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7.19.17 - Social Security: Broke in Five Years

Gold last traded at $1,242 an ounce. Silver at $16.29 an ounce.

NEWS SUMMARY: Precious metal prices held steady Wednesday on a firmer dollar. U.S. stocks traded higher as investors digested housing data and more quarterly earnings.

Silver To Surge Above $20 Within A Year -Kitco
"This year’s volatile silver market could see a positive price rally within the next 12 months, surging 25% from the current value, one UK-based precious metals consultancy said. Silver prices should see a strong rebound of at least 25% from their current levels of $16.27 to trade all the way at $20.25 within a year, Metals Focus analyst George Coles told Bloomberg on Tuesday. The main reason for the upcoming rally would be disappointing U.S. economic growth, which would translate into slower rate hike pace by the Federal Reserve, explained Coles, adding that this would mean good news for silver....Another boost for silver could come from short covering by Comex speculators, Coles noted. Even though silver prices saw a lot of resistance in the past three months, many investors are putting their money into silver ETFs, said Coles, with assets reaching a record 21,211 metric tons, valued at $11 billion."

Fox Business The Economic Consequences of DC Gridlock -Fox Business
Swiss America chairman Craig R. Smith on the growing sense of frustration by prominent Americans such as businessman Jamie Dimon and economist Mohamed El-Erian as well as average citizens over the lack of progress in draining the swamp in Washington DC and making progress in boosting economic growth. Mr. Smith offers an optimistic strategy to help get America growing again - before American citizens (and the rest of the world) lose all confidence in U.S. political and economic leadership.

Tax reform becomes a must-win issue for the White House -Politico
"With President Donald Trump’s effort to undo Obamacare derailed by opposition from Republican senators, the White House has turned its attention to its next big shot at a big win: tax reform. The long-held GOP goal of re-engineering the U.S. tax system has now become a political imperative for the Trump administration, which has yet to deliver any major legislative victories despite Republican control of the White House and both houses of Congress....Donors and influential Republicans are particularly eager to see tax reform completed before the 2018 midterms - both for their own bottom lines and because it will be harder for Republicans to hold on to Congress without policy accomplishments, White House advisers and outside supporters fear. 'If Republicans fail to repeal or at least substantially roll back Obamacare, it raises the stakes dramatically to pass into law a big, bold tax-reform plan,' said Tim Phillips, who leads Americans for Prosperity, the political group backed by the Koch brothers....The senior administration official said the White House hopes to start rolling out a tax blueprint in August and then 'build on it.'"

Social Security Will Be Paying Out More Than It Receives In Just Five Years -Zero Hedge
"No matter how you slice it, it doesn’t seem possible to keep social security funded. In fact, social security is going to start paying out more money than it receives in just a few short years. It may even be insolvent before the baby boomer generation dies off....Right now Social Security continues to take in through revenue more than it pays it through benefits, which is expected to continue until 2022. Once Social Security begins to pay out more than it takes in, it will be forced to liquidate the assets held by the trust funds....There isn’t really any viable solution for paying off the future liabilities of social security, aside from cutting the benefits or increasing the retirement age. Otherwise it’s going to run out of money eventually, which is the same story with private and public pensions. We are all paying for our retirements in one form or another, but few of us living right now are going to fully benefit from it."

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7.18.17 - Why Millennials Dislike Capitalism

Gold last traded at $1,241. Silver at $16.26.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks traded mostly lower amid political gridlock on healthcare reform.

Gold price rises to two-week high as dollar slides -Reuters
"Gold prices hit a two-week high on Tuesday as the dollar fell on fading prospects of an imminent increase in U.S. interest rates and expectations of stronger demand from the physical market. 'We see gold averaging around $1,300 over the third quarter,' said ING commodities strategist Warren Patterson....Weighing on the dollar is the collapse of U.S. President Donald Trump's efforts to deliver a new healthcare bill in a market deeply worried by the pace of America's economic growth....'It pushes out the rest of the agenda. It’s hard to do a tax reform in the style that it was campaigned on,' said Art Hogan, chief market strategist at Wunderlich Securities in New York. 'The healthcare hurdle pushes everything in Trump’s agenda to 2018.'"

Fox News Netflix stock rockets on strong subscriber growth - FoxNews
Swiss America chairman Craig R. Smith joined a panel discussion with Fox News host Neil Cavuto to react to Netflix's huge rise in subscribers, sending the stock price up 9% and bringing Netflix's year-over-year growth to 64%. But is this growth sustainable? Watch now.

U.S. stock market will likely top out in the next three weeks -Marketwatch
"Investors have been expecting the U.S. stock market to crash for years....At the end of the past week, I have begun to hear people talking about how the market is about to 'take off' again in a big way. However, I was looking for the market to do just that in early 2016, and we are now approaching the topping target we set for this segment of the rally we expected back in early 2016. In fact, for those viewing my charts during that time, you would know the chart had a blue box target between 2,487 and 2,564 on the S&P 500 since last year for this segment of the rally. At this point, it looks like we may only attain the lower end of that target region....Moreover, Luke Miller, who runs one of our proprietary timing models at Elliottwavetrader.net, notes that there is a potential timing target around Aug. 9 that can mark a larger-degree top in the market."

Why don’t millennials like capitalism? Blame parents. Blame schools. Blame Obama. -TheState
"As a society, we have done millennials a disservice. An entire generation of young people in America came of age during a decade of sluggish economic growth, and as a result, many are skeptical of free enterprise and capitalism. A stunning 2016 Harvard University survey of young adults between the ages of 18 and 29 found that 51 percent of respondents do not support capitalism....President Obama told impressionable young voters if only the rich paid more taxes, everyone would be better off. But Obama’s tax and spend policies produced a predictably stagnant economy that stifled economic opportunity for young people....The Left preached that everyone has a 'right' to free child care, free health care, a free college education and a roof over their head. And that the State will provide no matter what, so there’s no need to save, no need to work hard or pay your mortgage or student loans....This is also the first generation raised by 'helicopter parents,' who did their part, however well- intentioned, to undermine personal responsibility....Then they went off to a higher educational system that produces an oversupply of the white-collar soft-science and humanities majors, many of whom have no marketable skills....But capitalism and free enterprise, not socialism and welfare, have proven to be the key to prosperity and to reducing global poverty and inequality."

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7.17.17 - America's Secret Debt Ceiling Plan

Gold last traded at $1,233 an ounce. Silver traded at $16.10 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain hunting and improved investor sentiment. U.S. stocks fluctuated on political uncertainty as investors await this week's earnings reports.

Gold poised for more gains on soft U.S. rate outlook -Reuters
"Gold climbed on Monday and was likely to see further gains after the dollar slumped to multi-month lows on the back of data that pointed to weak U.S. inflation and dampened prospects for rate hikes. 'The dollar continues to be on the back foot and yields have dropped back somewhat from their relatively elevated positioning lately,' said analyst Jonathan Butler at Mitsubishi in London....'If gold remains at $1,230 or goes higher, there's an elevated risk that some of those short positions might start to be reversed and that would give some further upside to gold,' Butler added....'Investor sentiment (for gold) has improved quite dramatically over the past week, especially with the weak data out of the United States last week,' said ANZ analyst Daniel Hynes. 'Gold is now primed for another rally.' On the technical front, gold is likely to significantly break above key resistance at the 200-day moving average near $1,230 per ounce and could even rise to the $1,250 level in the shorter term, Hynes said. 'The technical bounce looks fairly solid,' he said"

debt America's Secret Plan for the Debt Ceiling -PontificationBlog
"Sometime this October, the Federal Government is going to run out of money. It will be unable to borrow more until Congress agrees to raise the debt ceiling, a vote that some Republicans want to use to shrink the government. Usually this has meant that government could 'shut down' briefly if debt ceiling legislation leads to deadlock....What may happen instead is 'a harebrained scheme that is apt to backfire,' says Congressman Tom Cole (R.-Oklahoma), who sits on the House Budget Committee. It could be U.S. debt 'default by another name,' warns former Treasury Secretary Jacob Lew. If lawmakers cannot resolve the debt ceiling issue, then the government may employ what Bloomberg News on July 14 called a 'once-secret plan written by the [President Barack] Obama administration that would lead to the first-ever default on U.S. debt.'....This. warns Jack Lew, could trigger a review of whether the U.S. still warrants a AAA rating on its debt paper....The government would have to pay much higher interest to borrow money by selling its debt." Full story

There is more risk than reward in today's market: Jim Grant -YahooFinance
"Jim Grant, founder and editor of Grant’s Interest Rate Observer, said the stock market is currently overvalued and investors should be cautious when entering the marketplace. 'There is more risk than reward in this market. I say that stocks, at current levels, are worrisomely high. I would say the interest rates are worrisomely low … And I say that now is a great time not to be caught up in the crowd which has to invest as if by compulsion,' he told FOX Business’ Maria Bartiromo. As the Fed looks to begin unwinding its $4.5 trillion balance sheet, Grant believes attempts to normalize rates may be unsuccessful because the Fed could be forced to react to external events. You know, Janet Yellen would have us believe the Fed controls outcomes … And I’ve lived to see many episodes in the history of the Federal Reserve in which events were driving the Fed,' he said."

Senate GOP's healthcare problem is not Trump -McClatchyDC
"One big reason Senate Republicans are having trouble uniting around a plan to overhaul the nation’s health coverage is that a lot of them just don’t get along. These intra-party clashes of personality and policy stymie the bill’s progress as much as any other political force. Sure, lawmakers are reluctant to side with President Donald Trump, particularly in traditional swing states such as Ohio or Wisconsin. And waiting in the House are conservatives who are wary of the latest Senate plan, crafted to win over centrists. But what’s hurting the Senate’s effort to come together are the personal relationships. Or lack of them....The math on health care is tough for the GOP, a fact that even Trump acknowledged in a conversation with reporters on Air Force One recently....Add to all this Republican governors weighing in, too, trying to strong arm their states’ senators to vote one way or another....'Here’s the problem: You’re not going to get a bill passed in Washington that Republican governors don’t like,' said Sen. Lindsey Graham, R-S.C."

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