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9.18.17 - Will Gold Shine As Bitcoin Crashes?

Gold last traded at $1,310 an ounce. Silver at $17.15 an ounce.

NEWS SUMMARY: Precious metal prices traded lower Monday on profit-taking and a firmer dollar. U.S. stocks rose following a big defense sector deal ahead of a key Federal Reserve meeting.

Deutsche Bank: "Global Asset Prices Are The Most Elevated In History" -Zero Hedge
"In an extensive report published this morning by Deutsche Bank's Jim Reid, the credit strategist looks at the 'Next Financial Crisis', and specifically what may cause it, when it may happen, and how the world could respond assuming it still has means to counteract the next economic and financial crash....According to Reid, 'we're in a period of very elevated global asset prices - possibly the most elevated in aggregate through history.'....Current valuations are certainly stretched relative to nominal GDP through history....The cyclically adjusted Price/Earning (CAPE) ratio valuations are certainly stretched relative to nominal GDP through history. We have been more expensive but we are approaching the peaks of 2000 and 2007 and are in line with the most stretched valuations from the 1930s on this metric and higher than the 1929 crash point."

tax reform America Needs a “Tax Reformation” -Pontification Blog
"In today’s struggle between globalist collectivism and nationalist individualism, we need more than tax reform. We need a Tax Reformation that again puts the individual taxpayer above the government and reasserts the ancient Roman Cicero’s motto that the good of the people is the highest law....The United States, which began as a free enterprise nation, now imposes a 35 percent tax rate on businesses, the highest among advanced countries....President Donald Trump's wish to reduce business taxes to 15 percent is 'unrealistic' according to the left-of-center magazine The Atlantic. Yet 15 percent could bring 2.5 Trillion in overseas earnings home, and is the business tax rate in prosperous Germany, Luther’s homeland. The Left deems a 25 percent rate plausible. This is the business tax rate in Communist China - 10 percentage points lower today than in the 'capitalist' United States....The purportedly pro-business Republicans run Congress but have been hesitant to make President Trump’s tax cut proposals law....But if Democrats regain power because of Republican timidity or inaction, the rules will immediately be changed to raise taxes. Americans need again to see that lower taxes and smaller government - a Tax Reformation - are the path back to greater prosperity, freedom, individuality, and enterprise."

Will gold shine brightly again as bitcoin crashes? -The National
"In June I wrote about the many forces propelling gold prices to beat the S&P 500 so far this year, most critically a weakening US dollar and unpredictable new US president. For followers of the gold price it was the final break out above $1,300 last month that was most impressive and the quick sprint up in the price to $1,350 an ounce....The US Federal Reserve has now raised interest rates three times. You might expect higher interest rates to boost the dollar but rather this is seen as a sign of slowing growth opportunities for US assets and a negative for investors. Why then is the US stock market still so sky high? Well that's now down to a concentration of speculation into a very limited number of stocks in the Nasdaq. Lesser company stocks have already fallen....One event to look out for is the collapse of the cryptocurrencies, now under assault from central banks around the world worried about losing control over the global monetary system and a speculative bubble....But why should investors in overvalued global financial markets and hot-air speculations like digital currencies retreat into precious metals at this stage in the cycle? It’s an insurance policy against disaster and a diversification that always has a residual value. Gold or silver, at least in physical form, is the oldest form of money, a real asset that cannot be spirited away by plunging global stock markets, nor lost as computer code containing supposed riches. And all it takes is a relatively small number of investors around the world to decide to allocate five to 10 per cent of their wealth to gold and silver to radically improve its valuation."

Justice Department Begins Criminal Probe Into Equifax -Zero Hedge
"The U.S. Justice Department has opened a criminal investigation into whether top officials at Equifax violated insider trading laws when they sold stock before the company disclosed that it had been hacked, according to people familiar with the investigation. Equifax disclosed earlier this month that it discovered a security breach on July 29. The three executives sold shares worth almost $1.8 million in early August. The company has said the managers didn’t know of the breach at the time they sold the shares. Senator Heidi Heitkamp, a Democrat who sits on the Senate Banking Committee, said it was 'disturbing' that it appeared executives sold their stock before disclosing material information to the public. 'If that happened, somebody needs to go to jail,' Heitkamp said at a credit union industry conference in Washington. 'It's a problem when people can act with impunity with no consequences. How is that not insider trading?'....The total value of Equifax shares sold by Gamble, Ploder and Loughran 2 days after Equifax had discovered the data breach and 37 days before the company informed the public about the breach is $1.88 million."

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9.15.17 - Equifax Incompetency Being Investigated

Gold last traded at $1,325 an ounce. Silver at $17.70 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday on mild profit-taking and Fed rate hike fears. U.S. stocks extended gains, despite geopolitical worries, as tech stocks rebounded.

The Golden Solution to America's Debt Crisis -Rickards/Daily Reckoning
"Right now, the United States is officially $20 trillion in debt. Over half of that $20 trillion was added over the past decade....Basically, the United States is going broke....The U.S. has a 105% debt to GDP ratio, trillion dollar deficits on the way, more spending on the way....We’re heading for a sovereign debt crisis....There’s only one solution left, inflation....The Fed could actually cause inflation in about 15 minutes if it used it. How? The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce....Don’t think this is possible? It’s happened in the U.S. twice in the past 80 years....The first time was in 1933 when President Franklin Roosevelt ordered an increase in the gold price from $20.67 per ounce to $35.00 per ounce, nearly a 75% rise in the dollar price of gold....The second time was in the 1970s when Nixon ended the conversion of dollars into gold by U.S. trading partners. Nixon did not want inflation, but he got it. Gold went from $35 per ounce to $800 per ounce in less than nine years, a 2,200% increase....I call it the weird gold trick, and it’s never seen discussed anywhere outside of some very technical academic circles."

Investment Advice for My Children & Grandchildren -Merk/Merk Investments
"Hedge fund manager Ray Dalio likes to say he chose the first stock he ever bought because it cost less than $5 a share, given that his savings from caddying at the time were, well, five bucks. That story is a great icebreaker but also highlights with what’s wrong with our industry: when we think about investing, we immediately think about the stock market. Let’s take a step back. My oldest recently returned back to college having completed a summer job. Thanks to our 'Golden College Fund' (our kids’ college savings is in physical gold; please see this 2014 Forbes article 'The Golden College Fund' for details), our son in the fortunate position that he doesn’t have to pay off college debt with his earnings. If he did, paying off college debt - like any other debt- is a choice of whether one expects a higher rate of return with one’s investments (after tax) than if one were to pay off the debt. It’s also a choice of risk tolerance, as a debt-free person has much less to worry about."

college costs

"Talking about worrying: the advantage a college kid without debt over just about any other adult has is that he or she has no obligations, notably also no family to feed. I allege that financial stress is foremost a function of expenses, not income....In an era where central banks have elevated asset prices into what might be bubble territory, and fostered capital misallocation, investors need new tools to have a robust portfolio for what may lie ahead....Gold comes up many times in these discussions; it's not that gold is so much 'better' than many other investments, but it’s much easier to grasp the potential diversification benefits and understand the risks of gold than of a long/short equity or a long/short currency strategy."

Bitcoin is in a bubble, and here's how it's going to crash -CNBC
"Can bitcoin be a transformational, technology-based, currency and be in a bubble at the same time? Uh, yeah!....Most disruptive developments in technology and finance eventually inflate into speculative bubbles as investors and traders assume that the intrinsic value of these new vehicles will expand forever. As yet, bitcoin also fails as a currency in several ways. Money is defined by three characteristics: 1) A storehouse of value. 2) A unit of account. 3) A medium of exchange. It's hard to determine if bitcoin is a storehouse of value. Daily volatility tops 5 percent to 10 percent while its 'value' has skyrocketed. If it crashes, it will fail to meet criteria No. 1. It is a unit of account, but for whom? It may be a medium of exchange, but for now that is only for a very few users....Bitcoin is in a bubble, make no mistake. The episode, for some, will end badly while others reap the rewards of getting in on the action early and, more importantly, getting out before the bust."

Equifax used the word 'admin' for the login and password -CNBC
"Scores of accounts on Equifax's website in Argentina allegedly were protected by the same generic username and password: 'admin.' Researchers at Hold Security, a Milwaukee-based cybersecurity firm, found that after some guesswork, they were able to uncover personal employee information housed on Equifax's South American site, including names, emails, and Social Security equivalents of over 100 individuals. ....'You don't expect anything like that,' said Alex Holden, Hold Security's chief information security officer. 'An ability to lookup cases for individuals based on a single numeric ID and gender drew our attention.' The research came as Equifax sank deeper into a controversy over its handling of a data breach that could affect 143 million people. The credit reporting company is now facing multiple investigations. In a rare public acknowledgement, the Federal Trade Commission announced Thursday that it has opened a probe into Equifax's breach in the United States. Since it announced the U.S. data breach last Thursday, Equifax shares have fallen more than 30 percent through Wednesday's close."

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9.14.17 - Chinese Halt Trading: Bitcoin Crashes

Gold last traded at $1,329 an ounce. Silver at $17.78 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Thursday on mixed economic signals and a flat dollar. U.S. stocks traded mixed as rising inflation increased odds of another Fed rate hike.

Your Social Security Number Isn't a Secret -New York Times
"The Equifax credit-reporting agency is being terribly, dangerously vague about its stunning loss of 'potentially' 143 million Social Security numbers. The data belong to roughly three-quarters of Americans with a credit report. Might as well be everyone. Whatever the company finally admits to, this much is certain: Social Security numbers are no longer a secret. These numbers were created for a single purpose: to track worker contributions to a national retirement fund. Until the 1970s, the cards even arrived printed with the warning 'Not for identification.' It's time we heeded that warning and stopped using the number for applications of any kind. For loans, for jobs, for cellphones. It’s going to be very expensive, but the jig is up....This fragile authentication arrangement based on Social Security numbers persists so that retailers and banks can offer easy credit. Walk in with a number and a name, walk out with a new TV and a credit card....Social Security numbers were never designed to be a security tool, and their usefulness for that purpose has run its course."

Your financial privacy is now officially a thing of the past. A Swiss America Research Report reveals how and why your money is more vulnerable today than ever before following the hacking of hundreds of the biggest U.S. firms in recent years. Read this urgent Free Report: AMERICA'S CYBER-HIT LIST

market ‘False Peace’ for Markets? A Trader Is Betting Millions on It -New York Times
"As investors celebrated yet another bounce-back from a market slip, Christopher Cole, a trader who runs a hedge fund here that makes bets on various forms of financial apocalypse, spotted something amid the sprawl of data and code that decorated the wall of screens before him. 'Optically, volatility is still very low, but fear is increasing,' Mr. Cole said....Now, just a month ahead of the 30th anniversary of Black Monday, when the Standard & Poor's 500 stock index plunged 20 percent, Mr. Cole is wagering on a similar calamity, underpinned by a vicious spike in the VIX and a steep sell-off in stocks. 'The fact that everyone has been incentivized to be short volatility has set up this reflexive stability - a false peace,' he said. 'But if we have some sort of shock to the system, all these self-reflexive elements reverse in the other direction and become destabilizing as opposed to stabilizing.'....'Volatility is an instrument of truth, and the more you deny the truth, the more the truth will find you through volatility,' Mr. Cole said. 'If central banks want to keep saving the day, that is fine. But volatility will then be transmuted through other forms like populism and identity politics and threaten the fabric of democracy."

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

Venezuela Stops Accepting Dollars for Oil Payments -Fox Business
"The government of this oil-rich but struggling country, looking for ways to circumvent U.S. sanctions, is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy have told The Wall Street Journal. Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros....The measure is designed to bypass financial sanctions President Donald Trump's administration leveled against Venezuela's government last month for jailing political opponents and creating a super body of pro-government delegates that bypasses all institutions....The new payment policy hasn't been publicly announced, but President Nicolás Maduro's government had hinted it was moving in this direction after the U.S. Treasury Department banned any U.S. company or citizen from buying new Venezuelan debt....'To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar,' Vice President Tareck El Aissami, who has been blacklisted by the U.S., said Friday."

Cyber Looms as Top National Security Threat, DNI Says -Meritalk
"Cybersecurity threats have risen to the top of the nation's national security concerns, according to U.S. Director of National Intelligence Daniel Coats, who spoke at the Billington CyberSecurity Summit on Sept. 13. 'What keeps me up at night now is the wide diversity of threats that we have from all across the world, including the ever-expanding list of cyber threats,' Coats said. 'It’s clear that cybersecurity has become one of the most important priorities for the director of national intelligence and the intelligence community. China continues to conduct cyber espionage against the U.S. government, our allies, and U.S. companies. Iran and North Korea are improving their capabilities to launch destructive cyberattacks to support their political objectives. And nonstate actors, notably terrorist groups like ISIS, are using the Internet to organize, to recruit, spread propaganda, raise funds, collect intelligence, inspire action, and coordinate operations.'....'The good news here is that the private sector is increasingly focusing on cyber intelligence and increasingly understanding the need for interconnectedness and the sharing of information,' said Coats."

Bitcoin Crashes After Chinese Exchange Says It Will Halt Trading -Bloomberg
"Bitcoin fell for a fifth day, the longest losing streak in more than a year, after one of China's largest online exchanges said it would stop handling trades by the end of the month amid a government crackdown on cryptocurrencies. The cryptocurrency has slumped as much as 22 percent since Sept. 7. It had risen more than four-fold this year amid greater acceptance of the blockchain technology that underpins the exchange method, global political uncertainty and increased interest in Asia....Bullish bets on the cryptocurrency are now considered the most crowded trade in financial markets, according to fund managers surveyed by Bank of America Merrill Lynch."

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9.13.17 - Equifax: Worst Cyber-Hit Ever

Gold last traded at $1,328 an ounce. Silver at $17.86 an ounce.

NEWS SUMMARY: Precious metal prices consolidated Wednesday on short-term profit-taking and a firmer dollar. U.S. stocks traded mixed as Apple and tech stocks fell, which capped gains in the broader market.

The hurricanes negative impact on Q3 GDP growth -CNBC
"Early estimates from Wall Street economists suggest the twin hurricanes that slammed the United States will have a sizable negative impact on third quarter growth numbers. Economists shaved their GDP estimates, with Oxford Economics paring 0.4 percentage point on the low end of the range to Goldman Sachs trimming 0.8 point on the high end. Most see the biggest hit from Hurricane Harvey, with only modest reductions or one- or two-tenths from Irma....Most economists see the fourth quarter getting a boost as rebuilding begins, but had not yet estimated the impact....Beyond the overall growth impacts from the hurricanes, individual data releases should begin soon to see storm effects. Jobless claims out Thursday are seen surging above 300,000, nearly 50,000 above trend, and September job growth could be off by 50,000 to 100,000."

federal debt Time To Drain The Fed Swamp -First Trust Outlook
"The Panic of 2008 was damaging in more ways than people think. Yes, there were dramatic losses for investors and homeowners, but these markets have recovered. What hasn't gone back to normal is the size and scope of Washington DC, especially the Federal Reserve. It's time for that to change. D.C. institutions got away with blaming the crisis on the private sector, and used this narrative to grow their influence, budgets, and size. They also created the narrative that government saved the US economy, but that is highly questionable....It wasn't government that saved the economy...Changing the insanely rigid mark-to-market accounting rules was the key to recovery, not QE, TARP or 'stress tests.' The Fed, and supporters of government intervention, ignore all these facts. Why? First, institutions protect themselves even if it's at the expense of the truth. Second, human nature doesn’t like to admit mistakes. Third, Washington DC always uses crises to grow. Admitting that their policies haven't worked would lead to a smaller government with less power...So how do you drain the Fed? By not appointing anyone that is already waiting in D.C.’s revolving door of career elites....We need a government that is willing to support the private sector and stop acting as if the 'swamp' itself creates wealth."

Equifax breach could be worst in history -Scotsman Guide
"The hack reported last week by Equifax will go down as one of the worst data breaches in history, and could prove to be the most damaging ever for American consumers, many security experts contend. Anonymous criminals committed the crime, but cybersecurity experts told Scotsman Guide News that the blame for exposing sensitive information belonging to roughly half of the U.S. population lies with Equifax, which has a history of data breaches. 'I firmly believe they could have prevented this,' said Tim Crosby, a senior security consultant with Austin, Texas-based Spohn Consulting....Equifax believes the attack occurred in mid-May and continued until it was discovered nearly two months later. 'This is a pretty scary thing,' Crosby said. 'It is going to affect the other credit reporting agencies, who are going to have to be on their toes. We know somebody has the information. We don’t know how widely it has been distributed, or who got it yet.'....'In my opinion, this is the super jackpot of cybersecurity compromise,' said Jeffrey Bernstein, the managing director of Critical Defence. Bernstein doubted that the hackers will ever be caught. They may have already sold the information on a shadowy 'dark web,' a number of small private networks that can't be accessed through traditional search engines."

AMERICA'S CYBER-HIT LIST, is a Swiss America Research Report that reveals hundreds of the biggest U.S. firms that have been hacked in recent years and what you can do to protect your money.

Bitcoin drops 8% after JPMorgan's Jamie Dimon calls it a fraud -CNBC
"Bitcoin fell below $4,000 on Wednesday with negative comments from a major business leader about the cryptocurrency and the threat of a regulatory crackdown, unnerving investors. The digital currency fell as low as $3,766.36 on Wednesday and traded down 8.7 percent at $3,792.43 as of 11:03 a.m. in New York, according to data from industry website CoinDesk. The move lower came a day after JPMorgan Chase CEO Jamie Dimon called the cryptocurrency a 'fraud,' adding that 'Someone is going to get killed, It's worse than tulip bulbs. It won't end well,' Dimon said at a banking industry conference organized by Barclays. 'Currencies have legal support. It will blow up.'....Investors have also been jittery in the past few days mainly because of numerous media reports suggesting that Chinese authorities are looking to shut down some bitcoin exchanges. These are platforms where bitcoin is traded....It's not just Chinese regulators taking a closer look at bitcoin. On Wednesday, India's central bank said it had been looking into cryptocurrencies as legal tender."

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