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Jan 22, 2021


1.22.21 - Gold to 'Maintain High Prices' in 2021

Gold last traded at $1,856 an ounce. Silver at $25.47 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday on profit-taking and a firmer dollar. U.S. stocks retreated from record levels, as investors reassessed the ambitious Covid stimulus plan.

Polarized U.S., delayed recovery, inflation: Gold price to 'maintain high prices' in 2021 -Kitco

"Gold remains an attractive investment this year as people opt for inflation-hedge options amid a myriad of risks, including a still divided U.S., according to StoneX.

'The precious metals sector was the best performing commodity group in 2020, rising on average by 27% Y/Y, led by silver, which in turn mirrored gold's movements as the latter benefited significantly from its characteristics as a hedge against multiple forms of risk,' StoneX said in its 2021 outlook. 'This year, with both geopolitical and economical certainty skewed to the downside, we expect that gold will maintain high prices, especially given negative real interest rates and excess liquidity seeking a home.'

Bullish factors for gold in 2021 include massive global stimulus, accelerating inflation risk, low real interest rates, geopolitical uncertainty, and a still divided U.S., the report highlighted.

'The United States, the European Central Bank, and the Bank of Japan have all been active with combined asset growth of over $7 trillion last year. With Congress' approval of a $900 billion virus relief package in the United States (tied to the $1.3 trillion government funding program) there is more liquidity coming; Europe may follow suit, while Japan is looking to extend support for the corporate sector,' StoneX said."

spending U.S. Government's Monetary Policies Are Eroding Americans' Wealth -Bonner/Rogue Economics

"There are only two important things a president has to do: He has to protect the American people… and their property. Like two banks of a river, they can never be entirely separated....

According to JPMorgan Chase CEO Jamie Dimon's calculation - normal, pre-fake-money growth rates would have produced twice as much additional GDP in the last decade, an extra $10 trillion to divvy up over the last 10 years.

So most people are deprived of both wealth and income as a result of the feds' fake economy.

Even more egregious, the Federal Reserve gave some $7 trillion of fake money to the richest people in the nation. Relatively, everyone else is poorer.

But today, we're going to cross over to the other bank of the river. We will take a look at how America's presidents have protected our freedom… or not.

On neither side of the river is the U.S. blazing any new trails. This process of government-led impoverishment is nothing new. Or strange. Or mysterious....

And here, we will make it even simpler for the new president to understand what he is supposed to do. Time and resources can either be used to create more wealth (capital formation)… or they can be consumed.

Government, with some small exceptions, is a consumer of wealth. The private sector creates it. So the smaller and less intrusive the government, relative to the private sector, the richer and freer the society....Small government = good. Big government = bad....

Americans’ freedom has been taken away… one pettifogging regulation, one fake dollar, one lie… at a time. And now, the whole system seems to be coming apart. Nothing is too extreme. Or too absurd."

The Internet Versus Democracy -Roach/Project-Syndicate

"In an era of mounting social and political instability in the United States, internet-enabled connectivity is powerfully amplifying an increasingly polarized national discourse. The horrific events also touch on a critical contradiction of modern societies: the internet's role as an instrument of democracy's destruction.

It was not supposed to be this way. The internet's open architecture has long been extolled by cyber-libertarian futurists as a powerful new democratizing force. Information is free and available instantaneously - and anyone can now vote with a mere click. The rapid expansion of the public square is offered as exhibit A. Internet penetration went from 1% to 87% of the US population from 1990 to 2018, far outstripping the surge in the world as a whole from zero to 51% over the same period.

The problem, of course, lies in internet governance - namely, the absence of rules. Even as we extol the virtues of the digital world, to say nothing of the acceleration of digitization during the COVID-19 pandemic, the dark side has become impossible to ignore....

US digital platforms - from Twitter and Facebook to Apple and Google - have taken matters into their own hands...Understandably, there are great misgivings about entrusting corporate leaders with the fundamental task of protecting democracy. But that is not the only line that has been crossed in the US. As Shoshanna Zuboff shows in The Age of Surveillance Capitalism, the business models of Google, Amazon, and Facebook are based on the use of digital technology to gather and monetize personal data....

Whether or not we want to admit it, the aspirations and values of the so-called originalist interpretation of American democracy are being challenged as never before. The insurrection of January 6 and the pandemic share one critical implication: the potential breakdown of order in a free society. It's not that China has it right. It's that we may have it wrong. Unfortunately, today's hyper-polarization makes it exceedingly difficult to find a middle ground....

Internet-enabled connectivity is dangerously amplifying an increasingly polarized national discourse in an era of mounting social and political instability."

Covid-19 Vaccine: What You Need to Know When You Get the Shot -Wall Street Journal

"Those getting ready to roll up their sleeves for a Covid-19 vaccine shot will take part in the most ambitious vaccination effort in U.S. history. As efforts ramp up, here's advice from doctors involved with the vaccine rollout on how to prepare and what to expect.

Many people will register for a timed appointment, aimed at keeping wait times and the potential for crowds to a minimum - although the patchwork rollout so far has also meant many waiting in long lines. After filling out consent forms and receiving the shot, you'll be monitored for adverse reactions for 15 or 30 minutes depending on your allergy history. In the case of a timed appointment, the entire process should take around an hour, says Julie Boom, co-chair of the Covid-19 Vaccine Task Force at Texas Children’s Hospital in Houston, which is now vaccinating eligible patients that already have records within the hospital system. Afterward, some people choose to go home and rest.

In most cases, you'll simply need your photo ID and proof of your appointment. Some places may require additional documents, such as employee badges for first responders to show they are eligible.

For now, the two vaccines available in the U.S. are found to be similarly safe and effective, says Wafaa El-Sadr, professor of epidemiology and medicine at Columbia University in New York. Eventually, choosing one vaccine over the other may come down to scheduling conflicts, she says. The second dose of the Pfizer vaccine is offered 21 days later, while Moderna is offered 28 days later. 'The only thing I would consider is convenience,' says Dr. El-Sadr....

People are asked to stay at the site to be monitored for adverse effects, including allergic reactions, though these are rare. Those experiencing any post-vaccine sensations can call over a medical professional to address concerns. The monitoring occurs 'within the line of sight of our nurses,' Dr. Huhn says. In some cases, Dr. Boom notes, feelings of faintness can relate to nervousness over getting the shot rather than side effects relating directly to the vaccine."

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Jan 21, 2021


1.21.21- Gold Climbs on Fiscal Stimulus Talk

Gold last traded at $1,870 an ounce. Silver at $25.98 an ounce.

NEWS SUMMARY: Precious metal prices eased back on normal profit-taking despite a weaker dollar. U.S. stocks traded mixed, as investors bet on strong earnings from big tech companies next week.

Gold prices climb on talk of further U.S. fiscal stimulus -Marketwatch

"Gold prices climbed on Wednesday, on track for their highest finish in nearly two weeks, as expectations for further fiscal stimulus measures under the Biden administration looked to pressure the U.S. dollar, boosting prices for the dollar-denominated precious metal.

The market expects additional fiscal stimulus measures to be 'announced very soon,' providing support for gold, said Chintan Karnani, chief market analyst at Insignia Consultants. In testimony to the Senate Financial Committee Tuesday, incoming President Joe Biden’s nominee for head of the Treasury Department, Janet Yellen said the U.S. should 'act big' on the economy.

More stimulus would create more debt, which would lead to a weaker dollar, which can boost prices for gold....U.S. Treasury yields 'will fall if and when additional stimulus is announced,' said Karnani and lower bond yields are bullish for gold....

Bullish gold investors made the case that accommodative central banks across the globe and Biden's legislative agenda, highlighted by an ambitious $1.9 trillion coronavirus relief proposal, will ultimately provide support for gold and weaken the greenback."

behind the curtain The 2020 Election Was a Rebuke of Socialism -Soave/Reason

"Two days after the 2020 election, which saw Democrats capture the White House while losing ground in Congress, House Democrats held a conference call to discuss what went wrong. Rep. Abigail Spanberger (D–Va.) was unequivocal: 'We need to not ever use the words socialist or socialism ever again,' she said.

Indeed, socialism was something of a political loser this election cycle. The specter of it likely cost Joe Biden his chance at winning Florida...And while voters reelected all four members of the socialism-friendly 'squad' - Reps. Ayanna Pressley (D–Mass.), Ilhan Omar (D–Minn.), Rashida Tlaib (D–Mich.), and Alexandria Ocasio-Cortez (D–N.Y.) - the consensus among the party's leadership seems to be that the s-word is toxic outside of heavily left-leaning districts....

For democratic socialists, the 2020 election cycle began with great promise: The hard left had not one but two progressive primary candidates, Sens. Elizabeth Warren (D–Mass.) and Bernie Sanders (I–Vt.). But neither Warren nor Sanders could overcome Biden, the Democratic candidate who worked hardest during the primaries to put serious distance between himself and socialism.

Democratic socialists thought they were riding a blue wave. Instead they gave us divided government. That's not what they intended, but it might be the best possible outcome."

Offsetting the misery of the U.S. government's spending disaster -Washington Times

"The persistent myth is that government spending increases economic growth when, in fact, it slows growth beyond a certain point.

The myth is based on an old Keynesian theory argument that if there are unemployed people, the government can boost employment by giving people more money to spend, even though it increases the deficit.

This has some validity in the short run, provided, as Keynes argued, that the borrowed funds are paid back during the full employment phase of the business cycle....

Politicians misused the Keynesian argument to justify ever-increasing amounts of government spending, often even at the top of the business cycle. From 2019 to 2020, government spending soared as a percentage of GDP in all major countries. In the U.S., for example, government spending increased in one-year from 36% to 47% GDP.

If a government builds a new dam, where the benefits from flood control, power generation and irrigation exceed the full cost of the dam, economic growth will benefit over the long run. But when government spending is used for transfer payments - taking money from the productively employed through taxation or borrowing and then giving it to people who are not working - economic growth will decline over time.

Writing in The Wall Street Journal this past Friday, former senior U.S. government economic officials John Taylor and John Cogan argued that President-elect Joe Biden’s proposed $2,000 checks will do nothing to stimulate the economy and will only add to the federal debt. They further stated: 'Since the mid-1970s, one-time cash payments to individuals to stimulate economic growth have been tried on at least five separate occasions.' Presidents Ford, Carter, Bush and Obama tried the gambit - all with negligible results."

The Case for Decentralizing Monetary Policy -Yang/AIER

"Money for much of history has been something closely regulated by the state and today that trend has been steadily increasing. Whether it’s commodity standards like gold or today's fiat currency, which the government can issue at will, the state has always had a close eye on the money supply. This is rather curious because we should know by now that the market tends to manage things far better than the state. Just look at grocery stores in the United States and grocery stores in a communist country like North Korea or Cuba. Of course, this isn't an argument to privatize everything and anything but it should be reasonably understood that decentralized decision-making tends to work for most things and money should fall into that category.

That's the case that John Wood's short book Monetary Policy in Democracies: Four Resumptions and the Great Depression makes when he gives an in-depth account of the history of central banking in the United States and England. He explains that such banking regimes were kept under strict central scrutiny and control regardless of whether it was the Bank of England, the Bank of the United States, or the US Federal Reserve....It is clear that the highly centralized public management of money has insulated key decision-makers from the intricacies of everyday monetary affairs. The core problems associated with this suboptimal dynamic could be remedied to some degree with the decentralization of monetary policy.

One of the core benefits of the market as opposed to the political system is that there is no arbitrary decision-making and all decisions are made in the interests of the beneficiaries, i.e. the people. In the marketplace decisions on how much of something to produce and at what rate are determined by the willingness of consumers to buy and the willingness of suppliers to sell. It's a win-win situation and allows for countless preferences to be weighed and processed with a great deal of rapidity. The same cannot be said about the public sector....

I think it's fair to say that the world is reaching a new frontier of monetary policy. Fiat currency around the world is being pushed to its theoretical limits as trillions of dollars are being printed to finance stimulus packages. Interest rates in the United States are near zero and Europe has crossed into the experimental realm of negative interest rates. Meanwhile there is talk of the implementation of digital currencies and cryptocurrency is gaining mainstream popularity, albeit they are still not legal tender. It is an exciting and frightening time for the very notion of currency...Policy makers should heed the lessons of history and the principles of sound money to ensure that the future of money is guided by the democratic tendencies of the market rather than the arbitrary hand of the state."

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Jan 20, 2021


1.20.21 - The Case For $3,000/oz. Gold

Gold last traded at $1,868 an ounce. Silver at $25.80 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Tuesday on safe-haven buying and a flat dollar. U.S. stocks cheered President-elect Joe Biden's inauguration, as strong corporate earnings boosted sentiment on Wall Street.

Gold $3,000? -Timmermans/van den Noord/CFA Institute

"Since hitting bottom in late 2015, gold has been on the rise, with no end in sight. As Europe has moved gradually towards more of a fiscal union, as we predicted, and the United States has struggled with its response to the COVID-19 pandemic and social and political unrest, the Dollar index has only fallen slightly. This despite accelerated US monetary expansion in the face of the pandemic. With no negative correlation between gold and the money supply, the current gold rally is different....

With the two largest central banks printing so much money to combat the COVID-19 crisis, the dollar and euro should have lost value against gold. But the gold rally - and the elevated unease among investors that it represents - preceded the pandemic. The inverse relationship between gold and the dollar should hold firm in the long run....

So what might this mean for the price of gold?....

1. No Change in Fundamentals - the price of gold would rise slightly to $1,900 and stabilize there in 2021. This is likely a low-probability outcome if, as expected, QE-fueled monetary growth continues.

2. Continued Monetary Expansion - If this trend holds into 2021, leaving everything else unchanged, gold could reach $2,400 by the final quarter of 2021. This seems the much more likely scenario and may, in fact, be relatively conservative. If anything, money creation will only accelerate.

3. A Weaker Dollar - Our calculations, which assume continued QE, suggest that a price of $3,000 per ounce is possible.

All in all, this constitutes a bullish outlook for the price of gold. We see little in the way of downside risk and anticipate gold will fall within a bandwidth of $1,900 and $3,000 over the next 18 months. Which means the one of the world's oldest stores of value may be storing more of it in the months ahead."

Yellen The Debt Question Facing Janet Yellen: How Much Is Too Much? -Wall Street Journal

"A big question hangs over Janet Yellen this week at her confirmation hearing to become U.S. Treasury secretary: How much debt is too much?

In the past four years, U.S. government debt held by the public has increased by $7 trillion to $21.6 trillion. President-elect Joe Biden has committed to a spending program that could add trillions more in the year ahead. At 100.1% of gross domestic product, the debt already exceeds the annual output of the economy, putting the U.S. in company with economies including Greece, Italy and Japan....

The Biden administration will now contend with progressives who want even more spending, and conservatives who say the government is tempting fate by adding to its swollen balance sheet. Ms. Yellen's challenge, if confirmed, will be to keep Democrats together and persuade some Republicans to come along....

Ms. Yellen told lawmakers Tuesday that she and Mr. Biden appreciate the scale of the country's debt burden... 'But right now, with interest rates at historic lows, the smartest thing we can do is act big.'

The strongest advocates of this view are center-left economists, including former Treasury Secretary Lawrence Summers. Republicans have implicitly embraced the idea when in power....

Unaddressed are the twin questions of whether there is a ceiling on the U.S.'s debt load and how the country will pay it back, concerns heard mostly on the right. 'At some point we'll start paying a price for this,' said Michael Boskin, a Stanford University economist. He served as chairman of the Council of Economic Advisers under President George H.W. Bush in the early 1990s, the last time a Republican administration cut deficits.

Mr. Boskin agrees that low interest rates and a weak economy help make the case for limited federal support. He said he favored tax cuts over government spending and warned that immense deficits can't be carried on without limit. 'Eventually rates will rise,' he said....

Long-run challenges remain. Even before a new spending plan is launched, U.S. debt is on track to double to nearly 200% of GDP by 2050 because of soaring Social Security and Medicare promises, according to the CBO. Ms. Yellen has said such high levels can't be sustained. Mr. Biden has proposed tax increases on high-income households to pay for some of his economic policy proposals, which include investments in clean energy and health care. But there is little appetite in Washington for cuts to Medicare or Social Security."

UBS Wealth Warns Clients Crypto Prices Can Actually Go to Zero -Bloomberg

"Strategists at one of the world's largest wealth managers are issuing a warning to newbie crypto investors plunging into the record rally: You could still lose all your money.

Between regulatory threats and central bank-issued competitors, there’s nothing stopping a wipeout in big-name digital currencies eventually, according to UBS Global Wealth Management.

As Wall Street jumps on the Bitcoin rally like never before, the Swiss firm says prices may rise in the near term, but the industry faces existential risks over the long haul.

'There is little in our view to stop a cryptocurrency's price from going to zero when a better designed version is launched or if regulatory changes stifle sentiment,' authors including Michael Bolliger, the chief investment officer for global emerging markets, said in a report Thursday....

With Bitcoin slumping back to $35,000, the famously volatile asset class is stoking debate among the world's biggest money managers. While famed investors including Paul Tudor Jones and Stan Druckenmiller are entering the industry, critics see gambling, scandal and manipulation.

In the near-term crypto prices could climb anew powered by market momentum, institutional adoption and limited supply. But over the long term, the market risks regulatory intervention, the strategists said, citing the U.K.’s decision to ban sales of certain crypto-derivative products to retail investors."

More Americans Face Retirement Insecurity -Wall Street Journal

"After improving slightly in 2019, the outlook for financial security in retirement for workers ages 30 to 59 deteriorated in 2020, according to a study released Tuesday by Boston College's Center for Retirement Research.

According to the study, 51% of U.S. households are now at risk of being unable to maintain their standard of living in retirement. That is up from 49% in 2019.

Considering the scale of the 2020 pandemic shock to the global economy, the deterioration was relatively modest. Rising home and stock prices counteracted some of the impact of sharply higher unemployment, said Alicia Munnell, an economist at Boston College and the center's director....

In 2007, only 40% of U.S. households were considered at risk of falling short in retirement, down a tick from 41% in 2004, when Boston College began publishing the calculation.

Reasons for the long-term increase in households at risk include a rise in the age at which people can claim full Social Security benefits, to 67 for people born in 1960 or later. Other reasons include longer life expectancies and the long-term decline in interest rates, which has reduced the amount of income retirees can earn on their savings."

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Jan 19, 2021


1.19.21 - 'Rescue Plan' Could Destroy 4 Million Jobs

Gold last traded at $1,841 an ounce. Silver at $25.25 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks edged higher as investors digested the new earnings season amid increased stimulus and vaccine distribution hopes.

U.S. Set To Test How Much Ruin Nation Can Take -Black/New York Sun

"It is clear that we should never have listened to, or at least taken seriously, the advice of public-health experts to shut down the economy of the Western world in order to 'flatten the curve' of the increase in the incidence of the coronavirus.

There was early evidence of the inordinate vulnerability of elderly people and those with other significant ailments, and there was also plenty of evidence that a great many people had minimal symptoms or none at all, that we were only detecting a small minority of those who contracted the coronavirus, and that 80% of those who were deemed to have died from it had in fact died with it and other ailments, making the identification of the cause of death difficult....

The Democrats, facing a lost election due to the full-employment, no-inflation, robust-lower-income-growth economy that President Trump’s policies created, generated panic and hysteria through their parrot press. Enough of the population was screaming for an economic shutdown to make it happen. Many millions were thrown out of work, hundreds of thousands of small businesses failed, and terrible hardship was inflicted on the country, along with an unbearable strain on the Treasury and the money supply and the deficit.

This was all done to reduce the chances of mortality of the 1% of the population that was vulnerable to the coronavirus. Their average age was 78, the life expectancy of male Americans....

In the balance of the year, [many American cities] have enjoyed a rise in violent crime of between 40% and 170%....The United States has had the greatest percentage annual increase in violent crime in its history....

American democracy is at the lowest point in its post-segregation history: corrupt elections, abdicated courts, cowardly legislators, dishonest media, a prosecutocracy that terrorizes the whole country and wins 99% of its cases (95% without a trial), crumbling standards of education, skyrocketing crime rates, and a president-elect who looks and sounds like a waxworks dummy who has in his over-long career faced in all four directions on every major issue.

Adam Smith wrote that there is 'a great deal of ruin in a nation,' meaning that it can survive a lot of official incompetence and misfortune. The United States will undoubtedly prove that adage to be true, but it is putting it to a good test, and in politics as in other spheres it has its own collective misjudgment to blame for the nation's decline. It is not irreversible, but it will not be reversed by continuation of the lunacies and absurdities of the last year."

Archimedes The Biden Team Prepares for the White House -Bonner/Rogue Economics

"Archimedes expressed what at least was a 'theoretical' possibility. Joe Biden went off the deep end, saying his administration would move 'Heaven and Earth' to give people a shot in the arm.

From USA Today: 'President-elect Joe Biden wants Americans to get 100 million COVID-19 vaccine shots during the first 100 days of his administration...' Our guess: Heaven will stay put.

2021 is shaping up to be one of the most entertaining years ever. Yes, Dear Reader, moving Heaven and Earth was just part of a larger program… a $1.9 trillion grab bag of boondoggles and absurdities… including $2,000 'stimmy' checks… pretending to be 'relief.'....

Biden says the feds have a 'moral obligation' to provide money they don't have to people who don't need it.

We have already seen that 'stimulus' can raise prices (especially asset prices). But it can't magically turn printing-press money into the goods and services a real economy requires.

According to the theory, stimulus is like a lever… You can use it to pry into the economy and lift up growth. But where's the growth?.... Biden says this is just the beginning. There'll be more coming… as necessary. He's already on the case… with a proposal to double the minimum wage....

When money is so easy to come by, everything becomes a little lighter… easier to pry loose and levitate.

That is, when you can replace years of hard work, saving, self-discipline, innovation, resources, and time itself... with fake money... the SKY'S the LIMIT! So Heaven will have to get out of the way."

Biden's $1.9 trillion 'rescue plan' could destroy 4 million jobs -Moore/Fox News

"Can Uncle Sam tax, spend, borrow and print money to return America to prosperity? President-elect Joe Biden's 'American Rescue Plan,' announced Thursday night, makes a $1.9 trillion bet that we can.

The Biden plan is almost a replay - except with more than twice the price tag - of the strategy that President Barack Obama and then-Vice President Biden employed in 2009 with their $900 billion 'stimulus' bill. Even by Obama's own numbers, that bill led to hundreds of thousands of fewer jobs than if we had done nothing.

So now here we go again with a second kick of the mule. Actually, it is the third, fourth or fifth kick. Trump and Congress have already approved nearly $3 trillion on pandemic spending. The Biden proposal would bring the total spending for the pandemic to about $5 trillion.

What Biden has presented isn't a COVID-19 relief bill. It is a Sen. Bernie Sanders-type wish list of everything conceivable that the left has wanted to spend money on for years, and even decades. It certainly isn't a 'stimulus' bill....

In addition to sending $1,400-per-person checks to millions of American households - helicopter money - the Biden plan includes $350 billion for a blue state bailout, paid parental leave, a $15-an-hour minimum wage, $400 a week bonus unemployment checks, transit aid, paid leave of $1,400 a week, some $100 billion for school aid (for schools that have been shut down for almost a year!), 'health equity' grants, student debt relief and checks for illegal immigrants....

Biden's proposals will lift the national debt to above $30 trillion and will likely speed America further along the track to bankruptcy, higher interest rates, higher inflation and much higher taxes. Democrats defend themselves by arguing that Trump ran up the deficit to $27 trillion, so they have license to take our debt even higher into the stratosphere....

If the idea here is to create jobs, there is a less expensive and much more effective way to get employers to hire and workers to get back in the labor market. We could completely eliminate for an entire year the 7.5% payroll taxes paid by every small business and taken out of every worker's paycheck. That would unleash millions of jobs."

Biden And The Fed Embark On Fresh Multi-Trillion Dollar Bitcoin 'Marketing Campaign' -Bambrough/Forbes

"Bitcoin soared through 2020, in part due to the U.S. Federal Reserve effectively printing more than $3 trillion.

The unprecedented stimulus measures led to many big-name and institutional investors piling into bitcoin, led by billionaire hedge fund manager Paul Tudor Jones who named bitcoin as the 'fastest horse' in the race to beat inflation.

Now, after taper talk from Fed officials over the last week raised eyebrows among bitcoin and equity investors, Federal Reserve Chair Jerome Powell has stamped out suggestions the central bank’s massive bond-buying campaign could be headed for a premature reduction - just as U.S. President-elect Joe Biden has unveiled a $1.9 trillion coronavirus relief proposal.

Powell, who was named as Forbes Person Of The Year In Crypto last month for his '$3 trillion bitcoin marketing campaign,' said on Thursday it's too early to talk about making any changes to the central bank's easy monetary policy stance....Powell said the Fed expects 'a strong wave of exuberant spending' that could result in higher-than-usual prices later this year....

'As the federal government's stimulus programs continue to infuse trillions of dollars into the financial system, it poses significant economic risks, risks of dollar devaluation and inflation,' Steven Schnall, the chief executive of New York-based digital bank Quontic, said in emailed comments.

'With the Fed adding trillions of dollars to the money supply, it is inevitable that fiat currency will be subject to possible devaluation and there could be significant inflation. We believe that bitcoin could serve as a possible hedge against these occurrences.'"

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Jan 15, 2021


1.15.21 - Gold Outlook 2021 -World Gold Council

Gold last traded at $1,827 an ounce. Silver at $24.74 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday as muted wholesale inflation help boost the dollar. U.S. after President-elect Joe Biden announced details of a $1.9 trillion stimulus plan and major banks released mediocre earnings reports.

The Bailout Binge Begins -Rubino/ZeroHedge

"Incoming president Joe Biden just proposed that $10,000 of student debt be forgiven for each borrower. This sounds generous but is actually just the opening bid in a negotiation that will end in a very different, much more expensive place - and that will be repeated for many, many other groups of borrowers. Here's how this first round will go:

The vast community of ex-college students who still owe big bucks on their much-less-valuable-than-expected college degrees will scoff at Biden’s miserly offer....

The new government - correctly recognizing that deeply-indebted college-educated baristas are a core voting bloc - will immediately come back with a bigger number. This too will be roundly rejected as not fixing the entire problem. It will only be when the bailout number cracks the $1 trillion mark that the complaining will subside.

The Treasury will then write the checks, the Fed will finance the required borrowing, and the circus caravan will move on to the next needy group. Which will almost certainly be state and local governments, whose criminally mismanaged pension funds will make the student loan bail-out look like chump change.

And so it will go, through corporations that borrowed record amounts to buy back their own stock and are now broke, frackers who financed themselves with junk bonds but can’t generate enough cash flow to pay the interest, colleges that spent their endowments on shiny new stadiums, and foreign entities that borrowed too many dollars and might inconvenience big US banks by defaulting....

Somewhere along the way, questions will be raised about the impact of adding another ten or so trillion dollars to what looks suspiciously like a banana republic balance sheet. But with everyone’s eye firmly on their own upcoming bailout, the naysayers will be de-platformed for scaring fragile Robinhood daytraders.

Oh, and of course the vast bulk of the bailout funds will eventually find its way to the bank accounts and offshore vaults of the 1%. But that’s just obvious. Buy gold."

gold 2021 Gold Outlook 2021 -World Gold Council

"Looking ahead, we believe that investors will likely see the low interest rate environment as an opportunity to add risk assets in the hope that economic recovery is on the immediate horizon. That said, investors will likely also be navigating potential portfolio risks including: ballooning budget deficits, inflationary pressures, market corrections amid already high equity valuations.

In this context, we believe gold investment will remain well supported while gold consumption should benefit from the nascent economic recovery, especially in emerging markets....

Investors' preference for physical and physical-linked gold products last year further supports anecdotal evidence that, this time around, gold was used by many as a strategic asset rather than purely as a tactical play....

Many investors are concerned about the potential risks resulting from expanding budget deficits, which, combined with the low interest rate environment and growing money supply, may result in inflationary pressures. This concern is underscored by the fact that central banks, including the US Federal Reserve and European Central Bank, have signaled greater tolerance for inflation to be temporarily above their traditional target bands.

Gold has historically performed well amid equity market pullbacks as well as high inflation. In years when inflation was higher than 3%, gold’s price increased 15% on average. Notably too, research by Oxford Economics shows that gold should do well in periods of deflation. Such periods are typically characterized by low interest rates and high financial stress, all of which tend to foster demand for gold.

Further, gold has been more effective in keeping up with global money supply over the past decade than US T-bills, thus better helping investors preserve capital."

Jobless claims surge to highest weekly total since August -CNBC

"First-time claims for unemployment insurance jumped to 965,000 last week amid signs of a slowdown in hiring due to pandemic restrictions, the Labor Department reported Thursday.

The total was worse than Wall Street estimates of 800,000 and above the previous week's total of 784,000.... the jobless number for the week ended Jan. 9 was another sign of economic turmoil brought on by restrictions in activity aimed at combating the pandemic. The total was the highest since the week of Aug. 22, when just over 1 million claims were filed....

The increase in claims was spread across a handful of states, mostly those with more stringent restrictions on businesses.

Illinois, where Chicago has clamped down on restaurants, saw a jump of 51,280, according to unadjusted data. Other big gainers were California, which doesn’t even allow outdoor dining and saw its claims number rise by 20,587, a 13% increase. New York rose by 15,559."

Bitcoin Will Break Wall Street's Heart -Bird/Wall Street Journal

"The gyrating price of bitcoin has made headlines again this year, as has growing interest from institutional investors. But most vanilla financiers have more to lose than win by diving into digital assets.

Open interest in CME's bitcoin futures has surged by more than 250% since the beginning of October. Large trade sizes and the fact that bitcoin doesn't have to be held directly mean CME's system is considered a benchmark of activity by institutional investors.

Crypto-focused hedge funds and individual buyers are free to invest as they like, of course. Buying a volatile asset without cash flow in a euphoric market is a risk they are willing to take. It has certainly paid off for those with iron stomachs....

Grayscale Chief Executive Michael Sonnenshein told Bloomberg last week that pension funds were helping to drive the growth. Insurers are getting involved, too. Massachusetts Mutual Life Insurance is one high-profile recent example, having purchased $100 million of bitcoin. The company says it is comfortable with the exposure, which makes up around 0.04% of the $235 billion it recorded in assets at the end of September.

Estimates by Digiconomist suggest that the bitcoin network consumes around as much electricity as Chile, 77.78 trillion watt hours on an annualized basis. Bitcoin mining is often concentrated in places with abundant renewable energy such as China's Sichuan province and Iceland, but increasingly climate-conscious governments will nonetheless likely take a dim view of bitcoin mining's social utility as a priority for energy use.

The prospect of more onerous regulation may take the shine off digital assets, too. The Treasury Department's plan to make trading platforms keep more stringent identity and transaction records is just one example of how the attractive anonymity of the system could be undermined.

Freewheeling individual investors willing to take the risk may still enjoy the ride. But with the regulatory framework for cryptocurrencies still unfurling and the bitcoin rally already long in the tooth, the upside for big institutions looks far less clear."

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