of negative interest rates, so like central bankers we are all in uncharted territory now."

When in Doubt, Print Money -City Journal
"Advocates of Modern Monetary Theory want us to believe that debt doesn't matter and that government can spend endlessly. Eleven years ago, the 2008 financial crisis transformed politics, creating the conditions for a new crop of national-profile candidates who are throwing the old rules away, from Donald J. Trump to Alexandria Ocasio-Cortez. Now, insurgent academics have come forward with a seemingly elegant theory to revolutionize economics, underpinning the profligate spending impulses of many of these newly minted politicians. This framework, 'Modern Monetary Theory' or 'Modern Money Theory,' has a simple premise: the U.S. and other Western countries can offer government-funded, good-paying jobs to anyone who wants one and pursue any other public-policy objective as well, through vastly increased spending. The outlays for such ambitious efforts, the theory holds, won't result in high deficits, high interest rates, or inflation that haunted Western policymaking on both sides of the aisle from the 1970s to the early 2000s. Those risks are exaggerated, MMT maintains, and can be mitigated through prudent government action. Extravagant as they sound, MMT's prescriptions resemble how the U.S. and other Western governments have approached economic and monetary policy in the years leading up to and following the financial crisis. That's hardly a comforting feature of MMT, though. This upside-down theory matches reality only because reality is upside-down....Throw everything in the old textbooks out, MMT partisans say. The guiding principle of MMT is that modern governments face no pressing constraints on spending - including the need to hike taxes to pay for it....If the government doesn't have to tax or borrow to fund its operations, it has only one other option: print the money. For MMT, that's nothing to worry about. Modern governments don't literally need to print money, of course; these days, they can create it on computers....MMT's economic vision is ultimately fanciful. The most obvious criticism is the risk of inflation - or even hyperinflation - that MMT poses. One doesn't have to be a hard-core monetarist to get queasy at the prospect of the U.S. and the European Union 'printing' trillions in dollars or euros forever."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,515 an ounce. Silver at $17.93 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying amid ongoing geopolitical tensions. U.S. stocks fell to session lows after China trade officials cut US visit short.

Gold edges higher as softer dollar, Gulf tensions lend support -Reuters
"Gold prices rose on Friday and were headed for their first weekly gain in a month, supported by a softer dollar, tensions in the Middle East and caution about Sino-U.S. trade talks, while palladium climbed to a fresh record peak. Spot gold was up 0.3% at $1,503.36 per ounce, up about 1% this week. 'A weaker U.S. dollar is giving gold a little bit of an upward drift,' said Michael McCarthy, chief market strategist at CMC Markets...'Investors are all waiting on any further developments in the trade negotiations as they move towards October meeting and that may provide next big driver for gold prices,' McCarthy said....Gold prices have risen about 17% this year mainly on U.S.-China trade tensions, concerns over the global economic growth outlook and prospects of monetary easing by central banks. The Fed cut interest rates for the second time this year on Wednesday to help sustain economic expansion but gave mixed signals on future rate cuts. Also, giving bullion a lift were tensions in the Middle East as the United States said on Thursday it was building a coalition to deter Iranian threats following a weekend attack on Saudi Arabian oil facilities."

Beware Mocking Bubbles & Bears -Global Macro-Monitor
"Once again, seeing lots of articles and talking heads mocking bubbles and the bears, which is usually a sign a big bubble is going to burst. The last time we saw this kind of taunting of the bears was three days before the bear market, which we think is on, began in January 2018. Nobody really knows for certain what is causing the stress in the money markets, but our calculated guess is it is: 1) somehow related to the massive new issuance of Treasuries, which is sucking liquidity out of the markets, as prices are repressed and not allowed to clear –> think, a) rent control, where the excesses have to be cleared through quantities, and b) Le Chatelier's principle, where, in a dynamic equilibrium, pressure on one variable has to be offset by movement in other variables...Whatever the case, the markets are so distorted now and becoming more so, especially by the false belief that central banks can even now fine-tune a Stradivarius violin. Haha! We believe quantitative easing and the massive expansion of central bank balance sheets are the financial equivalent to excessive carbon emissions resulting in kind of a of global warming in the markets. Thus, traders and investors should expect more extreme market conditions....So, folks, when listening to the Street, bubble vision, the market talking heads, and even central bankers and policymakers, take heed the words of the great American author, Upton Sinclair: 'It is difficult to get a man to understand something when his salary depends upon his not understanding it.'"

Democracy Doomed the Money System -Bonner/Bonner And Partners
"The plain people vote. But insiders - the elite, the cronies, the Deep State - make the important decisions. And these few can increase their own wealth and power only by taking it from the many they are meant to serve - the public. And when they are in the 'Inflate-or-Die' trap, rarely are they willing or able to risk easing off from inflation. First, because it threatens their power (the masses want free stuff too). Second, because it slows the transfer of wealth in their direction (it curbs the government spending on which they rely). And third, because it usually means an immediate cut in their personal wealth (as stock prices collapse). That is why there is always a bias towards inflation - the benefits come quickly and mostly go to the people in charge of the system. The bill shows up much later and is paid - in higher prices, depression, and misery - by the public. Team Trump - including the president's nitwit advisor, Peter Navarro - believes it may be able to get the Dow up to 30,000 in time for next year's election. As far as we recall, it is the first reelection strategy in history expressly tied to the Dow. Whether stock prices will rise or not, we don't know. But if they rise, we'd be very surprised if gold didn't go up more. Gold is real money. When fake money gets debased and inflated, gold shines. Since the beginning of this century, central banks have added some $22 trillion in new, fake money - or 15 times the value of all the gold ever mined from the time of The Flood to 2000 A.D. In January 2000, the price of gold stood at $280. It is now $1,500 - a more than five-times increase...You would have made twice as much in capital gains from low-risk gold as from high-risk stocks over the last 20 years."

Desperate Central Bankers Grab for More Power -Ellen Brown Blog
"Conceding that their grip on the economy is slipping, central bankers are proposing a radical economic reset that would shift yet more power from government to themselves. Central bankers are acknowledging that they are out of ammunition. Mark Carney, the soon-to-be-retiring head of the Bank of England, said in a speech at the annual meeting of central bankers in August in Jackson Hole, Wyoming, 'In the longer-term, we need to change the game.' The same point was made by Philipp Hildebrand, former head of the Swiss National Bank, in an August 2019 interview with Bloomberg. 'Really there is little if any ammunition left,' he said. 'More of the same in terms of monetary policy is unlikely to be an appropriate response if we get into a recession or sharp downturn.' 'More of the same' meant further lowering interest rates, the central bankers' stock tool for maintaining their targeted inflation rate in a downturn....So what is a central banker to do? Hildebrand's proposed solution was presented in a paper he wrote with three of his colleagues at BlackRock, the world's largest asset manager, where he is now vice chairman...Their proposal calls for 'more explicit coordination between central banks and governments when economies are in a recession so that monetary and fiscal policy can better work in synergy.' The goal, according to Hildebrand, is to go 'direct with money to consumers and companies in order to enliven consumption,' putting spending money directly into consumers' pockets....Central bankers would be acquiring even more power, by giving themselves a new pot of free money that they could deploy as they saw fit in the service of 'government objectives.'....Better would be to nationalize the Fed, turning it into a true public utility, mandated to serve the interests of the economy and the voting public."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,509 an ounce. Silver at $17.91 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose as gains in Microsoft, AT&T and other tech companies offset an underwhelming decision by the Fed.

Gold holds near $1,500 after Fed cuts interest rates -CNBC
"Gold edged lower on Wednesday but held near the key $1,500 per ounce level after the U.S. Federal Reserve decided to cut interest rates, a decision that was widely expected. 'The gold market has been pretty sensitive to FOMC and Fed policy this year, so the expectations of a rate cut are supportive for gold,' said James Steel, chief precious metals analyst at HSBC. The Fed approved an interest rate cut of a quarter point, which the market had largely priced in to expectations....Meanwhile, limiting safe-haven inflows into bullion, oil prices pulled back, having jumped nearly 15% earlier this week following attacks on production facilities in Saudi Arabia, after the major producer said it would restore its output by month-end."

Democrats and Republicans Aren't Just Divided. They Live in Different Worlds. -Wall Street Journal
"America's political polarization is almost complete. Its two main political parties increasingly represent two different economies. And they barely overlap. Democrats can be found in educated cities and suburbs where professional jobs are plentiful. Republicans live in working-class and rural communities, home to agriculture and low-skill manufacturing. Let's look at GDP to understand how the two parties are divided. These days, Democratic House districts are doing substantially better: Two-thirds of the nation’s GDP comes from those areas, with Republican districts making up the rest. This is striking, because the Republican share of GDP is shrinking. Even though the party controls more House districts than a decade ago, those districts account for less economic activity, Brookings Institution data show....Democrats represent districts with the biggest clusters of professional jobs. That includes tech hubs around Silicon Valley and Boston. Nearly three quarters of jobs in digital or professional industries are in Democratic districts. Republican districts, by contrast, hold growing shares of the nation's agriculture, mining and low-skill manufacturing jobs, many of which do not require a college degree, have lower pay and are more exposed to overseas competition....The two parties represent different parts of the economy, in large part because they represent different kinds of places." [Image: Courtesy Wall Street Journal]

Stock market's eerie parallels to September 2007 should raise recession fears -Marketwatch
"Since last year real GDP growth in the U.S. has been slowing. The chair of the Federal Reserve has been signaling that while growth is slowing, there is no recession risk and the Fed is forecasting continued positive growth. Warning signs in the economy, including an inverted yield curve, have been ignored and stock markets continued to make new highs in July. In August a correction took a place and subsequently a rally ensued into early September. On September 18 the Fed cut rates. Sound familiar? It fairly describes market and economic conditions in the U.S. over the past couple of months. Except that this paragraph would be as true for the U.S. economy and stock market in September 2007 as it is today. Consider that 12 years ago the yield curve was inverted and U.S. economic growth was markedly slower than it had been in 2006. Yet the Standard & Poor's 500 made a new high in July 2007 (same as 2019), there was an August correction (same as 2019), and then the Fed cut rates on September 18 (ditto - same day even). U.S. stocks proceeded to make another marginal high that October - and that was it. Lights out. We all know what happened next. It seems we are at a curious moment in time. Parallels to late 2007 are running through the markets now. This doesn't mean the market's fate will play out as it did then, but the ingredients are there and all that's needed is a trigger....According to a November 2007 Reuters report, Bernanke told a congressional committee: 'Our assessment is for slower growth, but positive growth, going into next year.' The U.S. economy entered recession in December 2007. Does this not sound eerily similar to what Fed Chairman Jay Powell has been saying? Here's Powell on September 6: 'We're not forecasting or expecting a recession,' he said....What does all of this suggest? For starters, the Fed will not tell you when a recession starts. They can and will be in total denial until after the fact."

Why is the NY Fed pumping billions into the money market? -Yahoo Finance
"For the first time in more than a decade, the US central bank this week stepped into financial markets to keep interest rates on short-term lending from popping above its target range. The New York Federal Reserve Bank conducted money market interventions on Tuesday and Wednesday and planned another for Thursday morning, as a cash crunch drove up the cost of borrowing for banks that need to replenish the reserves they hold at the central bank. Financial institutions use money markets to borrow for very short periods, from one day to a year, a crucial function to keep the gears of the economy running. In so-called repurchase or 'repo' agreements, banks borrow by putting up assets like Treasury notes as collateral and then repay the loans with interest the following day....The reasons behind borrowers' sudden demand for cash were attributed to a host of technical conditions that converged to drain money out of the system...'It looks like a lot of cash left the system in recent days and that demand for dollars was greater than the number of dollars in circulation,' said Gregori Volokhine of Meeshaert Financial Services."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,515 an ounce. Silver at $17.91 an ounce.

NEWS SUMMARY: Precious metal prices traded higher Wednesday ahead of the Fed's rate decision. U.S. stocks lower as the Federal Reserve loses control of its own interest rate on the day of their big decision.

3 Reasons Why There's Further Upside Potential for Gold Prices -Holmes/Forbes
"Gold may be off its 52-week highs, but the precious metal is still up more than 15 percent for the year through September 17. This appears to put gold on a path for its best year since 2010, when it gained just under 30 percent. I believe buying the dips in gold right now could turn out to be a wise investment decision. I see a lot happening at the moment - from an unprecedented $17 trillion in negative-yielding bonds worldwide to heightened geopolitical threats - that might boost investors' appetite for the metal, which has a history of holding its value in times of crisis. Read on for three reasons why I believe there's further upside to gold prices... #1 U.S. inflation is finally starting to heat up...In the past, faster inflation has been constructive for gold prices. That’s because inflation, by its nature, destroys your purchasing power, and to limit these losses, investors have traditionally turned to the yellow metal as well as gold mining stocks. #2 Negative yields in the U.S.? $17 trillion in debt around the world...has recently pushed the price of gold to new all-time highs in a number of currencies, including the British pound, Japanese yen and Canadian and Australian dollars...It could only be a matter of time before U.S. fixed-income yields turn subzero - especially if Trump gets his way. #3 Geopolitical and economic risks raise the demand for a safe haven. There are a number of geopolitical and economic risks right now that have triggered gold's 'fear trade' Economic growth is slowing worldwide as a result of trade tensions....Other geopolitical concerns, including unrest in Hong Kong as well as last Saturday's attack on Saudi Arabia's oil facilities, have helped support gold demand."

The Dollar and Democracy Are Frauds -Bonner/Bonner And Partners
"Today's dollar is fake, with no firm connection to the real world of time, resources, and output. The 'wealth' it produces is fake too. We saw that last week; in the 50 years after WWII, household net worth averaged about 350% of GDP. Then, suddenly it shot up to over 500%. Where did that extra money – about $30 trillion of extra household wealth – come from? Among the many, it's slim pickins. Real median household income was a little over $60,000 in the late '90s; it's still a little over $60,000. But among the few, it's high cotton all year round....During that same period, central banks flushed some $22 trillion in new (fake) money into the world economy. That money bid up prices for stocks and bonds, making asset holders much richer, relatively, than everyone else. In effect, the feds aided and abetted the grandest larceny in history. The essential fraud of the financial system is not only that the money is fake. It is also the overweening conceit that seven jackasses on the Federal Open Market Committee can control, improve, and stimulate a $20 trillion economy… as if it were a cranky lawnmower in need of a tune up. The essential fraud of democracy has two parts to it too. First is that some voters have the right to tell other voters what to do… and second is that they control the government....In the absence of real information or real knowledge, the voter defaults to campaign slogans, lies, and empty promises… and leaves the real decision-making in the hands of the elites in the Swamp. Naturally, these insiders look out for themselves. Their main goal is to keep the power and money headed in their direction, which is why any reform of federal budgets or the fake money system is impossible… and why deficits, debt, and funny-money finance will worsen until they finally blow sky-high."

Dollar Devaluation Will Impoverish Americans, Weaken the Economy -Real Clear Markets
"After years of complaining about countries manipulating their currencies, trade protectionists have finally found a country they would be happy to see drive down the value of its money: the United States. Sens. Tammy Baldwin (D-Wis.) and Josh Hawley (R-Mo.) make amazing promises about legislation they have introduced, the Competitive Dollar for Jobs and Prosperity Act. According to the bipartisan duo, the bill would 'make U.S. exports more competitive, boost American manufacturers and farmers, and reduce our trade deficit.' The measure may be well intentioned, but it is fundamentally misguided because it misunderstands the underlying economics. This congressional version of 'if you can't beat them, join them' would harm the U.S. economy and make us poorer....The economic realities of currency manipulation are counterintuitive. A shift in exchange rates changes a country's 'terms of trade,' an expression used by economists to describe the ratio of a nation's export prices to its import prices...Just as individuals at the grocery store would be better off if they are able to buy more apples for the same amount of money, so the United States is better off when our dollar is strong and we can purchase from other countries at favorable prices....If Congress wanted to do something that genuinely benefits exporters, it would work to end the trade war...Let's get the economics right. Ending the trade war will lead to increased U.S. prosperity. Devaluing the dollar will not."

What Ever Happened to 'We the People'? -Carrington/Wall Street Journal
"Sometimes you know something so well that you stop seeking out what it can teach you. This can happen with anything from a beloved novel to the Bible. In our divisive political times, one well-worn text that bears re-examining is the preamble of the Constitution....Consider its opening and closing: 'We the People . . . do ordain and establish this Constitution for the United States of America.' Every political community has to decide who is ultimately sovereign. Our commitment to popular rule stems from a belief in the inherent equality of all human beings. As equals, the only just rule is self-rule. In so committing, America was one of the first countries to reject the rule of the few elites, building on an English commitment to freedom. But unlike Britain's customary constitution, 'We the People' would record the structures and conditions of our rule, setting them in stone as a standard of liberty. The Founders chose another route, a summary of the just ends of political society. These ends were grounded in human virtue, not greed or vainglory....Liberty bestows myriad blessings, allowing us to fulfill our purposes as human beings, to seek the good, virtue, and the worship of our Creator. We must secure these not only for us, but for our children and children's children. The Founders sought in the Constitution 'to form a more perfect Union.' The rule of the people and their commitment to certain purposes came in the form of a common bond....The preamble's commitments articulated the basis of our union. But every one of them now is contested, even the most fundamental: self-rule...This Constitution Day, (September 17th) let us seek to learn anew from the preamble."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,513 an ounce. Silver at $18.14 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying ahead of Fed statement. U.S. stocks fell for a second straight day as the Federal Reserve kicked off a two-day monetary policy meeting.

Gold steady as markets await Fed clues on rate outlook -Reuters
"Gold prices were little changed on Tuesday as traders largely remained on the sidelines, awaiting a widely expected cut to interest rates by the U.S. Federal Reserve this week and a steer on its longer-term plans. 'The market is searching for a new catalyst ... The 25 basis point rate cut is relatively priced in already, but what traders are really looking for is forward guidance,' said Phillip Futures analyst Benjamin Lu. A quarter-point cut to U.S. interest rates is widely expected when the Fed issues its next policy statement on Wednesday. It would be the central bank’s second such cut after lowering rates in July for the first time since 2008....The Fed's language and new economic projections will be examined closely, given the backdrop of a bruising U.S.-China trade war, stimulus by the European Central Bank and a stream of weak manufacturing data that hints at larger potential problems for the United States....Attacks on Saudi Arabia's main oil refinery at the weekend have also entered the equation, prompting U.S. President Donald Trump to apply more pressure on the Fed to lower interest rates. 'It appears conviction remains positive so long as gold hangs around $1,500,' AxiTrader strategist Stephen Innes said in a note, adding that the market has been caught between hedging against a possible U.S. military response on Iran and position-squaring ahead of the Fed’s two-day meeting"

How an Oil Price Surge Could Hurt Consumer Spending, and the Economy -New York Times
"For months, American consumers have kept the economy humming. While businesses pulled back, shoppers continued to spend. But a prolonged surge in gasoline prices after the attacks on oil production facilities in Saudi Arabia could undermine that phenomenon and increase the risk of a recession. 'It's clearly not a positive, and it adds a negative to the outlook,' said Steve Blitz, chief United States economist at T.S. Lombard, an independent research firm. 'It's another straw on the camel’s back.' Monday's nearly 15 percent spike in oil prices to $62.90 a barrel isn’t big enough to bring on a recession - it only returns crude prices to where they were this spring. Monday's jump is expected to add roughly 20 cents to gas prices, which now average $2.56 a gallon nationally, said Tom Kloza, global head of energy analysis for the Oil Price Information Service. But a shock in the form of a rapid $20 or $30 a barrel jump in oil prices would have a bigger economic impact. 'At that level, the consumer takes a significant hit,' said Ethan Harris, head of global economics and research at Bank of America Merrill Lynch. A $25 a barrel increase in oil prices, the kind of move analysts cite as a potential threat to the economy, would add 50 cents to the cost of each gallon of gas. That would mean an extra $45 in monthly spending for the typical family....The biggest risk to consumers - and the economy itself - would be a significant military conflict between the United States and Iran. Businesses, already cautious about spending, would pull back further. Consumers would likewise retreat."

The Fed's Mandate Is Up to Congress and the President -Sheldon/Wall Street Journal
"The role of the Federal Reserve as an instrument of public economic power could use some clarification. The central bank's status as an independent agency derives from an act of Congress in 1913, and is reinforced by oft-invoked references to its statutory 'dual mandate': to achieve stable prices and full employment. But the Fed's job description is more complicated than people usually think. Its purposes have evolved through various legislative changes over the decades, the most notable of which was imposed by Congress in 1977. The Federal Reserve Reform Act, which gave the central bank its current, explicit mandate, named three goals rather than two. The legislation as amended states: 'The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.'....It would be appropriate and constructive for the Fed to consider international monetary stability in its interest-rate decisions. In an era of world-wide currency exchange, America’s central bank should not ignore the effects of movements spurred by other major central banks. With no consistent free-trade principles governing global monetary policy, the Fed must take proactive steps to ensure that the U.S. can compete successfully. It would be in keeping with its historical mandate if the Fed were to pursue a more coordinated relationship with both Congress and the president. When it comes to fulfilling the economic goals authorized by legislative decree, it isn’t seemly for a government agency to be selective."

Book Review: 'The Smallest Minority' -Tamny/Real Clear Markets
"The Houston-based Kevin Williamson's very entertaining and insightful book, 'The Smallest Minority: Independent Thinking In the Age of Mob Politics,' is among other things a rejection of 'mob politics,' and 'its effects on our political discourse and our culture.' In the free market, the mob most certainly doesn't rule...Free markets are about individual choice, as opposed to decrees from the Commanding Heights about what we'll purchase, and how. When Burger King rolled out its plant-based Whopper, it tested it in St. Louis first, as opposed to ramming it down the throats of thousands of franchisees. Williamson plainly doesn't trust the mob, and it seems one message the National Review reporter is trying to send is that we should aim to localize our policymaking a la Burger King. If so, bad ideas will be contained while good ones will be widely adapted. The free markets account for our many differences, while politicians increasingly strive to craft national solutions to perceived problems. Williamson would no doubt prefer to leave things to the people....Most important is Williamson's muscular disdain for democracy. 'I come not to praise democracy but to bury it.' As he later explains, the 'Founding Fathers understood the dangers of democracy' without limits on government: it would lead to ochlocracy, another word introduced to me by Williamson which is, you might have guessed, mob rule. And while most would describe Williamson as a conservative, particularly given his views on abortion, he's really a libertarian as the previous paragraph makes rather plain. Williamson believes in individual freedom to do as one wishes short of hurting others, and undiluted democracy has little do with freedom....The crisis narrative is easily my favorite part of Williamson's book...'Every interest group, faction, and policy entrepreneur in the country has a crisis narrative to peddle. The Right blames the rhetoric of the Left every time a cop is ambushed, the Left blames the rhetoric of the Right every time a gay man or Muslim is assaulted or worse.' Conservatives and liberals, and conservative and liberal pundits most of all, have thoroughly stripped any meaning from the word 'crisis.' Thank goodness Williamson is willing to showcase this truth....Williamson's conclusion at book's end is that 'the biggest democracies will always be a dangerous place for the smallest minority,' as in the individual. So true. The answer is freedom."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,511 an ounce. Silver at $18.02 an ounce.

NEWS SUMMARY: Precious metal prices shot upward Monday on safe haven buying and market uncertainty. U.S. stocks fell sharply amid fears that a surge in oil prices, following an attack in Saudi Arabia, could slow down global economic growth.

Gold jumps 1% as attacks on Saudi lift safe-haven bets -Reuters
"Gold prices jumped 1% on Monday as attacks on Saudi Arabia's oil facilities dented risk appetite, boosting demand for the safe-haven bullion, while investors awaited for clues on monetary easing from major central bank meetings due this week....The attacks on Saudi oil installations have lead to a rotation of interests out of stocks and into safe-havens, said OANDA analyst Jeffrey Halley. The risk-averse sentiment in the market underpinned the bullion, often seen as an alternative investment during times of political and financial uncertainty. With escalating tensions in the Middle East and hopes of more stimulus measures from major central banks, the next target for gold will be $1,530, Halley added....Investors also await the outcome of the U.S. Federal Reserve and Bank of Japan's policy meetings on Wednesday, for signals on their future policy path. 'Accommodative monetary policy by global central banks will support bullion's appeal for 2H 2019,' Phillip Futures analyst Benjamin Lu said in a note. Central banks globally are facing increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade dispute hurt trade and business sentiment."

Global Markets Slide, S&P Futures Back Under 3000 On Oil Chaos, China Slowdown -Zero Hedge
"On the 11th anniversary of the Lehman default, global stock markets and US equity futures are broadly lower after this weekend's drone attack on Saudi oil facilities resulted in the biggest oil price surge in history. State energy producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-largest oil field in Khurais....Iran-backed Houthi rebels in Yemen claimed credit for the attack, but President Trump has already said that the US is 'locked and loaded depending on verification' that Iran staged the attack, an assertion also made by his secretary of state Mike Pompeo and backed by administration officials....'We have never seen a supply disruption and price response like this in the oil market,' said Saul Kavonic, an energy analyst at Credit Suisse Group AG. 'Political-risk premiums are now back on the oil-market agenda.' The shock collapse in Saudi oil output pushed S&P futures back under 3,000 and yields on 10Y Treasurys down 8bps to 1.81%, while the dollar shortage has returned, sending the Bloomberg Dollar index to session highs. Adding to the downward pressure on risk assets was the latest dismal news from China which saw the country's economic slowdown deepen in August as core data missed across the board and industrial production tumbled to its weakest 17-1/2 years as reported last night....On Sunday night, President Trump tweeted there is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack and under what terms to proceed, while he tweeted that there is plenty of oil and suggested it is fake news he is willing to meet with Iran without conditions."

Saudi Oil Attack Is the Big One -Wall Street Journal
"Saturday's attack on a critical Saudi oil facility will almost certainly rock the world energy market in the short term, but it also carries disturbing long-term implications. Ever since the dual 1970s oil crises, energy security officials have fretted about a deliberate strike on one of the critical choke points of energy production and transport. Sea lanes such as the Strait of Hormuz usually feature in such speculation. The facility in question at Abqaiq is perhaps more critical and vulnerable. The Wall Street Journal reported that 5.7 million barrels a day of output, or some 5% of world supply, had been taken offline as a result....The attack could build in a premium to oil prices that has long been absent due to complacency. Indeed, traders may now need to factor in new risks that threaten to take not hundreds of thousands but millions of barrels off the market at a time. U.S. shale production may have upended the world energy market with nimble output, but the market's reaction time is several months, not days or weeks, and nowhere near enough to replace several million barrels. After the smoke clears and markets calm down, the technological sophistication and audacity of Saturday's attack will linger over the energy market."

Drone Attack on Saudi Oil Field Seen as Realizing Worst Fears -Bloomberg
"For many of the national security teams that monitor threats on the U.S., the apparent drone strike Saturday on the heart of Saudi Arabia's oil production facilities was the realization of their worst fears. Houthi rebels battling Saudi Arabia in Yemen took responsibility for the attack and said they used drones, though U.S. officials have said Iran was behind the attack and that at least some cruise missiles may have been used. The attack underscored fears raised by U.S. security officials and experts in terrorism about the rapid evolution of technologies that could have allowed inexpensive devices to pierce Saudi defenses in a way that a traditional air force could not: flying long distances to drop potent bombs that apparently set vast portions of the Saudi petroleum infrastructure ablaze....The implication of Saturday's attacks are enormous, Price said. They not only highlight the growing technical capability of rebel groups, but could also serve as inspiration for home-grown terrorists in the U.S. who may be motivated by the Islamic State or al-Qaeda, he said. 'Flying a drone, that puts a new spin on things,' he said. 'It enables attacks that previously weren't able to be conducted with that level of stealth and detachment from the attacker.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,499 an ounce. Silver at $17.56 an ounce.

NEWS SUMMARY: Precious metal prices backed off Friday on short-term profit-taking. U.S. stocks traded mixed amid improving sentiment around U.S.-China trade relations and Apple price target downgrade.

Can Gold Help Diversify a Portfolio? -Barrons
"Gold has had a great run this year. But it's always had a questionable reputation among many money managers because of its volatility and difficulty in valuing. Now, InvestmentNews cites a study showing that a 5% allocation to the yellow metal improves the risk-adjusted performance of a standard portfolio of 60% stocks and 40% bonds. For optimal risk-adjusted performance, as measured by the Sharpe ratio, the standard 60-40 portfolio should be set at 60% stocks, 5% bonds and 35% gold, according to GraniteShares' research. 'Adding gold to a portfolio improves the Sharpe ratio, and a 35% allocation is optimal,' said Will Rhind, founder and chief executive of GraniteShares, an ETF provider whose funds include the GraniteShares Gold Trust ETF (BAR). Rhind adds: 'Gold has more value in a portfolio than most people think.' When the analysis was pushed back to the beginning of 2000, it showed that adding an allocation of just 5% gold provided superior or equal risk-adjusted returns to a 60-40 portfolio 79% of the time."

China: De-Dollarization Bid Continues amid Trade War -Market Realist
"As the trade war rages on, China's de-dollarization bid continues. The trade war is taking a toll on the US and Chinese economies. China seems to be more on the losing end. There's a trade imbalance between the two countries. The US has much more maneuverability to target Chinese imports. Also, due to trade uncertainty and tariff structure, many US companies are moving their production away from China, which impacts the country. In August, the trade war escalated to a whole new level. President Trump announced tariffs on an additional $300 billion of Chinese goods. The Chinese central bank devalued the yuan to the lowest level in about a decade to offset some of the impacts from the tariffs. On August 23, China announced retaliatory tariffs on $75 billion worth of US products. However, the tensions calmed down at the beginning of September. Both sides decided to meet for trade talks in October. Due to rising trade tensions, China is trying to diversify away from the US dollar. China continues to pile into gold. Gold is a safe-haven asset and a hedge in times of uncertainty. In August, China added to its gold reserves for nine consecutive months....If the trade war escalates more, President Trump might try to manipulate the US dollar. If there’s a currency war, gold would probably be the winner."

Should You Spend, or Save, as if You’ll Live Forever? -New York Times
"Older people's ability to proclaim their youth, strength and all-around-great lives appears to be thriving. But the age you feel, as opposed to the years you've accumulated, affects how you think about your money, many experts now believe. They say it influences how people save, spend, donate and plan what to leave to heirs. This effect isn't confined to people who are just comfortably upper middle class. Chip Conley, founder of the Modern Elder Academy, said research had found that as long as they are in good health, even those in the lower middle class reassess their finances in their 50s to prepare for longer lives than they might have expected....People who feel fit are acting much differently, working longer or taking on side projects to supplement their savings. They're doing this while traveling and enjoying themselves. In a sense they're doing what twenty-somethings can do without fear. 'We try to help people understand the way we live today you're going to have a lot of adult life ahead of you, so don't get caught up on how Social Security is going to support you,' Mr. Conley, 58, said. 'You're not going to retire at 65. You're going to have part-time work by desire or need.' 'To encourage people to think of working way into their 70s, we talk about how retiring can be bad for your health,' Mr. Conley said, mentioning research on longevity rates and retirement. 'People need to build skills that allow them to build money. They could be an Airbnb host with a cottage in their backyard, plus $20,000 from Social Security and then part-time consulting at $20,000. That's enough to live for a very long time.'....Old age is a new thing, and that requires people to reimagine how they're going to pay for it."

Everyone Knows the Truth About Politics -Noonan/Wall Street Journal
"Everyone knows Donald Trump can be taken in 2020, but everyone doubts the ability of the current Democratic field to do it. Everyone knows Elizabeth Warren has successfully created and inhabited a persona - the determined, high-energy fighter full of plans - and is killing it. She knows she has gone too far left for the general electorate and will introduce nuance and an air of greater moderation once she gets the nomination. Everyone knows this. Everyone knows the Democratic moderates are going nowhere and cluttering up every stage, but no one minds their being there because they make the party look sane. Joe Biden may have about 30% in the polls, but that means all the candidates to his left have about 70%...The Democratic Party really HAS gone sharply left, and everyone knows....When we talk about politics we all obsess on alt-right and progressive left, those peas in a sick pod, and no one speaks of the center, which is vast and has something neither way-left nor way-right has, and that is a motivating love for America itself, and not for abstractions and ideologies and theories of the case. As a group they are virtually ignored, and yet they are the center of everything. They include those of the left who are no longer comfortable in a new progressive party. And rightists not comfortable with Mr. Trump, or with the decisions and approaches of the Bush era. It includes those experiencing ongoing EID - extreme ideological discomfort. In this cycle they continue to be the great ignored. And everyone knows."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,507 an ounce. Silver at $18.17 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose modestly after a senior Trump administration official denied a report about the U.S. mulling over an interim trade deal with China.

ECB Launches Major Stimulus Package, Cuts Key Rate -Wall Street Journal
"The European Central Bank cut its key interest rate and launched a sweeping package of bond purchases Thursday that lays the ground work for what is likely to be a long period of ultraloose monetary policy, jolting European financial markets and triggering an immediate response from President Trump....It is the ECB's largest dose of monetary stimulus in 3½ years and a bold finale for departing President Mario Draghi, who looks to be committing his successor to negative interest rates and an open-ended bond-buying program, possibly for years. The euro fell against the dollar after the decision was announced, down 0.4% at $1.10...In a tweet, Mr. Trump said the ECB was 'trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.'....'The final showdown has started with a big bang,' said Carsten Brzeski, an economist with ING in Frankfurt."

What Gold's Recent Price Rise is Telling You -Craig R. Smith/Swiss America
"What should rising gold prices be telling you? After seven years of trading in a tight range, metals have now broken the technical barrier and are ready to continue the climb....Owning physical gold and silver as 'wealth insurance' is the bedrock of a well diversified portfolio. Along with providing needed portfolio safety, precious metals have also quietly outperformed every other major asset class for almost 20 years; including stocks, bonds and real estate! During the latest gold bull market (2002-2011), it took over 3 years for gold prices to rise $200/oz. But starting this June, gold prices rose over $200 – to above $1,500/oz. in just ten weeks! At this pace gold prices could exceed their previous 2011 high of $1,800/oz. by the end of 2019! Most precious metal analysts agree this is a confirmation of the beginning stage of an explosive new precious metals bull market, which is likely to take both gold and silver prices to fresh historic highs....Now is the time to take action, before prices run any further. Price dips present an excellent buying opportunity. To learn more about the gold-to-silver ratio, please call Swiss America at 800-289-2646 and request our Special Alert. Full Story

Gold's Rise Looks Unstoppable. It Could Hit $2,000, Analyst Says. -Barrons
"Citigroup Senior Commodities Strategist Aakash Doshi thinks gold may top $2,000 an ounce in the next year or two, a gain of about 34% from its current price...'We now expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,' Doshi wrote. Bullish factors cited by Doshi include 'lower for longer nominal and real interest rates, escalating global recession risks - exacerbated by US-China trade tensions - heightened geopolitical rifts and amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity.' Doshi boosted his fourth-quarter gold forecast by $125 an ounce to $1,575 and his calendar 2020 projection to $1,675, while noting an 'increasing probability' that bullion markets 'retest' their highs from earlier in the decade. In a recent interview, Jens Nordvig, the founder and CEO of Exante Data, said that, given the 'extreme bull market in bonds, gold will be very well supported.' He noted that central banks have boosted their purchases of gold and said, 'Nobody's crying when gold goes up, so there's really no anchor on how high it can go.'"

Wall Street is freaking out at the thought of President Liz Warren -New York Post
"The 2020 election is still a long way off, but the nation's big banks are already pricing in the possibility of an Elizabeth Warren presidency, their senior executives tell me. The picture ain’t pretty - for the banks or average Americans....They know Warren has a built-in hatred for financial institutions and folks with wealth. President Trump would destroy her, though, right? Not so fast, the bankers say. The Trump economic boom is showing signs of some weakness, thanks to Trump's trade war and conditions globally....Warren has spoken often about dismantling mega banks like JP Morgan and re-instituting the Depression-era Glass-Steagall law that separated their commercial lending and deposit operations from their Wall Street activities. She believes that combination proved deadly in the run-up to the financial crisis, because their risk-taking infected the consumer side, ultimately forcing a government bailout....Stocks would plummet, as would retirement savings - and not just for fat cats, but for every teacher, fireman and cop."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,503 an ounce. Silver at $18.17 an ounce.

NEWS SUMMARY: Precious metals prices rose Wednesday on bargain-hunting despite a firmer dollar. U.S. stocks rose as Apple added to its gains from the previous session after unveiling their newest products.

Citi says gold prices may top $2,000 an ounce -Marketwatch
"Analysts at Citi say gold prices will 'trade stronger for longer' and see them possibly topping $2,000 an ounce and posting new highs in the next year or two. 'We now expect spot gold prices to trade stronger for longer, possibly breaching $2,000/oz and posting new cyclical highs at some point in the next year or two,' the analysts said in a note published Tuesday. 'From a birds-eye view, low(er) for longer nominal and real interest rates, escalating global recession risks - exacerbated by U.S.-China trade tensions - heightened geopolitical rifts amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity, are all combining to buttress a bullish gold market environment.'"

$200 trillion in global debt at risk if trust falters -Sidney Morning Herald
"The Organization for Economic Co-operation and Development (OECD) has warned almost $200 trillion in public and private debt could be the catalyst for another global economic crisis if trust in government and financial institutions deteriorates...The OECD also said the destruction of trust following the global financial crisis (GFC) had contributed to the rise of crypto-currencies, which themselves were exacerbating the globe's economic risks. The OECD is forecasting global economic growth to edge down to 3.3 per cent over 2019, partly in response to the US-China trade war and the fallout of the Brexit debate in Britain and Europe. It expects Australia to grow at 2.7 per cent. In its annual report into key issues facing businesses and the financial sector, the Paris-based think-tank said governments had invested huge amounts of political capital and public finances into rebuilding the trust destroyed across the financial sector by the GFC in 2008....A decade after 'excessive debt' in the housing market brought the global economy to its knees, the OECD said even more debt today could precipitate a loss of trust in financial and political institutions. 'Should global economic growth and credit conditions continue to deteriorate, a new bout of financial stress could erupt, the financial markets could become more vulnerable to episodes of contagion,' it said."

Trump says Fed 'boneheads' should cut interest rates to zero 'or less' -CNBC
"President Donald Trump on Wednesday continued his verbal assault on the Federal Reserve, which he blames for slowing the economy, tweeting that the central bank should cut interest rates to zero or even set negative interest rates. The president also called Fed officials 'boneheads' in the tweet. 'The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term,' he said. A Fed spokesman declined comment on the latest Trump salvos. The president also made a new suggestion not seen in some of his past attacks on the Fed, saying that the country should refinance its debt load. The U.S. has $22.5 trillion in debt, $16.7 trillion of which is held by the public. That debt load has grown $2.6 trillion, or 13% under Trump, due in part to the 2017 tax cut that the president shepherded through Congress. Taxpayers have shelled out $538.6 billion in interest costs in the 2019 fiscal year, easily a record. The idea for 'refinancing' federal debt is without any modern precedent....The Fed is expected to approve another quarter-point rate cut at its meeting next week, following July's reduction that was the first such move in 11 years. Markets foresee one more reduction before the end of the year and another in early 2020."

The 9/11 Generation Comes of Age -Wall Street Journal
"It's always difficult to determine precisely when an epochal event makes the transition from memory to history, but 2019 may well mark that moment for the terrorist attacks of Sept. 11, 2001. This week's 18th anniversary can be seen as both the legal coming-of-age of the cohort born in the wake of al Qaeda's assault and the generational passing of the torch from the children of the Cold War to the children of the war on terror....Many members of the '9/11 Generation' - the young Americans who have come of age in a world still wrestling with the consequences of the day - remember not so much the events themselves as the way they were refracted through the emotions of the adults around them. Beau Garner, who lived in Michigan and was just 3 on 9/11, said, 'My only memory is my mom standing in front of the TV watching the news.'....For many, al Qaeda's attacks marked a profound moment of growing up. 'I just couldn't understand why anyone would want to hurt so many people,' recalled Kristin Camille Chez, who was a fifth-grader in Florida in 2001....We rarely know precisely how milestone events transform entire generations, even as we note the way that those who came of age during the Great Depression so often remained frugal and how those who lived through Vietnam and Watergate tended to doubt national leaders and institutions. We don’t yet know what the lasting impact will be of coming of age in a country engaged in seemingly perpetual war....The 9/11 generation, numbering roughly a quarter of the U.S. population, has never known the peace, security and swagger that pervaded America in the 1990s - when the political scientist Francis Fukayama could proclaim 'the end of history' on American terms."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,499 an ounce. Silver at $18.18 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid mild profit-taking as well as bargain hunting. U.S. stocks fell, weighed down by a continuing decline in tech shares while Ford was pressured by a downgrade to its credit rating.

Every reason to avoid buying a gold ETF -Sovereign Man
"ETF stands for 'exchange-traded fund'. It's sort of like a mutual fund that's listed on the stock exchange, meaning investors can buy/sell shares of an ETF just like they would buy/sell shares of Apple, Ford, or Netflix. But unlike Apple, which is an operating business with employees, products, revenue, etc., an ETF is NOT an operating business. It's a fund that merely pools capital to own assets....The ETF is a LOT easier for most investors. But there are also ETFs for gold and silver. And I find this mystifying...Gold and silver are easy to buy...So gold ETFs provide no added convenience. Yet there's an enormous amount of downside....First off - it's important to know that if you buy an ETF, you're paying for a ton of unnecessary expenses. The ETF has to pay custodian fees, marketing fees, listing fees to the New York Stock Exchange, audit fees, management fees, etc. If you own physical gold in your own safe, you wouldn't have to suffer the cost of paying lawyers, auditors, and investment bankers. So how do they (ETFs) pay for this mountain of expenses? By selling gold. Your gold. GLD trustees periodically sell off the gold (that's supposedly owned by the investors) in order to pay expenses....Seriously, you have to be insane to buy GLD. Sure, it's convenient to click a button and buy GLD with your brokerage account. But it's also convenient to buy physical gold coins...So gold ETFs have no real advantage. But the disadvantages are numerous."

Why the coming recession could force the Fed to swap greenbacks for digital dollars -Marketwatch
"A movement has been brewing among economists, financial-services professionals and central bankers to encourage a rethinking of the technology of currency - those paper notes we carry in our wallets - with an eye toward issuing a digital currency. Some argue that could give central banks the tools necessary to break free of chronic disinflation and persistently low or negative interest rates, while providing Americans a risk-free means to transact in a world where digital commerce constitutes a growing share of the economy....Americans already use digital currency for most of their purchases. In 2018, they used physical dollars for just 26% of transactions, versus 62% with digital currency, which includes credit cards, debit cards and bank transfers, according to the Fed...The local bank that manages your savings account could fail at any time and the dollars in your account (beyond those insured by the FDIC) would disappear. A Fed 'e-dollar' would persist as long as the U.S. government does....The current economic expansion is the longest in U.S. history, but warning signs of a recession abound, including slowing economic growth and the recent inversion of the yield curve for U.S. government debt. In response, the Fed reduced interest rates in July and hinted at more cuts to come. But economists worry that the Fed will not have enough ammunition to fight the next downturn, as the central bank has typically had to cut rates by at least five percentage points to stimulate the economy following a recession. The Fed may be forced to restart its program of 'quantitative easing,' or the purchase of long-term government debt to push down long-term interest rates, though there is growing concern that this is an ineffective tool....While the Federal Reserve is unlikely to issue e-dollars anytime soon, it will surely be watching digital-currency experiments undertaken by central banks around the world....As economic storm clouds gather over the United States, and as the Federal Reserve appears to lack the ammunition to save the country from the sort of prolonged malaise that has overtaken other wealthy economies, it's possible that the next crisis-driven revolution in monetary policy is at hand."

Real US debt levels could be a shocking 2,000% of GDP -CNBC
"Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level. AB Bernstein came up with the calculation - 1,832%, to be exact - by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions....'U.S. debt is large. And it's growing. But if we want to think about debt problems (in any sector - sovereign, households, firms or financials) the conditions rather than the levels are more significant,' Carlsson-Szlezak said. The warnings about potential debt hazards come as the total federal debt outstanding has surged to $22.5 trillion, or about 106% of GDP. Advocates for fiscal reform argue that the debt impact has indeed reached the point where action is necessary. 'Globally, we have become over-reliant on borrowing as a solution for everything. Political excuses abound for why it doesn't matter, which just clearly isn't the case,' said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan committee of legislators. 'We are quickly approaching a situation where we have dug ourselves a debt hole which is doing to have profoundly negative effects on the economy for probably decades going forward,' MacGuineas added."

US heading toward worst financial crisis since Great Depression -Sanford/Fox Business
"Former Republican South Carolina Gov. Mark Sanford, who announced on 'Fox News Sunday' he is challenging President Donald Trump, said he foresees 'the most significant financial storm... since the Great Depression.' 'It's not just debt and spending, which is, again, my primary focus given the fact that we're walking our way toward the most significant financial storm, I believe, in our country since the Great Depression,' Sanford said. 'That's what we're walking toward.' 'And I think we need again to have a real conversation about what that means for the American dream and what that means in our ability to achieve a job, wealth, and all the things that go with the American dream.' Sanford also spoke against Trump's trade war with China. 'We need to as well have a conversation on, where are we going on trade, protectionism, turning inward versus outward,' he told host Chris Wallace, saying tariffs may cost $1,000 per U.S. household. The politician, who is no stranger to scandal after exiting the governorship under the cloud of a highly publicized extramarital affair, has aligned himself with the Never-Trump camp."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,510 an ounce. Silver at $18.20 an ounce.

NEWS SUMMARY: Precious metal prices took a healthy breather Monday on mild profit-taking. U.S. stocks rose near record levels amid increasing optimism around U.S.-China trade relations.

SILVER – GOLDEN OPPORTUNITY -Gold Switzerland
"Silver is probably one of the most undervalued investments that you can buy today. Since the top in 2011 at $50, silver went as low as $14 in 2015. But we must remember that silver was $4 in 2002....If you hold silver today, or if you intend to buy, you are now looking at one of those times in history when an investment is likely to make spectacular gains for an extended period of several years. But let me warn you. Silver is not for widows and orphans. The move up will also see periods of vicious corrections that will keep you awake at night, if you are a nervous investor....Once gold broke the 6 year Maginot resistance line at $1,350 in late June, this was the signal for the metals getting out of the starting blocks. That break was the signal and the gold/silver ratio peaked a few days later near 94-to-1. As silver is now going up faster than gold, the ratio is coming down fast and has so far lost 13%. But that is just the beginning. I expect that ratio to first come down to the 2011 low at 30-to-1. This means silver will go up 3x faster than gold (ratio goes from 94 to 30). If we take an example that gold will reach an intermediate top at say $2,000, and the gold/silver ratio then reaches 30. That would mean a silver price of $66....But remember that you are not buying gold or silver for short term price gains and therefore price targets are unimportant. Physical precious metals are bought for wealth preservation purposes. You buy and own physical gold and silver as insurance against a totally rotten and manipulated financial system which is unlikely to survive in its present form."

The Fed Can't See Its Own Shadow -Wall Street Journal
"Over the past few weeks 30-year bonds yielded less than 2% interest. That inverted the yield curve as short-term rates were higher, including the rate on repurchase agreements and what the Federal Reserve pays on excess reserves. Should we blame the usual suspects - a weakening global economy and trade wars? Not so fast. Sometimes it helps to look at things differently. 'There's a dollar shortage,' Jeffrey Snider of Alhambra Investments tells me. 'The market knows what's going on and further knows the Fed doesn't.'...The Fed's assets increased from less than $1 trillion in September 2008 to almost $3.8 trillion today. Sadly, the stimulus hasn't stimulated very much. What went wrong? Maybe the shadow knows. Shadow banking, that is. That's the market for repurchase agreements, or 'repos,' a form of short-term borrowing....'The Fed is, as usual, clueless,' Mr. Snider explains. 'It's a dollar shortage across several different facets, including foreign exchange, which is not something the Fed can recognize especially since it involves the global dollar system rather than just certain domestic pieces of it.' The U.S. dollar is indeed global. China and others use dollars as reserves instead of gold. Dollars are involved in 87% of currency exchanges world-wide....So what should they do? Encourage the Treasury to issue more of the long bonds the market is demanding: 30- or even 100-year. Feed the beast. Then stop quantitative easing: It doesn't work and soaks up collateral."

US-China trade war risks becoming a currency war -The Hill
"Leaders of the world's most advanced economies - Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, known as the Group of 7 (G-7) - met in France last month, with the world markets on edge and economies slumping....One formidable challenge on the minds of G-7 leaders was the escalating U.S.-China trade war and its fallout on world markets and slowing global economy...To the trade war's disruption we now can add the possibility of even greater disruption from a potential currency war. On Aug. 5, China's currency, the renminbi (RMB), fell below what markets consider the 'psychologically significant' level of 7 RMB to the dollar...President Trump pressed the Federal Reserve to counter by pushing down the dollar's value and pushing up the RMB...Taken together, these actions raise fear of a series of competitive devaluations - a currency war."

Gold will be the last man standing in a currency war -Mobius/Kitco
"Gold will be the last global currency standing as central banks around the world race to debase their paper money, according to billionaire investor Mark Mobius, the founding partner of Mobius Capital Partners. Friday, in an interview with CNBC, Mobius reiterated his bullish outlook on gold and said that all investors should have at least 10% of their portfolio in physical gold. 'Physical gold is the way to go, in my view, because of the incredible increase in money supply,' said Mobius, in the interview. 'All the central banks are trying to get interest rates down, they are pumping money into the system.'....Mobius added that the recent strength in the U.S. dollar could be the spark that ignites a global currency war. Mobius said the dollar could start to slide as the Trump administration voices its support for a weak U.S. dollar in an attempt to boost U.S. exports. 'They are certainly going to try to weaken the dollar against other currencies and of course, it's a race to the bottom. Because, as soon as they do that, other currencies will also weaken,' said Mobius. 'People are going to finally realize that you got to have gold, because all the currencies will be losing value.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,515 an ounce. Silver at $18.11 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose despite the release of weaker-than-expected jobs data.

Gold rebounds on weaker US jobs growth, eyes weekly gain -CNBC
"Gold turned positive on Friday...as a weaker-than-expected U.S. nonfarm payrolls report weighed on the dollar and increased appetite for safe-haven bullion, putting it on course for a weekly gain....The dollar also dipped following the payrolls data, making gold cheaper for investors holding other currencies. 'Today's jobs number missed expectations, causing gold to bounce higher. It just lends more credence to the fact that the job numbers are getting a little softer and it supports another rate cut by the U.S. Federal Reserve,' said Bob Haberkorn, senior market strategist at RJO Futures. Federal fund futures implied that traders saw a 96% chance for a 25 basis-point rate cut from a current rate of 2.00-2.25% by the U.S. central bank this month. Uncertainties around U.S.-China trade ties, fears of a deceleration in global economic growth and negative Treasury yields around the world were further supporting bullion, analysts said....Bullion has risen about 19% so far this year...Silver was up 0.1% to $18.65 an ounce and was headed for its fifth straight weekly gain."

The Great Debasement -Zero Hedge
"The facts are that the euro lost another 1.4%, the pound another 1.1%, and the yuan another 0.9% last week....Everyone should be bellowing from the rooftops, not about the greatly exaggerated death of the dollar, but that major currencies are dropping so fast! Analysts should be inquiring why they are falling, while their paradigm encourages them to think that it is the dollar which is, or should be, falling. We think it is entirely appropriate to measure these currencies by the US dollar, as they are derived from the dollar. And we measure the dollar by gold. Since the recent peak, at 24.51 milligrams of gold at the beginning of May, the dollar has fallen 12% to 20.34mg. It now seems to be within striking distance of its all-time low set in 2011, about 16mg. In gold terms, since that same date, the euro has fallen over 18%. We don't know why Europeans aren't screaming 'bloody murder' at this not-so-subtle looting. And to a somewhat lesser degree, Americans should be right there yelling too. Instead, gold owners in both currency areas are celebrating. That's because they adhere to the dollar paradigm. Although they know that the dollar loses value, they measure the value of everything else in dollars. They think gold is going up. We have a radical idea: the dollar's loss can be measured in gold. That means: if the price of gold doubles, the gold owner may have twice as many dollars but those dollars are each worth half as much. It is good to own gold, not for making profits but for avoiding the loss of the currency."

Note: Back in 2012 we published The Great Debasement: The 100-Year Dying of the Dollar and How To Get America's Money Back which warned of the dollar's approaching demise. Here is a brief excerpt from Swiss America Chairman Craig R. Smith's Introduction..."After 100 years of deliberate debasement, the U.S. Dollar is dying. America - whose power, prosperity and freedom have been secured by what once was the world's strongest, most trusted money - cannot long survive as a superpower after the dollar dies."

The Fed's Between The Rock And The Hard Place -Capital Speculator
"The Fed finds itself in a dilemma with no precedent in modern times. After cutting interest rates to nearly zero for years after the Great Recession, the central bank has managed a degree of normalization lately by lifting rates. But the tide seems to have turned this summer as the Fed target rate was cut in the face of softer economic data. Federal Reserve Chairman Jerome Powell called it a 'mid-cycle adjustment,' but the change was widely seen as the first of several reductions to counter a downshifting economy....The current target rate is 2.0%-2.25%, leaving little room to fight the next recession using the standard policy tool: reducing the price of money. If an economic downturn started today, the current Fed funds rate would rank as the lowest in the post-World War II era at the start of a recession....If negative interest rates are destiny for the US, a growing chorus of analysts are warning that the trend is doomed to failure as a stimulus effort for the economy. Sub-zero rates also threaten the stability of the banking industry, as Europe has come to learn with its grand experiment with negative terrain....The growing calls for the Fed to give up its monetary experiment and forgo new stimulus may be compelling on paper, but it's hard to imagine that the central bank will stand pat, much less tighten policy, if the economy is slipping into a recession. Indeed, political pressure on the Fed is growing, courtesy of President Trump’s continuing calls for rate cuts. Damned if you do, damned if you don't. It seems that central bank policy has run out of road. Ill-informed or not, the Fed will likely continue to cut rates and perhaps ease into more QE."

The Current Situation is much more dangerous than during the Dotcom Bubble -Hickey/The Market
"Wall Street darlings like Apple, Google and Amazon have dominated this bull market. But today, the so-called FAANG stocks have lost some of their attraction and are lagging the overall market since last year. 'Without participation from the FAANGs it will be difficult for the stock market to rip to new highs', says Fred Hickey. According to the renowned contrarian investor, each of the tech behemoths is struggling with its own fundamental problems, with Apple being the weakest of the group. Hickey also sees a huge gap between fundamentals and valuations in the semiconductor sector...Yet, in contrast to previous cycles, the editor of the 'The High-Tech Strategist' hasn't placed large bets on a crash. That's because he fears that central banks could step in once again and bloat the stock market with new rounds of quantitative easing. 'We’re near a recession if not already in one. Many parts of the world are in trouble. China's growth is at a multi-decade low and its economy might be in a recession. As a result, we see terrible export numbers coming out of Korea and Taiwan. Around the globe, trade, manufacturing and capital spending are contracting. In the tech world, all the end markets are very poor: auto and smartphone sales are declining, PC sales are weak, and semiconductors are in the worst downturn in a decade.'....'And, if you look at the valuations in the stock market as a whole, you could see a 40 to 50 per cent decline there.'....'I have quite a bit of cash, more than I had in a long while...But my biggest position is in precious metals.'....'People are very underinvested in gold and silver. In the past, when people were heavily invested in gold, they had 5 to 8 per cent of their portfolio in gold. Today, we're at a fraction of one per cent...So the smart money has jumped in, the masses of institutions have not yet. We're still in the early stages of this bull market.'"

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,525 an ounce. Silver at $18.80 an ounce.

NEWS SUMMARY: Precious metal prices retreated Thursday on short-term profit-taking. U.S. stocks rose after the U.S. and China agreed to meet next month in Washington to discuss trade.

$10,000 gold is not crazy talk -Holmes/Kitco
"Extremely dovish monetary policies around the world and economic conditions could propel gold prices much higher, to even $10,000 over the long-term. 'I think it goes up to $10,000. I don't think it's going to happen in the next 12 months, but I think the supply of gold, peak gold is there. The supply of gold is not growing. GDP per capita is still strong in China and India and Southeast Asia. 60% is bought for love, and that's a steady demand for gold,' Frank Holmes said. He added that we are now in a paradigm shift where the Chinese have shifted from being market takers of gold to being market makers."

The Economic Future of a Negative Interest Rate World -AIER.org
"Danske Bank of Denmark introduces the first negative 10-year fixed-rate mortgage. The German Finance Ministry voices disappointment at the lack of demand for 30-year zero-coupon bonds. The U.S. and Sweden contemplate issuing 50-year and 100-year bonds. These are all cause for concern. Excessively low interest rates support assets, favor the rich over the poor, favor the rentier (a person living on income from property or investments) over the business investor, encourage leverage and stock buybacks over capital expenditure and equity-capital formation. Income inequality grows, and social instability follows. Corporations that, under a more normal interest rate regime, would have been placed into receivership are able to continue to operate....If an inverted yield curve is the harbinger of recession, there may be trouble ahead....The effect that an artificially low interest rate has on an economy is pernicious. Asset markets are supported, and it raises the point at which they clear, but it also reduces the need for companies to improve internal efficiency. For corporates, borrowing becomes preferable to issuing equity. Firms become more leveraged....For households, lower interest rates encourage borrowing to buy assets...With falling interest rates comes more affordable mortgage financing, boosting property prices....And what of the poor, the unemployed, those unable to clamber onto even the first rung of the property ladder? Populist politicians will seize the opportunity to pander to the dispossessed voter....In the thrall of negative interest rates there is a clear incentive to borrow and a disincentive to save. This is Ponzi finance; it has turned time preference on its head, driving us to borrow from tomorrow to consume today."

Alan Greenspan says it's 'only a matter of time' before negative rates spread to the US -CNBC
"It will not be long before the spread of negative interest rates reaches the U.S., former Federal Reserve Chairman Alan Greenspan said. 'You're seeing it pretty much throughout the world. It's only a matter of time before it's more in the United States,' Greenspan told CNBC's 'Squawk on the Street' on Wednesday. There are currently more than $16 trillion in negative-yielding debt instruments around the world as central banks try to ease monetary conditions to sustain the global economy....'We're so used to the idea that we don't have negative interest rates, but if you get a significant change in the attitude of the population, they look for coupon,' Greenspan said. 'As a result of that, there's a tendency to disregard the fact that that has an effect in the net interest rate that they receive.' He added that gold prices have been surging recently because people are looking for 'hard' assets they know are going to have value down the road as the population ages. Gold futures are up more than 21% in 2019 and are trading around levels not seen since 2013."

Falling From Grace: The Decline Of The US Empire -Zero Hedge
"If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we're looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that's existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it's fallen....All empires follow the same cycle. They begin with a population that has a strong work ethic and is self-reliant. Those people organize to form a nation of great strength, based upon high productivity. This leads to expansion, generally based upon world trade. At some point, this gives rise to leaders who seek, not to work in partnership with other nations, but to dominate them, and of course, this is when a great nation becomes an empire. The twentieth century was the American century and the US went from victory to victory, expanding its power. But the decline began in the 1960s, when the US started to pursue unwinnable wars, began the destruction of its currency and began to expand its government into an all-powerful body. Still, this process tends to be protracted and the overall decline often takes decades....The US is presently in a state of suspended animation. It still appears to be a major force, but its buttresses are quietly disappearing...The final decline will occur with alarming speed."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,560 an ounce. Silver at $19.54 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks climbed as tensions in Hong Kong between the government and protesters eased after the withdrawal of a controversial bill.

Central Banks Just Love Gold and It's Going to Stay That Way -Bloomberg
"A major gold-buying spree by central banks is likely to persist in the coming years, according to Australia & New Zealand Banking Group Ltd., which flagged the potential for further purchases by nations including China. 'In the current environment, where uncertainty in emerging-market currencies is high, we see good reason for countries like Russia, Turkey, Kazakhstan and China to continue to diversify their portfolios,' ANZ said in a note on Tuesday. Net buying by the sector is likely to stay above 650 tons, it said. Central-bank accumulation of bullion has emerged as a increasingly important trend in the global market, offering additional support for prices that have rallied to the highest level since 2013 on rising demand....Central-bank accumulation of gold 'has further room to run,' Deutsche Bank AG said in a report, citing factors including a gradual migration of reserve assets away from the dollar. 'The stability of central-bank demand should help to bias gold prices higher over longer time frames.'...'Central banks in emerging markets are buying gold,' Jeff Currie, global head of commodities research at Goldman Sachs Group Inc., told Bloomberg Television. 'Why? Because they don't want to own dollars with sanction risk, geopolitical risk, trade-war risk out there.'"

Retirement After The Bubbles Burst? -Smith/Zero Hedge
"What happens when these monstrous speculative bubbles pop? Let's start by stipulating that if I'd taken a gummit job right out of college, I could have retired 19 years ago. Instead, I've been self-employed for most of the 49 years I've been working, and I'm still grinding it out at 65. By the standards of the FIRE movement (financial independence, retire early), I've blown it. The basic idea of FIRE is to live frugally and save up a hefty nestegg to fund an early comfortable retirement. As near as I can make out, the nestegg should be around $2.6 million - or if inflation kicks in, maybe it'll be $26 million. Let's just say it's a lot....Where do you put your expanding nestegg so it earns a positive yield? In the good old days, regular savings accounts earned 5.25% annually by federal law. Buying a house was not a way to get rich quick, it was more like a forced savings plan, as over time real estate earned about 1% above the core inflation rate. But all the safe ways of securing a return have been eradicated by the Federal Reserve. The Fed's 'fix' for economic stagnation was to financialize the U.S. economy, effectively eliminating low-risk returns and forcing everyone to become a speculator in high-risk financial casinos. As a result, the saver seeking a yield above zero is gambling that all the asset bubbles don't all pop before he/she cashes out....Which leads to another strategy entirely: focus not on retiring comfortably, but on working comfortably. Line up work you enjoy that can be performed in old age. That's a much safer bet than counting on the bubble-blowing machinery of the Fed to keep inflating speculative bubbles that magically never pop....What happens when these monstrous speculative bubbles pop? Trillions in phantom wealth vanish, pension funds go broke, states, cities and counties are insolvent, and nesteggs invested in speculative assets dry up and blow away."

In Coming Currency Wars, Gold Is the Only Practical Way to Preserve Buying Power -Dyson/Bonner And Partners
"Why is the price of gold rising around the world? Many countries are about to weaken their currencies. And it starts with America. Look at Trump's recent tweets. Or the U.S. government's $22 trillion in debt (which is effectively a massive bet on the dollar losing value). America needs a weaker dollar to win back industry from overseas and keep the credit flowing. Look at the Chinese, who want their products to seem cheap in the rest of the world. Or the Japanese and the Germans, who compete with the Chinese. Or the Brits, who are about to Eurexit… We're entering an era of 'competitive devaluations' or 'currency wars.' Gold will be the only practical way to preserve purchasing power. The markets are starting to sense this, I think, but it's still just a trickle. Yet as more and more people buy gold, we get closer to the tipping point… the bursting dam… the avalanche. That's the moment when the idea cascades and there's a stampede into gold. Gold will go far higher than it is today… maybe even double or triple. We're not there yet. But it feels like the moment is getting closer....That's why Kate and I sold everything we owned last year and converted ALL our assets to gold and silver. I started nagging my friends and family to get into gold, too. This is the third time in the last 20 years I've had this level of conviction. The first time was in 2002. I converted all my assets into gold then, too. I even took money from my mother's work friends and two of my friends from university and invested it in gold futures. Gold ended up rising 6x over the next eight years....when the Dow-to-Gold ratio hits 5, I'm selling the gold and converting it into high-quality, dividend-raising stocks. This simple, two-step investment strategy should take care of Kate and me for the rest of our lives."

The Greatest Threat to Wealth Preservation is 'It Won't Happen to Me' Syndrome -Maalamalama Wealth Academy
"Unfortunately, the “It Won’t Happen to Me” syndrome has investors worldwide discounting the potential of gold and mining stocks and clinging to overbloated stocks like AMZN, FB, NFLX, GOOG, TSLA, GOOGL and others...For those with a more conservative nature, of course, opting to hold physical gold and silver is the viable option versus the market cap giants of the US stock market....All of us have fallen victim to the 'It Won't Happen to Me' syndrome at some point in our lives, whether it's as simple as going swimming in waters where someone has been seriously injured, or even killed due to a shark attack, no matter how small the probability of such an event being a recurrent one, or whether it's ignoring the possibility of bank seizures in our own countries even though it's already happened in Cyprus and people have lost millions in bank investment products in China, lost millions in bank deposits in Ghana, and multiple red flags continue to manifest in the banking systems of dozens of other nations. When it comes to the greatest threat to wealth preservation, falling victim to this belief that 'it can't happen to me' could prove tragic over the next several years....In a twist of great irony, the reason so many of us embrace the 'It Can't Happen to Me' syndrome is the following. From a psychological standpoint, it preserves our immediate to short-term feeling of well-being by allowing us to disassociate ourselves from reality and encouraging inaction, even though from a long-term perspective, it is very likely to destroy our self-preservation abilities. In other words, the 'It Can't Happen to Me Syndrome' is a form of escapism, the reason movies were so popular as a form of entertainment during the Great Depression....In fact, ever since the overinflated status of the US stock market bubble became apparent, I often have opened every year on this blog by expressing the following sentiment: 'Even if you don't believe that gold and silver will preserve your wealth as the Central Bankers currency wars escalate and you want to ignore the large rebounds that will eventually happen in gold and silver assets,' they will continue to happen whether or not you are aware of them....In conclusion, just because we never have had prior experience with an event, we should never assume that the possibility of that event is invalid. Likewise, we should realize that only legitimizing what we already know can be a very dangerous mindset, and that we all need to step outside of our boundaries of human comfort to explore areas we do not know or understand fully if we wish to remove any layers of passivity that may surround us and take a proactive approach to the developing global financial crisis."

RealMoneyBlog - Free daily/weekly email

Gold last traded at $1,555 an ounce. Silver at $19.23 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Tuesday on downbeat economic data and China fears. U.S. stocks fell after the U.S. and China began imposing new tariffs on each other's goods and weak manufacturing data dented investor sentiment.

Silver technically joins gold in a new bull market -Kitco News
"With December Gold continuing to consolidate recent gains above $1500, investors have begun to move quickly into the cheaper safe-haven option of silver which has surged 12% this month and touched an over two-year high of $18.76 on Thursday. Unless there is a harsh selloff later today below $17.50 in 'poor man’s gold', the metal that most everyone has loved to hate since it broke down sharply in 2013 will technically join gold in a new bull market. If history is any guide, leadership and its outperformance in relation to the gold price should continue in silver for the precious metals rally to keep running. Historically, the gold trend in either direction has driven the silver market. Investors typically ignore this tiny sector until gold has rallied long and high enough to convince them its upside momentum is sustainable. In fact, when this current secular bull market in gold began in early 2001, silver did not begin its major up-leg until late 2003....Since the price of silver peaked at nearly $50 per ounce in early 2011, this precious metal with a strong industrial component has continued to lag the gold price until the closely followed gold/silver ratio peaked above 96 on a weekly basis early last month. Once the gold price broke out of a 6-year basing pattern in late June, silver began to wake up from its 8-year slumber. The ratio of gold to silver prices has fallen 13 percent since early July and even though gold has risen sharply during that period, the grey metal has risen faster....The buying opportunity may not last long, as I also expect to see the silver mean reversion to gold continue picking up speed once a technical correction in the precious metal complex has completed. The metal could move quickly towards its 2016 high above $21 heading into the next FOMC meeting on September 17-18, once a healthy correction takes place."

Investors Rush Into Gold -Bloomberg
"Investors are going for gold in a big way. Inflows into bullion-backed exchange-traded funds topped 100 tons in August to hit the highest since February 2013 as the trade war worsened, risk assets took a knock, and central banks signaled looser monetary policy. Holdings rose 101.9 tons, bringing total known assets to 2,453.4 tons as of Friday, according to data compiled by Bloomberg. It was the third straight monthly increase. Bullion's been on a tear, gaining 19% this year, as the global outlook worsened on the stand-off between the U.S. and China. Central bank-buying has provided another layer of support, and Goldman Sachs Group Inc. says prices are likely to advance further as official purchases continue and demand for ETFs rises."

What Economic News Can You Trust? -Wright/AIER.org
"Traditional news may not be 'fake' per se, but people are right to remain suspicious of it...What people sense with the news is that it is not, in fact, trustworthy because the incentives of traditional news providers and their readers are not closely aligned, especially when it comes to economic and financial analysis. That has long been the case in television, hence the constant admonitions to trust newscasters, but today it is also the situation even for newspapers and magazines, as most of their revenue comes from advertisements rather than subscriptions....All the survivors of the great newspaper wars of the last several decades, WaPo, NYT, WSJ, LA Times, and so forth, diversify their page view portfolios by publishing articles along that spectrum....Even the accuracy of some government economic statistics (raw numbers) has been questioned, leading to sites like John Williams' Shadow Government Statistics (which, not coincidentally, is subscription-based). Where else can people turn for news and analysis?....The most powerful independent sources of economic and financial analysis are therefore those backed by endowments, caches of cash-producing assets that allow them to pay smart people to think, research, and write without worrying about pleasing advertisers. Such sources, like Mercatus, the Independent Institute, and the AIER, still face economic realities like opportunity and sunk costs but they can provide a public good from a private source of funding dedicated, basically, to one thing - the Truth, insofar as our feeble human brains can ascertain and elucidate it. That is the closest alignment of incentives between author and audience that money can't buy....Readers, viewers, and listeners should ask themselves if a particular article, segment, or podcast helped them to understand the world in a more nuanced, realistic way, if it helped them to an insight that made their lives better in some tangible way, like improved investment results or a more sophisticated view of a public policy. Such real world results can't be faked."

Overseas Investors Unload U.S. Real Estate -Wall Street Journal
"A strong appetite among foreign investors for office buildings, apartments, malls and other real estate has in part fueled the long-running bull market in U.S. commercial property. Now, amid a maturing property market cycle and rising uncertainties in geopolitics and the global economy, foreign investors have sold more U.S. commercial real estate than they bought in a quarter for the first time since 2013. European and Canadian investors have been active sellers recently, along with some high-profile investors from China. 'U.S. real estate is priced very high right now, and people think we're close to the top of the market,' said Matt Posthuma, a partner in Ropes & Gray's asset management practice....'For someone looking out three to five years, their investments may not be worth as much as they are today,' Mr. Posthuma said. 'That's the fear.' Some domestic investors in commercial property also are moving to the sidelines. Overall, sales volume of commercial U.S. property fell 9% in the first quarter of this year from one year ago....Finding good deals also has become trickier in the U.S. as a possible recession looms and other regional and economic trends - including the impact of e-commerce on the retail sector - cast a shadow over some property types."

RealMoneyBlog - Free daily/weekly email