Swiss America Blog Archive


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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7.14.17 - Exactly How Dumb IS the Fed?

Gold last traded at $1,227 an ounce. Silver traded at $15.93 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Friday as dovish Fed testimony further weakened the dollar. U.S. stocks rose modestly climbing a wall of worry over geopolitics, tech valuation and weak retail sales.

Gold Prices Boosted By Dollar Slide -EconomicCalender
"After narrow ranges dominated on Thursday, gold was boosted in US trading on Friday by a sharp dollar retreat and decline in bond yields....Retail sales data was also weaker than expected with a headline decline of 0.1% for the month and underlying dip of 0.3%. The dollar dipped sharply lower following the data with the dollar index at 9-month lows near 95.0 while USD/JPY retreated to below 112.50....The combination of a weaker dollar and lower yields provided robust support to gold with prices advancing to the $1,230 per ounce area. Gold was also on track for the first weekly gain of July."

Fed How Dumb Is the Fed? -BonnerandPartners
"This morning, we are wondering: How dumb is the Fed? The question was prompted by this comment by former Fed insider Chris Whalen at The Institutional Risk Analyst blog: '[O]ur message to the folks in Jackson Hole this week [at the annual central banker meeting there] is that the end of the Fed’s reckless experiment in social engineering via QE and near-zero interest rates will end in tears.'....If you believe the newspapers, the Fed has begun a 'tightening cycle.' It is on course to raise its key interest rate, little by little, in quarter-point increments. It must know that this is a perilous thing to do. After so much market manipulation over such a long period, prices all up and down the capital structure - from junk bonds to quality stocks and solid real estate - have been bent and distorted....But the feds could only work this miracle by buying bonds. And the feds didn’t have any money. What could they do? No problem! They used their fake money, the post-1971 credit dollars - trillions of them… money they could create at will....Which brings us back to our question: How dumb is the Fed?....Nothing comes from nothing. Fake money produces fake prosperity. Take away the fake money… and the fake prosperity goes 'poof,' too. Which is why the Fed will never, voluntarily, stop manipulating prices. It can’t let the markets return to 'normal' price discovery....The Fed says it is going to return its interest rate policy back to normal…No chance. It’s not that dumb."

What We Learned Yesterday When Yellen Came to the House -ArcMedia
"On Wednesday, Janet Yellen testified before the House Financial Services Committee....While little news was made, with Yellen maintaining her support for generally low interest rates, there were some points made today worth noting. 1) Republicans Continue to Push on the Fed’s Subsidy to Wall Street....This policy has drawn increasing criticism from House Republicans, and Yellen faced criticism....2) Higher Interest Rates for Wall Street, not for Main Street....All of this is simply another demonstration of how policies by the Federal Reserve are benefitting Wall Street at the direct expense of the rest of the country....3) Maxine Waters Wants to Make Poor People Poorer....The way politicians like Waters discuss inflation makes it clear that they don’t truly comprehend how it presents itself in real life....4) Yellen still hates 'Audit the Fed'....This time it was Rep. Bill Posey who tried to push Yellen away from her default defense of mythical Fed independence. Posey repeatedly asked Yellen to name a single instance in which the Fed would have been negatively impacted by a full audit. The Fed Chairwoman was unable to provide an answer."

US retail sales drop 0.2% in June vs 0.1% increase expected -CNBC
"U.S. retail sales unexpectedly fell in June for a second straight month, which could temper expectations of strong acceleration in economic growth in the second quarter. The Commerce Department said on Friday retail sales fell 0.2 percent last month, weighed down by declines in receipts at service stations, clothing stores and supermarkets. Americans also cut back on spending at restaurants and bars, as well as on hobbies....Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1 percent last month after being unchanged in May. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product."

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7.13.17 - 14 Million Verizon Customers Hacked

Gold last traded at $1,217 an ounce. Silver traded at $15.69 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday following dovish Fed comments on the economy and rate hikes. U.S. stocks rose as Target's upbeat outlook boosted retail shares slightly.

Neil Cavuto Asks 'What's Going On With Metals?' -TFmetalsReport
"This is Neil Cavuto [host on Fox Business] discussing the 'markets' with Terry Duffy, the one and only CEO of the CME Group (Chicago Mercantile Exchange). The first five minutes are the standard boilerplate of Fed policy, etc and blahblahblah. However, at the 4:55 mark, Cavuto asks: 'But we haven't seen money move into the metals....what is going on there?'....To which Duffy answers: 'Given all that's going on the world, gold should probably be $5,000 to $6,000 per ounce.' Watch Fox Business Video Clip....WHY would the CEO of the CME state this on live TV?? Is it because he now expects much higher metals prices in the months ahead and he wants to front-run them with his "analysis"? Is he tipping off The Banks that their games are almost over?"

Fed policy Fed Is Living In A Dream World; Buy Gold On Dips -Tocqueville -Kitco
"Investors should have used gold’s month-long pullback, culminating in a four-month low as a buying opportunity, according to one major precious metals portfolio manager. John Hathaway, senior portfolio manager at Tocqueville Asset Management, was fairly critical of positive sentiment surrounding further U.S. economic growth, which has led to complacency in financial markets, resulting overvalued equity valuations. 'We believe that the Fed’s view of economic activity is not rooted in reality and that its stubborn pursuit of interest-rate hikes is likely to precipitate a bear market in equities and bonds,' said Hathaway in his recently published second quarter gold strategy investor letter....'Financial-market complacency seems (inexplicably, to us) to be based on confidence in a continuing economic expansion and a smooth transition (meaning pain-free in terms of market damage) to normalization of monetary policy and interest rates. We believe that these two expectations are incompatible and unattainable simultaneously,' he said. 'An unexpected U-turn in monetary policy would almost certainly cause precious metals prices to surge.'"

John Hathaway is a brilliant precious metals portfolio manager who consistently sees the forest for the trees. He expects metals to "surge" when the Fed reverses monetary policy. We do too. The time to prepare for a major trend reversal is now. Right now could be the best gold buying opportunity of the year. Learn more about the wisdom of owning gold and silver today by reading our free 2017 Gold and Silver Research Reports.

Verizon data breach: 14 million customers reportedly exposed -Fox News
"Millions of Verizon customer records have been exposed after an Israeli technology company left user data unprotected, the International Business Times reported. 'As many as 14 million records' of Verizon customers were found unsecured on an Amazon storage server controlled by Israeli-based Nice Systems, according to ZDNet.com. The database was found to have communication logs of Verizon customers who called customer service, as well as customer cell phone numbers and account PINS, according to the IBTimes....The security breach comes a year after Verizon said the contact information of 1.5 million business customers was for sale by hackers."

Read AMERICA'S CYBER-HIT LIST, a new 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.

Americans are hoarding cash in checking accounts -USAToday
"Cash - or something close to it - is king again. Enjoying a steady job market but reluctant to spend freely due to economic uncertainty, a wide swath of middle-class Americans are hoarding money in banks. Total bank deposits rose 6.6% last year to $10.7 trillion, extending steady growth seen in recent years, data from the Federal Deposit Insurance Corporation show. And Americans love liquidity. They hold about $2 trillion in checking account now, says Mike Moebs, CEO of Moebs Services. The average U.S. checking account deposit is about $3,600, climbing from $1,000 in 2007, he says....Consumers 'are not spending,' Moebs said. 'The Great Recession isn’t over for consumers and small businesses. Small businesses feel a great deal of uncertainty and they’re being very cautious, especially with any capital plans they have.' High debt obligations also are affecting household spending decisions."

In 2017, hackers infected the computers of 140 banks in 40 countries with a program that allowed them to order bank ATMs to spit out untold millions into the paper bags of waiting accomplices ... Learn more in our free 2017 White Paper Don’t Bank On It!

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7.12.17 - Gold Rises After Fed Remarks

Gold last traded at $1,219 an ounce. Silver traded at $15.88 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday following dovish Fed comments which weakened the dollar. U.S. stocks cheered the Fed's statements about the uncertainty of future rate hikes.

Gold Jumps After Yellen's Remarks -Bloomberg
"The gold market rendered a quick dovish read on Federal Reserve Chair Janet Yellen’s prepared testimony to Congress. Yellen said Wednesday that 'considerable uncertainty always attends the economic outlook,' citing 'uncertainty about when - and how much - inflation will respond to tightening resource utilization.'....'Considerable uncertainty always attends the economic outlook,' Yellen said Wednesday in remarks prepared for delivery to the U.S House Financial Services Committee....She also mentioned that the Fed anticipates it will start reducing its balance sheet 'this year.'....U.S. stocks opened higher while Treasury yields fell with the dollar after her testimony was released....With U.S. economy growing at a steady pace, Yellen’s Fed is gradually pulling back from crisis-era stimulus. It raised interest rates in June for a second time this year and forecast another hike in 2017."

Yellen What's next for the dollar, stocks, bonds & gold? -MerkInvestments
"The Fed’s 'balance sheet reduction' may have profound implications for the dollar, gold, stocks and bonds....If reducing the Fed’s balance sheet at a rate of $50 billion a month is akin to watching paint dry, what then is the ECB’s activity of purchasing €60 billion a month (its current rate)? Either the Fed or the ECB is pulling our leg here. If printing money is quantitative easing (QE), then balance sheet reduction is quantitative tightening (QT)....I am in the camp that believes QE has been all about compressing risk premia, i.e. the spreads between risky and so-called safe assets...And equities trade at higher valuations and lower volatility? Sound familiar?....You can call the weak dollar a deflating Trump trade, but the Fed may well have initiated a far greater force by enabling other central banks to tighten....Stocks are historically correlated to junk bonds, not because they are junk, but because they are both so-called risk assets. Just as their volatility has been compressed with QE, we believe their volatility should rise with QT....Rising risk premia may be a positive for the price of gold. Because gold does not have cash flow, there’s also no greater discounting of future cash flows as risk premia rise."

Visa Takes War on Cash to Restaurants -Fox Business
"Visa Inc. has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash. The company is announcing the initiative this week as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a '"journey to cashless.' 'We're really viewing this as the opening salvo,' said Mr. Forestell, Visa's global head of merchant solutions, of the potential total $500,000 commitment....'The idea that merchants don't want to accept cash is a myth,' said Mallory Duncan, senior vice president and general counsel at the National Retail Federation."

The "News" Is Content-Free -Smith/OfTwoMinds
"We're 'your' trustworthy news source, even though 90% are owned by six corporations or billionaires with political agendas. In 1983, the same 90% of American media was owned by 50 companies. The 'news' has loomed large in The News - a classic self-referential loop in which the media itself becomes its own content. While the controversy over what constitutes 'fake news' and 'real news' has itself become 'the news,' the cold reality is all 'news,' 'real' or otherwise, is content-free. The 'news' is so devoid of content that a simple software program could assemble a semi-random daily selection of headlines, scrolling banners, and radio/TV 'news' reports from a pool of typical 'news' stories and insert a bit of context (local highways that are congested, rough neighborhoods where shootings occur, names of local authorities, etc.), and the consumer of 'news' would be hard-pressed to tell the difference between the randomly generated 'news' and the 'real news.'"

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7.11.17 - Sell Stocks Before Storm Hits -WSJ

Gold last traded at $1,214 an ounce. Silver traded at $15.74 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on bargain hunting amid political turmoil and a weaker dollar. U.S. stock volatility increased as traders digested emails released by Donald Trump Jr. regarding Russian interference in the U.S. presidential election.

Saxo Bank Bullish On Gold In Q3, Sees $1,325 As Year-End Range -Kitco
"In its Q3 outlook, Danish Saxo Bank maintained a 'bullish' outlook for gold, adding that the U.S. Federal Reserve might be too optimistic on rate hikes, while the stock market could face a long-overdue correction. 'We maintain a bullish outlook for gold in the belief that the risk to the US economy is currently skewed to the downside,' said Ole Hansen, head of commodity strategy at Saxo Bank....'A long-overdue stock market correction could be the missing link that gold needs to break resistance at $1,300/oz. The sector will receive increased scrutiny, not least following comments about 'rich' asset prices made by the Fed chair at the recent ECB Forum on central banking,' according to Hansen. Saxo Bank added that it is maintaining its $1,325 level as the end-of-year forecast, with the risk on the upside."

annuity trap How To Rescue Your Retirement -PontificationBlog
Every day 10,000 Baby Boomers reach age 65, and this will continue until 2029. Many need to protect their life savings and prepare for retirement....The government and Federal Reserve have pressured banks to pay less to depositors in interest than the rate of inflation, a policy economists call 'financial repression.' This forces savers either to lose purchasing power or to move their money out of safe accounts and into the stock market casino, a gamble that could burst like a risky bubble. Many are now thinking of betting their futures on annuities, which, in our latest free White Paper The Annuity Trap, monetary expert Craig R. Smith and I describe as 'the oldest, trickiest and stickiest of financial snares.'....Annuities come not from banks, but from insurance companies and are not backed by any federal entity such as the Federal Deposit Insurance Corporation (FDIC)....Annuities come in three basic types... Full story

'Perfect' Stock Market Says Sell Now Before Storm -Investopedia
"The current 'perfect' world of an 8th year of rising stock prices, a steady economy and unusual investor complacency provides an ideal time for investors to sell their shares before an unexpected shock spurs a major decline or move to a bear market, according to the Wall Street Journal....The U.S. in 2017 is experiencing a 'Goldilocks' economy of low inflation and stable economic growth similar to the 1990s, the Journal says, and many investors believe that only a recession can trigger a bear market. This is a badly mistaken assumption, the Journal says....Strategists have cited a growing list of signs that the bull market is aging, if not near an end, including the stock market's narrow leadership by the big tech stocks as well as investors' increasing willingness to invest in riskier securities."

Congress Returns to Battles Over Health Care, Budget -Wtop
"Congress is still trying to send President Donald Trump his first unqualified legislative triumph, nearly six months after Republicans grabbed full control of Washington. Now, lawmakers are returning from their July 4 recess with an added objective - averting some full-blown political disasters. The GOP campaign to repeal Democrat Barack Obama’s health care law is bogged down in the Senate and flirting with collapse. Efforts to pass a budget are stuck, there’s no tax code overhaul package, spending bills are in limbo and it’s unclear how leaders will find the votes to avert a federal default....Lawmakers have three weeks of work before an August recess. Some Republicans are making noise about shortening that respite, but doing so would be a step shy of sacrilege on Capitol Hill."

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7.10.17 - Why Americans Cannot Retire

Gold last traded at $1,213 an ounce. Silver traded at $15.62 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on bargain hunting and a flat dollar. U.S. stocks traded higher, led by the tech sector ahead of the beginning of the latest earnings season.

Trader bets nearly $1.5 million on major gold rally in the second half -CNBC
"Gold has rallied 6 percent this year, and as investors weigh mounting geopolitical tensions, one trader is betting nearly $1.5 million on an even bigger rise for the precious metal in the second half. The yellow metal climbed last week as the dollar and stocks slumped as slowing economic data and jitters over North Korea have Wall Street hitting the panic button....In one eyebrow-raising trade, someone bought 35,000 contracts of the December 135/160 call spread paying 42 cents each. Since each options contract accounts for 100 shares, this is about a $1.5 million bet that the GLD will close above $135.42 by December expiration - which is more than 16 percent above where it was trading Thursday."

world currency Get Ready For A World Currency By 2018 -Zero Hedge
"'THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix...' -The Economist, Get Ready for the Phoenix, January 9, 1988....At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987....The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates....In all these ways national economic boundaries are slowly dissolving....The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy....Pencil in the phoenix for around 2018, and welcome it when it comes."

Working Past 70: Americans Can't Seem to Retire -Bloomberg
"More and more Americans are spending their golden years on the job. Almost 19 percent of people 65 or older were working at least part-time in the second quarter of 2017, according to the U.S. jobs report released on Friday. The age group’s employment/population ratio hasn’t been higher in 55 years, before American retirees won better health care and Social Security benefits starting in the late 1960s. And the trend looks likely to continue. Millennials, prepare yourselves....Older Americans are working more even as those under 65 are working less, a trend that the Bureau of Labor Statistics expects to continue. By 2024, 36 percent of 65- to 69-year-olds will be active participants in the labor market, the BLS says. That’s up from just 22 percent in 1994....Longer lives and rising health care costs have made retirement more expensive at the same time that stagnant wages and the decline of the traditional pension have made it harder to save enough. The U.S. isn’t the only place people are planning to work longer. Around the globe, workers of all ages are moving their retirement goals later and later in life."

The Fed's Failed Policies -CATO
"Once upon a time, there were monetary velocity and a money multiplier. Since 2008, there has been neither monetary velocity nor a money multiplier, at least not at levels comparable to the status quo ante....Monetary transmission mechanisms through traditional and reasonable channels have stalled. The main choice is to attempt to bring back the former economy...That is a formula that simply will not work, as the generation-long experience of Japan has shown....I think we need to observe what the new economy (low growth/slow growth due to slowing productivity growth and increased global competition) requires us to do....1. The central bank absolutely should not lend to anyone whose books it does not examine....2. The Fed needs to give up its extraordinary methods as soon as possible if it is to be preserved in anything like its present form....3. There needs to be a bipartisan or nonpartisan study commission to review the entire monetary policy operational structure of the Fed....4. The Open Market Trading Desk should be redivided into its traditional areas of responsibility..."

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7.7.17 - Major US Banks Fail Web Security Test

Gold last traded at $1,209 an ounce. Silver traded at $15.42 an ounce.

NEWS SUMMARY: Precious metal prices ended the week lower Friday as upbeat jobs data boosted the buck. U.S. stocks rose on boosted investor confidence.

Government Job Growth in June Outstrips Manufacturing 35 to 1 -CNSNews
"The seasonally adjusted government employment number grew by 35,000 in the month, while seasonally adjusted manufacturing employment grew by only 1,000. Also, in 2017 so far, the United States has created 1,000 more government jobs than manufacturing jobs, according to the BLS data....The BLS noted in its release on the June employment data that health care had added 37,000 jobs during the month, social assistance employment had added 23,000, financial activities had added 17,000, mining had added 8,000, professional and business services had added 35,000 and food services and drinking places had added 29,000. Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, showed little change over the month."

CNBC cautions investors, "'We shouldn't take a great deal of comfort in a "good" jobs number alone,' Robert Frick, chief corporate economist at Navy Federal Credit Union, said in a statement. 'There are many other factors that come into play which haven't moved, like wages and labor force participation.'"

The Golden Age Has Just Begun -Zero Hedge
"Many things, including bitcoin, stocks and leaves tend to fall in the aptly named fall… but some things actually start to fly…Such assets do of course exist, and one that has particularly good prospects at the moment is gold. You may well have already heard that gold prices typically exhibit strength in the second half of the year. But when exactly does gold begin to rally, and how long does its strength last?"

gold chart

"Take a look at the seasonal chart of gold. Contrary to standard charts, seasonal charts illustrate the average performance of an asset price in the course of a year. In this case the prices of the past 20 years were averaged. The seasonally strong period begins on July 6 and ends on February 24 of the following year. The average gain of the gold price in the seasonally positive time period amounted to 8.62 percent, or 13.90 percent annualized. In short, the strong seasonal period is beginning right now!"

When it comes to protecting your financial future from uncertainty, it is better to be a year early than one day late. Learn more about the wisdom of owning gold and silver today by reading our free 2017 Gold and Silver Research Reports.

Hamburg under siege for G20 -AFP/YahooNews
"Anti-capitalist protesters wreaked havoc Friday in the G20 summit's host city of Hamburg, torching cars, firing flares at police choppers and blocking US First Lady Melania Trump at her residence. Hamburg police were also forced to call in reinforcements from other parts of Germany, as Chancellor Angela Merkel condemned the violence wrought by demonstrators as 'unacceptable'....On the eve of the summit of the leaders of the world's top 20 economies, a protest march in the northern port city by 12,000 people quickly got out of hand....'War, climate change, exploitation are the result of the capitalist system that the G20 stands for and which 20,000 police are here to defend,' demonstrator Georg Ismail told AFP....Local resident Benjamin Laub, 53, said his neighborhood has resembled a zone 'under a state of emergency' for days."

Nearly 7 in 10 Major US Banks Fail Web Security Testing -Merkle
"Banks and other financial institutions need to take proper security measures to protect customer funds. Worryingly, this does not appear to be the case for many banks. A new report by Online Trust Alliance paints a troubling picture. They claim nearly seven of every ten US banks failed web security testing. Such a high number is absolutely unacceptable in this day and age of theft and data breaches. Trust in banks and other financial institutions is at an all-time low right now. Consumers of all ages use banks to secure their money, but they are less eager to do so....In fact, the majority of US banks failed web security testing. Considering how the Online Trust Alliance audited over 1,000 banking websites around the world, it is disconcerting to see US banks come out as the worst....What is even more troubling is how these US banks fail in both security and privacy...Of all major US banks, only 27% made the 80% cut. That is a 28% drop compared to 2016. The US clearly needs to catch up with the rest of the world. These US banks are also more prone to data breaches. While most banks will publicly state they take security and privacy very seriously, this report tells a very different story."

Read AMERICA'S CYBER-HIT LIST, a new 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.

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7.6.17 - North Korea: Trump's Best Strategy?

Gold last traded at $1,223 an ounce. Silver traded at $15.98 an ounce.

NEWS SUMMARY: Precious metal prices held steady Thursday as weak jobs data weighed on the dollar. U.S. stocks fell on tech valuation and retail stock/consumer spending worries.

ADP Employment Disappoints - No Manufacturing Jobs Gained In June -ZeroHedge
"After jumping heroically in May, ADP reported a disappointing 158k employment gain in June (188k exp.) and revised May's exuberance notably lower (253k to 230k). While 'soft' survey data suggests employment should be resurging, the hard numbers are disappointing again. Perhaps most notable for President Trump is that all 158k of the gains came in the Service-Producing sector of the economy - Goods-Producing Sector gained zero jobs."

CRS Interview North Korea: What Is the Best Strategy? -Cavuto/Fox News
Swiss America Chairman Craig R. Smith discusses whether President Donald Trump will be able to get China's General Secretary of the Communist Party, Xi Jinping, to help stop the North Korean pursuit of ICBM's and nukes by using financial force or other incentives to gain their cooperation. Watch now to hear what Mr. Smith feels is Trump's best strategy at the upcoming G20 summit.

We are sleepwalking towards a global war – and Russia and China are enabling it -Telegraph
"This is not 'just another North Korean missile launch'. The 'successful' testing of what North Korea’s state news agency KCNA called an 'inter-continental ballistic missile' (ICBM) takes the Korean Peninsula one step closer to a conflict that could drag in the world’s great powers and cost millions of lives. This time is different, and potentially much worse than those that have gone before, because it threatens to bring a reaction from the United States. The US closely monitors North Korea’s ability to strike cities on the West Coast, and significant progress towards that goal is unlikely to go unanswered."

An Economic Crisis Is On Its Way -DailyTelegraph
"An economic crisis of possibly historic proportions is fast approaching....Worryingly, the monetization of government and corporate debt, nominal or real negative interest rates, 'helicopter money', bank bail-ins, capital controls and the eradication of cash through financial digitization are all being contemplated by American and other international central bank officials. Such measures seek to, in effect, trap citizens to keep their money in the financial system and to allocate their money into particular asset categories, thus preventing bank runs or hoarding which can occur when confidence in political, economic and ­financial systems collapse. Thus it is up to individuals to think about what they can do to mitigate their own risks. Eliminating all forms of debt, ­improving personal cash flow and maintaining cash reserves to guard against bouts of unemployment or to purchase cheap assets is best under a deflationary scenario. Alternatively, acquiring real (or physical) goods or assets such as precious metals is the best defense to offset any loss of currency purchasing power..."

The Flashpoints for World Leaders at the Hamburg G-20 -Bloomberg
"The Group of 20 summit that starts in Hamburg on Thursday is the most anticipated - and potentially turbulent - meeting of global leaders in years. An unpredictable U.S. president with a protectionist bent, a Russian leader subject to international sanctions and a Chinese president looking to assert a greater global role are just a few of the factors that might stoke tensions. Sparks could really fly over the policy agenda of free trade, climate change and migration put forward by the German host. Angela Merkel is determined to avoid a repeat of May’s G-7 meeting in Italy, where it was six against one: Donald Trump. Yet she acknowledges that 'the discord is obvious' and 'it would be dishonest to paper over the conflict.' Following are what look to be the main flashpoints at the summit and the relative positions of G-20 members with most at stake: Trade....Climate....Migration....Trump policies."

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7.5.17 - Brace Yourselves for Next Big Debt Crisis

Gold last traded at $1,221 an ounce. Silver traded at $15.89 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 3-month lows Wednesday on a firmer dollar. U.S. stocks gyrated after the Fed minutes revealed expectations of rising inflation and balance sheet unwinding risks.

The Next Bull Market for Gold May Have Just Begun -USNews
"With stocks pricey and investors getting valuation jitters, precious metals may be just the thing to add a little luster to your portfolio. For starters, there are reasons to believe that a bull market for gold and silver might be beginning....The uptick in prices could continue because gold has a long history as the asset that investors flock to when everything else seems risky. And for some investors, the stock market is flashing a yellow warning light now. 'This is not a really good time to be buying equities,' says Don Coxe, chairman of Coxe Advisors LLC in Chicago, given their high price-earnings ratios....Coxe likes gold because it has a limited supply. Although it doesn't pay a dividend the way many stocks do, gold tends to hold its value over time. 'Recessions are a great environment for gold,' he says....Because their prices aren't correlated with stocks or bonds, precious metals can reduce a portfolio's overall volatility or risk. That's why many smart investors suggest holding 5 to 15 percent of a portfolio in gold and other precious metals, with some people believing that number should be higher."

When gold prices take a dip, smart money seizes the opportunity to buy, knowing solid fundamentals confirm true value. Learn more about the wisdom of owning gold and silver today by reading our free 2017 Gold and Silver Research Reports.

Italy Italy to nationalize bank, shed $32.5B in bad loans -ABCNews
"In a bid to end years of struggles, the Italian government is taking control of bank Monte dei Paschi under a relaunch plan agreed by European officials that includes the disposal of a massive $32.5 billion in bad loans....The Italian government will inject 5.4 billion euros into the bank, giving it a 70-percent stake, as part of a total boost of 8.1 billion euros. Under the deal, the government must exit within five years....It is the third capital injection in recent years for Siena-based Monte dei Paschi, Italy's third-largest by assets, as it struggles to recover from poor management and a heap of bad loans that compounded during Italy's long economic crisis. Under the bad loan disposal plan, $32.5 billion will be bundled and sold at 21 percent of gross book value, the vast majority to the government-organized Atlante II fund, while the bank retains 5 percent."

Banking risks are alive and growing in 2017. In addition to the risk of insolvent banks, we have a virtual army of computer hackers who've infected computers of 140 banks in 40 countries ordering bank ATMs to spit out untold millions into the paper bags of waiting accomplices. Get the full story in our free 2017 White Paper Don’t Bank On It!

Faber: There will be another 'massive' financial crisis in my lifetime -CNBC
"Marc Faber has a warning for investors - brace yourselves for another financial crisis. Just last week, Federal Reserve Chair Janet Yellen said another crisis like the one in 2008 was not likely to happen 'in our lifetime.' Faber told CNBC's 'Squawk on the Street' on Monday that 'I'm 71 and for sure in my lifetime, unless I have an accident tomorrow, I will see another financial crisis and a massive one.'....'We have a colossal credit bubble in the world. Can it expand? Yes, but it cannot expand forever. One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007,' the editor The Gloom, Boom & Doom Report said. The noted bear also has been calling for a big drop in the U.S. stock market and believes 'we have a bubble in everything.'"

Don’t Buy the Scare Stories About the GOP’s Medicaid Reform -Batchelor/TheDailyBeast
"The charges against the Republican proposals for Medicaid reform as part of the American Health Care Act debate are grave and condemning. 'Mr. Trump and the Republicans would lower spending on the frailest and most vulnerable people in our health care system,' report three esteemed health care policy professors, David Grabowski of Harvard University, Jonathan Gruber of MIT, and Vincent Mor of Brown University. The professors declare that many will suffer if the Republican legislation is passed, but that the elderly disabled in nursing homes are bound to suffer the worst....'It's nonsense, absolute nonsense,' Charles Blahous of the Mercatus Center of George Mason University and the Hoover Institution of Stanford University told me last week....Blahous concluded about the Republican Medicaid proposal: 'It has nothing to do with seniors. It has nothing to do with the disabled. It has nothing to do with poor children. Those people were eligible for Medicaid before the Affordable Care Act. They would be eligible for Medicaid after the Affordable Care Act - if it's repealed - and they are simply not in jeopardy as a result of what’s being discussed on the Hill.'....In sum, the blunt charge that Republicans are emptying nursing homes of the elderly disabled in order to find savings in Medicaid is starkly inaccurate."

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7.3.17 - Smart Money Buys Gold in a Recession

Gold last traded at $1,219 an ounce. Silver traded at $16.12 an ounce.

NEWS SUMMARY: Precious metal prices slipped Monday as U.S. dollar rebounded from last week's sharp loss. U.S. stocks mixed as tech shares lagged.

Ron Paul: Not a 'total shock' if stocks plummet 25% and gold soars 50% by October - CNBC
"A painful correction is coming and there's little that can be done to prevent it, according to former Republican congressman and libertarian firebrand Ron Paul. Speaking to CNBC last week, the former GOP presidential contender argued the economy is not as strong as Wall Street consensus believes, and the situation could turn ugly as soon as October. 'If our markets are down 25 percent and gold is up 50 percent it wouldn't be a total shock to me,' said Paul recently on 'Futures Now.' That scenario would drag the S&P 500 Index as low as 1,819, and gold as high as $1,867 an ounce from current levels..... 'I think it's a very precarious market, and the Fed better be very careful. Since they are incapable of knowing what to do, I don't expect much good to come out of anything they do,' said Paul. 'There are so many mistakes made out there that the correction is almost unlimited.'"

gold Why Investors Buy Gold in a Recession - The Motley Fool
"Recessions are financially and emotionally trying events. It's fair to say that nobody likes a recession. But that doesn't stop them from happening as the so-called 'invisible hand' works to clean up excesses built up in the good times. How can you protect yourself from these downturns? Consider buying gold....when the financial world looks like it's going to end, gold starts dancing to its own tune.....for thousands of years, gold has been used as a store of wealth. It is a physical asset that has value in and of itself, and the gyrations of paper assets have little impact on it. If there were an event that led to monetary collapse, gold would likely be the primary fallback currency....This is why, when the going gets tough, investors flock to gold. Although the number changes each year, investment usually accounts for around 30% of annual demand for gold. That's a big number that includes gold coins."

Maine and New Jersey state governments shut down by budget failures - Market Watch
"Governors in New Jersey and Maine shut down state government after lawmakers in their states failed to reach budget deals before Friday’s midnight deadline. Republican New Jersey Gov. Chris Christie, who is in his final year of two terms running the state, called the Democratic-led legislature back to Trenton for a special session on Saturday. In Maine, Republican Gov. Paul LePage put in place a partial shutdown until Monday afternoon. 'This is embarrassing and it’s pointless,' Christie said at a Saturday news conference in Trenton. 'Our residents do not have access to a myriad of services that they deserve.' Under the New Jersey shutdown, only essential state employees such as state police, prison workers, and hospital employees will report to work, according to a statement from the governor’s office." Illinois races the clock to avoid 'junk' downgrade

Illinois races the clock to avoid 'junk' downgrade - CNN Money
"Illinois officials are racing against the clock to pass a budget before the state's credit is branded junk. The state legislature, facing a massive budget crisis, was unable to reach a spending deal before the new fiscal year began on Saturday -- marking the third year in a row that Illinois has started without a full budget....Illinois is at risk of becoming the first state to get slapped with a credit downgrade to junk, which could make its money problems even worse. Earlier this week, S&P Global Ratings warned that it would probably issue the demotion if Illinois failed to pass a budget before Saturday....After decades of fiscal mismanagement, Illinois faces $15 billion in unpaid bills and owes a whopping quarter-trillion dollars to public employees when they retire. The budget crisis has crippled social services that rely on state money, from mental health services and Meals on Wheels for homebound seniors to domestic violence support centers."

**Swiss America will be closed Tuesday, July 4 in observance of Independence Day.**

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